SNAP Spending Doubles, Let's Try Something Different
SNAP Spending Doubles, Let's Try Something Different
By Chris Edwards
Federal government spending soared 40 percent between 2019 and 2023. The government passed large spending bills in response to the pandemic, but spending remains high today even though the crisis has passed.
The ratcheting‐up of spending is evident with the Supplemental Nutrition Assistance Program (SNAP). SNAP benefits, or food stamps, are administered by the states but funded by the U.S. Department of Agriculture (USDA) and ultimately federal taxpayers.
SNAP spending doubled from $63 billion in 2019 to $127 billion in 2023. The Congressional Budget Office (CBO) projects that spending will dip as pandemic benefits expire but will remain far above the 2019 level, as shown in the chart.
Here are some causes of the SNAP spending spike:
The number of recipients increased from 36 million in 2019 to 42 million in 2023. In 2019, CBO projected that the number would fall to 34 million by 2023.
The March 2020 pandemic bill provided additional SNAP benefits called emergency allotments, and the Biden administration boosted the amounts. The benefits ended in March 2023.
The December 2020 pandemic bill temporarily increased benefits 15 percent, and the Biden administration extended the increase through September 2021.
Some SNAP recipients are subject to a three‐month limit on benefits. This work requirement was suspended during the pandemic but is set to be reinstated in 2023.
Recipients were allowed to delay eligibility recertification during the early pandemic.
The 2018 farm bill directed the USDA to update the Thrifty Food Plan (TFP), which helps to determine benefit amounts. Angela Rachidi says the update should have been cost‐neutral, but in 2021 the USDA permanently boosted overall benefits by 21 percent.
SNAP benefits are adjusted annually for inflation.
Some of these changes were temporary, but the TFP and inflation adjustments boosted benefits permanently. AEI analysts calculate that the maximum benefit for a family of four has jumped 46 percent since 2019, while CBPP analysts calculate that the average per‐person benefit has jumped 50 percent.
SNAP is up for reauthorization in this year’s farm bill, which is an opportunity for policymakers to cut costs. The federal government needs to pursue broad spending reforms to reduce dangerously high budget deficits.
Here are some options for SNAP reform:
Beef up work requirements, as proposed by two dozen House Republicans.
Eliminate broad categorical eligibility, which states use to loosen eligibility standards notes Leslie Ford.
Repeal the 21 percent TFP increase, which was an administrative action that costs taxpayers more than $20 billion a year.
Convert SNAP to a fixed block grant for the states and cut spending.
Devolve the SNAP program, including funding, to the states as part of a broader effort to revive federalism. There are few advantages in funding such programs federally but many disadvantages.
This piece was originally written for The Cato Institute.
Chris Edwards' straightforward explanation of SNAP’s spending spike highlights why there is more pressure today than ever before to improve federal SNAP spending.
In a 2015 Mercatus study, economist Jayson Lusk found that the reduction or elimination of subsidized crop insurance, SNAP, and ethanol production mandates would reduce food prices for many consumers, benefit food producers who are not heavily subsidized by the government, and provide an overall economic benefit to taxpayers across the United States by potentially decreasing taxes.
The Farm-Benefit Myth
Today's federal food assistance programs are evolved versions of emergency aid programs that were initiated during the Great Depression. At that time, American farmers produced a surplus of food. To address this issue, the government created the Commodity Credit Corporation, which purchased much of the excess food and distributed it to hungry Americans.
These programs continued even after the New Deal era, with the government continuing to buy certain farm goods. During President Reagan's tenure, he discovered that there were storage facilities filled with decaying food. In response, he created the Temporary Emergency Food Assistance Program and deployed the U.S. cheese reserves. This is the origin of the term, and sometimes meme, 'government cheese.’
Today’s welfare programs are much more complex, but they still carry the Depression-era assumption that buying excess food (U.S. agricultural products) is good for farmers.
This assumption is incorrect.
Jayson Lusk concluded that, “SNAP may be included in the Farm Bill in part to support agricultural commodity prices for producers, but the evidence shows that it is an inefficient form of support: for every dollar spent by taxpayers, farmers benefit by only one cent.”
Like any publicly funded program, SNAP should be regularly evaluated for its effectiveness and ability to improve society. Veronique de Rugy points out, “Putting cash in people’s pockets and reducing food insecurity are important. But it matters how you do that. And should the government be involved, we shouldn’t ignore the potential tradeoffs of such policies. The changes in food-stamp eligibility combined with other relief programs that were expanded during the pandemic could reduce the incentives to work for most of the non-elderly population. The changes could also reduce income mobility, with all the known consequences for children.”
Further Reading:
Distributional Effects of Selected Farm and Food Policies: The Effects of Crop Insurance, SNAP, and Ethanol Promotion |Jayson L. Lusk
Food Stamps and Work Disincentives | Veronique de Rugy for National Review
President Biden’s Overreach on SNAP | Angela Rachidi for American Enterprise Institute
Participation in Major Antipoverty Programs Since the Financial Crisis | Veronique de Rugy for The Mercatus Center
The Great Bush-Obama Food Stamp Expansion | Veronique de Rugy for The Mercatus Center