BEYOND THE NUMBERS
Setting the Record Straight About SNAP Spending and the Upcoming Farm Bill
The Congressional Budget Office (CBO) last week released new projections of SNAP spending under current rules for the next ten years. CBO projects SNAP spending will fall this year as temporary COVID-19 relief measures expire and then will remain flat (even without adjusting for inflation) for the next decade. Some policymakers have suggested these estimates are problematic, but these concerns are misplaced.
First, SNAP is a critical, basic protection against hunger that should be strengthened, not cut. SNAP is broadly available to households with low incomes and its spending is driven by need: the number of people who qualify for assistance under program rules and who apply. The program helps more than 40 million children, older adults, working adults, parents, people with disabilities and others in low-income families each month, or about 1 in 8 people in the U.S. The average SNAP benefit is very modest — only about $6.10 per person per day (which includes the recent Thrifty Food Plan revision, discussed below). Research has linked SNAP benefits to improved health, education, and economic outcomes, and to lower medical costs.
Second, SNAP’s share of farm bill spending doesn’t affect farm programs. SNAP’s share of projected farm bill spending has grown since 2018. But this does not mean that funding is diverted from farm programs or that other farm bill priorities are crowded out, as some policymakers have claimed. Any projected increase in SNAP spending does not take away from support for farmers. CBO’s projections for farm program spending depend on factors including commodity prices, program rules, and funding levels set in law; their forecasts for SNAP spending have no bearing on projected farm program spending.
Third, SNAP spending has increased in recent years — but for reasons that are critical to SNAP meeting its core purpose, not due to unexpected problems.
- Temporary pandemic-related SNAP benefit improvements helped stave off food insecurity but will soon end. Pandemic-related additional SNAP benefits are ending after February. As a result, SNAP spending is expected to fall by $3 billion per month starting in March (a more than 25 percent reduction). Other pandemic-related eligibility expansions will also phase out once the public health emergency ends in May, further reducing SNAP spending. These and other temporary policies, as well as SNAP’s ability to expand automatically to meet need, helped ensure that overall rates of food insecurity did not meaningfully increase in 2020 or 2021 compared to 2019, and for families with children reached a two-decade low in 2021.
- At Congress’ direction, the Department of Agriculture (USDA) brought SNAP benefit levels more in line with the cost of a healthy diet. Based on a directive from the bipartisan 2018 farm bill, USDA revised the Thrifty Food Plan (TFP), which is the basis of SNAP benefit levels. It represents a nutritionally adequate diet that low-income households can purchase and prepare, assuming they take significant steps to stretch their food budget. Before the reevaluation, SNAP benefits were badly out of line with the most recent dietary recommendations and the economic realities most low-income households face when trying to buy and prepare healthy foods. The revised TFP raised the level of SNAP benefits (in real terms) for the first time in more than 40 years — by about $1.35 per person per day. This modest but meaningful increase is estimated to lift about 2.4 million people, including more than 1 million children, above the poverty line. While previous USDA revisions to the TFP had been cost neutral under the Administration's discretion, in Section 4002 of the 2018 farm bill Congress explicitly directed the USDA to "re-evaluate and publish" the TFP taking into account current food prices and other factors.
- SNAP benefits adjust automatically for inflation every year. SNAP spending has also increased (in nominal terms) due to recent high food price inflation. SNAP has an annual cost-of-living adjustment that keeps the value of benefits from eroding over time, just as is the case with programs like Social Security and Medicare. CBO’s forecast for SNAP costs for the 2024-2033 period are higher than the forecast it did in 2018 for the same period, and about one-quarter of the increase is due to higher food prices. (While food price inflation has moderated substantially, food prices are expected to remain at higher levels than was previously predicted.)
Fourth, CBO’s forecast shows that SNAP spending will fall in fiscal year 2023 and will not increase over the next decade.
- Under CBO’s February 2023 baseline, even with higher food prices and the revision to the Thrifty Food Plan, SNAP spending is expected to fall in fiscal year 2023 because of the end of the temporary pandemic spending, and will, even in nominal terms, remain flat over the next decade.
- Many economists and budget experts use comparisons to U.S. gross domestic product to assess the cost of individual programs and government overall as a way of determining whether the program area or government as a whole is projected to comprise a larger share of national resources over time. Since SNAP is projected to grow slower than the economy and return to pre-pandemic levels as a share of GDP by the end of the next decade, there is no basis for claims that SNAP is contributing to the nation’s long-term budget growth.
Fifth, SNAP supports farmers, the agricultural economy, and rural communities.
- SNAP helps farmers and rural Americans. A study by USDA’s Economic Research Service showed that increased spending on SNAP benefits would boost income for the agriculture industry and support new agricultural sector jobs. Additionally, the share of people participating in SNAP is typically higher in non-metro counties than in metro counties, and SNAP had a greater impact in reducing poverty in non-metro counties than in metro areas, according to a recent American Enterprise Institute study.
- Like many farm programs, SNAP is a countercyclical support for families. Just as farm program spending increases when commodity prices are low, spending on SNAP increases when economic conditions mean more people need assistance. Conversely, SNAP spending typically declines as the economy improves and fewer families need help affording food.
