Would the new administration food stamps rule make it harder to combat future recessions?


A recent administration rule spotlights an important question: Should able-bodied, working-age, childless adults remain consistently idle while collecting food stamps?  The rule says the answer should be no, especially when jobs are available.

As Angela Rachidi and I recently reviewed, the rule bolsters the longstanding requirement “able-bodied adults without dependents” (ABAWDs) engage in part-time work, training, or community service when collecting food stamps for longer than three months in a three-year period.  Only three million out of 18 million households receiving food stamps include an ABAWD, so the requirement is far from universal.  States can also waive it in areas demonstrating a “lack of sufficient jobs.”

But loose waiver eligibility currently exempts half the ABAWD population nationwide despite record economic growthlow unemployment, and job availability. The rule, in sum, raises the bar for getting a waiver and thus expects more ABAWDs in areas where jobs are available to work or improve their skills.

Some critics have reacted like it’s the end of food stamps as we know them.  Reports blare “Nearly 700,000 will lose food stamps” in “a scheme to punish hungry Americans.”  Even though the original law creating these work requirements passed with bipartisan support, some opposition reflects partisan vitriol accompanying any move the current administration makes. And some reflects the view government should “guarantee economic security” even for those “unwilling to work,” as Rep. Alexandria Ocasio-Cortez argued in her Green New Deal.

Still other critics suggest the rule will make it “harder to combat future recessions” by preventing adequate stimulus.  However, this criticism ignores both the current size of the food stamp program and how policymakers reacted to the last recession.

Despite the strong economy, the food stamp program continues to spend at historically high levels.  As displayed in the chart below, the most recent full-year spending of $65 billion in 2018 far exceeds spending when unemployment was similarly low in 2007 ($40 billion) and 2000 ($25 billion).

Source: US Department of Agriculture and US Bureau of Labor Statistics.
Note: Dollars adjusted according to annual CPI-U. Total SNAP costs include Federal share of State administrative expenses, Nutrition Education, and Employment and Training programs, and other Federal costs (e.g., Payment Accuracy, EBT Systems, Program Evaluation and Modernization, Program Access).Enter a caption

Similarly, even if every ABAWD were to leave the rolls, there would still be more Americans on food stamps (an estimated 36 million) than in 2007 (26 million) and 2000 (17 million).[1]  Thus the baseline for future expansions — and their stimulus effect — remains well above levels prior to past recessions.

Despite that high level of spending, critics contend the rule will restrain the program from growing fast enough when unemployment rises.  That might be expected from a change raising the minimum unemployment rate required to claim a waiver, which will limit waivers both at the end of recoveries (like now, when unemployment is low and stable) and at the start of recessions (when unemployment may be still low or moderate but rising).

But that’s far from the end of the story.  First, ABAWDs are just a fraction of the caseload, as noted above, and overall “the program responds rapidly to economic downturns.”  But more importantly, the same critics acknowledge repeated and bipartisan program expansions during the last recession: “The Bush and Obama administrations, Congress, and states took action throughout the Great Recession to increase geographic eligibility for waivers.”  The reason?  “None of the automatic triggers were sufficient to turn on the waivers for much of the country promptly.”

Those expansions waived the work requirement in literally every state, which contributed to high benefit levels after the recession ended.  The heart of the “harder to combat future recessions” criticism thus rests on the fear similar responses wouldn’t occur.  The most recent experience suggests that’s a misplaced concern, or depends on very different policy reactions to the next recession than to the last one.

In the end, critics have already developed a stimulus plan that extends far beyond perceived deficiencies with the ABAWD rule.  That plan would replace past “timely, targeted, and temporary” stimulus with far larger and permanent “automatic stimulus” that would grow food stamps, unemployment, and a host of other benefits whenever unemployment rises — and even after it has fallen again.  That plan proposes to simply “eliminate SNAP work requirements.”  Ironically, it also would “remove the ‘look-back provisions’ in the Extended Benefits program,” which are designed to end unemployment benefits as economic conditions improve.

That’s the same policy critics deride in the administration’s ABAWD rule — meaning they support the change when it expands unemployment benefits, but oppose it when it contracts food stamps.  Those proposals help explain the apparent real goal of critics — to expand food stamps (among a host of other benefits) in bad times and good.

[1] The 36 million estimate reflects September 2019 participation, according to the most recent Supplemental Nutrition Assistance Program (SNAP) Program Information Report. The 2007 and 2000 figures reflect average annual participation rounded to the nearest million, according to USDA SNAP Participation and Costs table.

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