The Trump administration is proposing bumping 3.1 million people off of food stamps (about 8 percent of the total program) through the federal rule-making process — cutting out Congress.
The rule cracks down on “broad-based categorical eligibility,” or BBCE, a policy that enables states to enroll people in food stamps (formally called the Supplemental Nutrition Assistance Program or SNAP) if they’ve already applied for other benefits limited to low-income people, most notably Temporary Assistance for Needy Families (TANF). The claim (which doesn’t have much basis in evidence) is that this provision is easy to game and keeps benefits from going to the neediest people.
That’s a lot of acronyms, but the basic point is this: The program that the administration is targeting helps needy people get access to food stamps more easily and quickly. Eliminating it will reduce access to benefits, to the tune of 3.1 million people, by the Trump administration’s own numbers.
Safety net supporters are, understandably, concerned. “The proposed rule would take basic food assistance away from working families, seniors, and people with disabilities, and make it harder for struggling people to make ends meet,” Stacy Dean, the Center on Budget and Policy Priorities’ vice president for food assistance policy, said in a statement.
This action fits well with Trump’s budgets, which have consistently proposed slashing food stamps. But unlike those budgets, this is a policy his administration can enact without congressional go-ahead. While those budgets are mostly dead on arrival, this policy will very likely take effect barring a dramatic change.
How “categorical eligibility” works, and how Trump would change it
In most cases, SNAP recipients become “categorically eligible” by applying for TANF, a largely moribund program meant to provide money to low-income families with children. TANF has more or less collapsed due to state mismanagement of funds and federal underfunding, so many people who apply for it don’t get it. But people who qualify to apply generally have quite low incomes, making application a useful proxy for need and for eligibility for food stamps.
Additionally, categorical eligibility lets states opt out of federal asset limits, which currently limit households without disabled or older people to $2,250 in savings, and ones with disabled or older members to $3,500 — effectively forcing poor people to spend down all their savings before getting help. A number of states not commonly regarded as leaders in providing safety net benefits — like Mississippi, Alabama, Georgia, and Iowa — have used the program to eliminate asset limits. The program also allows states to offer modest SNAP benefits to people earning more than the federal limit of 130 percent of the poverty line ($33,475 for a family of four).
Under current policy, you can qualify under categorical eligibility by merely applying for TANF, but technically you need to receive some “benefit” — in many cases, just a brochure or informational pamphlet from the state TANF agency. The proposed rule would require people to not just apply for benefits, but actually receive benefits worth at least $50 a month for at least six months in order to qualify. You’d need to receive a lot more than a brochure from the state, in other words: At least $300 more in benefits, either cash or job support or something else.
Supporters of the policy change point to the perceived game-ability of the current system as a justification. Republicans in Congress have used Rob Undersander, a millionaire in Minnesota who signed up for food stamps under categorical eligibility, as a kind of mascot in the debate, trying to prove that the program was easy to defraud. If he got in, the argument goes, how many other fraudsters might be out there? Specifically, Undersander got in by claiming low interest income from his savings but high assets; an asset test would’ve excluded him.
Opponents of the change note that Undersander’s just an odd anecdote, and in practice this provision doesn’t seem to generate many if any problems. “To receive SNAP, all households, including those eligible under BBCE, must apply, be interviewed, and document that their monthly income and expenses, such as high housing and child care costs, leave them with too little disposable income to afford a basic, adequate diet,” Robert Greenstein of the Center on Budget and Policy Priorities notes.
What’s more, the best evidence we have says not that many, if any, rich people are pulling Undersanders. A 2012 Government Accountability Office report (hat tip to Arthur Delaney for the pointer) estimated that only about 2.6 percent of recipients in 2010 had incomes above the eligibility limit; these people, it further found, weren’t much richer than people under the income limit. They were, on average, at 150 percent of the poverty line ($33,075 for a family of four, back then), and because they were richer they claimed significantly lower benefits than other enrollees.
More recent data is even more telling: As of 2017, just 0.2 percent of SNAP benefits went to beneficiaries with net incomes (after housing, child care, etc.) above the poverty line. There just isn’t a mass of very high-income people using this to get benefits.
Supporters of categorical eligibility also highlight the benefits of getting rid of the federal “asset test,” which could deter savings (or at least cash savings), and the fact that it slows the phaseout of SNAP benefits, which reduces the work disincentive caused by the phaseout removing benefits as people earn more money.
But under Trump’s rule, if the same worker gets a 50-cent raise, the whole family loses SNAP overnight, because it puts them >130% FPL.— Rebecca Vallas (@rebeccavallas) July 23, 2019
They face a net *loss* of $75 per month.
They’re *worse off* after getting a raise.
They also note that categorical eligibility means families with SNAP automatically qualify for free school lunches, access to which could be limited by this rule as well. If your parents no longer get SNAP, you’ll no longer get a reduced-price school lunch.
The rule is not policy quite yet. It has to go through a public comment process, and Congress could, if it desires, reverse the rule or legislatively preempt it. But it’s getting close, and the safety net is set to shrink for a large number of people.
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