Significant Changes to SNAP Benefits Under New Legislation

The recent reconciliation package proposed by Republican lawmakers introduces tax cuts that have raised concerns among policy experts. Research indicates that these changes primarily favor affluent individuals, while simultaneously implementing substantial reductions in the Supplemental Nutrition Assistance Program (SNAP), which was previously known as food stamps.

Potential Loss of Benefits for Millions

According to a recent analysis by the Urban Institute, this legislation could impact approximately 22.3 million families, resulting in some losing part or all of their SNAP benefits. Currently, SNAP aids over 40 million people, a group that includes children, seniors, and non-elderly adults living with disabilities. The Urban Institute’s study highlights the gravity of the new law, which was passed by the Senate and subsequently signed by former President Donald Trump with no amendments from the House.

Of the families affected, nearly 5.3 million are projected to lose at least $25 per month in assistance. On average, impacted families could face a monthly reduction of about $146 from their SNAP support. The Congressional Budget Office has estimated that the adjustments made in the Senate’s reconciliation package could lead to a significant reduction in SNAP funding—about 20%, or $186 billion—by the year 2034. This marks the most extensive cut to SNAP in its history.

Overview of New Work Requirements

Under the current legislation, criteria for receiving SNAP benefits require most individuals to limit their participation to three months within a three-year span unless they work at least 20 hours a week or qualify for an exemption. The new rules will expand these requirements to include individuals aged 55 to 64, parents of minors aged 14 and older, and veterans. It remains uncertain when these new stipulations will go into effect.

These increased work requirements could lead to unintended consequences for many families. A significant number of working families—around 3.5 million—may lose at least $25 in monthly benefits or an average of $108 if they do not consistently meet the newly mandated work hours. Moreover, there’s a risk that additional households may become ineligible due to administrative failures when reporting their qualifications.

Financial Burdens on States

The legislation places new financial obligations on states, requiring them to cover a percentage of benefit costs (between 5% and 15%) if their error rates exceed 6%. These error rates evaluate the accuracy of eligibility determinations and benefit distributions. In fiscal year 2024, many states reported an average payment error rate of 10.9%, with numerous states surpassing the 6% threshold.

If these states are unable to bear the costs, it could result in reduced SNAP benefits or lead to states opting out of the program altogether. While states have until 2028 to begin assuming responsibility for a portion of SNAP funding, immediate measures to reduce error rates are likely to become a priority. This could result in a decline in benefits due to administrative hurdles, impacting families reliant on support for their basic needs.

Moreover, children eligible for SNAP might see reductions in school meals and summer EBT benefits, affecting their nutritional support. The law also limits SNAP eligibility to U.S. citizens and lawful permanent residents, further constraining access.

Economic Implications of SNAP Cuts

Spending on SNAP plays a crucial role in stimulating local economies. According to a 2019 report from the U.S. Department of Agriculture, every dollar allocated to SNAP generates an economic return of $1.54. Recipients often utilize their SNAP dollars immediately, benefiting grocery stores, producers, and transportation companies.

These funds not only support immediate spending but also facilitate hiring, even during economic downturns. However, should the new legislation compel states to cut benefits amidst budget constraints, the situation may worsen during a recession, when demand for SNAP typically increases.

If the adjustments lead to administrative inefficiencies, the program may struggle to respond effectively to the rising needs of the population in the future. The intricacies of these changes could significantly influence the livelihoods of millions who depend on SNAP for essential food assistance.