SNAP Costs Falling, Expected to Fall Further
Trend Reflects Shrinking Caseloads and Recent Benefit Cut
Updated May 28, 2014
SNAP spending, which doubled as a share of the economy (gross domestic product or GDP) in the wake of the Great Recession, has begun to decline, as the Congressional Budget Office (CBO) and other experts expected.
- SNAP spending as a share of GDP was stable in fiscal years 2012 and 2013 and is on track to fall substantially in 2014 and thereafter. Government data show that spending on SNAP (formerly food stamps) fell slightly as a share of GDP in 2012 and 2013 and is expected to fall by 9 percent in 2014. As the economic recovery continues and fewer low-income people qualify for SNAP, CBO expects SNAP spending to fall further in future years, returning to its 1995 levels as a share of GDP by 2019. (See Figure 1.)
- The end of the Recovery Act’s benefit increase has contributed to the large drop in SNAP spending in 2014. U.S. Department of Agriculture (USDA) data show that due to the November 1, 2013 expiration of a SNAP benefit increase in the 2009 Recovery Act, average benefits fell by about 7 to 8 percent, or over $400 million, in November. Table 2 shows the average benefit and dollar amounts of the decline in each state. Over the first six months of fiscal year 2014 (October 2013 through April 2014), SNAP outlays were 7 percent lower than the same period of fiscal year 2013 on a nominal basis, rather than as a share of GDP.
- The number of SNAP participants has started to fall. SNAP caseload growth slowed in 2011 and 2012. Caseloads held steady in 2013 and have now begun to decline: fewer people participated in SNAP in each of the last six months for which data are available (September 2013 through February 2014) than in the same months one year earlier; 1.6 million fewer people participated in SNAP in February 2014 than when participation peaked in December 2012. SNAP participation has fallen in 47 states and, in the other states, the rate of growth has slowed substantially. This trend of falling caseloads follows the pattern of recovery from previous recessions.
Background: SNAP Grew Significantly in Response to Recession
SNAP’s caseload growth in recent years resulted primarily from more households qualifying because of the recession and more eligible households applying for help. CBO has confirmed that “the primary reason for the increase in the number of participants was the deep recession . . . and subsequent slow recovery; there were no significant legislative expansions of eligibility.”
SNAP caseloads grew in part because more households qualified for the program due to the recession and lagging recovery. The number of people in households with incomes below 130 percent of the poverty line (the SNAP income limit) rose from 54 million in 2007, before the recession, to 60 million in 2009 and 65 million in 2012, allowing more households to qualify for help from the program.
Participation among eligible individuals also increased, from 69 percent in 2007 to 79 percent in 2011 (the most recent year available). Several factors likely contributed. The widespread and prolonged effects of the recession, particularly the record long-term unemployment, may have made it more difficult for family members and communities to help people struggling to make ends meet. Households that already were poor became poorer during the recession and may have been in greater need of help. In addition, states continued efforts begun before the recession to reach more eligible households, particularly working families and senior citizens, by simplifying SNAP policies and procedures.
The number of SNAP recipients increased in every state, and some of the states hit hardest by the recession saw the largest caseload increases. For example, Nevada, Florida, Idaho, and Utah, the four states with the greatest growth in the number of unemployed workers between 2007 and 2011, also had the greatest growth in the number of SNAP recipients.
Adding to SNAP costs, the 2009 Recovery Act temporarily boosted SNAP benefits as a fast and effective economic stimulus measure to help push against the rising tide of hardship for low-income Americans. Economists consider SNAP one of the most effective forms of economic stimulus. Moody’s Analytics estimates that in a weak economy, every dollar increase in SNAP benefits generates about $1.70 in economic activity. Similarly, CBO has found that SNAP has one of the largest “bangs-for-the buck” (i.e., increase in economic activity and employment per budgetary dollar spent) among a broad range of policies for stimulating economic growth and creating jobs in a weak economy. The Recovery Act’s additional SNAP benefits raised SNAP spending by almost 20 percent in fiscal years 2010 and 2011 and between 8 and 11 percent in each of fiscal years 2009, 2012, and 2013.
Two changes to many states’ SNAP eligibility rules also contributed somewhat to caseload growth during the recession. First, between 2009 and 2011, additional states adopted the “broad-based categorical eligibility” option, which allows them to provide food assistance to households — primarily low-income working families and seniors — with gross incomes or assets modestly above federal SNAP limits but disposable incomes in most cases below the poverty line. Second, because of the recession, more areas qualified for waivers from the three-month time limit on SNAP benefits for unemployed childless adults. This waiver authority, which applies to areas with high unemployment, has existed under the same criteria since the time limit took effect as part of the 1996 welfare law.
However, economists Peter Ganong and Jeffrey Liebman found that these two factors explain less than a fifth of the increase in SNAP enrollment between 2007 and 2011. Increased adoption of broad-based categorical eligibility accounted for 8 percent of the increase, while the temporary expansion of waivers from the time limit due to the recession accounted for another 10 percent.
Caseloads Have Started to Fall and Are Projected to Fall Further
As the economy started to recover, SNAP caseload and spending growth slowed substantially. Caseloads leveled off in 2011 and 2012 and held steady in 2013. (See Figure 2.) Caseloads were high during this period because the economy remained weak, with persistent long-term unemployment and employment rates well below pre-recession levels.
The most recent data, however, for the first half of fiscal year 2014, show emerging signs that SNAP caseloads are beginning to decline. Fewer people participated in SNAP in each of the last six months for which data are available (September 2013 through February 2014) than in the same months of the prior year. In February 2014, 1.6 million fewer people participated in the program than in December 2012, when participation peaked.
Caseloads are falling in 47 states, according to state data. Based on data through February 2014, the states with the largest declines from a year earlier include Georgia (-13 percent), Utah (-11 percent), Louisiana (-9 percent), North Carolina (-9 percent), Vermont (-8 percent), Kansas (-8 percent), and Missouri (-7 percent). CBO expects that as the economy improves, the number of participants nationally will fall by about 2 to 4 percent each year over the next decade: from 47.7 million in fiscal year 2013 to 46.8 million in 2014, 46 million in 2015, and 33.6 million by 2024.
It will take several years for researchers to have the data needed to rigorously assess the causes of today’s caseload trends, but the economic recovery is likely playing the primary role. SNAP caseloads have historically tracked economic conditions, rising when the economy weakened and then falling — with a several-year lag — when it recovered. As CBO has observed:
Even as the unemployment rate began to decline from its 1992, 2003, and 2010 peaks, decreases in [SNAP] participation typically lagged improvement in the economy by several years. For example, the number of SNAP participants rose steadily from about 20 million in the fall of 1989 to more than 27 million in April 1994 — nearly two years after the unemployment rate began to fall and a full three years after the official end of the recession in March 1991.
Other factors, however, may also be playing a role. Notably:
- Administrative barriers in some states. Some of the states with especially large declines have recently experienced delays in processing SNAP applications. Media reports have described problems with SNAP administration in Georgia and North Carolina, for example. To the extent that applicants or participants are experiencing difficulties obtaining SNAP benefits, participation may be suppressed in some places.
- November 2013 benefit cut. The November 2013 across-the-board benefit cut (discussed below) may have caused some eligible SNAP households to leave the program or not apply. Research has found that take-up of SNAP among eligible households is higher when benefits are higher. When facing lower benefits, some eligible households find that applying and maintaining eligibility are not worth the small benefits they anticipate they would receive.
- Reinstatement of three-month time limit. A few states with large caseload declines, including Kansas and Vermont, recently reinstated the three-month time limit on participation by unemployed childless adults. These states had waived the time limit because of high unemployment but either became ineligible for waivers as unemployment fell or opted not to request a waiver for fiscal year 2014. While the population subject to the time limit is a small share of the total caseload and this is not a large factor nationally, it may have an impact in some states.
Recovery Act Expiration Also a Major Factor in Falling SNAP Costs
Declining SNAP caseloads are a major factor in falling SNAP costs over the longer run, but for fiscal year 2014, the November 1 expiration of the Recovery Act’s temporary benefit increase — which will cut SNAP spending by about $5 billion for the year and affected every SNAP household in almost every state — is a larger factor. (See Table 2.) The average decrease in benefits was $19 per household per month, or about 7 percent — equivalent to ten meals a month. Households of the same size experienced the same dollar cut in almost every state (see Figure 3), so households receiving less than the maximum benefit experienced a larger percentage cut. SNAP benefits are based on a household’s expected contribution toward buying food; households with no disposable income receive the maximum SNAP allotment.
With the expiration of the Recovery Act benefit increase, the average SNAP benefit per person per meal fell to just $1.39 per person per month, from about $1.49. Benefits will remain at this lower level for the remainder of fiscal year 2014. In future years, SNAP maximum benefit levels — following the program’s standard benefit adjustments — will simply keep pace with food price inflation.
|Table 1 |
Difference in SNAP Benefits Resulting From the Expiration
of the Recovery Act Boost
|October 2013||November 2013||Decrease in benefits||% Decrease|
|Maximum benefit (Household of 3)||$526||$497||-$29||-5.5%|
|Average Benefit per Household||$276||$257||-$19||-7.0%|
|Average Benefit per Person||$134||$125||-$9||-7.0%|
|Source: CBPP Calculations Based on USDA Program Data. |
Note: Data differ slightly from published numbers due to two adjustments to data for New York and Alaska. See footnote 2 for an explanation.
SNAP spending is almost certain to continue to decline in 2014, primarily because of the expiration of the Recovery Act’s benefit increase. In subsequent years, CBO and others expect SNAP spending to decline further as the economy recovers and the number of SNAP participants falls. CBO expects SNAP spending to return to its 1995 levels as a share of GDP by 2019.
Once the economy has fully recovered, SNAP costs are expected to rise only in response to growth in the size of the low-income population and increases in food prices. Unlike health care programs and Social Security, SNAP faces no demographic or programmatic pressures that will cause its costs to grow faster than the overall economy. Thus, SNAP is not contributing to the nation’s long-term fiscal problems.
To the extent that recent SNAP caseload declines reflect improving economic circumstances among low-income households, they are welcome news. As noted, however, certain policy changes also may be contributing to the caseload declines.
Another key question is whether states will be able to maintain their progress in reaching eligible households. During the recession, SNAP caseloads grew both because more people qualified for help (due to the weak economy) and because a higher share of eligible people applied for and received benefits. To the extent that administrative barriers are a factor in SNAP caseload declines, state and federal policymakers will need to act quickly to address the problems. States have made significant gains in lowering barriers to SNAP for eligible individuals and should assess whether some eligible individuals face barriers to applying for and receiving SNAP, which could reverse those gains and increase hunger and hardship.
|Table 2 |
Decrease in Average Benefits Resulting From the Expiration of the Recovery Act’s Temporary Benefit Increase, October to November 2013
|Average Benefits per Household, October 2013||Average Benefits per Household, November 2013||Approximate Cut Per Household, October to November 2013||Total Monthly Loss in Benefits to State (millions)3||Approximate Total Loss in Benefits to State, FY 2014 (millions)4|
|District of Columbia||$245||$229||-$16||-$1||-$15|
|Sources: CBPP calculations based on USDA SNAP Program Data and New York State Office of Temporary and Disability Assistance Monthly Caseload Statistics. |
1Alaska experienced an increase in participation and benefits in October 2013 (as every October), due to residents’ receipt of the annual oil dividends. Data shown here are for September 2013 instead of October 2013. New York residents experienced an increase in benefits due to a one-time settlement payment, and thus data are for December 2013 instead of September 2013.
2USDA sets SNAP benefits for Alaska, Hawaii, Guam, and the Virgin Islands differently from the rest of the United States because the cost of food is different in these areas. Hawaii’s Thrifty Food Plan exceeded the Recovery Act levels beginning in fiscal year 2013, and therefore its SNAP benefits were already set higher than Recovery Act levels, and participants did not experience a decrease in maximum benefits in November 2013.
3This column estimates the benefit loss from October to November 2013 by multiplying the average cut per household by the number of participating households in November 2013. The total decrease in benefits that a state experienced may be larger as a result of declining participation in addition to the drop in per-household benefits.
4This column multiplies the November loss in benefits by 11 months to simulate the 11 months of fiscal year 2014 that the Recovery Act cut is in effect (November 2013-September 2014). This assumes that participation will remain flat, so if SNAP caseloads rise or fall, the total cut in the state over the 11 months will be correspondingly higher or lower. Because caseloads are falling in most states, the amount of the aggregate cut likely is modestly lower than shown here.
|Table 3 |
Number of SNAP Participants Is Declining in Most States
|SNAP Participants, February 2013 (000s)||SNAP Participants, January 2014 (000s)||SNAP Participants, February 2014 (000s)||% Decrease in Participants, February 2013 to February 2014||% Decrease in Participants, January 2014 to February 2014|
|District of Columbia||145||142||141||-2.6%||-0.8%|
|Sources: USDA SNAP Program Data.|
 While nominal spending increased somewhat in fiscal years 2012 and 2013, the economy grew faster than SNAP spending, so SNAP as a share of GDP fell slightly.
 We conducted this analysis only for November 2013 because in subsequent months it is more difficult to isolate the effects of the benefit cut from the falling caseloads. These numbers differ slightly from the published USDA numbers because CBPP made two adjustments to account for one-month anomalies in state data and better reflect the likely annual trend. Specifically, because New York made a one-time legal settlement payment to some SNAP recipients in November 2013, we used data for December 2013 from New York State’s Office of Temporary and Disability Assistance (ODTA) Monthly Caseload Statistics instead of November 2013. For Alaska we used participation and benefit levels for September 2013 instead of October 2013, as Alaska experiences an annual one-month decline in participation and benefits due to payment of oil dividends to residents.
 For this paper the term “state” includes the District of Columbia, Guam, and the Virgin Islands, which are treated as states in SNAP.
 Congressional Budget Office, “The Supplemental Nutrition Assistance Program,” April 2012.
 CBPP analysis of the U.S. Census Bureau’s Current Population Survey (CPS).
 Esa Eslami and Karen Cunnyngham, “Supplemental Nutrition Assistance Program Participation Rates: Fiscal Years 2010 and 2011,” U.S. Department of Agriculture, February 2014, http://www.fns.usda.gov/sites/default/files/trends2010-2011.pdf. The estimated participation rates are not directly comparable between 2007 and 2011 because of revisions to the methodology. More recent available data suggest that the rise in SNAP participation rates among those eligible has continued since 2011.
 Both Mark Zandi of Moody’s Analytics and CBO have listed SNAP as one of the most effective policies to increase economic growth and employment in a weak economy. CBO has generally ranked transfer payments to individuals, including SNAP, as one of the top stimulus multipliers as well. See, for example, “Estimated Impact of the American Recovery and Reinvestment Act on Employment and Economic Output in 2013,” February 2014, http://www.cbo.gov/sites/default/files/cbofiles/attachments/45122-ARRA.pdf. Zandi has consistently ranked SNAP as one of the top fiscal stimulus multipliers (see, for example, here: https://www.economy.com/mark-zandi/documents/2012-02-07-JEC-Payroll-Tax.pdf).
 For more information see Stacy Dean and Dorothy Rosenbaum, “SNAP Benefits Will Be Cut for Nearly All Participants in November 2013,” Center on Budget and Policy Priorities, revised August 2, 2013, http://www.cbpp.org/cms/?fa=view&id=3899.
 Neither of these two changes to states’ eligibility rules resulted from recent legislation. Both are state options from the 1996 welfare law. The Recovery Act suspended the three-month time limit for the rest of 2009 and 2010, but because of the high unemployment associated with the recession, most areas already were eligible for a waiver under long-standing rules. In January 2009 the Bush Administration clarified that states that qualify for the newly created Emergency Unemployment Compensation (EUC) program would be treated the same as states that qualify for the Extended Benefits (EB) unemployment insurance program. For more information on these two provisions, see Dorothy Rosenbaum, Stacy Dean, and Robert Greenstein, “Cuts Contained in SNAP Bill Coming to the House Floor Would Affect Millions of Low-Income Americans,” Center on Budget and Policy Priorities, September 17, 2013.
 See Peter Ganong and Jeffrey B. Liebman, “The Decline, Rebound, and Further Rise in SNAP Enrollment: Disentangling Business Cycle Fluctuations and Policy Changes,” National Bureau of Economic Research, Working Paper 19363, August 2013, http://www.nber.org/papers/w19363.pdf?new_window=1.
Recent CBO estimates show that a relatively small share of SNAP participants’ eligibility depends on these two rules. According to CBO, expanded categorical eligibility in all states, including those that adopted it before 2009, accounts for only about 2 percent of program costs. CBO also estimated that eliminating all waivers from the three-month time limit (not just the waivers for areas that had high unemployment because of the recession) would have cut SNAP participation in 2014 by less than 4 percent
 The decline in the unemployment rate over much of this period overstated the improvement in the labor market. Because people continued to drop out or stay out of the labor force even as the economy recovered, the share of the adult population with a job (the employment rate) has barely improved since the depth of the recession. As Federal Reserve Chair Janet Yellen said recently, “In some ways, the job market is tougher now than in any recession.” See Janet L. Yellen, “What is the Federal Reserve Doing to Promote a Stronger Job Market,” March 31, 2014. http://www.federalreserve.gov/newsevents/speech/yellen20140331a.htm. See also Chad Stone, Jared Bernstein, Arloc Sherman and Dottie Rosenbaum, “SNAP Enrollment Remains High Because the Job Market Remains Weak,” Center on Budget and Policy Priorities, revised July 30, 2013, http://www.cbpp.org/cms/index.cfm?fa=view&id=3996.
 This number is based on an assessment of whether each state’s number of SNAP participants has peaked and is now falling. When assessing at state’s “peak” SNAP caseload we have not included months when the number of SNAP participants in the state was elevated because of a disaster or other anomaly. The states that we identify as perhaps not having “peaked” as of February 2014 are: California, Connecticut, Hawaii, Nevada, Rhode Island, and West Virginia.
 Congressional Budget Office, “The Supplemental Nutrition Assistance Program,” April 2012, http://www.cbo.gov/sites/default/files/cbofiles/attachments/04-19-SNAP.pdf.
 See, for example, Lynn Bonner, “NC Counties Receive Staffing Help to Get Through Food Stamp Backlog,” Charlotte Observer, January 10, 2014, and Craig Schneider, “Food Stamp Woes Put $76 Million at Risk,” Atlanta Journal-Constitution, March 30, 2014.
 Every state except Hawaii experienced a decrease in benefits from October to November 2013 because of the expiration of the Recovery Act provision, but we used December 2013 participant and benefits data for New York because a one-month settlement payment in November 2013 clouds the picture; and we used September participants and benefits data for Alaska instead of October data because certain dividend payments to households in October result in a pattern that is not representative.
 USDA sets SNAP benefits for Alaska, Hawaii, Guam, and the Virgin Islands differently from the rest of the United States because the cost of food is different in these areas. Hawaii’s Thrifty Food Plan exceeded the Recovery Act levels beginning in fiscal year 2013, which resulted in its SNAP benefits already being set higher than Recovery Act levels, and therefore its residents did not experience a cut in November 2013 as a result of the Recovery Act’s expiration. SNAP households in Alaska, Guam, and the Virgin Islands experienced a benefit cut in November 2013 that was the same in proportional terms, but slightly different in dollar terms, from the cut in the 48 other states and the District of Columbia.
 For more information on benefit calculation, see “A Quick Guide to SNAP Eligibility and Benefits,” Center on Budget and Policy Priorities, revised August 30, 2013, http://www.cbpp.org/cms/index.cfm?fa=view&id=1269.