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Temporary SNAP Benefit Bump a No-Brainer for More Economic Stimulus

Policymakers are appropriately considering additional stimulus measures in the face of mounting job losses and other dire economic signs due to COVID-19, and a top item on their list should be raising SNAP (food stamp) benefits as a way of injecting fast, high “bang-for-the-buck” stimulus into the economy.

SNAP has proven to be one of the most effective mechanisms available both to reach low-income households and to provide counter-cyclical help in recessions. That’s why we recommend a 15 percent increase in the SNAP maximum allotment (known as the Thrifty Food Plan, or TFP) until economic measures show that unemployment is no longer significantly elevated. That would amount to about $25 more per person per month, or just under $100 per month in food assistance for a family of four.

SNAP benefits are one of the fastest, most effective forms of economic stimulus because they get money into the economy very quickly. Low-income individuals generally spend all of their income to meet daily needs such as shelter, food, and transportation, and every SNAP dollar that a low-income family receives enables the family to spend an additional dollar on food or other items. Some 80 percent of SNAP benefits are redeemed within two weeks of receipt; 97 percent are spent within a month. That’s why the Congressional Budget Office and Moody’s Analytics rate SNAP expenditures as one of the most effective supports for the economy during downturns, generating roughly $1.50 in economic activity for every dollar of federal spending.

Moreover, increasing SNAP benefits can be implemented immediately, often within a couple of weeks of enactment.

Along with this benefit increase, we recommend several other changes, including suspending SNAP’s three-month time limit for unemployed adults not raising minor children at home, until the economy shows signs of improving.

A 15 percent benefits increase throughout the economic crisis would build on two important short-term provisions in the Families First Coronavirus Response Act. One provides emergency supplemental benefits to millions, but the Agriculture Department is interpreting the law in a way that leaves out about 40 percent of SNAP households, including many families with children and others who have the lowest incomes and need the most help affording food (which Congress could also address in this package). And those who do qualify for the supplement can only do so as long as the public health emergency lasts, a limitation that also applies to the law’s second major benefit: meal replacement benefits to compensate families with kids who can’t get free or reduced-price meals because their schools are closed. An elevated need for food assistance and for economic stimulus will persist far longer than the official health emergency, as unemployment remains high and families struggle with much lower incomes.