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6 Takeaways From CBO Estimate of House Agriculture Committee SNAP Proposals

May 3, 2018 at 5:00 PM

The Congressional Budget’s Office (CBO) estimate of the House Agriculture Committee’s Farm Bill reiterates that its SNAP benefit cuts would total more than $17 billion over ten years ($23 billion in cuts minus $6 billion in modest benefit improvements.) In addition, CBO’s detailed assumptions help to clarify several important points about the SNAP changes. Here are six key takeaways from the CBO estimate:

  • First, millions would lose SNAP benefits. Some 1.2 million adults would lose SNAP benefits in an average month in 2028 due to the proposed stricter work requirements, CBO estimates, with about 740,000 (or 62 percent) of them in households with children. Most of the rest would be older adults aged 50 to 59. Another 400,000 households (with almost 1 million people) — almost all of them working families with children — would lose SNAP benefits due to a provision that reimposes a “benefit cliff” (i.e., the loss of benefits) at 130 percent of poverty (eliminating the state option known as expanded or broad-based categorical eligibility.) All told, more than 1 million households with more than 2 million individuals would be adversely affected — either cut off SNAP or receiving reduced benefits.
  • Second, states would need more than two years to create new employment and training opportunities. The proposed work requirements would take effect in 2021, just two years after the bill’s expected enactment, but CBO assumes that states would need far more time to create employment and training opportunities for all adults who would need them under the bill’s requirements. “CBO estimates that by the end of 2028, about 80 percent of the beneficiaries who are subject to the work requirement would be offered such services through a state program.” CBO assumes that individuals would not lose eligibility for SNAP if the states didn’t offer a work or training opportunity. There’s a risk, however, that not all states would take that approach or that the federal Agriculture Department would not allow it, leaving individuals who can’t participate in a work program because states haven’t created enough slots without their SNAP benefits.
  • Third, states will face increased costs for tracking SNAP beneficiaries’ work status or exemption from work requirements. Because the bill requires authorities to determine each month whether recipients are complying with work requirements, CBO estimates that “spending on other [SNAP] administrative expenses would increase because of an increase in the cost to states of tracking who is meeting the work requirements (or is exempt from them) under the proposal.” Of CBO’s estimated $7.7 billion in new federal administrative costs, an estimated $900 million would be needed for additional administrative costs associated with this tracking. Because SNAP administrative costs are reimbursed at a 50 percent matching rate, the total additional administrative costs, including state costs, would total $1.8 billion.
  • Fourth, even after states create work programs, they will serve a relatively small number of people. CBO estimates that only 2 percent of those newly subject to stricter work requirements (non-disabled adults aged 50 through 59 without children, and non-disabled adults aged 18 through 59 not caring for a child under 6) would meet the requirement by participating in a training program. That amounts to only about 110,000 people in a typical month of 2028. By contrast, CBO assumes that 24 percent of the group would lose SNAP that year in a typical month, totaling 1.2 million people.
  • Fifth, the bill imposes unfunded mandates on states. The unfunded state mandates would come because, CBO concludes, “the bill’s requirements would increase the workload of state agencies in areas where they have limited flexibility to amend their responsibilities and offset additional costs.” CBO points to seven different provisions that contribute to these unfunded mandates.
  • Sixth, the provision to mandate cooperation with child support enforcement (CSE) costs almost 3 times more than it saves. The bill mandates that states require custodial and non-custodial parents to cooperate with CSE in order to receive SNAP. That’s now a state option that only six states have adopted due to the high costs associated with implementing it, the limited evidence of its impact on child support collections, and the risks to children from sanctions that reduce food assistance. CBO indicates that the new administrative costs would add to almost $11 billion over ten years, of which the federal government would cover about $7 billion, leaving states to pay another $4 billion. But the savings in SNAP benefits would be only about $4 billion over the ten years (or just over a third of the $11 billion in costs). Of note, CBO’s savings estimate appears to come only from households receiving less in SNAP benefits because they receive more in child support. That’s another example of where the risk of benefit cuts may be higher than CBO assumed. Some households likely would be sanctioned for non-compliance or would opt to forgo benefits by not applying. Parents who don’t engage with the child support agency often have good reason; some already receive support from the other parent, and some don’t want to risk undermining the relationship with the other parent to pursue support they know that person can’t pay. Moreover, some survivors of domestic violence decide that seeking child support would put them or their children in harm’s way.
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