On Friday $5 billion in cuts to the nation's food stamp program went into effect, meaning low-income Americans will soon receive less government assistance to put food on their tables. Currently, 47.6 million Americans, or roughly 1 in 7, are on the Supplemental Nutrition Assistance Program, or SNAP.
The benefit cuts come as recession-era SNAP spending increases come to an end. President Barack Obama's 2009 stimulus package included boosts to food stamp benefits, but Congress has not passed a budget that might replace those cuts. That 2009 boost came at a time when the recession led tens of millions of Americans to sign up for SNAP. Today's nearly 48 million recipients are double the number of people who received food stamps in 2004.
Starting in November, monthly benefits will shrink by $11 for a household of one, with progressively larger cuts based on household size. A household of four will lose $36 per month, according to the Center on Budget and Policy Priorities, a left-leaning public policy organization.
That will make the new maximum benefit for a household of four $632. While that may sound like a modest cut, it is also a cut to a modest food budget, equaling roughly $1.76 per person per meal. According to USDA guidelines, a family of four with two school-age children on a "moderate-cost" food spending plan pays around $1,025 per month for food at home, or around $2.85 per meal. However, the new monthly food stamp benefits fall roughly in line with what the USDA considers a "thrifty" spending plan.
It doesn't just matter for families on SNAP; local economies and the national economy could be affected by the cuts. Government transfer programs to the poor tend to have high fiscal multipliers, in economist-speak. What that means is for every dollar the government spends on food stamps, GDP tends to improve by more than a dollar. Mid-recession, Moody's Analytics estimated that every dollar of SNAP spending increased output by $1.73. The CBO estimated in February that the multiplier for SNAP spending was anywhere between 0.4 and 2.1 – a broad range, but also among the highest multiplier estimates the CBO gave for any stimulus act program.
Families receiving food stamp benefits spend more on groceries and also tend to have room for more spending elsewhere, says the CBO. That means a cut in benefits could mean less economic activity. Some areas of the country are particularly dependent on food stamps. Census data show three metro areas in Texas – those surrounding Laredo, McAllen, and Brownsville – lead the nation in food stamp recipients. Nearly 30 percent of households in Brownsville receive SNAP benefits, along with nearly 33 percent in McAllen and 34 percent in Laredo. Below are the 10 metro areas with the highest share of households receiving SNAP benefits.
Meanwhile, other areas of the country might not notice the cuts so intensely. In Manhattan, Kan., and Boulder, Colo., a little more than five percent of households receive SNAP benefits. Below are the 10 metro areas with the lowest share of households receiving food stamp money.
The new food stamp cuts may just be a prelude to yet more benefit declines. The House and Senate are currently negotiating cuts to the program as they attempt to pass the Farm Bill. The Senate's version of the bill would cut around $4 billion, while the House's version would cut nearly $40 billion.