Last week the U.S. Department of Agriculture (USDA) proposed a measure it claims will close a loophole that allows states to make participants receiving minimal Temporary Assistance for Needy Families (TANF) benefits automatically eligible to participate in USDA’s Supplemental Nutrition Assistance Program (SNAP). Acting Deputy Under Secretary Brandon Lipps said the proposed rule would result in saving an average of $2.5 billion per year.
Here are five facts you should know about food stamp programs like SNAP.
1. The first federal Food Stamp Program (FSP) began in 1930 and ended in 1943. The program allowed people on relief to buy orange stamps equal to their normal food expenditures. For every $1 worth of orange stamps purchased, 50 cents worth of blue stamps were received. Orange stamps could be used to buy any food while Blue stamps could only be used to buy food determined by the USDA to be surplus. Another pilot program ran from 1961 until 1964, when Congress passed the Food Stamp Act. The program grew from half a million participants in 1965 to a record high of 22.4 million people in 1981. (A new record high of 47.6 million people was reached in 2013.)
2. The FPS underwent numerous revisions throughout the 1970s and 1980s. One significant change was the Electronic Benefits Transfer (EBT), a program first introduced in 1984, which provided benefits on a debit card rather than on paper stamps. EBT helped to reduce food stamp fraud by creating an electronic record of each food stamp transaction, making it easier to identify violations. The rate of food stamp fraud—primarily the exchange of food stamps for cash—dropped from nearly 4 percent in the 1990’s down to around 1 percent after EBT was fully implemented.
3. In efforts to counter the stigma attached to the term “food stamps,” Congress changed the name of the program in 2008 to the Supplemental Nutrition Assistance Program or SNAP, and changed the name of the Food Stamp Act of 1977 to the Food and Nutrition Act of 2008. States were given flexibility to name the program on their own (at the time, 10 states already changed the names of their programs) but were encouraged to change the name to SNAP or another alternate name.
4. SNAP is the largest federal nutrition assistance program, in both participation and spending. Such programs are funded under the “Nutrition” section of the omnibus legislation passed every five years known as the farm bill (the latest bill was the Agriculture Improvement Act of 2018). According to the Congressional Budget Office’s (CBO’s) projected costs at the time of the 2018 law’s enactment, the Nutrition title makes up approximately 76 percent of farm bill spending, and SNAP is the vast majority of the Nutrition spending. Approximately 95 percent of SNAP spending is for the benefits themselves, which are 100 percent federally funded., while administrative costs of eligibility determination are shared between the states and the federal government. As of 2018, the program cost $64.9 million for 40.3 million participants.
5. SNAP is designed primarily to increase the food purchasing power of eligible low-income households to help them buy a nutritionally adequate low-cost diet as determined by USDA guidelines. SNAP benefits are available for households that meet federal financial eligibility tests for limited monthly income (at or below 130% of the federal poverty level) and liquid assets ($2,000 per household). These rules, however, can be bypassed through the use of “categorical eligibility” for SNAP. Categorical eligibility provides states with the ability to modify federal financial eligibility rules. As of February 2018, 42 states utilized broad-based categorical eligibility, although several do so with an added limit on liquid assets. To be eligible for SNAP, a household must also fulfill requirements related to work effort and must meet citizenship and legal permanent residence tests.
