SNAP Costs Declining, Expected to Fall Much Further
Trend Reflects Recent Benefit Reduction and Lower Caseloads
February 9, 2015
SNAP spending, which rose substantially 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 fell as a share of GDP in 2014, after stabilizing in 2012 and 2013. Spending on SNAP (formerly food stamps) fell by 11 percent in 2014 as a share of GDP. SNAP spending also fell in 2014 on a nominal basis, by 8 percent. It fell by 9 percent after adjusting for inflation.
- CBO's forecast indicates SNAP is not part of the long-term budget problem. 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 level as a share of GDP by 2020. (See Figure 1.) Thus, while CBO recently projected that the overall gap between federal spending and revenues will grow starting in 2018, SNAP is not contributing to this problem; CBO forecasts that SNAP will decline as a share of the economy over the entire ten-year budget window.
- The end of the 2009 Recovery Act's benefit increase contributed to the large drop in SNAP spending in 2014. Due to the November 1, 2013 expiration of the benefit increase, average benefits fell by about 7 percent (about $450 million a month) in the rest of fiscal year 2014, U.S. Department of Agriculture (USDA) data show.
- The number of SNAP participants has started to fall. SNAP caseloads grew significantly between 2007 and 2011 as the recession and lagging economic recovery led more low-income households to qualify and apply for help. SNAP caseload growth slowed substantially in 2012 and 2013, however, and caseloads fell by about 2 percent in fiscal year 2014. Fewer people participated in SNAP in each of the last 15 months for which data are available (September 2013 through November 2014) than in the same month one year earlier; 1.5 million fewer people participated in SNAP in November 2014 than when participation peaked in December 2012. In 43 states, the average number of SNAP participants was lower in fiscal year 2014 than in fiscal year 2013.
Background: SNAP Grew Significantly in Response to Recession
SNAP's caseload growth from 2007 to 2013 resulted primarily from more households qualifying due to the steep recession and sluggish initial recovery, and a larger share of eligible households applying for help; Figure 2 shows the considerable increases in both areas. 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."
Census data show that the number of people in households with incomes below SNAP's income limit of 130 percent of the poverty line rose from 54 million in 2007 (before the recession) to 60 million in 2009 and 64 million in 2013, allowing more households to qualify for help from the program. The participation rate among eligible individuals also increased, from 69 percent in 2007 to 83 percent in 2012 (the most recent year available).
Several factors likely contributed to the increase in the participation rate. 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. Finally, research has found that take-up of SNAP among eligible households is higher when benefits are higher, so the Recovery Act's temporary SNAP benefit increase may also have contributed to higher participation rates.
The deep recession expanded SNAP caseloads 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 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 during this period.
Adding to SNAP costs, the 2009 Recovery Act temporarily boosted SNAP benefits to provide fast and effective economic stimulus and 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., increases 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 benefit boost raised SNAP spending (compared to what it otherwise would have been) by almost 20 percent in fiscal years 2010 and 2011 and between 8 and 11 percent in 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, more 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 of the country qualified for temporary 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 Congress established it (along with the time limit itself) in the 1996 welfare law. (As discussed in detail below, the number of areas eligible for waivers is shrinking as the economy recovers.)
Economists Peter Ganong and Jeffrey Liebman found that these two factors related to state eligibility rules 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 growth in temporary waivers accounted for another 10 percent.
Caseloads Have Started Falling and Are Projected to Fall Further
Annual SNAP caseload growth slowed to 4 percent in 2012 and 2 percent in 2013. In 2014 SNAP caseloads declined in most states; as a result, the national SNAP caseload fell by 2 percent. (See Figure 3.)
Nationally, fewer people participated in SNAP in each of the last 15 months for which data are available (September 2013 through November 2014) than in the same month of the prior year; 1.5 million fewer people participated in SNAP in November 2014 than in December 2012, when participation peaked.
CBO expects that as the economy improves, the number of participants will fall by about 2 to 4 percent each year over the next decade: from 46.5 million in fiscal year 2014 to 46.0 million in 2015, 44.3 million in 2016, and 32.8 million by 2025. By 2025 CBO forecasts that the share of the population receiving SNAP will return to close to 2007 levels (about 9 percent.)
Most States Have Seen Caseload Declines
During the recession and slow recovery (that is, 2007 through 2012), every state saw substantial SNAP caseload increases. The picture has not been as uniform across the states in the two years since caseloads peaked, but in 43 states the average number of SNAP participants was lower in fiscal year 2014 than in fiscal year 2013. A few states saw small caseload increases, though at a much slower rate than in prior years. (See Figure 4.)
As Figure 3 shows, SNAP caseloads nationally have been flat for the most recent six months, after declining for several months from late 2013 to early 2014. Caseload trends within individual states have varied somewhat over the past one to two years:
- The most common pattern, occurring in about half the states, is a consistent caseload decline following a peak in late 2012. These states have about 40 percent of all SNAP participants.
- In about ten states, caseloads stopped growing but have been essentially flat since. These states have 20 percent of SNAP participants.
- In about ten other states, caseloads fell for a period of time but have held steady or risen slightly in recent months. These states have about 20 percent of all SNAP participants.
- In about five states, caseloads fell and then rose substantially, approaching or surpassing previous peaks. For example, in Florida and New Mexico, caseloads fell for several months but then rebounded to new highs. These states have about 15 percent of SNAP participants.
- In four states, caseloads are apparently still growing. Some of them, such as Nevada, were hit especially hard by the recession and are experiencing a slower recovery. These states have about 5 percent of all SNAP participants.
Factors Driving SNAP Caseload Trends
The data needed to rigorously assess the causes of recent caseload trends won't be available for several years, but the economic recovery is likely playing a major role. SNAP caseloads have historically tracked economic conditions, rising when the economy weakens and then falling -- with a several-year lag -- when it recovers. 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.
The recent declines in SNAP caseloads suggest that this pattern, with some delay, is holding for this recovery. Nonetheless, some critics have suggested that the fact that SNAP enrollment has not declined in tandem with the recent decline in the unemployment rate indicates a problem with the program. The reality, however, is that the labor market for low-income households is much weaker than the overall unemployment rate might suggest.
- The share of the population age 16 and over with a job (known as the employment-population ratio) plummeted during the Great Recession and its immediate aftermath and has regained little ground since. After falling from 63.0 percent to 58.4 percent from 2007 to 2011, it has risen only to 59.0 percent in 2014. Unlike the unemployment rate, this measure reflects not only the effect of unemployment but also the effect of people who would like to work dropping out or staying out of the labor force because they think they have little prospect of finding a job.
- Long-term unemployment hit record highs in the recent recession and remains unusually high; in January 2015, more than three in ten (31.5 percent) of the nation's 9.0 million unemployed workers had been looking for work for 27 weeks or longer. By contrast, the long-term unemployed never constituted more than 26 percent of all unemployed workers in any prior recession back to World War II. Workers who have been unemployed for more than six months are only half as likely as those unemployed for shorter periods to have found employment by one year later; they also are more likely to have exhausted assets and other support and to seek help from SNAP.
- The number of unemployed workers not receiving unemployment insurance (UI) benefits -- the group of the unemployed most likely to qualify for SNAP because they have neither wages nor UI benefits -- has continued to grow. It was actually higher in 2014 (6.9 million) than at the bottom of the recession (5.0 million in 2010). The share of unemployed workers receiving UI is at its lowest point on record in data going back to 1971.
- The share of workers who would like a full-time job but are working part time because they can't find a full-time job neared historic highs during the recession and remains elevated.
- Finally, poverty and food insecurity stayed well above pre-recession levels in 2013. Data for 2014 are not yet available for these measures.
Two other factors may help explain why SNAP caseloads have not fallen more in recent years. First, low-wage workers often are eligible for SNAP, and a large share of SNAP recipients who can work do work. A parent with two children who works 35 hours a week at $10 an hour will qualify for about $300 a month in SNAP benefits. The share of SNAP households that have earnings while participating in SNAP has risen in recent decades and continued to grow during and after the recession. (See Figure 5.) More than half of families with children that receive SNAP have earnings while receiving SNAP benefits. Thus, while unemployment statistics are helpful in understanding the economy's impact on SNAP caseloads, many employed low-wage workers receive help from the program. When people leave the ranks of the unemployed for a low-wage job as the economy slowly recovers, they often remain eligible for SNAP.
Second, as discussed above, SNAP is doing much better at reaching those who are eligible, especially working families. Participation among eligible individuals in low-income working families rose from 43 percent to 72 percent between 2002 and 2012. (See Figure 6.) If participation rates have continued to improve since 2012, this could have partly offset the caseload decline resulting from a modestly stronger economy lifting some people above SNAP eligibility. For example, California and Nevada -- two of the states with the largest recent growth in SNAP caseloads -- historically had among the lowest SNAP participation rates. These states may be seeing substantial increases in participation rates, which could help account for their caseload growth.
At the same time, factors other than an improving economy may be pushing SNAP caseloads down, including:
- Return of the three-month time limit in some areas. Several states with large caseload declines, including Kansas, Utah, and Vermont, reinstated the three-month time limit for 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. The caseload declines they have since experienced may foreshadow the impact in other states of ending the waivers, as discussed below.
Administrative barriers in some states. Some of the states with especially large declines experienced delays in processing SNAP applications and other administrative problems over the last year or more. Media reports have described problems with SNAP administration in Georgia, Maine, Missouri, and North Carolina, for example. To the extent that applicants or participants have trouble obtaining SNAP benefits, this may suppress participation in some places.
- November 2013 benefit cut. The November 2013 across-the-board benefit cut may have caused some eligible SNAP households to leave the program or not apply. As mentioned above, take-up of SNAP among eligible households is higher when benefits are higher. When benefits are lower, some eligible households conclude that applying and maintaining eligibility are not worth the small benefits they expect to receive.
Recovery Act Expiration Is Major Factor in Falling SNAP Costs
Declining caseloads are expected to be a major factor in the decline in SNAP costs that CBO projects over the coming decade. For fiscal year 2014, however, the November 1 expiration of the Recovery Act's temporary benefit increase -- which cut SNAP spending by about $5 billion for the year and affected every SNAP household in almost every state -- is a larger factor. Benefits fell by an average of $19 per household per month, or about 7 percent. Households of the same size experienced the same dollar cut in almost every state (see Figure 7), 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.
The expiration of the Recovery Act benefit increase lowered the average SNAP benefit per person per meal to $1.38, from about $1.49. In future years, SNAP maximum benefit levels -- following the program's standard benefit adjustments -- will simply keep pace with food price inflation.
CBO and others expect SNAP spending to continue to decline as the economy recovers and the number of SNAP participants falls. CBO expects SNAP spending to fall every year as a share of GDP, returning to its 1995 level by 2020.
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 will not be contributing to the nation's long-term fiscal problems.
To the extent that recent and future SNAP caseload declines reflect improving economic circumstances among low-income households, they are welcome. However, one major policy change on the horizon for SNAP will reduce caseloads and costs not because of an improved economy, but because of an austere provision in current law that affects some of the nation's poorest individuals. Over the course of 2016, roughly 1 million people will be cut off SNAP due to the return in many areas of a three-month limit on SNAP benefits for unemployed adults aged 18-50 who aren't disabled or raising minor children.
In the past few years, this three-month limit has not been in effect in most states because the law allows states to suspend it in areas with high and sustained unemployment, as noted above. Many states qualified due to the Great Recession and its aftermath and waived the time limit throughout the state. But as unemployment rates fall, fewer areas will qualify for waivers. We estimate that just a few states will qualify for statewide waivers by 2016 and that approximately 1 million SNAP recipients will have their benefits terminated due to the time limit in fiscal year 2016. The loss of this food assistance, which averages approximately $150 to $200 per person per month for this group, will likely cause serious hardship among many, since the average income of those potentially affected is less than 20 percent of the poverty line. 
Another key question for SNAP's future 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 should address the problems. States have made significant gains in lowering barriers to SNAP for eligible individuals and should assess whether some eligible individuals continue to face barriers to applying for and receiving SNAP.
 All years in this paper are fiscal years, unless otherwise noted.
 Congressional Budget Office, "The Budget and Economic Outlook: 2015 to 2025," January 2015.
 This figure is calculated by comparing average SNAP benefits for October 2013, the month before the Recovery Act's benefit increase ended, to the average over the remaining 11 months of the fiscal year.
 This figure is based on preliminary data from USDA's Food and Nutrition Service (available at http://www.fns.usda.gov/pd/supplemental-nutrition-assistance-program-snap).
 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). These figures are for calendar years rather than fiscal years. The number peaked at 65 million in 2012 before falling slightly to 64 million in 2013. Data on poverty in 2014 are not yet available.
 Esa Eslami and Karen Cunnyngham, "Trends in Supplemental Nutrition Assistance Program Participation Rates: Fiscal Years 2010 to 2012," U.S. Department of Agriculture, July 2014. The estimated participation rates are not directly comparable between 2007 and 2012 because of revisions to the methodology. More recent data suggest that SNAP participation rates among those eligible continued to rise slightly in 2013. USDA also calculates an annual "Program Access Index" based on the number of SNAP recipients as a share of the number of low-income individuals in each state (with income below 125 percent of poverty). At the national level this measure rose from 74 percent in 2012 to 75 percent in 2013; in 2007 it was 53 percent.
 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 having 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 having one of the top fiscal stimulus multipliers (see, for example, 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 longstanding rules. In January 2009 the Bush Administration clarified that states qualifying for the newly created Emergency Unemployment Compensation program would be treated the same as states qualifying for the Extended Benefits unemployment insurance program, which were eligible for statewide waivers under existing law. 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. CBO estimates from the 2014 farm bill debate also confirm 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 those for areas with high unemployment because of the recession) would have cut SNAP participation in 2014 by less than 4 percent.
 In addition to the economy and SNAP-related policy changes, other factors will need to be considered in assessing caseload trends; for example, state implementation of the Affordable Care Act, which expanded Medicaid eligibility in many states and induced virtually every state to revise its automated eligibility systems and processes, may have had an indirect effect on SNAP enrollment.
 Congressional Budget Office, "The Supplemental Nutrition Assistance Program," April 2012, http://www.cbo.gov/sites/default/files/cbofiles/attachments/04-19-SNAP.pdf.
 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 population age 16 and over with a job (the employment rate) remains near its recession low. As Federal Reserve Chair Janet Yellen said less than a year ago, "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. While the job market strengthened significantly in 2014, indicators of "slack" in the labor market (people not working but who want to be, or people who want to be working more hours than they are) were still abnormally high at the end of the year. See "Statement by Chad Stone on the December Employment Report," Center on Budget and Policy Priorities, January 9, 2015, http://www.cbpp.org/cms/index.cfm?fa=view&id=5256.
 The annual figures in this bullet and the following bullets are for calendar years.
 See Claire McKenna, "The Job Ahead: Advancing Opportunity for Unemployed Workers," National Employment Law Project, February 2015, Figure 1, http://www.nelp.org/page/-/UI/Report-The-Job-Ahead-Advancing-Opportunity-Unemployed-Workers.pdf?nocdn=1.
 See, for example, Craig Schneider, "Food Stamp Woes Put $76 Million at Risk," Atlanta Journal-Constitution, March 30, 2014; Christopher Cousins, "Short-staffing at DHHS blamed for delays in delivering food stamp benefits to Mainers," Bangor Daily News, June 17, 2014; Nancy Cambria, "Missouri policies blocking access to food stamps, Medicaid and other support for the needy," St Louis Post-Dispatch, March 23, 2014; and Lynn Bonner, "NC Counties Receive Staffing Help to Get Through Food Stamp Backlog," Charlotte Observer, January 10, 2014.
 Benefits fell in every state except Hawaii in November 2013 in conjunction with the expiration of the Recovery Act provision.
 Because the cut was not in effect for October -- the first month of the fiscal year -- average SNAP benefits for the fiscal year as a whole fell by slightly less (6 percent).
 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, so its SNAP benefits were already higher than Recovery Act levels and its residents thus did not experience a cut in November 2013 when the Recovery Act benefit boost expired. SNAP households in Alaska, Guam, and the Virgin Islands experienced a benefit cut in November 2013 that was the same in proportional terms as the cut in the 48 other states and the District of Columbia, but slightly different in dollar terms.
 For more information on calculating benefits, see "A Quick Guide to SNAP Eligibility and Benefits," Center on Budget and Policy Priorities, revised September 29, 2014, http://www.cbpp.org/cms/index.cfm?fa=view&id=1269.
 The law limits such individuals to three months of SNAP benefits (while they aren't employed or in a work program for at least 20 hours a week) out of every three years. People who are looking for work but can't find a job or a position in an employment program thus lose benefits after three months.
 See Ed Bolen, "Approximately 1 Million Unemployed Childless Adults Will Lose SNAP Benefits in 2016 as State Waivers Expire," Center on Budget and Policy Priorities, January 5, 2015, http://www.cbpp.org/cms/index.cfm?fa=view&id=5251.