President Donald Trump calls his proposed budget for fiscal year 2018, “A New Foundation For American Greatness.” Alternately dubbed the “taxpayer-first budget,” the document proposes $3.6 trillion in cuts over 10 years – largely at the expense of education, health care, housing and services that give low-income individuals and families a chance to maintain financial security – while decreasing taxes for the wealthy.
As Congress considers the proposals under the Trump budget, we at Colorado Center on Law and Policy believe that a true foundation for “American greatness” begins with policies that invest in struggling Americans. To that point, we are publishing a series of analyses entitled, “A Better Budget,” which will examine the importance of programs targeted for reduction or elimination under the Trump budget. We will then outline how policymakers can strengthen – not undermine – the nation’s safety net while building an inclusive, fair and just economy that reflects our American ideals and puts more Americans on a path toward self-sufficiency.
Part Three of the series examines proposed cuts in the federal Supplemental Nutrition Assistance Program (SNAP, formerly known as food stamps), which provides nutrition assistance to low-income people.
Snapshot of SNAP
As the largest federal food program in the United States, SNAP reduces hunger for children, older Americans, people with disabilities and households during economic decline. Given the alarming rates of food insecurity, and diet-related chronic disease around the country, SNAP’s role has perhaps never been more important.
SNAP participation is shown to reduce hunger, benefit children’s learning ability, improve health, lift families out of poverty and strengthen economic self-sufficiency for women. Furthermore, research from the U.S. Department of Agriculture shows that every $5 in SNAP benefits generates $9 of economic activity in local communities. The program has a proven track record of connecting Coloradans to vital nutritional resources.
SNAP ensures that families and individuals can purchase groceries, with the average benefit being about $1.40 per meal, per person, or about $130 a month. SNAP’s upper-income limit is 130 percent of the Federal Poverty Level (FPL).
In fiscal year 2016, SNAP reached 44.2 million participants in the U.S, or 14 percent of the population. In the same year, SNAP reached 476,000 Coloradans or 9 percent of the state population. The program supports 235,000 Colorado kids. In fact, almost 74 percent of SNAP participants in Colorado are families with children while almost 25 percent are families with members who are elderly or have disabilities.
Nearly 48 percent of SNAP recipients are in working families. According to estimates from the Center on Budget and Policy Priorities, SNAP kept an average of 117,000 people out of poverty in Colorado – including 55,000 children – every year between 2009 and 2012. Close to 70,000 Coloradans in rural counties relied on SNAP in 2016, totaling $102 million in benefits, according to Hunger Free Colorado. Meanwhile, Moody’s Analytics estimates that SNAP benefits pumped about $728 million into Colorado’s economy in 2016. Yet, Colorado ranks only 45th in the nation in SNAP access and lost out on more than $686 million in grocery sales due to a significant lag in SNAP enrollment. Currently, only three out five eligible Coloradans are enrolled in the program, leaving 350,000 eligible-but-not-enrolled citizens who are needlessly going hungry.
Funding for SNAP benefits comes from the USDA, but the administrative costs are split 50-50 between the state and federal governments.
Proposed cuts: SNAP
Though Colorado has not done a good job harnessing available federal SNAP dollars for its neediest citizens, President Trump’s budget would roll back any progress the state has made. Trump’s proposed cuts would strip nearly $200 billion from SNAP over a 10-year period – fundamentally changing SNAP’s structure. In fact, Trump’s budget would shift 25 percent of the burden of SNAP funding to the states by 2023 – money Colorado does not have.
Coming up with this money would have taken $182 million from Colorado’s 2016 budget. In total, the state share adds up to up to a $1.3 billion hit over the next decade. The budget also attempts to cut costs by targeting recipients of SNAP’s minimum benefit – including seniors and the disabled, who already receive a paltry $16 in benefits per month. According to Hunger Free Colorado, an estimated 15,000 of these most at-risk Coloradans would be targeted by these cuts.
A report from the Center on Budget and Policy Priorities says under the Trump budget, SNAP households nationwide would receive roughly $12 billion less each year. That would cut benefits by more than $25, per person, per month. To make matters worse, these cuts would come at a time when food costs are expected to rise because of the Trump administration’s “crackdown” on immigrant labor and foreign trade.
While the budget proposal purports to realize cost savings by tightening work requirements on SNAP recipients who are unemployed – it should be noted that most able-bodied SNAP recipients are already working. Colorado is among the states with a SNAP work requirement.
Trump’s budget eliminates a state option that lets states raise SNAP’s gross income eligibility level higher than 130 percent FPL. The budget also forces states to limit benefits to three months for individuals who are not working 20 hours per week – unless they have children. That would mean about 1 million unemployed Americans would no longer have access to food assistance.
“SNAP is an efficient program without much room for cuts,” said Victoria Palacio of CLASP in a recent commentary. “It responds to economic and population changes, expanding when need rises and contracting when need declines. Cutting SNAP by $193 billion over 10 years wouldn’t permit the flexibility needed to combat hunger.”
Palacio added that dramatic cuts in SNAP would also “undermine the physical and mental health in our most vulnerable communities” and shift the burden to states that can’t shoulder the additional expense – especially in times of recession when SNAP is most needed.
As part of the cost shift to states, the Agriculture Department under the Trump budget would let states cut benefit levels as a cost-management tool – meaning that low-income families, seniors and people with disabilities would no longer be guaranteed access to a basic diet. Instead, states’ ability to pay for SNAP benefits will drive the benefit level. That provision doesn’t bode well for Colorado, which has constitutional budgetary constraints that would make additional funding for SNAP highly unlikely, if not impossible.
The budget also proposes raising revenue for SNAP by making retailers pay an application fee for accepting food stamps. Though Trump’s budget claims the government can raise $2.3 billion in revenue a year through such a policy, it is simply an unworkable idea because small retailers – particularly in rural parts of the country – would probably prefer to avoid the hassle and the fees associated with applying, leaving SNAP-eligible residents without a local food source.
Combined with proposed cuts in education and training, affordable housing and Medicaid, the SNAP cuts would hurt millions of Americans with lowncomes and force states to reduce benefits for their neediest residents – with a devastating effect on the health and economic well-being of their communities.
What policymakers should do
Although SNAP is absolutely essential for low-income families, the program has not kept up with the changing realities of food costs and consumption. Currently, benefits are determined by the cost of a food budget known as the Thrifty Food Plan (or TFP).
Using a formula set in the 1970s, the TFP assumes that low-income households can spend an unlimited amount of time preparing food from scratch. That makes food preparation more challenging for time-strapped working families, those without a full kitchen in their residence and those who are forced to move frequently, and makes it harder to stretch SNAP dollars for those looking for convenient and healthy fare.
According to a 2016 policy proposal from The Hamilton Project, the SNAP benefit is insufficient because the maximum benefit amount is “based on an increasingly unrealistic market basket of food.” The Hamilton Project estimates that 87 percent of SNAP recipients lack the time and resources to meet their families’ nutritional needs. The TFP formula also doesn’t account for variation of food prices in different parts of the country.
To address this concern, The Hamilton Project proposed adding a 20 percent inflation factor to the TFP to increase the maximum benefit for a four-person household from $649 per month to $779 per month. The report also proposed relaxing the constant-cost constraint of the TFP to include geographic price adjustments. The proposal would undoubtedly raise the cost of SNAP, but such an investment would undoubtedly reduce hunger and poverty.
Other proposals for improving the program:
* Support the “Closing the Meal Gap Act of 2017” – Sponsored by Rep. Alma Adams, D-N.C. and introduced in March, the legislation would require the USDA to make adjustments to account for household size, changes in the cost of a diet and the costs of food in specified areas. The bill exempts those who are not offered a position in a SNAP Employment and Training program from the SNAP work requirements .
* Take lessons from states. In 2004, Oregon adopted a five-year plan to end hunger in the state. The plan included strategic outreach to vulnerable populations and improved business processes. It also proposed expediting the SNAP enrollment process, improving customer service for the program and improving performance metrics for accuracy, timeliness and access. In 2008, Maryland launched a No Kid Hungry campaign that enrolled 15 percent more households with children under 18 in SNAP. In 2015, Pennsylvania launched an effort to improve food security by leveraging federal, community and state resources, enhancing public-private partnerships and improving outreach, awareness and advocacy.
Clearly, SNAP is critical to reducing hunger and forging pathways from poverty in Colorado and nationwide. To that point, dramatic cuts in the program would undermine struggling families’ efforts to put food on the table, make ends meet and secure or maintain employment. Trump’s budget would also hurt state economies and create hardships and burdens for families and. We think that’s the wrong direction for Colorado and our nation, and we urge stakeholders nationwide and statewide to identify new goals and strategies to end hunger.
In the meantime, please encourage Colorado’s congressional delegation to reject Trump’s budget cuts to SNAP in favor of policies that reduce hunger, increase access to healthy and nutritious food, and invest in Colorado.
– By Bob Mook