Trump Rule Weakens SNAP’s Recession-Fighting Power

The Trump Administration’s new rule that severely limits access to SNAP (food stamps) for certain jobless individuals aged 18-50 who aren’t raising minor children in their homes is not only cruel; it amounts to economic malpractice.

An important feature of economic security programs like SNAP and unemployment insurance is that, amid rising unemployment and falling incomes in an economic downturn, they automatically serve more people to address rising hardship and support consumer spending. As “automatic stabilizers,” they provide needed economic stimulus early in a downturn without requiring new legislation.

In many local labor markets, and in the national economy during a recession, jobs are scarce and many willing workers can’t find steady work quickly — or at all. Accordingly, SNAP rules have let states receive, for high-unemployment areas, waivers from the SNAP’s three-month time limit on benefits for unemployed childless adults. The Administration’s new rule dramatically narrows states’ ability to qualify for these waivers. The Administration itself predicts the change will end basic food assistance for nearly 700,000 people beginning next year.

Under the previous rules, a state could receive a waiver for the entire state if its unemployment was high enough to trigger the federal Extended Benefits (EB) program, which provides added weeks of unemployment benefits to jobless workers who exhaust their regular unemployment benefits before finding a job.

Under the new rule, an area can’t receive a waiver unless:

• its average unemployment rate over a recent two-year period is at least 6 percent and at least 20 percent higher than the national average; or
• its average unemployment rate over a recent one-year period is over 10 percent.

As a result, far fewer areas will qualify for waivers during a national recession, when the national average unemployment rate is high — and, the worse the recession, the higher the hurdle to receive a waiver. If national unemployment for the two-year period averaged an already high 7 percent, for example, an area would need an even higher 8.4 unemployment rate to qualify.

In local economies with chronically high unemployment, SNAP payments sustain higher spending and economic activity. And in a national recession, SNAP provides high “bang-for-the-buck” stimulus — generating $1.50 or more of spending per dollar of cost — that slows job losses when business and consumer confidence is low and economic activity is weak. The natural expansion in SNAP caseloads provides this stimulus automatically when the economy weakens; under prior rules, waivers enabled even more low-income people to receive SNAP, providing added stimulus while simultaneously addressing the greater hardship from the recession.

Policymakers should eliminate SNAP’s three-month time limit altogether; short of that, they should ensure that it’s suspended automatically in a recession. Making the limit even harsher isn’t just bad social policy, it’s a step backward in preparing for the next recession.