Food Stamp Use Swells as Unemployment Recedes

April 3, 2013

Despite a variety of indicators suggesting the economy is recovering, food stamp utilization remains high. The high participation rate is due to broadened eligibility rules, says the Wall Street Journal.

  • While the financial crisis ended in 2009, enrollment in the Supplemental Nutrition Assistance Program (SNAP), formerly called food stamps, has increased dramatically.
  • The number of people receiving SNAP benefits rose 70 percent between 2008 and December 2012 to a record 47.8 million individuals.
  • Official estimates project that participation will rise slightly in 2013 and fall only slightly in 2014.

The increased participation is due to states' ability to ease asset and income tests for would-be participants at their discretion. The Obama administration has encouraged states to expand coverage to people with relatively higher incomes as well as savings.

  • The program's leniency was designed to encourage people to use the program before they became destitute, but the looser qualifications mean that program rolls are unlikely to fall with unemployment.
  • The Congressional Budget Office predicts that unemployment will fall to 5.7 percent by 2017 but SNAP participation will only fall by 4.5 million people to 43.3 million participants.
  • SNAP administrators say the program is working as designed because almost 50 million people are under the federal poverty level and aggressive efforts to get those families who qualify for aid onto the rolls have been successful.

The government spent a record $74.6 billion on SNAP benefits last year, up from $30.4 billion of spending in 2007. Critics warn that the program creates dependence on the government and proponents claim that low-income Americans need the assistance.

  • The unemployment rate peaked at 10 percent in 2009 and began to recede in 2011, while at the same time SNAP enrollment remained steady despite fewer people living in poverty.
  • The higher enrollment is due to the 43 states and territories that currently have expanded eligibility policies that allow individuals with some savings or earnings above the poverty threshold to qualify.
  • Reversing the standards would cause between 2 million and 3 million people to lose benefits and only amount to $4.5 billion savings over 10 years, which is just a fraction of the total program cost.

Sources: Damian Paletta and Caroline Porter, "Use of Food Stamps Swells Even as Economy Improves," March 27, 2013.

 

Browse more articles on Economic Issues