Are SNAP benefits really too low?

By Angela Rachidi of AEI.

"Benefits are too low. At least, that’s the narrative circulating in Washington when it comes to the Supplemental Nutrition Assistance Program (SNAP)—formerly known as Food Stamps. A new report from the President’s Council of Economic Advisers at the White House incorrectly argues as much, and suggests that benefits should be increased. But before acting on this recommendation, Congress might want to take a closer look at the data that show that SNAP eliminates hunger for the overwhelming majority of American children, and leaves most recipient households with adequate food. Congress should reform SNAP, but a costly benefit increase is not the right answer.

According to a US Department of Agriculture survey on food security, only 1.1 percent of American households with children had a child who experienced hunger in 2014. Yet, the CEA report mistakenly claims that “the current level of [SNAP] benefits often cannot sustain families through the end of the month—causing children to go hungry and endangering their health, educational performance, and life chances.” Little evidence suggests that low SNAP benefits contribute to child hunger. In fact, SNAP is a major reason child hunger is not a larger problem.

The CEA’s claim that SNAP cannot sustain families through the end of the month also overstates the evidence. It is true that food purchases for SNAP households have been found to decline over the course of the month. But researchers Justine Hastings and Ebonya Washington suggest in their 2010 American Economic Journal article that this is due to “short-term impatience.” In other words, households respond to a large influx of cash-equivalent at the beginning of the month by spending it up-front. The authors recommend solving this problem by giving out SNAP benefits more frequently. A study by Jessica Todd published in 2014 in Applied Economic Perspectives and Policy found that a temporary increase in SNAP benefits resulting from the 2009 stimulus package increased SNAP spending later in the month. It’s been suggested that this means that SNAP benefit levels were too low prior to the increase. It’s possible. But it is also possible that households responded to an increase in benefits by spending more, which still doesn’t tell us much about the adequacy of SNAP benefits.

The CEA report’s statement that “a majority of SNAP households still reported experiencing low or very low food security in 2014” also misrepresents SNAP. Low food security (meaning an adequate, nutritious diet is not provided) could have easily occurred before the household started receiving SNAP benefits. Examining food security data while households were participating in the program, reveals that 66.5 percent were in fact food secure.

Another way to assess SNAP adequacy is to compare benefit levels to the cost of food in the thrifty food plan (USDA’s assessment of an adequate diet that is used to set SNAP benefit levels). A recent study found “that for roughly 30 percent of households, the average cost of the [thrifty food plan] exceeds the maximum SNAP benefit.” This means that 70 percent of SNAP households receive sufficient benefits to provide a diet determined adequate by USDA, which provides further evidence that SNAP is sufficient for most households.

All of this is to suggest that costly across-the-board increases in SNAP benefit levels are not needed. According to the Congressional Budget Office (CBO), the SNAP increase in the 2009 stimulus cost approximately $8.4 billion per year (accounting for about one-fifth of the growth in SNAP expenditures from 2009 to 2011). A 3 percent benefit increase, per the CBO, would cost an additional $2.3 billion per year.

A less costly option may be to provide different benefit levels based on local food costs, as has been suggested in a 2013 Institute of Medicine report. Allowing for larger housing cost deductions when calculating SNAP amounts should also be considered. This would increase SNAP amounts for those living in high housing costs areas, such as New York City, Boston, and Washington, D.C. Both would better target those most at risk of being ‘food insecure,’ without raising benefit levels for many of those who do not need it.

Pilot programs to test these theories are also worth considering, as was recommended in a new report from the National Commission on Hunger. And more research is definitely needed on the relationship between SNAP and hunger, especially among children. Adding a question to the USDA’s food security survey to better assess whether households were receiving SNAP at the time of the reported incidence of hunger would be a good first step.

SNAP has been described as “one of the most effective antipoverty programs in the safety net.” If this is to remain true, we need an open and transparent dialogue about what the data really show. Large-scale policy changes based on false impressions are not the answer."