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| American Enterprise Institute
For more than 50 years, the Supplemental Nutritional Assistance Program’s (SNAP) success has been built on its reliance on the free market system, by supplementing resources that low-income families have to purchase food through regular channels of trade. SNAP is a cornerstone of the social safety net and kept 8.4 million people, including 3.8 million children, out of poverty in 2014. SNAP benefits the economy, with every $1 in new SNAP benefits generating as much as $1.79 in economic activity.
SNAP responds quickly to increased need in times of economic downturns, providing needed relief to families and strengthening the macroeconomy. Block granting the program would fundamentally undermine the program’s ability to perform these benefits.
SNAP is strictly time-limited for able-bodied, unemployed adults without dependents during normal economic times, and the program could be strengthened by doing more to assist participants with finding employment and rewarding work. Smart federal investments in monitoring could further improve the integrity of the program by reducing fraud and error.
The Supplemental Nutrition Assistance Program (SNAP), formerly known as the Food Stamp Program, makes up the lion’s share of the farm bill, totaling approximately 80 percent of its spending.1 In 2016, 13.6 percent of the population participated in the program, with $66.6 billion spent on benefits.
SNAP is an efficient and effective program. It is designed to work in conjunction with the free market through the normal channels of trade by supplementing the cash resources that a family has to purchase food, so that between SNAP and their other income, a family can purchase an adequate diet. Average monthly benefits in 2016 amounted to $255 per household, or $126 per person—about $4.20 per person per day. Benefits can be used to purchase most foods at grocery stores and farmers markets that are intended to be taken home and prepared, excluding goods such as hot foods intended for immediate consumption, vitamins, paper products, pet foods, alcohol, and tobacco. Benefits typically are paid once per month on an electronic benefits transfer card that can be used in a checkout line like a debit card.
An important goal of SNAP is to address food insecurity—that is, having inadequate or uncertain access to enough food for an active, healthy lifestyle. In 2016, 12.3 percent of households overall were food insecure at some point over the year, and 16.5 percent of households with children experienced food insecurity. As shown in Figure 1, food insecurity rates increased approximately 30 percent during the Great Recession, rising by more than would have been expected from families’ declines in income alone.2 Food insecurity has declined markedly over the past few years but nonetheless remains elevated over prerecession levels. SNAP has been shown to reduce food insecurity.3
The earned income tax credit (EITC) and SNAP are the cornerstones of the social safety net. In 2014, SNAP kept 8.4 million people, including 3.8 million children, out of poverty, after correcting for undercounted benefits in the Current Population Survey.4 Because the EITC is designed to provide benefits only when a household has an employed worker, its effectiveness is limited in times of high unemployment.5 On the other hand, SNAP can both support work when it is available and serve as insurance, propping up food consumption levels during periods of unemployment. While SNAP payments and caseloads increased in the wake of the Great Recession, the caseload has begun to fall slowly since its peak in 2013, and the Congressional Budget Office (CBO) predicts that it will fall further in the coming years in response to a strengthening economy.6 This paper will lay out facts and recent research findings on SNAP and propose potential policy reforms.
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