The Wall Street Journal featured this nice graphic yesterday, showing that the number of food-stamp (“SNAP”) recipients in America, after an incredible surge during the recent recession, has definitely finally peaked and is steadily falling — though it’s barely fallen in absolute terms.
The drop isn’t dramatic yet: Recipients are down from 47.7 million to 46.2 million, according to monthly data from the USDA. (A less dramatic version of this chart, from the liberal Center on Budget and Policy Priorities, is here.) Nonetheless, it’s encouraging, and it should be accelerated not just by further improvement in the economy. With the employment situation, and real wages, recovering slowly but steadily, why has it taken this long to put a dent in the number of food-stamp recipients?
In large part because this has been such a rotten recovery: Yes, wages have grown a bit and unemployment has dropped, but the share of the population employed has barely budged, the housing market remains depressed, millions have dropped out of the labor force, and jobs have been created much more slowly than in past recoveries. That said, SNAP rolls have always dropped well after the worst of a recession has hit. The sheer size of the increase is exceptional here, but the lag is nothing new: Note, for instance, that recipients in the early-90s recession peaked in the beginning of 1994 — when the recession actually occurred in 1990 and unemployment peaked in 1992).
This is partly because people who’ve been unemployed are likely to get low-wage or part-time jobs that leave them still eligible for benefits. The labor market also typically recovers more slowly for low-skill workers, those who are more likely to be on SNAP while employed or unemployed, than it does for high-skill workers.
The cost of the program isn’t going to drop as dramatically as the number of recipients, but it’s going to drop, slowly: The CBO’s projection from last year, which has been slightly pessimistic actually, was that spending will drop steadily from about $82 billion in 2013 to $77 billion a year in 2017 (this drop is much more dramatic as a share of GDP).
Besides an improving economy, it’s possible that a small reform to the program included in the farm bill passed earlier this year will reduce SNAP rolls (and spending) somewhat. It doesn’t take effect immediately, but the CBO estimated that it would save $8.6 billion over the next ten years, by moving people off the food-stamp roles. How? Congress tried to close something called the “heat and eat” loophole, under which states could make their residents eligible for substantial SNAP benefits if the residents received any help from the state with their heating bills — as little as $0.10. But this year, primarily blue states that had eagerly made use of the program found an obvious way around it.
Congress set the minimum heating benefit to qualify for SNAP at $20 a month, when it had previously been basically nothing at all. So states, including New York and Connecticut, are just deciding to spend a few million dollars more a year on the heating program (called “LIHEAP”) in order to keep people eligible for tens or hundreds of millions of dollars in federal food-stamp dollars. The CBO’s savings may not evaporate entirely, but most states are moving to boost their LIHEAP spending to save their food-stamp dollars. Not every state took advantage of the loophole in the first place, so the ones that did do it are almost all going to try to keep up the scam. It’s very tricky to figure out how to end this for good, but categorical eligibility was a problematic idea in the first place.
And why did we see such an incredible surge in SNAP enrollment in the first place? This recession was obviously much worse than what we saw in the early 2000s or the early 1990s, but SNAP is also a more generous program than it was then. Work requirements, for instance, have been substantially weakened in most states. The maximum benefit was also expanded from 2009 to 2013 under the president’s stimulus package, contemporaneously with a big push to enroll people in the program. The stimulus also marginally and briefly widened eligiblity, but more generous benefits plus the promotion campaign probably had more to do with why this increase was so dramatic (even taking into account the exceptionally bad economy).