Reducing SNAP (Food Stamp) Benefits
Provided by the ARRA: P.L. 111-226 & S. 3307

Joe Richardson
Specialist in Social Policy
Jim Monke
Specialist in Agricultural Policy
Gene Falk
Specialist in Social Policy
August 20, 2010
Congressional Research Service
7-5700
www.crs.gov
R41374
CRS Report for Congress
P
repared for Members and Committees of Congress

Reducing SNAP (Food Stamp) Benefits Provided by the ARRA: P.L. 111-226 & S. 3307

Summary
The American Recovery and Reinvestment Act of 2009 (ARRA; P.L. 111-5) included an across-
the-board increase in benefits provided under the Supplemental Nutrition Assistance Program
(SNAP, formerly the Food Stamp program), effective in April 2009. The ARRA effectively
replaced, until after FY2018, the increase in SNAP benefits that occurs based on annual food-
price inflation indexing (under current inflation scenarios). The ARRA substantially raised
maximum monthly benefits, by 13.6%. For a one-person household, the added benefit was $24 a
month; for two persons, $44 a month; for three persons (the most typical household), $63 a
month; for four persons, $80 a month; and for larger households, higher amounts. As a result,
average household SNAP benefits (typically less than the maximum) were boosted by more than
15%. The effects of the ARRA benefit increase were expected to terminate after FY2018, when
food-price inflation “caught up” with the ARRA add-on. Through FY2018, when the effect of this
increase is currently projected to end, Congressional Budget Office (CBO) estimates indicate an
extra benefit cost of some $57 billion linked to the 2009 ARRA provision.
These increased SNAP benefits were recently reduced as part of P.L. 111-226 (a law providing
funding for education jobs and Medicaid) and are proposed for further reduction in the Senate’s
amended version of its child nutrition/WIC reauthorization bill (S. 3307, as approved on August
5, 2010).
Under congressional “pay-as-you-go” (PAYGO) rules, P.L. 111-226 and S. 3307 would tap future
spending for ARRA-generated extra SNAP benefits to pay for costs incurred in these initiatives—
to the tune of $11.9 billion in P.L. 111-226, and an additional $2.5 billion under the terms of S.
3307. P.L. 111-226 achieves its savings by terminating the ARRA across-the-board SNAP
increase effective March 31, 2014. As a result, SNAP benefits will revert to what basic SNAP law
directs (i.e., as calculated using annual food-price inflation). CBO estimates that the initial drop in
monthly benefits will be between $10 and $15 a person—approximately a 10% reduction in
average per person benefits. S. 3307 proposes to achieve its savings by moving up the date on
which the ARRA-generated SNAP benefit increase will terminate—to October 31, 2013.
This report outlines how the provisions in these two measures work to draw on future SNAP
spending and benefits and the effect they have on ARRA-based SNAP benefits.

Congressional Research Service

Reducing SNAP (Food Stamp) Benefits Provided by the ARRA: P.L. 111-226 & S. 3307

Contents
The American Recovery and Reinvestment Act of 2009 (ARRA) ................................................ 1
Funding for Education Jobs and Medicaid ................................................................................... 2
Child Nutrition and WIC Legislation........................................................................................... 3
Future Food-Price Inflation ......................................................................................................... 4

Figures
Figure 1. ARRA Increase in SNAP Benefits ................................................................................ 2
Figure 2. Education Jobs/Medicaid Law (P.L. 111-226) SNAP Benefit Reduction........................ 3
Figure 3. Child Nutrition/WIC (S. 3307) SNAP Benefit Reduction.............................................. 4
Figure 4. Illustrative Effect of Higher Future Food Prices on SNAP Benefits ............................... 5

Contacts
Author Contact Information ........................................................................................................ 5

Congressional Research Service

Reducing SNAP (Food Stamp) Benefits Provided by the ARRA: P.L. 111-226 & S. 3307

The American Recovery and Reinvestment Act of 2009 (ARRA)
Benefits provided by the Supplemental Nutrition Assistance Program (SNAP, formerly the Food
Stamp program) are, under basic SNAP law (the Food and Nutrition Act), normally indexed for
food-price inflation at the beginning of each fiscal year—every October 1.1 The most recent
Congressional Budget Office (CBO) projections (in its March 2010 “baseline”) show annual
food-price inflation (as measured by the cost of the Agriculture Department’s “Thrifty Food
Plan”) ranging from negligible to 2% through FY2018.
The 2009 ARRA (P.L. 111-5) effectively overrode this annual inflation-indexing rule with an
across-the-board benefit increase, effective April 2009. Maximum monthly benefits were
increased substantially, by 13.6%. For a one-person household, the added benefit was $24 a
month; for two persons, $44 a month; for three persons (the most typical household), $63 a
month; for four persons, $80 a month; and for larger households, higher amounts. As a result,
average household SNAP benefits (typically less than the maximum) were boosted by more than
15%. The effects of the ARRA benefit increase were expected to terminate after FY2018, when
food-price inflation “caught up” with the ARRA add-on. There was no specific termination date.
The most recent CBO estimate of the cost of this jump in benefits (in the March 2010 “baseline”)
places it at approximately $57 billion (FY2009 through FY2018) and indicates that the cost and
added benefit effect is concentrated in the first five years—$43 billion, or 75%, over FY2009 to
FY2013. 2 SNAP costs under its base law for FY2009-FY2018 (with no ARRA-related increase)
are estimated at approximately $590 billion.
Figure 1 illustrates the ARRA benefit increase (the shaded area) and its decreasing effect over
time (as compared to pre-ARRA law) as food-price inflation (adjusted annually, each October 1)
increases the underlying benefit as dictated by basic SNAP law. The rising SNAP base benefit
(totaling some $590 billion through FY2018) is represented in the un-shaded portion of the
figure.

1 Each October’s inflation-indexing of SNAP benefits is based on the cost of the Agriculture Department’s “Thrifty
Food Plan” in the June immediately prior to it. Benefits also vary by household size, the amount and type of household
income, and certain living expenses (like high shelter costs).
2 Under current CBO estimates, FY2018 is the last year in which the ARRA benefit increase will have an effect (i.e.,
require benefits above what would have occurred under pre-ARRA law). It should be noted that earlier estimates of the
additional SNAP spending effects of the ARRA were much lower (e.g., about $20 billion near the time of enactment in
February 2009).
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Reducing SNAP (Food Stamp) Benefits Provided by the ARRA: P.L. 111-226 & S. 3307

Figure 1. ARRA Increase in SNAP Benefits
$ SNAP Benefit in ARRA
$57 billion
Increasing SNAP benefit in base law
FY2009
FY2014
FY2018

Source: Prepared by the Congressional Research Service (CRS).
Notes: The slope of the lines and size of the areas are for illustration only and not to scale. Under SNAP base
law, benefits would not have increased until FY2012 because of the lack of measured food-price inflation.
Funding for Education Jobs and Medicaid
The 2010 law providing funding for education jobs and Medicaid (P.L. 111-226; enacted August
10, 2010) included, as an offset for its costs, a significant reduction in future ARRA-based SNAP
benefits—beginning in April 2014 (halfway through FY2014).3 The CBO projected the savings
from this at $11.9 billion over FY2014 to FY2018, out of more than $14 billion that would have
been spent under the ARRA during this period.
P.L. 111-226 achieves its savings (in Section 203) by terminating the ARRA across-the-board
increase effective March 31, 2014. As a result, SNAP benefits will revert to what the base SNAP
law directs (i.e., adjusted annually using food-price inflation). CBO estimates that the initial drop
in monthly benefits will be between $10 and $15 a person—approximately a 10% reduction in
average per person benefits.
Figure 2 illustrates the education jobs/Medicaid law’s effect on ARRA-based SNAP benefits. The
solid line in the middle of the figure shows the immediate drop in benefits in April 2014. The
slow rise in base SNAP benefits (about 2% a year under CBO projections) is represented by step-

3 For information on the provisions for funding education jobs and Medicaid in P.L. 111-226, see CRS Report R41353,
Education Jobs Fund Proposals in the 111th Congress, by Rebecca R. Skinner and Steven Maguire; and CRS Report
RL32950, Medicaid: The Federal Medical Assistance Percentage (FMAP), by April Grady.
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Reducing SNAP (Food Stamp) Benefits Provided by the ARRA: P.L. 111-226 & S. 3307

wise (annual) increases. As in Figure 1, base SNAP benefits eventually reach the ARRA-
prescribed levels by the end of FY2018 (under current food-price inflation scenarios). The shaded
area to the right represents the foregone ARRA increase.
Figure 2. Education Jobs/Medicaid Law (P.L. 111-226) SNAP Benefit Reduction
March 31, 2014
$ SNAP Benefit in ARRA
P.L. 111-226
-$11.9 billion

Increasing SNAP benefit
in base law
FY2009
FY2014
FY2018

Source: Prepared by the Congressional Research Service (CRS).
Notes: The slope of the lines and size of the areas are for illustration only and not to scale. Under SNAP base
law, benefits would not have increased until FY2012 because of the lack of measured food-price inflation.
Child Nutrition and WIC Legislation
On August 5, 2010, the Senate approved an amended version of its measure to revamp laws
governing child nutrition programs and the Special Supplemental Nutrition Program for Women,
Infants, and Children (the WIC program). This bill, the Healthy, Hunger-Free Kids Act of 2010
(S. 3307) includes, as an offset for its costs, a provision further reducing ARRA-based SNAP
benefits by some $2.5 billion.4
The child nutrition/WIC legislation achieves its savings (in Section 442) by moving up the date
on which the ARRA-generated SNAP benefit increase will terminate—to October 31, 2013.

4 For information on this initiative, see CRS Report R41354, Child Nutrition and WIC Reauthorization: Issues and
Legislation in the 111th Congress
, by Joe Richardson. S. 3307, as reported from the Senate Committee on Agriculture,
Nutrition, and Forestry Committee (S.Rept. 111-178), included an offset reducing funding under the Agriculture
Department’s Environmental Quality Incentives Program (EQIP). This offset was approximately the same size as the
ARRA-related offset that replaced it in the Senate-approved bill.
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Reducing SNAP (Food Stamp) Benefits Provided by the ARRA: P.L. 111-226 & S. 3307

Figure 3 illustrates the additional effect on ARRA-based SNAP benefits that the Senate’s child
nutrition/WIC proposal (S. 3307) would have. The shaded area on the left represents SNAP
benefits until November 2013. The shaded area between the two solid vertical lines represents the
drop in SNAP benefits that would occur if S. 3307 were to be enacted. The shaded area to the
right represents SNAP benefits lost under P.L. 111-226.
Figure 3. Child Nutrition/WIC (S. 3307) SNAP Benefit Reduction
October 31, 2013
March 31, 2014
$ SNAP Benefit in ARRA
P.L. 111-226
-$11.9 billion

S. 3307
-$2.5 billion

Increasing SNAP benefit
in base law
FY2009
FY2014
FY2018

Source: Prepared by the Congressional Research Service (CRS).
Notes: The slope of the lines and size of the areas are for illustration only and not to scale. Under SNAP base
law, benefits would not have increased until FY2012 because of the lack of measured food-price inflation.
Future Food-Price Inflation
As noted earlier, CBO estimates annual food-price inflation at 2% or less through FY2018.
However, if food-price inflation exceeds these projections, the effects of the ARRA-generated
SNAP benefit increase, as well as the cutbacks in the education jobs/Medicaid law and the
proposed child nutrition/WIC measure, would be lessened.
Figure 4 illustrates the effect that higher-than-projected food-price inflation would have on basic
(pre-ARRA) SNAP benefits, benefits as reduced by the education jobs/Medicaid law (P.L. 111-
226), and benefits under the Senate’s child nutrition/WIC legislation (S. 3307). Figure 4 is
identical to Figure 3, with the addition of a dotted line that represents potentially higher food-
price inflation and a lessening of the effects of P.L. 111-226 and S. 3307. Effectively, basic
benefits would “catch up” to ARRA levels faster and reduce the degree to which the two
measures reduce ARRA-based SNAP benefits.
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Reducing SNAP (Food Stamp) Benefits Provided by the ARRA: P.L. 111-226 & S. 3307

Figure 4. Illustrative Effect of Higher Future Food Prices on SNAP Benefits
Higher Food Price Inflation
$ SNAP Benefit in ARRA
P.L. 111-226
-$11.9 billion

S. 3307
-$2.5 billion

Increasing SNAP benefit
in base law
FY2009
FY2014
FY2018

Source: Prepared by the Congressional Research Service (CRS).
Notes: The slope of the lines and size of the areas are for illustration only and not to scale. Under SNAP base
law, benefits would not have increased until FY2012 because of the lack of measured food-price inflation.

Author Contact Information

Joe Richardson
Gene Falk
Specialist in Social Policy
Specialist in Social Policy
jirichardson@crs.loc.gov, 7-7325
gfalk@crs.loc.gov, 7-7344
Jim Monke

Specialist in Agricultural Policy
jmonke@crs.loc.gov, 7-9664


Congressional Research Service
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