House Ag Subcommittee Receives Testimony from Center on Budget & Policy Priorities
"Thank you for the opportunity to testify today. I am
"My testimony today is divided into two sections: 1) SNAP's critical role in our country as a federal nutrition program; and 2) ideas for consideration to strengthen SNAP for the future.
SNAP's Critical Role
"I've testified several times recently about the critical role SNAP plays in our country. I'm going to quickly summarize here the most important points about SNAP's successful features and results, in part because these themes were so successfully drawn out in the series of hearings before this committee on SNAP over the past two years and highlighted in the comprehensive report the Committee issued late last year.
"SNAP is a highly effective anti-hunger program. Much of its success is due to its entitlement structure and its national benefit structure, which focus its benefits to the households with the lowest incomes available to purchase groceries and assists poor families to obtain adequate nutrition, regardless of where they live. As of last December, SNAP was helping 43 million low-income Americans to afford a nutritionally adequate diet by providing them with benefits on a debit card that can be used only to purchase food. On average, SNAP recipients receive about
- SNAP has largely eliminated severe hunger and malnutrition in
- SNAP is targeted at need and reduces poverty. SNAP reaches more than 80 percent of eligible households,
"These features help account for SNAP's large anti-poverty impact. SNAP kept 8.4 million people out of poverty in 2014, including 3.8 million children, and made millions of others less poor, according to Census data using the Supplemental Poverty Measure (which counts SNAP and other non-cash benefits as income). SNAP also lifted 2.1 million children above half of the poverty line.3
- SNAP helps low-income households put food on the table. SNAP benefits reduce food insecurity (which occurs when households lack consistent access to nutritious food because of limited resources) among high-risk children by 20 percent and reduces fair or poor health (as reported by their parents) by 35 percent, one study found.4 Another recent study found that participating in SNAP reduced households' food insecurity by about five to ten percentage points and reduced "very low food security," which occurs when one or more household members have to skip meals or otherwise eat less because they lack money, by about five to six percentage points.5
- SNAP improves long-term health and educational outcomes. Recent research comparing the long-term outcomes of individuals in different areas of the country when SNAP gradually expanded nationwide in the 1960s and early 1970s found that disadvantaged children who had access to food stamps in early childhood and whose mothers had access during their pregnancy had better health and educational outcomes as adults than children who didn't have access to food stamps. Among other things, children with access to food stamps were less likely in adulthood to have stunted growth, be diagnosed with heart disease, or be obese. They also were more likely to graduate from high school.6
- SNAP is highly responsive to the economy. SNAP is the most responsive means-tested program to changes in poverty and unemployment during economic downturns. It expands to meet need and then shrinks when need recedes, most recently during and after the Great Recession of 2007-09. This automatic response not only eases hardship for people directly hit by a downturn but also boosts economic activity in communities across the country, thereby acting as an "automatic stabilizer" for the weak economy.
- SNAP supports work. SNAP is designed to both supplement the wages of low-income workers and support workers during temporary periods of unemployment. Most SNAP recipients who can work do. The number and share of households that have earnings while receiving SNAP has been on the rise. Among SNAP households with at least one working-age, non-disabled adult, more than half work while receiving SNAP
- and more than 80 percent work in the year prior to or the year after receiving SNAP. The SNAP benefit formula is structured so that participants have a strong incentive to work longer hours or to search for better-paying jobs. SNAP benefits gradually decline as earnings rise, reducing the "benefit cliff" effect in SNAP. And, as I discuss in more detail below, SNAP provides a state option to all but eliminate any benefit cliff effects in SNAP.
- SNAP is efficient and effective.
- SNAP's national benefit structure is key to these successes. States have a high degree of flexibility in how they operate the program, but SNAP's benefit levels and eligibility rules are largely uniform across the states. The national benefit structure was established under
"The national benefit structure ensures that poor families can obtain adequate nutrition, regardless of where they live. It also substantially reduces differences across the states in their overall financial support for poor children -- a fact of special importance to southern states and rural areas, which have lower cash assistance benefits, higher poverty, and lower fiscal capacity.
"I also believe that the federal and state agencies that oversee SNAP are committed to the program, its participants, and strive for continuous improvement. In part, the five year Farm Bill cycle helps to foster an atmosphere of continual self-evaluation, a healthy sense of external scrutiny, coupled with the opportunity to pursue improvements when needed. While the core design of SNAP is largely unchanged since its origin,
Farm Bill Ideas for Consideration
"The focus of today's hearing is on ways to build on the strengths of SNAP. Over the past two years, the Committee has undertaken a serious effort to learn about SNAP, including the people it serves, how the program operates at the state level, and opportunities for improving its effectiveness. This learning is reflected in the Committee's report, which details the program's strengths, including the ways in which SNAP's basic structure contributes to its effectiveness. Given the findings of the report, it is appropriate for the Committee to consider future policy improvements recognizing that the program is working well and meeting its key goals.
"The remainder of my testimony will focus on a set of policy improvements that could strengthen the program without undermining the key programmatic elements that make it effective today. These policy ideas are informed by the Committee's hearings, academic research on the program, and our work with state officials, client advocate, and service provider groups, as well as our own research. The following is not a comprehensive or final list of the Center's suggestions for the 2018 Farm Bill. Instead, it is meant provide an overview of some of the key areas we recommend that you consider.
Improving SNAP's Basic Benefit
"SNAP's maximum benefit per person per meal is about
"Given the modest maximum and average benefit, SNAP delivers strong outcomes. In recent years, however, there has been increasing concern and growing evidence that SNAP's basic benefit level is out of date and not sufficient to ensure that participating households can afford a healthy diet. This evidence includes research by leading academics:
-
- Studies also show that households experience a range of adverse outcomes due to running out of food at the end of the SNAP benefit month. For example, one study found that the rate of hospital admissions for low blood sugar (which can occur when diabetics reduce their food intake) among low-income individuals in
- Economics professors
"Such a significant increase may not be feasible in the 2018 Farm Bill. Yet, evidence is mounting that SNAP's benefit is insufficient for all families to meet their basic food needs with a healthy diet. This topic merits further discussion and consideration. SNAP's core purpose is to meet low income households basic nutritional needs. If its benefit levels compromise the program's ability to achieve that goal, then they must be reconsidered.
The Benefit Cliff
"Some policymakers and service providers have raised concerns that programs that provide assistance for low-income families may discourage work if participants are worried that they will face a "cliff" where they lose their benefits all together if they take a job or increase their earnings above the program's income limit. SNAP currently contains three features that result in a fairly minimal benefit cliff for households with income right at the upper end of SNAP's income eligibility limit.
"First, SNAP's benefit formula, which targets benefits based on a household's income and expenses, phases out benefits slowly with increased earnings and includes a 20 percent deduction for earned income to reflect the cost of work-related expenses and to function as a work incentive. As a result, for most households with each additional dollar of earnings the household's SNAP benefits will decline by only 24 to
"The program does, however, have a federal gross income limit at 130 percent of the federal poverty line, a rule that creates a small but meaningful benefit cliff or benefit loss for some households who might increase their earnings above that level. For example, a typical household of three with income at 120 percent of the poverty line would lose about
"Fortunately, states currently have an option to lift the gross income limit through "broad-based categorical eligibility". More than 30 states have taken advantage of the option thereby allowing benefits to phase out gradually for all working households. Consider the previous example in a state that used the categorical eligibility option to adopt a higher gross income limit. The household's SNAP benefit would drop by only about
"The third protection against a benefit cliff is its structural guarantee to make food assistance available to every household that qualifies under program rules and applies for help. SNAP households that leave the program because they find a job or get a raise and no longer qualify can count on SNAP being available if they need help again later. Without this guarantee a household that loses its job might have to wait until funding became available to resume benefits -- as occurs now with child care and other benefits that are constrained by funding limitations from serving all who are eligible. The fact that SNAP is an entitlement lowers the perceived risks of working, making it easier for low-income families to take a chance on a new job or promotion.
"We plan to do some more detailed analysis on SNAP's income phase out and resulting benefit cliff and will publish those findings shortly in order to help inform the Committee's review of this issue.
Assessing SNAP's Response to Individuals with Disabilities
"SNAP provides needed food assistance to millions of people with disabilities. Over one in four SNAP participants, equivalent to over 11 million individuals in 2015, has a functional or work limitation or receives federal government disability benefits, according to CBPP analysis of data from the 2015
"The Center has a forthcoming analysis on the role SNAP plays for low income individuals with disabilities and how we might improve the program to better address their needs. At a minimum, this issue merits further study by the Committee and
Maintaining and Improving Access to SNAP
"SNAP is very successful in reaching eligible people.
- Increasing eligible senior enrollment in nutrition and health benefits. Many low-income seniors who are eligible for SNAP are also eligible for Medicare Savings Programs (MSPs), which defray
"In addition to lack of knowledge among low-income seniors about their potential eligibility for both nutrition and health benefits, senior participation also is inhibited by unnecessarily duplicative and uncoordinated application procedures. These procedures also push up administrative costs. While these programs have similar eligibility rules, seniors typically must apply for them via three duplicative processes -- through the
"Eligible seniors who don't enroll forgo significant financial assistance that could make a large positive effect in helping them make their ends meet.11 Tackling low participation rates across programs would be more effective in helping low-income seniors make ends meet than working to improve SNAP participation rates alone.
"While some of these issues are outside of the purview of the Agriculture Committee, the Farm Bill represents an opportunity to engage on improving services for low-income seniors. One suggestion would be to support innovative pilots that test using
- Ensuring SNAP's infants and toddlers are connected to WIC. Nutrition assistance programs play an especially important role for young children, whose brains are rapidly developing. Unfortunately, young children are likelier to live in poor and food-insecure families than older children and are particularly vulnerable to the negative health effects associated with a lack of proper nutrition. Low-income pregnant and post-partum women, infants and children up to age 5 who participate in SNAP are also income eligible for the
"SNAP does an excellent job of reaching eligible children, but it is unclear how many of SNAP's young children are connected to WIC. Our analysis of administrative and Census data suggests that many toddlers and preschoolers enrolled in SNAP are missing out on WIC, despite being eligible and despite the supplemental assistance WIC could provide and the positive long-term health outcomes of the WIC program. Given these programs' proven benefits on the long-term health and economic outcomes of young children, more can be done at the state level to ensure successful cross enrollment in these two complementary nutrition programs.
Eligibility
"In general, SNAP is available to all households that meet the federal income and asset rules. The amount that households receive is calibrated to their individual financial circumstances and their ability to purchase a basic diet. There are several groups, however, whose participation is further restricted based on their demographic or other circumstances. An example of one of those restrictions worthy of reconsideration is on individuals subject to the SNAP's three-month time limit.
"One SNAP's harshest rules limits unemployed individuals aged 18 to 50 not living with children to three months of benefits in any 36-month period when they aren't employed or in a work or training program for at least 20 hours a week.12 Under the rule, implemented as part of the 1996 welfare law, states are not obligated to offer all individuals a work or training program slot, and most do not. SNAP recipients' benefits are cut off after three months irrespective of whether they are searching diligently for a job or willing to participate in a qualifying work or job training program. As a result, this rule is a time limit on benefits and not a work requirement, as it is sometimes described.
"Many of the individuals subject to the time limit struggle to find employment even in normal economic times. Those subject to this rule are extremely poor, tend to have limited education, and sometimes face barriers to work such as a criminal justice history or racial discrimination. They also tend to have less education which is associated with higher unemployment rates. About a quarter have less than a high school education, and half have only a high school diploma or GED.13 SNAP participants subject to the three-month cutoff are more likely than other SNAP participants to lack basic job skills like reading, writing, and basic mathematics, according to the
"Unemployment rates for lower-skilled workers tend to be high. The unemployment rate for people lacking a high school diploma or GED -- who make up about a quarter of all non-disabled childless adults on SNAP -- stood at 7.5 percent in 2016, while the overall unemployment rate was 4.9 percent.15 (See Figure 1.) Unemployment rates for workers in many lower-skilled occupations, such as those in the service industries, are also substantially higher than the overall unemployment rate. In December of 2015, unemployment in the food services industry was 6.9 percent, above the national overall average of 4.9 percent.16
"While there have been few in-depth studies of those who are subject to the time limit, some evidence suggests that a sizable portion have a criminal history, which has a significant impact on job prospects. A detailed study of childless adults who were referred to community-based workfare in
"In addition to being harsh policy that punishes individuals who are willing to work, the rule is one of the most administratively complex and error-prone aspects of SNAP law. Many states also believe the rule undermines their efforts to design meaningful work requirements as the time limit imposes unrealistic dictates on the types of qualifying job training. For all of these reasons, many states and anti-hunger advocates have long sought the rule's repeal.
"The
Program Integrity and Oversight
"The Farm Bill is an important opportunity to equip
"Often, our biggest obstacle to helping states implement new measures that would increase the accuracy of benefit issuance is cost. Modernized eligibility systems, access to useful third-party data, and the appropriate level of staff to process cases with a high degree of accuracy can be costly for states. While the federal government shares in the costs of administering the program, state budgets are the limiting factor to ensuring the best systems and technology are deployed throughout the program. Many states downsized their program operations during the recent recession and have not yet rebuilt the capacity necessary to take full advantage of new options and technology.
"We offer the following suggestions as areas that
- A joint federal-state effort to analyze client and retailer data for predictors of fraud and to share effective methods of identifying cases or stores that contain fraud or that are guilty of trafficking after a more in-depth investigation.
- Taking the National Accuracy Clearinghouse nationwide. Through an FNS pilot, several southeastern states and Lexis/
- Some states pay (with the support of federal matching funds) a private company,
Employment and Training
"SNAP's existing employment and training (E&T) program allows states, within certain parameters, to design work and job training programs that help SNAP participants gain the skills, training or experience needed to gain regular employment. States can determine which populations and geographic locations to target for services and what types of employment services to offer. A number of states have been actively revising, expanding, and improving their E&T programs over the past few years.
"As part of the 2013 Farm Bill,
"These pilots are intended to help both states and the federal government understand how SNAP E&T can most effectively help SNAP recipients connect to needed job-related services and which of those services the E&T program needs to provide itself to produce the best employment outcomes possible. In addition, the Farm Bill requires
"We encourage the Committee to consider making new investments in E&T to expand job training opportunities for SNAP participants, perhaps through a competitive grant program. Such grants could be targeted to states with a proven track record producing positive employment outcomes in their E&T programs. Grants could support a wide range of programs including those targeted at removing barriers for individuals who face a difficult time finding employment such as ex-offenders or the homeless, providing case management services (a common theme in many of the pilots), or offering career and technical training informed by the local business community. The committee may also wish to consider proposals that would assist states that currently focus their E&T program primarily on job search and workfare
* programs that have not been shown to be effective in improving employment outcomes for opportunity of participants
* with the kinds of supports such as peer coaching and a learning collaborative that could help them to build more effective job training programs.
Assessing EBT
"SNAP Electronic Benefits Transfer (EBT) is the electronic system that allows a recipient to authorize transfer of their government benefits from a Federal account to a retailer account to pay for the groceries they buy. EBT is used in all 50 states, the
Issues External to SNAP for Consideration
"Much of my testimony has been about how to improve or strengthen SNAP from within the program. It's also useful to consider external factors that will set the context for what SNAP must respond to in the coming years.
The Labor Market
"While reshaping SNAP's employment and training program to be one that helps workers climb the economic ladder is a priority, no job training program can change the landscape of the low-wage labor market. As I mentioned earlier, the majority of working-age SNAP participants who can work, do work, but often the jobs they are working in, or are in-between, pay low wages, have variable, unpredictable schedules, don't provide full-time hours to workers who want them, and don't provide paid sick leave or other benefits. These workers often lack access to child care and other crucial job supports, and as a result of these conditions, these jobs tend to have high turnover. (For example, workers in jobs with paid sick leave are more likely to be able to stay employed in their current job than workers without, who may lose a job if they or a family member falls ill and they are unable to take the time off.19)
"SNAP participants who work are most likely to have service, sales, or office occupations, in occupations such as cooks, home health aides, janitors and maids, and personal care aides. They are most likely to work in the education and health industries (such as in schools, hospitals, home health services, and nursing homes), in retail trade (particularly in grocery stores and discount stores), and in leisure and hospitality (such as in restaurants and hotels).20 These jobs tend to pay low wages and offer part-time and variable hours.
"As a result, SNAP will continue to be an important support for low-wage workers and its features that respond and adapt to fluctuating earnings are important. It's also important to note that many workers will experience periods of unemployment or underemployment due to the nature of the labor market and SNAP is a crucial support to them during that time.
Repealing the Affordable Care Act
"While changes to the Affordable Care Act are still under consideration, it's worth noting that the outcome of that debate will have an impact on SNAP. First, research has shown that medical expenses can affect food insecurity, as low-income individuals with health problems can face tradeoffs between food and medicine. For example, one study found that one in three people with chronic conditions were unable to afford food, adequate doses of medication, or both.21 Another found that the probability of food insecurity increases as out-of-pocket medical expenses increase.22 Legislation that reduces health coverage or increases out-of-pocket medical expenses for low-income individuals could have an impact on SNAP. Moreover, when individuals go without care they need, their health status may decline, making it more difficult to get and keep jobs - and making the job of E&T efforts that much more challenging.
"In addition, SNAP is co-administered with
Downward Pressure on Non-Defense Discretionary Spending
"Earlier this month, the Administration released its initial fiscal year 2018 budget proposal. The Administration's budget outline now calls for cutting overall non-defense appropriations by another
"While the initial budget did not provide many details, this lower funding level raises concerns for SNAP. First, if FNS's administrative budget is cut, that could mean reduced funding for
"Other proposed reductions, such as in the area of job training programs, also can have an impact on SNAP. First, many SNAP state agencies rely upon the job training and other services offered through the Workforce Investment Opportunity Act (WIOA) for at least some of their E&T training programs. Cuts to those programs will mean fewer work slots for E&T participants. And in many cases, the community-based organizations that provide SNAP job training are also working with
"Chairman Conaway rightly described the Administration budget as a "proposal," not policy. As the FY18 appropriations process moves forward however, current law funding for non-defense discretionary (NDD) programs continues to decrease relative to the FY10 level. Even if
Conclusion
"SNAP is an efficient and effective program. It alleviates hunger and poverty and has positive impacts on the long-term outcomes of those who receive its benefits. And, SNAP has exacting standards with respect to eligibility determinations.
"Over the many years that I have worked on this program,
* * *
Footnotes:
1
2
3 CBPP analysis of 2014
4
5
6
7James Ziliak, "Modernizing SNAP Benefits,"
8
9
10
11 For example, the MSPs pick up annual Medicare Part B premiums of about
12 For a more comprehensive discussion of the time limit rule, see:
13
14 "Food Stamp Employment and Training Program," United States General Accounting Office (GAO-3-388),
15
16 Industries at a Glance: Food Services and Drinking Places,
17
18
19
20 Unpublished CBPP analysis of
21
22 Robert Hielsen,
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