Just as lawmakers temporarily increased food stamp benefits during the Great Recession of 2008-09, Congress should boost benefits to help poor families cope with the economic downturn that is accompanying efforts to slow the spread of the coronavirus, said the Center on Budget and Policy Priorities on Thursday. Rob Greenstein, head of the think tank, said higher SNAP payments provide a double benefit — they help people buy enough food and the purchases stimulate the economy.
“We know it is actively being looked at on Capitol Hill,” said Greenstein during a teleconference. The SNAP increase was among several steps recommended by the think tank as Congress works on a “phase three” relief bill. Without federal intervention, the economic downturn could be worse than the 2008-09 recession, he said.
Each $1 in SNAP benefits generates $1.50 in GDP, according to a 2019 USDA study. SNAP is counter-cyclical by design; enrollment is highest during periods of economic distress and outlays increase as enrollment rises. At latest count, some 36.2 million people received food stamps, with average monthly benefits of $122 per person. Peak enrollment was 47.6 million people during fiscal 2013.
Greenstein said increased SNAP benefits were one of the most efficient ways for government to relieve hardship and fuel business activity. The Center on Budget recommended a 15 percent increase in food stamps, equal to $25 per person, or $100 a month for a family of four. The increase should remain in force until the economy improves, it said. Similarly, it said that the usual 90-day limit on benefits for able-bodied adults without dependents (ABAWDs) should be suspended until there’s an economic recovery, and that the USDA should stop work on three regulations that would tighten SNAP eligibility and end benefits for nearly 4 million people.
“Contracting eligibility for SNAP during a downturn runs counter to the goal of boosting demand,” said the think tank.
In a decision last week, a federal judge barred the USDA from implementing the first of the regulations, affecting 700,000 ABAWDs, due to take effect on April 1. The USDA said on Wednesday that it would appeal the district court ruling, reported the Associated Press. Since 1996, ABAWDs have been limited to 90 days of food stamps in a three-year period unless they work at least 80 hours a month. The USDA regulation would curb the power of states to waive the 90-day limit.
Senate Republicans announced an economic package on Thursday and said they were ready to negotiate with Democrats on amendments to it. Majority Leader Mitch McConnell said the package offered “direct financial help” to Americans, “rapid relief for small businesses and their employees [with] significant steps to stabilize our economy and protect jobs,” and support for the healthcare industry. The Senate Finance Committee said tax law changes would include checks of $600 to $1,200 per person to Americans, depending on their income; an extension until July 15 for filing income tax returns; penalty-free withdrawal of money from retirement accounts to pay for coronavirus expenses; and a raft of business tax breaks, such as delays in the payment of estimated taxes and employer payroll taxes.
“These recommendations would blunt the impact for most Americans and limit the damage to the U.S. economy,” said Finance Committee chairman Chuck Grassley of Iowa.
Senate Democratic Leader Chuck Schumer said a “workers first” approach was the goal of Democrats in the Senate and the House. “And I know that the Speaker of the House [Nancy Pelosi] agrees with these points,” said Schumer, listing five objectives, including paid sick leave.
In the 2009 economic stimulus bill, SNAP benefits were increased temporarily by an average of 17 percent, or $80 a month for a family of four.
President Trump signed into law a coronavirus relief bill on Wednesday night that included $1.3 billion in additional funding for public nutrition programs such as WIC. It would suspend the 90-day limit on food stamps for ABAWDs during the public health emergency declared due to the coronavirus outbreak.
To read the Center on Budget and Policy Priorities paper, “Immediate and robust policy response needed in face of grave risks to the economy,” click here.