Farm Bill Holds Fate of Food Stamp Program

The cuts and changes Congress has been weighing to the farm bill could knock millions off SNAP rolls and reverse years of progress states have made in streamlining applications. See data showing how each state could be affected.
by | August 2, 2013 AT 12:00 PM

More than one in seven Americans now rely on federal assistance to put food on the table, with total enrollment more than doubling over the past 10 years.

At record levels in the wake of the Great Recession, participation for the Supplemental Nutrition Assistance Program (SNAP)—formerly known as food stamps—has yet to drop. Yet the fate of the program remains in limbo as Congress weighs an array of cuts and policy changes. In July, the House broke with decades of tradition, splitting SNAP from the rest of the farm bill by funding only agriculture programs.

As lawmakers debate the future of SNAP, many fear some proposals could have far-reaching consequences for states. One worry is that proposed changes call for knocking certain households off SNAP rolls—this on top of cuts to benefits already set to occur this year. But of particular concern of SNAP advocates is that the bill—besides limiting funding—could also reverse years of progress that states made in streamlining the application process.

The key provision on the table is known as “categorical eligibility,” an option adopted by 40 states that aligns SNAP income and asset requirements with those for Temporary Assistance for Needy Families (TANF), Supplemental Security Income and other assistance programs. This saves states significant money in administrative costs and allows more individuals and families to obtain benefits.

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To meet steep demand for safety net programs during the recession, some states set gross income requirements above the federal limit of 130 percent of the poverty line--up to 200 percent, allowing them to qualify more working families for SNAP. Applicants must also meet a net income test. Those categorically eligible aren’t subject to a separate assets test in most states. But this would change if the option were eliminated, meaning that families or individuals who qualified for SNAP previously would be subject to asset limits that have remained largely unchanged for decades.

Recently unemployed individuals or low-income earners with modest savings are among those mostly likely to be affected, said Stacy Dean, vice president for food assistance policy at the Center on Budget and Policy Priorities, a left-leaning policy institute based in Washington, D.C.

A report evaluating an earlier House bill by the Congressional Budget Office estimated 1.8 million SNAP participants per year would lose benefits if subjected to federal income and asset requirements. Such a change would yield the federal government a projected savings of $11.5 billion over 10 years.

The White House released its own estimates, projecting that about 3 million Americans would lose SNAP benefits. The Office of Management and Budget (OMB) did not respond to an inquiry regarding how the estimates were calculated.

The following table shows OMB estimates for states with categorical eligibility, along with the U.S. Department of Agriculture's most recent individual enrollment totals (initial numbers for April):

Gross income limits represent percent of federal poverty guidelines for TANF (Temporary Assistance for Needy Families) and MOE (State maintenance of effort benefit).

Households with seniors or disabled individuals and gross incomes exceeding 200 percent of federal poverty guidelines are subject to a $3,000 asset limit in the following states: Alabama, Colorado, Georgia, Illinois, Kentucky, Massachusetts, New York, Ohio, Pennsylvania, Rhode Island, South Carolina and West Virginia.

Households without children face gross income limits of 130 percent of poverty in Massachusetts.

Governing contacted officials in a few states to gauge how restricting categorical eligibility could affect social services agencies.

Officials in Wisconsin said at least 118,000 people may lose SNAP benefits absent the categorical eligibility option. The Maryland Department of Human Resources estimated that eliminating the option would strip SNAP benefits from 37,000. Other agencies overseeing administration of SNAP were unable to compute estimates.

Regardless, all SNAP recipients will see their benefits trimmed in November, when a temporary provision in the American Reinvestment and Recovery Act that boosted benefits lapses. Families of three can expect to see reductions of $20 to $25 per month. Dean expressed concern that many recipients are unaware of this looming cut. “That will be a big shock to the system,” she said. “It’s important that people prepare.”

Officials also expressed concerns that repealing categorical eligibility could impose additional administrative costs on states, as agencies would certify income and assets separately for SNAP applications.

When SNAP applications soared during the Great Recession, the majority of states used categorical eligibility to more efficiently meet the demand. Dean and others fear rescinding the option will result in a needless—and administratively time consuming—search for assets that in many cases probably don’t exist. “We’re going to make states look for assets that these people don’t have,” she said.

Washington was among states employing the categorical eligibility option to streamline its electronic application process. Babette Roberts, who oversees Washington’s SNAP program, said ending categorical eligibility would introduce redundancy. “We’d lose a lot of the efficiency across the system that has really has helped us to do more caseloads than we’ve done in the past,” she said.

Absent the option, Roberts estimated caseworkers are going to need another 10 minutes per applicant, on average, to review SNAP eligibility. That might not seem like much, but with around 600,000 Washington households receiving benefits, time adds up. Certifying applications—a process the federal government does fund in part—typically accounts for the bulk of SNAP’s administrative costs.

Dropping the categorical eligibility option complicates the whole process, said Roberts, potentially hampering accuracy rates. “The more cumbersome the rules become, the more likely they are to make mistakes," she said, "and the more people and time it takes to process applications."

Also in play are federal performance awards for states. An earlier House bill proposed ending performance bonuses, a move some say reduces the incentives to states to be efficient and accurate in calculating benefits.

In a typical year, USDA issues more than 30 performance awards for states registering high accuracy or low error rates, with most receiving multiple bonuses since 2003. States use the bonus money differently – some invest it back into SNAP programs, while others route it to their general funds.  One of Washington’s bonus awards, for example, helped fund a mobile community service office. The Senate version of the farm bill preserves performance awards, but requires states to invest the money back into SNAP program improvements.

Repealing performance bonuses would save the federal government $480 million over 10 years, according to estimates. But Larry Goolsby, director of Strategic Initiatives with the American Public Human Services Association, said the awards remain crucial to incentivizing states to fine-tune SNAP administration, which will become an even more critical issue if Congress decides to eliminate categorical eligibility.

“It’s been a significant factor in achieving the very low error rates we have now,” he said.

SNAP participants received an average monthly benefit of $133 per individual in fiscal 2012.

Able-bodied adults without dependents who are not enrolled in a job training program are limited to three months of SNAP benefits every three years. Benefits do decline as earnings increase, but at a rate still encouraging recipients to work.

An earlier bill that passed in the House Agriculture Committee eliminates categorical eligibility, while the Senate version preserves the option. House Republicans pledged to tackle the program in separate legislation after passing a farm bill without SNAP funding.

Most observers expect the eventual legislation that emerges to draw from both bills. The one-year extension of the 2008 farm bill is set to expire Sept. 30.

SNAP Participation Map

The following map shows the approximate share of each state's total population receiving SNAP benefits in fiscal year 2012. Click a state to view historical annual data. Figures represent Governing calculations using USDA data and Census Bureau population estimates.

NOTE: Please zoom out to view Alaska and Hawaii

View additional data with current and historical monthly totals for each state.