To stave off an economic free-fall from the COVID-19 pandemic, lawmakers on both sides of the aisle are still debating whether to provide cash payments for every American. Congress prevented Supplemental Nutrition Assistance Program (SNAP) eligibility restrictions during a public health emergency, and gave states some flexibility to ask for emergency allotments, but did not directly increase benefits.
But as Congress considers additional stimulus measures, another efficient and equitable vehicle for economic stabilization should be on the table: raising food assistance benefits for the more than 36 million Americans who currently receive SNAP and reversing Trump administration regulations to reduce the SNAP rolls. Notably, last week a federal judge blocked the administration’s plan to eliminate waivers from a work and job training requirement, which would have removed some 700,000 able-bodied adults off SNAP.
As the nation’s largest food assistance program, SNAP provides individuals an average of $122 per month ($240 per household). SNAP dollars can only be used for groceries prepared at home and are spent—almost as soon as they are received—in supermarkets and grocery stores across the nation. In fiscal year 2019, SNAP disbursed about $54 billion in benefits to the nation’s most vulnerable.
While the primary goal of SNAP is to ensure that low-income households do not go hungry, the program is also a very effective economic stimulus. Every SNAP dollar redeemed at a local grocer generates income for farmers, food processors, transportation companies, store cashiers, and many other food-related businesses. Using SNAP for food frees up a household’s remaining cash for other necessities, which support non-food businesses in local communities. Studies have shown that every $1 increase in SNAP benefits generates more than $1.50 in economic activity.
The economic impacts are significant. Because low-income households spend their benefits soon after they receive them (97 percent of benefits are spent within a month), SNAP dollars quickly infuse desperately needed cash into local communities at a much faster rate than dollars received by more affluent people, who tend to save some of their extra income. One U.S. Department of Agriculture economic model estimates that $1 billion in new SNAP benefits issued during a recession raises GDP by $1.54 billion and supports 13,560 jobs, particularly in the manufacturing, trade, and transportation sectors.
SNAP was used to stimulate the economy during the Great Recession, when the 2009 American Recovery and Reinvestment Act increased the maximum SNAP benefit by 13.6 percent. The additional money was added to recipients’ electronic benefits transfer cards just two weeks after the law was enacted. As a result of this boost to SNAP, an estimated 1 million additional Americans were kept out of poverty.
The economic impact of the coronavirus pandemic demands aggressive responses. Directing stimulus money into the SNAP program by dramatically increasing benefits would create large economic impacts. Continuing to allow states to waive work requirements for able-bodied adults would prevent hundreds of thousands from being thrown off SNAP. (On Thursday, the administration signaled that it might not appeal a judge’s ruling blocking the work requirement from taking effect.) Increasing and expanding SNAP would help the neediest Americans who are most likely to bear the brunt of the impending recession.
Such changes would not only support economic recovery but would also improve public health by ensuring that low-income families have enough food to remain healthy throughout this crisis.
Top photo CC-licensed by Walmart.