Can the U.S. Economy Afford to Modify SNAP?

The House voted to adopt a budget blueprint that will cut funding for the Supplemental Nutrition Assistance Program (SNAP). Formerly referred to as the Food Stamp Program, SNAP provides social support and acts as an economic stimulant in the U.S.  Newly appointed USDA Secretary, Brooke Rollins, who is now tasked with cutting funding in multiple areas of the agricultural sector maintains that any decisions influencing SNAP benefits are made with its original mission in mind; to supplement grocery budgets for low income families so that they are able to purchase nutritionally valuable food items and thereby assist economic momentum for farmers, manufacturers and grocery retailers.

With a potential for $230 billion in cuts for SNAP and Rollins supporting efforts to pick up the pace on a new Farm Bill that reassesses the relationships between the people who grow food and the people who need it things could change quickly. Though the Supplemental Nutrition Assistance Program is just one of many programs set to experience funding changes, it has long been viewed as a primary tool for economic recovery and resilience. The reach of the program is so broad that any changes will have a large scale effect.

Is SNAP a Supplemental Safety Net?

Some have called SNAP the nation's largest safety net in the event of an economic downturn. As grocery prices, utility expenses and fuel costs climbed in recent years, SNAP allowed even the lowest income families to shop for their own food. These benefits give households purchasing power that works to maintain a strong demand for grocery goods and supports food producers, manufacturers and the transport industry. As intended, benefits have often covered grocery bills and made it possible for families to continue paying rent or keep up with utilities without having to choose between necessities. 

Budget cuts could either restructure regulations and make it more difficult for families to be approved for benefits or decrease per month amounts received by as much as 23%. Either way, billions of dollars a year is meant to be removed from this micro-economy.  Those opposed to SNAP funding changes worry it could be a larger problem than kids going to school hungry; it could make the national economy vulnerable. 

I also worry about the impact on the grocery stores that use these funds to function in communities that do not have the income to support grocery stores. Roughly 42 million Americans receive SNAP benefits with the average benefit per month amounting to $192 per person. For every $1 spent an estimated $1.50 of economic activity is generated in the transfer of goods across the supply chain. Upwards of 45,000 jobs are tied to SNAP. If the funding is gone will these consumers reliant on the supplement continue to budget the same way for groceries? Will it ultimately impact other sectors like energy and housing?

Despite the fact that inflation percentages are stabilizing in the grocery sector, a decrease in benefits could be highly problematic. If benefits don’t expand at the same rate as inflation it could create a financial gap; inadequately supplementing consumer budgets and hurting both manufacturing and retailer bottom lines.

Is SNAP Nutrition Oriented?

Brooke Rollins has been viewed as somewhat of a wildcard in the ag sector. Will she prioritize economic momentum, filter her decisions through nutritional concerns and/ or throw her might behind the American farmer when it comes to reevaluating the SNAP? 

From a nutrition perspective some argue that SNAP does not allow its beneficiaries to truly make healthy purchases, or that recipients don’t tend to buy more nutritious food with their supplemented grocery fund. This is in part because the system favors big retailers and big food manufacturers who sell their goods in these types of stores. Very few small farms or little retail operations are able to accommodate SNAP grocery cards meaning that the extra dollars don’t equal increased access to better nutrition. 

A restructuring of benefits that makes it easier for SNAP recipients to purchase fresh meats, fruits and vegetables as opposed to prepackaged meals, canned goods or boxed foods has the potential to support both American food growers and the nutritional needs of lower income households. In theory, accommodations that bring locally raised and grown food to the people who need it would only serve to strengthen regional food supplies.  Likewise, any program that supports consumers spending their money in the perimeter of a grocery store might favor farmers over food manufacturers.

Who Will Be Assisted By SNAP?

SNAP is a federally funded assistance program that falls under the United States Department of Agriculture. Those in favor of cuts to SNAP funding argue that the agricultural sector receives little benefit from the program; portions of cents on the dollar. Whereas the food manufacturing industry actually receives a guaranteed market to sell to. It’s possible that any modifications to the current system will prioritize assistance to agricultural production, making it cheaper to produce and transport food so that retail prices come down and food becomes more affordable for consumers.

Rollins has been intentional in relaying the message that President Trump knows that agricultural families supported his nomination and they trust him to also assist them. Rather than enhance efforts to directly supplement shoppers will funding initiatives give greater consideration to the first links of the supply chain? 

Other food assistance programs in the United States worry about accommodating lost SNAP benefits in their own facilities. Even as grocery prices stabilize can food pantries realistically take on the financial burden of a benefit void?  Responsibility for assistance programs would fall largely on individual states and local communities rather than trickle down from federal government funding. 

Future funding for SNAP benefits are likely to consider more than just the intention of the program to combat poverty in the United States. The highly debated assistance model has been a core component of our economy whether it has created a positive impact in nutrition or agriculture or not.  Even slight lapses in funding could loosen a cog in the economic wheel that depends on supplemental income.