SNAP, Medicaid Block Grants Would Weaken the Already-Fragile Safety Net

Mar 13, 2013

By Elizabeth Lower-Basch

Once again, House Budget Committee Chairman Paul Ryan (R-WI) has put forward a budget proposal that calls for block granting of both Medicaid and the Supplemental Nutrition Assistance Program (SNAP, formerly known as food stamps).  Rep. Ryan justifies this proposal by citing the supposed "success" of the Temporary Assistance for Needy Families (TANF) block grant as a model.

As we have explained before, TANF has too often not been a success as either a safety net or a springboard to opportunity.    The poverty reduction that Rep. Ryan cites was limited to the boom years of the 1990s; child poverty rates had begun to climb even before the recent deep recession.  The funding for the block grant has been eroded over time, and state flexibility has led to a patchwork - and often flimsy - safety net.  While the number of families receiving cash assistance from TANF rose somewhat during the recession, it did not climb nearly as much as the number of families who might have benefited from such help. 

An important role for safety net programs is to be a countercyclical support - meaning that they automatically expand when the economy is bad.  This is both essential for the individuals who need assistance, and an important way to stimulate the economy by putting money in the hands of those who will spend it quickly.  However, states have much less capacity to provide countercyclical support than the federal government, as they are required to balance their budgets each year.  Their revenues decline in tough economic times, and in the absence of countercyclical federal spending, they are often forced to cut benefits just when they are needed the most.   This is precisely what happened under TANF.  In some states, time limits for receiving support were shortened and thousands of families lost benefits even as the unemployment rate rose to historic levels.  Facing revenue shortfalls, many states used the TANF block grant to take the place of state funds for a range of services for low-income families, rather than providing increased cash assistance.

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