BEYOND THE NUMBERS
The fiscal year 2021 Agriculture appropriations bill that the House will consider this week includes far less funding for SNAP (food stamps) than the program will likely need because it’s based on pre-COVID-19 funding assumptions.
The 2021 risks stem from (1) the uncertainty over the next 14 months (i.e., through the end of fiscal year 2021) of economic conditions such as unemployment and other factors that affect SNAP eligibility and enrollment; and (2) the fact that although SNAP is an entitlement, meaning that anyone who qualifies under program rules can get benefits if they apply, the appropriators cap available funding each year.
Fortunately, Congress can solve the problem by treating SNAP like it treats most other entitlement programs and — rather than provide a precise funding amount that may prove inadequate — provide “such sums as may be necessary” to fund all the benefits for eligible enrollees who apply for them.
Let’s take the two issues in turn.
Uncertainty about need. When the Trump Administration developed its estimates for the number of people who will be eligible for SNAP and the funding required to meet that need in fiscal year 2021, unemployment was below 4 percent and food inflation had been below 1 percent a year for five years. With a relatively strong economy, SNAP caseloads had fallen every year since peaking in fiscal year 2013. As a result, the Administration’s estimates (upon which the House based its SNAP funding level) assumed that SNAP participation would continue to fall in 2021 to an average of 37 million people a month and that food costs would rise only modestly.
But, due to COVID-19 and the resulting economic downturn, SNAP participation by early this summer had risen to more than 43 million and food costs had grown by 5 to 6 percent. Most forecasters expect unemployment to remain high for several years. The Congressional Budget Office (CBO) projects that it will be 9.4 percent in the first quarter of 2021 and 7.6 in the fourth quarter of that year.
Exactly how much SNAP will need next year based on the number of people who will qualify and apply is highly uncertain, but it’s already clear that the amount in the bill before the House is too low by many billions of dollars. Moreover, the shortfall is tied directly to one of SNAP’s most important features: its ability to expand to meet rising need as more people become eligible for its benefits during and after an economic crisis.
Capped appropriation. If SNAP were funded like almost every other entitlement program, its funding would adjust automatically to actual conditions — rising when more people are eligible for them and shrinking when fewer are.
But, as we’ve explained, SNAP and child nutrition (including school lunches and breakfasts) are the only major entitlements under which beneficiaries face the risk of two types of failures in the appropriations process: annual capped funding that proves inadequate to cover program needs for an entire fiscal year, and a government shutdown because policymakers have not funded some or all government programs in a particular year. Such failures can leave tens of millions of low-income families and children unable to afford food, and they risk causing confusion and harm to food retailers and schools.
Many entitlements that provide benefits to all eligible people who apply do not require annual appropriations because the laws establishing the programs directly provide funding. They include Social Security, unemployment insurance, and farm price supports through the Commodity Credit Corporation.
For most other entitlements that policymakers fund through the appropriations process — such as Medicare parts B and D, Medicaid, Supplemental Security Income, veterans’ compensation and pensions, and crop insurance — the House and Senate Appropriations committees provide protections in their bills against one or both types of appropriations failures.
For SNAP, the only “cushion” that appropriators have provided in recent years to address possible funding shortfalls is a $3 billion “contingency benefit reserve” for the Agriculture Department to use if the funding level is too low. That would have covered less than a month of SNAP benefits before the pandemic. In the bill before the House this week, once again, a $3 billion contingency benefit reserve is all that would be guaranteed. (Congress in recent years has extended its availability, so unused funds from the $3 billion are available for a couple of years into the future. This year, however, those funds may be needed to meet fiscal year 2020 program costs.)
To be sure, the President and Congress provided additional SNAP funding for fiscal 2020 through the CARES Act of March and will likely need to do so again in the next economic relief package that policymakers are now trying to put together. But there's no guarantee that policymakers will advance large supplemental or disaster bills, which might include more SNAP funding, the next time that SNAP runs the risk of running short.
For other appropriated entitlements, policymakers have a simple way to protect against inadequate annual funding: they provide “such sums as may be necessary” in the appropriations bills to fulfill the requirements of the underlying law that covers the program in question.
That approach does not “cost” the Appropriations committees any money under congressional budget rules, nor would it for SNAP. It would simply protect low-income families with children, seniors, and people with disabilities from hunger if SNAP funding falls short or if political or other factors interrupt or delay the appropriations process.
For the SNAP funding bill before the House, the House Appropriations Committee Report includes a commitment to “fully fund” SNAP, so the committee presumably plans to revisit the appropriation level in the coming months before agreeing to a final number during a House-Senate conference committee later this year to craft a final bill. But, given substantial economic uncertainties and the increased numbers of people struggling with food needs and other hardships, we strongly urge Congress to make the fix that’s really needed: put SNAP’s appropriation on par with other major entitlements and protect it fully from possible funding shortfalls.