BEYOND THE NUMBERS
Congress Must Delay SNAP Cost Shift to Stanch SNAP Participation Losses, Which Far Exceed CBO’s Estimates
About 5.5 million people lost food assistance through SNAP in the year since enactment of the 2025 reconciliation law. This includes about 2 million children, who were not targeted by the law’s eligibility restrictions.
These participation declines have resulted in a sharp drop in SNAP spending, since 90 percent of SNAP spending is for food assistance benefits. (The rest is primarily administrative expenses and Puerto Rico’s nutrition assistance block grant.)
SNAP spending in fiscal year 2026, which ended September 30, was nearly $11 billion lower than the prior year (-10.3 percent). Along with the 5.5 million people who have less money to purchase groceries, this also means people in communities across the U.S. had about $11 billion less for spending on food in fiscal year 2026.
The drop in SNAP participation and spending is considerably more than the Congressional Budget Office (CBO) predicted. The latest U.S. Department of Agriculture (USDA) data for July 2026 show that monthly SNAP participation in fiscal year 2026 is on track to average about 4.5 million fewer people compared to the average month in fiscal year 2025 — far greater than CBO’s prediction of 2.8 million fewer people in an average month in 2026 versus 2025. (See chart.) CBO projected that SNAP outlays would drop by about $6 billion in 2026; in actuality SNAP outlays dropped by nearly double that amount.
The most likely reason for the larger-than-expected cut is the impact of the 2025 reconciliation law shifting enormous new SNAP costs to states, which they owe starting in fiscal year 2028. CBO estimated the cost shift mandate would have no impact until 2028. But it has already led many states to erect barriers to people’s SNAP participation, such as more paperwork and other requirements that states often don’t have the staff to administer.
The reconciliation law granted a few states a two-year delay for this harmful cost shift. Congress should extend the delay to all states before the end of the year, given SNAP losses outpacing predictions and the high cost of groceries and other basic needs. CBO estimated the reconciliation law would cut SNAP by $187 billion (about 20 percent) through 2034, the largest SNAP cut in history. With far steeper cuts evident in fiscal year 2026, Congress should not further cut SNAP to offset the cost of a delay in the cost shift.
Impending Cost Shift to States Is Driving Larger-Than-Predicted SNAP Losses
In its most recent February 2026 baseline, CBO projected that 39.3 million people would participate in SNAP in an average month of 2026, compared to about 42.1 million in 2025. But just shy of 36.1 million people participated in SNAP in July 2026, according to the most recent data from USDA, suggesting that fiscal year 2026 participation will average about 37.6 million people, or about 4.5 million below last year’s average.
SNAP spending was also substantially lower than CBO’s forecast. CBO’s most recent baseline assumed a 6 percent drop in SNAP spending between fiscal years 2025 and 2026. But SNAP spending for the fiscal year was more than 10 percent, or nearly $11 billion, lower than it was in 2025.
The outsized drops suggest that people not ostensibly targeted by the 2025 reconciliation law’s eligibility restrictions are losing SNAP anyway. That includes many children, seniors, and people with disabilities, yet another reason for Congress to delay the cost shift.
At the time of the reconciliation law’s enactment, CBPP explained that, based on CBO’s estimate, once the law had fully taken effect about 4 million people would be cut from SNAP entirely or lose a substantial amount of their benefits. Now, with nearly a year of USDA data since the law’s enactment, more than 5.5 million fewer people receive any SNAP. That figure does not include people whose benefits are lower as a result of the new law. More losses are almost certain as the law continues to phase in.
That the losses are coming faster than CBO predicted is likely in large part because CBO’s original estimates did not factor in any effects of the state cost shift mandate until 2028. This is when the law requires states will to start paying for a share of SNAP benefits — 5 to 15 percent of them, potentially hundreds of millions of dollars for many states and roughly $9 billion across all states — based on their error rates for fiscal year 2025 (which came out in June 2026) and 2026.
In its analysis, CBO estimated that states would collectively reduce or eliminate SNAP benefits for about 300,000 people in an average month over the 2028-2034 period, which essentially assumed that no impact from the cost shift mandate would occur until states needed to start paying the required share.
State Efforts to Reduce “Error Rates,” the Basis of Cost Shift Amounts, Are Restricting SNAP Access
To be sure, exactly what actions states would take was harder for CBO to anticipate, compared to other reconciliation law changes that reduced eligibility or benefit levels but left the structure of the program unchanged. But as we’ve warned, the cost shift threatened harms that were both greater and more immediate than CBO estimated. With states’ 2025-2026 error rates being the basis for what they owe starting in 2028, states are incentivized to reduce error rates quickly, even at the cost of delaying or improperly denying benefits to eligible families — which isn’t counted as a payment error.
When states attempt to reduce errors by requiring substantially more paperwork, shortening certification periods, or adding more case reviews, they make the program more onerous to administer and more difficult for applicants to navigate. Especially in states where administrative capacity was already strained, this is causing delays in application processing, procedural denials, and other bureaucratic obstacles that are restricting access to SNAP. The impacts of those actions are felt across all types of households that use SNAP and may disproportionately affect seniors, people with disabilities, and working families, who may struggle to wait on hold for hours when calls go unanswered or to travel to a social services office during business hours for help with their paperwork.
And this all comes at a time when the economy’s prognosis is mixed at best. Year-over-year real wages have declined for six straight months (through September) and the unemployment rate has been flat since July 2025. In other words, it’s not likely the massive declines in SNAP participation are due to improving household finances and reduced need for help affording groceries.
Meanwhile, it’s likely that two other eligibility restrictions are only partially responsible for the decline in SNAP participation thus far and are not being fully felt yet. CBO’s cost estimate narrative for the 2025 reconciliation law predicted that together, these provisions will cause an average of 2.5 to 3 million people to lose SNAP eligibility altogether over the 2026-2034 budget window (and an average of fewer than 2 million people losing SNAP in 2026).
- Taking SNAP away for not meeting a work requirement. The law dramatically expanded SNAP’s already harsh and ineffective work requirement, by extending it to older adults up to age 65 and to parents and other caregivers of children 14 and older. It also substantially narrowed states’ ability to waive the time limit for areas with few job opportunities and eliminated exemptions for veterans, people experiencing homelessness, and former foster youth. Research consistently shows the work requirement cuts many people off SNAP without increasing employment or earnings. CBO estimated this stricter work requirement would account for the greatest of the law’s cuts to SNAP participation: 2.4 million people on average over the 2025-2034 period. CBO assumed that this provision would begin to take effect in fiscal year 2026, when about 75 percent of the full annual impact would occur, meaning about 1.8 million people would be cut from SNAP in an average month in 2026.
Cutting eligibility for people who are immigrants. CBO estimated about 90,000 people would be cut from SNAP from the provision that denies SNAP to many people who are immigrants living lawfully in the U.S., having been granted humanitarian protections. There is emerging evidence that additional immigrants and their citizen family members have lost SNAP because of confusion over the rules and the climate of fear the Trump Administration has stoked around human services programs available to immigrants. But CBO did not assume such individuals would be cut from SNAP, and this likely represents a relatively small share of the decline in caseloads given that immigrants and citizens in mixed-status families represent a relatively small share of SNAP participants.
All told, SNAP losses will continue to mount due to the reconciliation law — including among people not targeted by the law, and in magnitudes CBO didn’t predict. At minimum Congress should delay the provision likely most responsible for early, outsized losses: the harmful state cost shift.
This blog is an updated version of a blog first posted on June 30. The blog has been updated with more recent data on SNAP participation and spending.
