In Focus: Supplemental Nutrition Assistance Program (SNAP)

Jun 7, 2016  |  PERMALINK »

Strengthening the Social Safety Net: Building on What Works—and Avoiding Bad Ideas


Today, U.S. House Speaker Paul Ryan (R-WI) acknowledged the effects of poverty on too many Americans yet offered the wrong solutions. Instead of building on what works—such as the Earned Income Tax Credit (EITC), expanded Head Start and child care subsidies, and nutritional assistance—the policy paper released this morning by Speaker Ryan offered the same tired answers of consolidations, cuts, waivers, and participation requirements that have been shown to undermine the effectiveness of key income and work support programs.

Building on what works

The safety net works to reduce poverty, improve families’ wellbeing, and—according to strong emerging evidence—improve the long-term life chances of children who benefit from key programs. In 2014, the U.S. Census Bureau’s Supplemental Poverty Measure (SPM) shows that refundable credits, such as the Earned Income Tax Credit and Child Tax Credit, reduced overall poverty (as measured by the SPM) by 3.1 percentage points and child poverty by a remarkable 7.1 percentage points. Similarly, Supplemental Nutrition Assistance Program (SNAP) benefits reduced overall poverty by 1.5 percentage points and child poverty by 2.8 percent. Researchers at Columbia University who used similar methods to analyze the effect of these key programs found that in 2012, the most recent year with available data, government tax and transfer policies reduced the share of people who are poor by almost half, from 29 percent to 16 percent. By contrast, in 1967, tax and transfer programs reduced poverty by just 1 percentage point, from 27 percent to 26 percent.

Recent rigorous studies of both SNAP and public health insurance have demonstrated the positive effects of access as a child to these safety net programs on life outcomes into adulthood. Having access to SNAP in early childhood improves adult outcomes including health and economic self-sufficiency. Expanding health insurance coverage for low-income children has large effects on high school completion, college attendance, and college completion.

At a Center for American Progress event this morning, U.S. Senator Sherrod Brown (D-OH) called for an expansion of the EITC for adults without minor children and recommended that recipients be able to access a portion of their benefits in advance (rather than waiting on an annual income tax refund), in order to meet urgent needs and avoid high-cost payday loans. Working childless adults are the only group taxed into poverty. Young adults ages 18 to 24—who have the highest joblessness rate in the country—are completely ineligible for the EITC if they don't have children; those young adults who are working have higher poverty rates than the overall population and would significantly benefit from an expansion of refundable tax credits. Mr. Ryan has previously supported an EITC expansion to bolster the earnings of these low-income workers, but there is no mention of such an expansion in today’s proposal.

Avoiding what doesn't work

The proposal explicitly uses the Temporary Assistance for Needy Families (TANF) block grant as a model to be replicated to other public assistance programs operating at the federal level—even though the history of TANF shows vividly why block grant programs don’t work. The value of the TANF block grant has fallen by 33 percent over the last 20 years, leaving fewer than 1 in 5 poor children with any help at all from the program (and fewer than 1 in 10 in 17 states). And unlike the core safety net programs like Medicaid and SNAP that provided more help to states, families, and communities when revenues shrank and need rose during the Great Recession, TANF barely responded at all because of its capped resources —failing states and families when they needed help the most. The block grant has also given states so much flexibility in the use of federal and state expenditures that basic monthly assistance accounts for only 27 percent of spending under TANF (and work programs for only 8 percent); instead program funds have been used to plug holes in state budgets or to support other social programs that may vaguely meet one of the core statutory purposes of TANF.

The proposal also doubles down on work mandates—for example, in housing assistance programs—even though work requirements without strong public investment in jobs and training typically serve only to cut poor individuals off from help they need, rather than helping them get jobs. These so-called requirements also ignore the evidence that most poor families are already working—what they need most is stability in their lives (including a stable place to live, health care, and child care) and the opportunity to move up at work. Far from being an example of success, the provisions governing work in TANF fly in the face of research evidence about what helps families succeed at work. For example, TANF's work participation rate requirement limits the type of countable work-related activities, making it challenging for those participants with severe barriers to employment—such as a physical or mental disability, very low educational attainment, or persons with criminal records—to fully engage in activities mandated by the work requirement. States are rewarded for cutting such families off of assistance, which has led to an increase in deep poverty. By contrast, the Workforce Innovation and Opportunity Act (WIOA) of 2014, which Congress passed in a nearly unanimous bipartisan vote, emphasizes effective skills training leading to postsecondary credentials that employers recognize as having value in the labor market, which research has found to be “the most important determinant of differences in workers’ lifetime earnings and incomes.”

Another example of the bad ideas in this proposal is one that builds on ill-advised provisions of the House child nutrition reauthorization bill, which would shrink coverage of the very successful community eligibility provision and inappropriately increase verification paperwork for families, creating additional barriers for low-income children who need access to free or reduced price meals in order to succeed at school. The House bill also includes a three-state block grant proposal that would immediately cut the funding to operate the school nutrition programs in those states, and cap funding thereafter. With each year, the programs’ ability to serve low-income children will erode even further and states will be unable to respond to any increase in need arising from a recession or population growth.

And the paper’s claim that anti-poverty programs can be dramatically improved—including the elimination of "cliff effects" resulting from the loss of benefits as earnings increase—with no additional spending, while appealing, is just not true. The reality is that many key elements of economic security—child care, housing, transportation, and education—are unaffordable for low-wage workers even when they are able to find steady employment. No amount of state flexibility or coordination will substitute for adequate funding for these essentials.

Bold new ideas

But reducing poverty requires more than just avoiding bad ideas. As CLASP Executive Director Olivia Golden testified before the House Ways and Means Committee two weeks ago:

“Congress should avoid bad ideas that demonstrably don’t work—such as block grants, misguided requirements, and cuts in key programs—and should seize opportunities that build on research and experience. These include expanded access to child care for all low-income parents, investment in effective workforce development programs and career opportunities, financial access to postsecondary education and completion for today’s low-income students, crucial fixes to the work support system for adults and families, and basic standards for fairness at work, including raising the minimum wage. Many of these solutions would also benefit middle-income Americans who struggle with some of the same problems that hold back parents, workers, and students living in poverty—such as the high cost of child care and of postsecondary education, the need to develop new skills, and the lack of paid leave and fair, predictable work schedules.”

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Additional CLASP resources on related topics are linked below:

TANF 101” Policy Brief Series

Social Impact Bonds: Overview and Considerations

Does Head Start Work? Wrong Question

Child Care Assistance Spending and Participation in 2014

May 10, 2016  |  PERMALINK »

Louisiana Sets New Bar for State Efficiency

By Suzanne Wikle

In an important development for low-income people, Louisiana announced it will be the first state in the country to seek approval from the U.S. Centers for Medicare and Medicaid Services (CMS) to use data already on file to streamline its process for making determinations on eligibility for Medicaid. Thanks to an option provided to states in August 2015, Louisiana plans to use information that the state’s Supplemental Nutrition Assistance Program (SNAP) agency already has to assist with Medicaid enrollment in launching its Medicaid expansion this summer. This major development out of Louisiana reflects strong leadership and a vision for improving the efficiency of government programs. Louisiana is taking this step in part because of the bold move made by newly inaugurated Governor John Bel Edwards who, in his first executive action after taking office in January 2016, expanded Medicaid under provisions available to states through the Affordable Care Act (ACA).

Many people who are eligible for Medicaid under the ACA Medicaid expansion are also eligible for SNAP. Therefore, it simply makes sense to use data from one program to aid enrollment in the other, rather than requiring people to provide duplicative information about their income. Under the option Louisiana is seeking approval to use, states may utilize income information on record for select SNAP populations to determine Medicaid eligibility.

This letter from CMS to states outlines all the criteria for this option. Generally this method of streamlined enrollment is helpful in determining Medicaid eligibility for people under 65 years old with stable income and household characteristics who are certain to be eligible for Medicaid. For example, a single mother of two children who earns minimum wage and has no other income would benefit from Louisiana’s method by having her SNAP income information used to determine her Medicaid eligibility – reducing the burden of paperwork on the parent and eliminating unnecessary processing by the state. Simply put, it’s common sense to eliminate the need to prove what the state already knows, and doing so makes the work of state government more efficient.

What’s particularly exciting is that Louisiana is availing itself of an option to use SNAP information for initial enrollment and renewal. Evidence shows that many eligible people lose Medicaid coverage at the time of their renewal, often due to missing paperwork. However, because most people reapply after losing coverage, this “churning” of eligible people is costly to the state and disruptive to enrollees and medical providers. Louisiana’s approach promises to reduce the rate of churn, which in turn increases efficiency and saves the state money by processing fewer applications.

Such streamlining and efficiency is how programs should operate in 2016, and more states should follow Louisiana’s lead. Louisiana is raising the bar and setting new standards for how government can operate at the top if its game – efficiency for the state and for the people who are working hard but struggle to make ends meet. Other states should take note and examine whether they are fully utilizing information on hand in one agency to eliminate duplicative work elsewhere.

Mar 25, 2016  |  PERMALINK »

House Budget Seeks Cuts and Changes to Low Income Programs that Work

By Helly Lee

Last week, the House Budget Committee released their proposed budget plan for federal fiscal year 2017. It aims to reduce the national deficit by $7 trillion over the next 10 years through a combination of spending cuts ($6.5 trillion) and projected economic growth, while bringing in no new revenue. The budget proposes an $877 billion cut in federal non-defense discretionary (NDD) spending over the next decade. It would accomplish this by freezing NDD at $472 billion over the next nine years—significantly lower than the $516 billion FY 2017 cap set by last year’s Bipartisan Budget Agreement (BBA). The budget also calls for billions of dollars of cuts to mandatory programs, with the deepest cuts to programs affecting low-income families.

Under the proposed budget plan, legislators seek to balance the budget on the backs of low-income Americans by cutting into critical programs that actually work to address poverty such as the Supplemental Nutrition Assistance Program (SNAP) and the Child Tax Credit (CTC). CBPP reports that the House Budget Committee-approved plan would cut SNAP by more than $150 billion over the next ten years, ending food assistance for millions of low-income families. In addition, it seeks to block grant  SNAP, not only scaling back eligibility and reducing benefits, but also taking away the flexibility of the program to respond to the needs of families by expanding during times of economic downturn, and retracting as the economy recovers.

Some of the cuts included in the House Budget are already being moved as independent bills; the House Ways and Means Committee has cleared  H.R. 4722, which requires tax payers to use social security numbers when they claim the refundable portion of the CTC. This is yet another attempt to bring up a policy that would harm up to 4.5 million U.S. citizen children.  Under current law, low-wage, working parents who file taxes with an Individual Tax ID Number (ITIN) rather than a Social Security number, qualify for the CTC. Proponents claim that restricting CTC to only those who file with a Social Security number prevents fraud, but that claim is misguided. It would actually deny the benefits of the CTC to eligible, low-income working immigrant families, the vast majority of whom have U.S. citizen children. Other bills that have passed House committees would eliminate the Social Services Block Grant, and slash support for Medicaid and CHIP.

Both SNAP and the CTC, along with other critical safety net programs work to help low-income families make ends meet and lift millions of families out of poverty. Instead of proposing deep cuts and drastic changes to them, Congress should be working to protect and strengthen these programs.

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