Why kicking 3 million people off SNAP is bad policy

Q&A with Diane Schanzenbach of Northwestern University’s Institute for Policy Research on who will be most affected by latest proposed SNAP cuts

Most of the 3.1 million Americans projected to lose federal food assistance because of the Trump administration’s latest proposal are working families with children, older adults or people with disabilities, according to policy experts. In other words, they’re not millionaires. In announcing last month the proposed rule change to the Supplemental Nutrition Assistance Program (SNAP), Agriculture Secretary Sonny Perdue said the administration aimed to close a “loophole” that allows “millionaires” to receive benefits, pointing to one highly-publicized example of a Minnesota man who was able to receive SNAP benefits despite his considerable assets. That example doesn’t reflect the reality of SNAP, said Diane Schanzenbach, director of the Institute for Policy Research at Northwestern University. “The truth is, overwhelmingly, SNAP goes to low-income families with children, with disabled or elderly members, or to very poor adults to help them afford the food they need,” said Schanzenbach, a labor economist who was formerly director of the Hamilton Project at the Brookings Institution.

Diane Schanzenbach, director of the Institute for Policy Research at Northwestern University

The Trump administration seeks to restrict the ability of states to use what’s known as “broad-based categorical eligibility,” which allows some people to receive SNAP benefits if they receive certain other forms of government assistance. Many states use categorical eligibility to waive two onerous tests for SNAP eligibility – the gross income test and the asset test – and in doing so, ease administrative hurdles for low-income families. Those who receive SNAP benefits still must meet a net income threshold that allows for common-sense deductions, such as childcare expenses and housing costs. Kicking more than 3 million Americans off needed food assistance is bad public policy, said Schanzenbach, who recently joined the Greater Chicago Food Depository’s board of directors. The following interview has been edited for length and clarity. Q. Why is broad-based categorical eligibility important? A. When we look at the people who are eligible for SNAP under categorical eligibility, they’re overwhelmingly families who have elderly or disabled members, or children. Among those without elderly or disabled members, most of them are also workers. These families aren’t generally politically controversial. Everyone agrees that we want to give working families with children and high childcare expenses the boost that they need to purchase the groceries that they need. It surprises me across the board that this is something that’s being aimed at for policy change. Q. Why should someone with savings in the bank be able to receive SNAP benefits? A. Savings are good for families. You shouldn’t need to entirely spend your assets down before you can get help from SNAP, especially in times of job loss, or acute and temporary economic distress.

We think it’s good to get help from a temporary program like SNAP that can provide modest benefits, instead of spending down all of your savings.

But it’s important to note that usually when families on SNAP have savings, they’re not far above the asset test limit (which is $2,250). Our best estimates of this show that people who have assets above the threshold are more likely to be elderly and disabled. Q. In your recent analysis of this proposal, you said it would introduce a “sharp cliff in benefits.” What does that mean? A. I’ll use an example from Dottie Rosenbaum at the Center on Budget and Policy Priorities because I think it’s a really good one. Imagine a single mom with two kids. She spends about $1,200 a month on rent. She works full-time for $12.50 an hour. That brings her income up to about 125 percent of the poverty line. And then she’s eligible for about $160 a month in SNAP benefits. Let’s imagine she got a 50-cent-per-hour wage increase. Her earnings would increase by $86 per month and push her earnings slightly over 130 percent of the poverty line. (Editor’s note: In 2015, Illinois Gov. Bruce Rauner signed legislation raising the gross income level from 130 percent to 165 percent of the federal poverty line – thanks to broad-based categorical eligibility.) In the absence of broad-based categorical eligibility, we’d say, sorry, you don’t get to participate in SNAP anymore because your income is slightly above 130 percent of the poverty line.

What should she do instead? Do you want her to turn down that raise? Do you want her to reduce her hours?

She’d be gaining $86 per month in earnings but losing $160 a month in SNAP. She’s worse off. Under broad-based categorical eligibility, she would still have access to SNAP. Her benefits would be reduced by $30 per month due to her increased earnings, but her family would still be $55 per month better off overall.

Diane Schanzenbach, former director of the Hamilton Project at the Brookings Institution, recently joined the Food Depository’s board of directors.

Q. The administration has also touted these proposed SNAP cuts as a savings. Aren’t there greater long-term costs if people aren’t receiving food assistance? A. Absolutely. It’s important to note that we’re getting those savings by taking away food benefits from families who need them. I would argue this is money very well spent. When families have access to SNAP, other economic hardships go down. They’re less likely to have a bill sent to collections, they’re less likely to forgo medical treatment because they can’t afford it. They spend the benefits in their local communities, so there is also an economic multiplier effect that helps the local economy. When young kids especially have access to SNAP and have the resources they need to eat the food that they need, they grow up to be healthier and more economically stable when they’re adults.

When we spend on kids, part of that is an investment in the adult that they grow up to be.

If we are going to take away that investment, especially from the low-income working families that would be hurt by eliminating broad-based categorical eligibility, I would expect that kids in these families would be hurt – not only in the short run, but also in the long run. Q. Many children who receive free school meals would also be affected, right? A. Correct.

One of my favorite policies out there is automatic eligibility for free school meals for SNAP participants. It saves time and paperwork for schools. It makes sure that kids have access to the school meals that they need.

Loss of SNAP eligibility will mean that a lot of these kids will lose access to subsidized school meals. They will likely still be eligible for reduced-priced lunch, but we know empirically that not everyone applies for that for various reasons. Some kids will slip through the cracks. Q. We’re asking our advocates to submit their public comments in opposition to this rule change. Could Congress also step in and stop this rule change from going forward? A. Congress could absolutely stop this rule change. They can do that. And they should do that. Q. The Food Depository is a nonpartisan organization, but we strongly oppose cuts to SNAP that would harm the people we serve. Historically, SNAP has had bipartisan support. How did we get to this point? A. I really do think that from Congress’s side, there’s still a broad bipartisan agreement that SNAP is working well. Congress preserved broad-based categorical eligibility in the most recent Farm Bill. The SNAP cuts are really coming from the White House. Why their policy priorities are so far out of alignment with the Agriculture Committees in the House and Senate is a puzzle. Q. Based on the economic research that you’ve seen, should we be making the case to expand SNAP, instead of simply fighting to keep it as it is? A. There would be many benefits to a modest expansion of SNAP. A lot of people in my field think that increasing maximum benefits by about 20 or 30 percent would really help low-income families – starting with improving their food security but then spilling over into other things. We should be talking about expanding SNAP, not contracting it. Join the Food Depository in opposing the proposed SNAP cuts by submitting your public comment now.