Function 600 - Income Security
Tighten Eligibility for the Supplemental Nutrition Assistance Program
CBO periodically issues a compendium of policy options (called Options for Reducing the Deficit) covering a broad range of issues, as well as separate reports that include options for changing federal tax and spending policies in particular areas. This option appears in one of those publications. The options are derived from many sources and reflect a range of possibilities. For each option, CBO presents an estimate of its effects on the budget but makes no recommendations. Inclusion or exclusion of any particular option does not imply an endorsement or rejection by CBO.
|Billions of Dollars
|Change in Outlays
This option would take effect in October 2017.
The Supplemental Nutrition Assistance Program (SNAP; formerly the Food Stamp program) provides benefits to low-income households to help them purchase food. Eligibility is generally based on participation in other government assistance programs or on the income and assets of a household.
Most households that receive SNAP benefits—more than 90 percent in fiscal year 2014 (the most recent year for which such data are available)—are considered categorically eligible; that is, they automatically qualify for benefits because they participate in other federal or state programs. Most such households—three-quarters in 2014—qualify for benefits under what is termed broad-based categorical eligibility. Namely, all household members receive or are authorized to receive noncash benefits from the Temporary Assistance for Needy Families (TANF) program; such benefits could include child care, transportation assistance, or even a token benefit such as a pamphlet describing TANF. The remaining categorically eligible households—one-quarter in 2014—are ones in which all members receive cash assistance from TANF, Supplemental Security Income, or certain state programs that serve people with low income. Most households that qualify for SNAP because of categorical eligibility (including broad-based categorical eligibility) would also meet the federal income and asset requirements for eligibility.
Households that receive SNAP benefits but are not categorically eligible for the program—less than 10 percent of all participating households in 2014—qualify by meeting certain income and asset tests set by law that vary depending on households’ characteristics. For households that do not include an elderly or disabled person, total income in the month of application must be less than or equal to 130 percent of the monthly federal poverty guidelines. (Those guidelines are commonly known as the federal poverty level, or FPL.) Also, their cash assets must be less than or equal to $2,250. For households that include an elderly or disabled person, different tests apply.
This option would reduce the monthly income limit for eligibility from 130 percent to 67 percent of the federal poverty guidelines and would eliminate broad-based categorical eligibility, reducing SNAP outlays by 15 percent in 2019—the first year in which the option would be fully implemented. Eligibility for households with elderly or disabled people or those receiving cash assistance from certain other programs (45 percent of households receiving SNAP in 2014, the Congressional Budget Office estimates) would be unchanged. CBO estimates that this approach would yield federal savings of $88 billion from 2018 to 2026. (Eliminating broad-based categorical eligibility while leaving the monthly income limit unchanged would yield federal savings of about $8 billion over the same period.)
A rationale for lowering the income limit for eligibility and eliminating broad-based categorical eligibility is that doing so would focus SNAP benefits on people most in need. Also, eliminating broad-based categorical eligibility would make the eligibility for and benefits from SNAP more consistent among states because states have different policies regarding other assistance programs.
An argument against this option is that it would eliminate benefits for many households in difficult financial situations, including some people below the federal poverty level. (Lowering the income limit for eligibility to 100 percent of the FPL would eliminate benefits for fewer households but would save less than lowering the limit to 67 percent of the FPL.) An additional argument against eliminating broad-based categorical eligibility is that doing so would increase the complexity and time involved in verifying information on SNAP applications, probably resulting in more errors. Adopting that approach would also increase the paperwork for applicants.