FOOD STAMPS: BACKGROUND AND FUNDING

FOOD STAMPS: BACKGROUND AND FUNDING

Order Code 98-59 EPW
CRS Report for Congress
Received through the CRS Web
Food Stamps: Background and Funding
Updated November 7, 2000
Joe Richardson
Domestic Social Policy Division
Congressional Research Service ˜ The Library of Congress

Food Stamps: Background and Funding
Summary
The Food Stamp program provides monthly benefits, now averaging $73 a
person, that increase low-income recipients’ food purchasing power. Those eligible
must have monthly income and liquid assets below federally prescribed limits (or be
receiving other public assistance) and pass several nonfinancial eligibility tests — e.g.,
work requirements, bars against eligibility for many noncitizens. Benefits are based
on the monthly cost of the Agriculture Department’s “Thrifty Food Plan,” are
adjusted annually for inflation, and vary with household size, amount and type of
income (e.g., earnings are treated more liberally), and certain nonfood expenses (e.g.,
high shelter costs, dependent care expenses). Basic eligibility and benefit standards
are federally set, and the federal government pays for virtually all benefits and about
half the total cost of administration and work/training programs for recipients. States
shoulder the remaining expenses and have responsibility for day-to-day operations and
a number of significant program rules. The regular Food Stamp program operates in
the 50 states, the District of Columbia, Guam, and the Virgin Islands. Variants
operate in Puerto Rico (a $1.3-billion-a-year nutrition assistance grant aiding 1.1
million persons), American Samoa, and the Northern Marianas.
Food stamp benefits are the country’s largest source of food aid (making up 57%
of federal spending on food and nutrition efforts) and one of the most extensive
welfare initiatives. Just over 60% of those eligible participate, and the program helps
as many as 1 in 10 Americans over the course of a year. The majority of recipients
get other public aid. Slightly over half are children, and some 20% are elderly or
disabled. About 35% of recipient households have monthly income below half the
federal income poverty guidelines, and one-quarter have significant earnings.
Participation in the program is responsive to federal and state welfare reform
initiatives, to changes in the economy, eligibility standards, and administrative
practices, and to needy households’ willingness to apply and their perception of their
eligibility status. Enrollment has declined continuously and dramatically in recent
years. Monthly average participation fell to 18.2 million people in FY1999, and
recent figures (July 2000) show 16.9 million persons in 7.3 million households.
For FY2000, estimated spending for the regular program was about $17.9 billion
(plus $1.3 billion for Puerto Rico). The Administration’s FY2001 budget and the
FY2001 Agriculture Department appropriations law (P.L. 106-387) provide support
for spending as much as $18.7 billion on the regular program (and $1.3 billion for
Puerto Rico). The FY2001 appropriations law also includes substantive changes to
the Food Stamp Act, liberalizing benefits for those with high shelter costs and
loosening eligibility standards for those owning cars.
The Food Stamp Act, originally enacted in 1964, was largely rewritten in 1977.
Recent major changes include those in the 1996 welfare reform law, which made the
most extensive revisions since 1977, the 1997 Balanced Budget Act, which directed
new money to work/training efforts for food stamp recipients, and a 1998 law (P.L.
105-185), which restored federally financed food stamps to many legal immigrants
and reduced federal spending on food stamp administration.

Contents
The Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Eligibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Employment and Training Programs . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Fraud, Abuse, and Penalties for Noncompliance . . . . . . . . . . . . . . . . . 6
Puerto Rico, American Samoa, and the Northern Marianas . . . . . . . . . 7
Participation in the Food Stamp Program . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Funding the Food Stamp Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
FY1994-FY1997 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
FY1998 and FY1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
FY2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
FY2001, the Administration’s Budget . . . . . . . . . . . . . . . . . . . . . . . 20
FY2001, Appropriations and Estimated Spending . . . . . . . . . . . . . . . 22
Nonfederal Funding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Legislation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Enacted in the 106th Congress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Hunger Relief Act Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Other Legislation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
List of Tables
Table 1. Food Stamp Spending and Funding: FY1994-FY1997 . . . . . . . . . . . . 12
Table 2. Food Stamp Spending and Funding: FY1998 and FY1999 . . . . . . . . . 15
Table 3. Food Stamp Spending and Funding: FY2000 . . . . . . . . . . . . . . . . . . 19
Table 4. Food Stamp Spending and Funding: FY2001 . . . . . . . . . . . . . . . . . . . 24

Food Stamps: Background and Funding
The Food Stamp Act became law in 1964; however, the program did not become
nationally available until early 1975, when Puerto Rico and the last few counties in the
country entered. In 1977, the 1964 Act (as amended) was rewritten and replaced
with the Food Stamp Act of 1977, which greatly liberalized the program and
increased participation. Amendments to the 1977 Act during the early 1980s
significantly restricted eligibility and benefits. But, beginning in the mid-1980s and
continuing through amendments in 1990 and 1993, program benefits were generally
increased. In 1996, the omnibus welfare reform law — the Personal Responsibility
and Work Opportunity Reconciliation Act (P.L. 104-193) — incorporated the most
extensive changes in the program since the 1977 rewrite of the law. Substantial
benefit and eligibility cutbacks were legislated (lowering projected spending by an
estimated 13%, over $20 billion through FY2002), and states were given a
significantly greater role in the program. This was followed by the 1997 Balanced
Budget Act (P.L. 105-33), which directed spending of $1.5 billion on work/training
efforts to ease the effects of a new work rule put in place by the 1996 law. More
recently, a 1998 law (P.L. 105-185) reduced federal spending for food stamp
administrative costs and restored food stamp benefits to some legal immigrants who
were barred by the 1996 welfare reform measure. The program description in this
report reflects changes in food stamp law, and changes in food stamp policies and
regulations, through mid-2000.
Amendments to the Food Stamp Act are under the jurisdiction of the House
Committee on Agriculture and the Senate Committee on Agriculture, Nutrition, and
Forestry. Appropriations under the Act are authorized through FY2002, and funding
normally is contained in each year’s Agriculture Department appropriations measure.
The Program
The Food Stamp Act authorizes a regular Food Stamp program for the 50 states,
the District of Columbia, Guam, and the Virgin Islands.1 Food Stamp program rules
are generally uniform, with minor variations for Alaska, Hawaii, Guam, and the Virgin
Islands. However, major revisions to the law in 1996 and 1997 significantly eased
federal controls on how states can administer the program and granted states a
number of important options to vary from federal rules, especially in the case of food
stamp recipients who also are participants in their state’s other public assistance
programs. Significant waivers from regular rules also may be granted, so long as
federal food stamp costs are not increased.
1 See later discussion for variants of the regular program in Puerto Rico, American Samoa,
and the Northern Marianas.

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The Food Stamp program depends, for the most part, on federal funding.
Federal appropriations pay for almost all benefits and roughly half the cost of
administration and work/training activities for recipients, and states carry the
remaining administrative and work/training expenses and the cost of some benefits.
Standards for the regular program are established by the Act and regulations of the
U.S. Department of Agriculture’s Food and Nutrition Service (FNS), which also is
responsible for overseeing food stores and other outlets that it approves for
participation. At the state and local level, the program is administered by the offices
that run other public assistance programs; they are responsible for determining
eligibility, calculating and issuing benefits, and operating or arranging for
work/training programs for recipients.
Eligibility. Applicants for food stamps must have their eligibility determined,
and, if eligible, their benefits issued, within 30 days of application — or 7 days if they
are very poor. In most cases, benefits are issued within 2 weeks of initial application;
however, applicants can be refused benefits if they fail to cooperate with the welfare
agency in obtaining the information necessary for a determination. The food stamp
“assistance unit” is a household, typically those living together who also purchase and
prepare food together; but not all co-residents must apply together (e.g., while
spouses and parents and children must apply together, unrelated persons not
purchasing and preparing food in common may apply separately).
Eligibility depends primarily on whether a household has cash income and liquid
assets below federal limits. For most, the income test confines eligibility to
households with monthly total cash income at or below 130% of the federal income
poverty guidelines, adjusted for inflation and household size. For FY2001, this is
$1,848 a month for four persons, $1,533 for three persons, $1,219 for two persons,
and $905 for one person (in the 48 contiguous states, the District of Columbia, Guam,
and the Virgin Islands).2 The liquid asset limit is $2,000 for the majority of applicants.
More liberal financial eligibility standards apply to the elderly and disabled: a slightly
looser income test for both the elderly and disabled, and allowance of liquid assets up
to $3,000 for the elderly.3 However, not all financial resources are taken into account
— e.g., exclusions include a household’s home and personal belongings, the first
$4,650 of the fair market (“blue book”) value of a licensed vehicle, work- or business-
related assets, noncash income, and a few types of cash income like federal energy
assistance, most student aid, and Earned Income Tax Credit payments. With some
exceptions, recipients of aid under states’ Temporary Assistance for Needy Families
(TANF) grant programs, Supplemental Security Income (SSI) payments, and most
state/local general assistance benefits automatically meet food stamp income and asset
2 Income eligibility limits are 25% higher in Alaska and 15% higher in Hawaii.
3 The looser income eligibility test allows elderly/disabled households with total cash monthly
income above 130% of the poverty guidelines to participate if they have certain very high
nonfood living expenses (e.g., large shelter or medical costs). For other households, these
types of expenses are not taken into account until benefits are calculated. In effect, program
rules require that elderly/disabled households’ monthly income fall below the federal poverty
guidelines (not 130% of the guidelines), but after income reductions that are applied in the
benefit calculation (see later discussion of benefits).

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eligibility tests, but their benefit must be calculated using food stamp rules (e.g., their
income may qualify them for no benefit).4
Nonfinancial eligibility criteria include those related to work, citizen and student
status, and institutional residence. Unless exempted, most 18-50-year-old able-bodied
adults without dependents are denied eligibility if, during the prior 36 months, they
received food stamps for 3 months without (1) participating in a workfare program
or (2) working or engaging in a work/training program for at least 20 hours a week.5
In addition to this new rule added by the 1996 amendments to the law, work
requirements include a directive that most unemployed able-bodied adult recipients
not caring for very young children meet various work-related conditions of eligibility,
such as searching or training for a job or doing public service work (if assigned by the
state welfare agency), and bar eligibility to those who voluntarily quit a job or
significantly reduce work effort. Eligibility also is denied to households with strikers,
to most postsecondary students (e.g., those, without children, not working at least
half time), and to residents of institutions (other than residents in substance abuse
programs and shelters for the homeless and battered women and children).
In addition to the above-noted federal eligibility standards, states have the option
to disqualify or make eligible certain categories of applicants. States may disqualify
individuals from food stamps for failing to perform an action required by another law
related to means-tested benefits. They also may bar food stamps to those who are in
arrears in their child support payments or who fail to cooperate with child support
agencies. Finally, states may, at their own expense, provide food stamps to persons
made ineligible by the work rule for 18-50 year old adults without dependents and to
noncitizens ineligible for federally financed food stamps (see below).
Eligibility rules governing noncitizens greatly restrict their participation. Under
the 1996 welfare reform law, most noncitizens were made ineligible for federally
financed food stamp benefits; illegally present aliens and non-immigrant aliens were
already ineligible. Only a few categories of legal immigrants were left eligible: those
with long U.S. work histories covered by Social Security, veterans and active duty
military personnel and their families, and refugees and asylees for 5 years after entry.
Effective in late 1998, P.L. 105-185 restored eligibility to several significant new
4 SSI recipients in California are not eligible for food stamps because their SSI payment is
assumed to include a food stamp component, and welfare recipients living with non-welfare
recipients are not automatically food-stamp-eligible. Under terms of a regulatory policy
change announced in mid-1999, states may apply TANF rules governing the treatment of
assets in determining food stamp eligibility to those food stamp applicants who also receive
any type of TANF assistance — e.g., those receiving TANF cash aid or services may be
eligible for food stamps without regard to generally more rigorous food stamp eligibility rules
governing the value of a household’s vehicle.
5 Those disqualified by this work rule may requalify if they work or participate in a work/
training program at least 80 hours in a 30-day period or join a workfare program, and they
may qualify for up to an additional 3 months without working half-time or participating in
work/training or workfare if they lose the job or end work/training participation. Major
exceptions to the rule are allowed: e.g., federal waivers from the rule may be granted for areas
of very high unemployment or where there are insufficient jobs; states may, on their own,
exempt up to 15% of those covered.

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categories of legal immigrants: noncitizen children who had entered as of August 22,
1996 (the enactment date of the 1996 welfare reform law) so long as they are
children, the elderly who were here legally and age 65 as of August 22, 1996, the
disabled who were here as of August 22, 1996 (including persons who become
disabled after that date), refugees and asylees for 7 years after entry (as opposed to
5 years under prior law), and Hmong refugees from Laos and certain Native
Americans living along the Canadian and Mexican borders. In addition, a dozen
states have chosen to take advantage of an option to provide food stamp benefits, at
their own expense, to some or all legal immigrants still barred from federally financed
food stamps.6
Benefits. Food stamps are aimed at increasing recipients’ food purchasing
power. Monthly benefits averaged $72 a person (about $170 a month for a typical
household) in FY1999, and $73 a person for 10 months ending July 2000. Benefits
are inflation-adjusted each October, and vary with type and amount of income (e.g.,
earnings are treated more liberally), household size, and some nonfood expenses (e.g.,
high shelter costs, child support payments, dependent care expenses). They are
provided monthly, and, except for very poor recipients, monthly food stamp benefits
are not intended to cover all of a household’s food costs — most recipients are
expected to contribute a portion of their income to their food expenses.
To determine monthly benefit allotments, a household’s total cash monthly
income — the amount that is used to judge income eligibility — is first reduced to a
“net” income figure (representing income deemed available for food and other normal
living costs) by allowing a “standard deduction” ($134 a month) and additional
deductions for certain expenses. These include deductions for (1) excessively high,
but not all, shelter costs (generally, those above about one-third of a household’s total
cash income), (2) 20% of earnings (recognizing taxes and work expenses), (3)
dependent care expenses related to work/education, (4) child support payments, and
(5) medical expenses above $35 a month (if incurred by the elderly or disabled).
Shelter expense deductions claimed by households without elderly or disabled
members are subject to monthly dollar limits ($300 a month, or higher amounts in
Alaska, Hawaii, and Guam and a lower amount in the Virgin Islands), as are
deductions for dependent care costs ($200 a month for children under age 2, $175 for
other dependents).
Food stamp allotments then equal the estimated monthly cost of an adequate
low-cost diet (maximum benefits, set at the cost of the Agriculture Department’s
“Thrifty Food Plan” for the household’s size and indexed annually for food-price
inflation), less 30% of monthly net income as calculated above (the household’s
expected contribution toward its food costs). The theory is that food stamps should
fill the deficit between what a household can afford for food (its 30% contribution)
and the estimated expense of a low-cost, adequate diet (maximum benefits). In
FY2001, maximum monthly benefits in the 48 contiguous states and the District of
Columbia are $434 for a four-person household, $341 for three persons, $238 for two
6 Some 100,000 legal immigrants are covered by these state initiatives. The overwhelming
majority are participating in California.

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persons, and $130 for one person; recognizing significantly higher food prices,
higher maximums apply in Alaska, Hawaii, Guam, and the Virgin Islands.
Monthly allotments may be spent for virtually any food item (but not alcohol,
tobacco, or ready-to-eat hot foods) in approved food stores meeting rules as to
minimum staple and fresh food offerings or food sales volume.7 Purchases with food
stamp benefits are not subject to sales taxes, and food stamp assistance is not counted
as income under welfare, housing, and tax laws. Allotments have historically been
issued as paper “coupons. However, food stamp recipients in all or part of some 40
states and the District of Columbia (well over half of all recipients) now receive their
benefits through “electronic benefit transfer” (EBT) systems that deliver benefits by
using special “ATM-like” debit cards rather than paper coupons; all states are
expected to issue food stamp benefits through EBT systems by 2002. Food stamp
benefits also may be converted to cash to assist some recipients leaving cash welfare
rolls, paid as cash (to recipients’ employers) in “work supplementation” programs, or,
in a few areas, paid as cash grants to elderly/disabled recipients.
Employment and Training Programs. As noted earlier, unemployed able-
bodied adults not caring for very young children can be denied food stamp eligibility
if they do not participate in an assigned work or training activity — unless they are
already covered under another welfare program’s work/training requirements.
Whether to assign a food stamp recipient to a work/training activity and the type of
activity (e.g., monitored job search, workfare, job training, schooling) is the
responsibility of the state welfare agency. In FY1999, states reported placing nearly
700,000 food stamp recipients in employment/training program components. Federal
requirements on employment and training programs for food stamp recipients are
relatively minimal: where actual work is involved (e.g., workfare), the number of
hours required is limited to the household’s benefit divided by the applicable minimum
wage and generally may not exceed 30 hours a week; welfare agencies must pay
transportation, dependent care, and other support costs necessary for participation (up
to certain limits); welfare agencies must spend at least 80% of the unmatched federal
funding they receive for employment and training programs (see below) on those
covered by the work requirement for 18-50-year-old adults without dependents
(discussed earlier); the Agriculture Department is authorized to monitor and limit
states’ spending on individual employment and training program components to
“reasonable” amounts.
Federal financial support for employment and training programs consists of
several parts. All states receive a share of a basic formula grant (totaling $86 million
in FY2000); in addition, states can receive a share of an additional grant (totaling
another $86 million in FY2000) if they maintain their own spending on employment/
training activities. These funds are for operating costs (not required support costs like
transportation and dependent care), do not require any state matching, and are
available without fiscal year limitation. For any program and support costs that
7 Food stamp benefits also can be used for some prepared meals (e.g., in shelters for battered
women and children, in elderly nutrition programs, in residential substance abuse treatment
programs), seeds and plants for growing food, and hunting and fishing equipment (in remote
areas of Alaska).

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exceed these unmatched grants to states, the federal government pays a 50% match
(now running about $150 million a year).
Fraud, Abuse, and Penalties for Noncompliance. Fraud and abuse in the
Food Stamp program takes several forms — benefits can be paid to households that
are ineligible; benefits can be overpaid to eligible households; and food stamps can be
“trafficked” for cash or non-food items.
Annual “quality control” in-depth investigations of a sample of the food stamp
caseload indicate the extent to which food stamps are issued in error (overpaid or
issued to ineligible households).8 The FY1999 survey showed that 7% of benefits
(about $1.1 billion in that year) were erroneously overissued; it also showed that
underpayments equaled 2.9%, or some $450 million. Both these percentage “error
rates” were down slightly from FY1998. Erroneous eligibility and benefit decisions
occur because of intentional violations (fraud) and unintentional mistakes by both
recipients and eligibility workers. The FY1997 survey indicated that 59% of overpaid
benefits to ineligible and eligible households were attributable to recipients and that
just over one-third were due to intentional recipient violations. The remaining 41%
were caused by eligibility workers’ errors.
The extent of abuse of the program in the form of trafficking in food stamps is
difficult to measure. The most recent attempt was made by the FNS for calendar
years 1996-1998. It estimated that about $660 million a year (about 3.5% of food
stamps issued) was exchanged for cash (trafficked) through retailers (i.e., diverted
from food stamp benefits).9
There are a variety of penalties for intentional failure to comply with Food Stamp
program rules. Recipients can be disqualified for periods ranging from 1 year to
permanent disqualification, and welfare agencies are authorized to collect all
improperly issued benefits through any means they see fit — including reducing future
benefits and recovering from unemployment compensation payments, income tax
refunds, and some other government payments.10 Food concerns can be disqualified
for periods ranging from 6 months to permanent disqualification and be fined $20,000
or more. In addition, intentional violations like trafficking or falsely acquiring benefits
can lead to prison terms of 1 to 20 years and fines ranging from $1,000 to $250,000.
8 The results of these surveys are used by states to target areas for improved administration.
In addition, states with very high rates of erroneous benefit decisions are assessed financial
penalties that generally are required to be “re-invested” in upgrading administration. For
FY1999, 15 states and the District of Columbia were assessed $31 million (after downward
adjustments for states with very high proportions of “error-prone” cases). States with very
low erroneous decision rates receive increased federal matching funds for administration. In
FY1999, four states were granted this “enhanced” administrative funding, for a total of $38
million.
9 For more information, see The Extent of Trafficking in the Food Stamp Program: An
Update, U.S. Department of Agriculture, Food and Nutrition Service, March 2000.
10 Welfare agencies may recoup any improperly issued benefits, not just those issued because
of an intentional violation of program rules. However, in cases not involving fraud, certain
limits are placed on how much recipients’ future benefits can be reduced.

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FY1998 information on disqualifications and claims collections indicate: (1) almost
1,500 stores were removed for noncompliance with food stamp rules, (2) about
90,000 persons were disqualified, and (3) about $170 million in claims against
recipients were recouped. Finally, the expanding use of EBT benefit issuance systems
(noted earlier) is expected to significantly curtail trafficking because these systems
make it is easier to identify and link trafficking to specific recipients and retailers
through electronic records of transactions.
Puerto Rico, American Samoa, and the Northern Marianas. Variants of the
regular Food Stamp program operate in Puerto Rico, American Samoa, and the
Northern Mariana Islands. Puerto Rico’s Nutrition Assistance Program provides its
benefits in cash under rules similar to (but more financially restrictive than) the regular
food stamp program. It is the largest welfare program in the Commonwealth, but
federal support is limited to an annual block grant of specific amounts laid down in
and funded under the Food Stamp Act appropriation. This annual block grant pays
for all benefits, half of administrative expenses, and some work/training initiatives.
In recent years, Puerto Rico has received $1.2-$1.3 billion a year for cash nutrition
assistance in lieu of food stamps, allowing it to offer benefits to about 1.1-1.2 million
persons in some 450,000 households. The programs in American Samoa and the
Northern Marianas also are limited grants, each funded at about $5 million a year and
serving 3,000-4,000 people. They are not cash assistance programs and are roughly
similar to the regular program, although American Samoa’s program is limited to the
elderly and disabled and the Northern Marianas’ program has special rules directing
the use of some benefits to local products.
Participation in the Food Stamp Program
Enrollment in the regular Food Stamp program is responsive to changes in the
economy (i.e., recipients’ employment status and earnings), food stamp eligibility
rules (and potential applicants’ perception of their eligibility status), and
administrative practices, as well as recipients’ getting or losing public assistance
eligibility.
With few changes in eligibility rules, the caseload expanded from a monthly
average of 22.6 million persons in FY1991 to 25.4 million in FY1992, 27 million
FY1993, and 27.5 million in FY1994. All-time peak participation was 28 million
people in the spring of 1994. Since the 1994 peak level, enrollment has declined
continuously. In FY1995, the monthly average was 26.6 million persons, and FY1996
participation averaged 25.5 million people. In FY1997 and again in FY1998, there
were further reductions, to a monthly average of 22.9 million persons in 9.5 million
households during FY1997 and 19.8 million people in 8.2 million households during
FY1998 — because of the effects of an improving economy, federal and state welfare
reform initiatives, and a lower participation rate among those eligible. In an average
month, food stamp participation dropped to 8.5% of the U.S. population in FY1997
and 7.3% in FY1998, as opposed to 10%-11% in earlier years.
In FY1999, participation continued to decline, to a monthly average of 18.2
million persons in 7.7 million households. And the latest published enrollment report
(for July 2000) shows the caseload down to 16.9 million persons in 7.3 million

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households. While the rate at which food stamp enrollment is dropping has slowed
recently, the total caseload is now at the lowest point since the late 1970s.
By the mid-1990s, Agriculture Department studies (e.g., for September 1994)
indicated that about 71% of those eligible for food stamps actually participated,
following a rise in the caseload and higher levels of persons in poverty and
unemployment.11 But the relatively dramatic decline in food stamp enrollment since
1994 (even more substantial than would be suggested by the reduction in the number
of those with below-poverty incomes) has led many observers to conclude that the
participation rate among those eligible noted above has dropped significantly (to 62%
in September 1997 by the most recent Department estimate) and to look for
explanations for the large number of low-income persons “disappearing” from food
stamp rolls.12
Studies of the reasons for the caseload decline agree that a large share of the
decline in participation cannot be explained by readily measurable variables like the
job/income effects of an improved economy and specific changes in welfare/food
stamp law and policies. For example, one recent Agriculture Department study based
on information through 1998 found that 35% of the caseload decline was associated
with changing economic conditions and 12% with program reforms and “political
variables;” it also found that 28% of the reduction was associated with a decrease in
the number of persons with annual income below 130% of the federal poverty levels,
and another 55% of the difference was due to a decline in the proportion of low-
income persons who participate (because of economic conditions, program changes,
or both).13 Other cited reasons range from changing welfare office administrative
practices to recipients’ lack of understanding that being dropped from (or discouraged
from applying for) one public assistance program does not mean automatic ineligibility
for others like food stamps. The caseload decline study cited above notes that (1)
studies of those leaving states’ TANF welfare programs indicate that food stamp
participation dropped significantly among TANF “leavers” and increased earnings
alone were not likely the reason and (2) FNS reviews of state/ local welfare
11 Participation rates were and are not uniformly high among all segments of the food-stamp-
eligible population: e.g., participation is very low among the elderly (below one-third) and the
“working poor” (less than half of those eligible) and relatively high among those enrolled in
other welfare programs. In addition, while overall participation among eligible individuals
was estimated at 71%, the proportion of benefits issued as a proportion of potential benefits
was projected to be even higher (approximately 80%). Participation rates also varied and
continue to vary significantly by state — from an estimated 40-45% to over 90% in a few
states.
12 For information on overall participation rates (nationally and by state) see: Reaching Those
in Need: Food Stamp Participation Rates in the States (a July 2000 report done for the
Agriculture Department’s Food and Nutrition Service by Mathematica Policy Research, Inc.).
This report is available through the Agriculture Department’s website at:
[http://www.fns.usda.gov/oane/menu/Published/fsp/Participation.htm].
13 The Decline in food Stamp Program Participation in the 1990s (a June 2000 report from
the Agriculture Department’s Economic Research Service; Food Assistance and Nutrition
Research Report Number 7). This report is available through the Agriculture Department’s
website at: [http://www.ers.usda.gov/epubs/pdf/fanrr7/].

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administrative practices have identified improper barriers to food stamp
participation.14 Finally, there is concern that the “safety-net” character of the food
stamps is being undermined. Less-than-optimum participation appears to be
concentrated among needy families with children and the “working poor,” and states’
emphasis on moving families off welfare and into jobs may be having the “side-effect”
of keeping eligible poor families off food stamps.15
Because of the caseload decline and concerns over the non-economic reasons for
it, the Administration has announced a series of initiatives to boost participation; these
have included significant outreach efforts and changes that liberalize rules governing
how cars are counted as assets in judging eligibility, how households are required to
report income and other changes in their circumstances, and how states are held
accountable for “erroneous” benefit and eligibility determinations.16 In addition,
legislation aimed at increasing participation among eligibles and easing eligibility rules
is likely (see the discussion of legislation at the end of this report).17
According to preliminary data from the FY1999 survey of the characteristics of
food stamp households, 52% of participants were children (one-third of whom were
preschool age) and about 20% of enrollees were elderly or disabled. Single- parent
households with children made up almost 40% of participating households, and
elderly persons living alone comprised 16% of food stamp households. Non-Hispanic
white enrollees made up 41% of the caseload; non-Hispanic African-Americans
comprised 36%; and Hispanics totaled 18%. About 35% of food stamp households
were very poor, having cash monthly income below half the federal income poverty
14 Also see the General Accounting Office report cited in footnote #15.
15 In addition to the Economic Research Service report and the July 2000 food stamp
participation report cited above, several Agriculture Department studies provide information
about recent changes in food stamp participation and participation rates among those eligible
for food stamps — (1) Who is Leaving the Food Stamp Program? An Analysis of Caseload
Changes from 1994 to 1997; (2) Reaching Those in Need: How Effective is the Food Stamp
Program?; (3) Food Stamp Program Participation Rates: January 1994. These and other
relevant studies are available through the Agriculture Department’s website at:
[http://www.fns.usda.gov/oane/menu/Published/fsp/Participation.htm].
Other recent publications addressing declining participation in the Food Stamp program
include – (1) a July 1999 General Accounting Office (GAO) report entitled Food Stamp
Program: Various Factors Have Led to Declining Participation (GAO/RCED-99-185), (2)
an August 1999 report from the Center on Budget and Policy Priorities entitled The Initial
Impacts of Welfare Reform on the Incomes of Single-Mother Families, and (3) an October
1999 discussion paper from the Urban Institute entitled Declines in Food Stamp and Welfare
Participation: Is There a Connection? (Numbered 99-13).
16 A discussion of some of the more important of these initiatives (those dealing with how
households report changed circumstances) is provided in a September 2000 report by the
Center on Budget and Policy Priorities (Washington, D.C.) entitled Improving Access to Food
Stamps: New Reporting Options Can Reduce Administrative Burdens and Error Rates.
17 For a brief overview of information available as to the need for food assistance (e.g., the
extent of “food insecurity”) that some feel is not being fully met see The Emergency Food
Assistance Program and Emergency Feeding Needs, CRS Report RL30164.

CRS-10
guidelines. Recipients’ income was primarily from other public assistance — nearly
two-thirds of participating households received some type of cash welfare, while 27%
of participating households had some earned income. The 1999 survey –
Characteristics of Food Stamp Households: Fiscal Year 1999 (Advance Report) –
is available through the Agriculture Department’s website at:
[http://www.fns.usda.gov/oane/menu/Published/fsp/Participation.htm].
The above-noted enrollment figures and data on recipients’ characteristics do not
include 1.1-1.2 million persons receiving benefits under Puerto Rico’s nutrition
assistance grant in FY1997-99, down from 1.3 million in FY1996 and 1.4-1.5 million
people in earlier years.
Funding the Food Stamp Program
For budgetary purposes, virtually all programs and activities under the Food
Stamp Act are treated as entitlements: federal money is “guaranteed” to the extent
needed to fund benefits, the federal share of expenses related to administration and
work/training programs for recipients, and stipulated amounts for grants to Puerto
Rico, American Samoa, and the Northern Marianas.18 As a result, the bulk of each
year’s appropriation normally is based on an estimate of the amount needed to fully
fund benefit, administrative, and work/training expenses under the regular Food
Stamp program, plus money for nutrition assistance grants for Puerto Rico, American
Samoa, and the Northern Marianas, and contingencies. Moreover, some funding for
programs not directly related to food stamps also is contained in each year’s
appropriation for the food stamp account — money for the Food Distribution
Program on Indian Reservations and food purchases for the Emergency Food
Assistance program is mandated and appropriated under the Food Stamp Act. And
added funds, outside regular annual Food Stamp Act appropriation, are available for
spending on food-stamp-related operations. They include dollars collected from
benefit overpayment recoveries, payments from states exercising their option to pay
for benefits to noncitizens ineligible for federally supported benefits, accrued unused
employment and training program funds from prior years, and, in recent years, money
appropriated to the Economic Research Service for research and evaluation.
On the other hand, the amount spent on food stamps differs from the amount
available for spending (appropriations plus funds from benefit overpayment
recoveries, state payments, unused employment/training money, and the Economic
Research Service budget account). For the most part, expenditures depend on the
number of persons/households actually receiving benefits, the level of their benefits,
and related administrative and work/training program costs. As a result, readily
identifiable Food Stamp Act annual appropriations do not provide a clear picture of
the extent of federal spending on food stamps. And total (appropriated and other)
funding generally exceeds actual spending (obligations or outlays), as shown in the
18 Spending for a few activities, such as research and evaluation related to the Food Stamp
program, computer and electronic benefit transfer system support, and special nutrition
education and “outreach” projects, are treated as “discretionary” spending items. As such,
they are dependent on annual appropriations decisions as to how much should be spent, rather
than being driven by the number of recipients and benefit payments.

CRS-11
spending and funding tables in this report. Unspent appropriations normally are
returned to the Treasury or, in a few cases, transferred to help fund other Agriculture
Department nutrition programs. However, unspent grants to states for work/training
programs typically are accumulated for allocation and spending in later years.
Finally, in addition to federal dollars, states make a substantial contribution with
their matching share of administrative and work/training costs and the above-noted
payments for benefits to some noncitizens (see the discussion of these contributions/
payments later in this report).
FY1994-FY1997. Spending for the regular Food Stamp program peaked in
FY1994-FY1995. It increased from $18.7 billion in FY1991 to $22.5 billion in 1992,
$23.7 billion in 1993, and $24.4 billion in 1994. Even with decreased participation
(see the earlier discussion of participation in the program), obligations inched up to
$24.5 billion in FY1995 because of inflation indexing and more administrative and
work/training spending.
In FY1996 and again in FY1997, spending on the regular program turned down:
to $24.4 billion in FY1996 and, more significantly, to $21.7 billion in FY1997. These
lower expenditures were the result of reduced participation and slower growth in
benefits brought on by an improved economy and greater employment prospects, as
well as implementation of changes in food stamp and other public assistance laws
made by the 1996 welfare reform measure and states’ welfare reform initiatives.
While spending peaked and declined in the FY1994-FY1997 period, the annual
amounts available (from appropriations and other sources) were consistently above
the level needed to finance all needed spending: by 8%-21% ($2.1-$4.8 billion).
Estimates of need (reflected in available funding) exceeded actual needs.
On the other hand, annual federal spending under Puerto Rico’s nutrition
assistance grant (when considered separately from spending on the regular program)
rose from $974 million in FY1991, to $1.091 billion in FY1994, and continued to rise
to $1.143 billion in FY1995 and FY1996 and $1.174 billion in FY1997. In other
words, the amount of each year’s block grant (specified in the Food Stamp Act) was
fully spent under the Commonwealth’s nutrition assistance program.
Table 1 shows federal food stamp spending (obligations) and the amounts
available (from Food Stamp Act appropriations and other sources) for FY1994-
FY1997. Mandated spending (from the Food Stamp Act appropriation) for the Food
Distribution Program on Indian Reservations and the Emergency Food Assistance
program is not set out in the table, although the appropriations figure for FY1997
includes money for these two programs (totaling $150 million).19
19 For information about the Emergency Food Assistance program, see The Emergency Food
Assistance Program and Emergency Feeding Needs, CRS Report RL30164. The Food
Distribution Program on Indian Reservations provides federally donated food and money for
administration and distribution costs as an alternative to food stamps on Indian reservations
opting for this program. In years prior to FY1997, these programs were funded out of
(continued...)

CRS-12
Table 1. Food Stamp Spending and Funding: FY1994-FY1997
(in millions)
FY1994
FY1995
FY1996
FY1997
Regular food stamp
program spending a
$ 24,434
$ 24,535
$ 24,351
$ 21,694
(Benefits)
(22,675)
(22,651)
(22,399)
(19,668)
(Administration &
other costs) b
(1,759)
(1,884)
(1,952)
(2,026)
Puerto Rico’s nutrition
assistance grant c
1,091
1,143
1,143
1,174
Total food stamp
spending
25,525
25,678
25,494
22,868
Food Stamp Act
appropriation d
28,137
28,819
27,598
27,618
Other available funds e
e
e
e
149
Total available
funding
28,137
28,819
27,598
27,767
Notes: Figures generally are obligation amounts from Agriculture Department documents submitted
with annual appropriation requests. They do not show: (1) about $1.6-$1.8 billion a year in state
matching funding for administration and work/training programs and (2) spending ($150 million
from the FY1997 Food Stamp Act appropriation shown in the table) for the Food Distribution
Program on Indian Reservations and the Emergency Food Assistance program.
a. Regular program spending includes (1) small grants (totaling about $10 million a year) to
American Samoa and the Northern Marianas, (2) for FY1997, spending of about $100 million
for benefits to some noncitizens that were financed by state payments (not federal dollars), and
(3) $1-$2.5 million a year spent on “community food projects” under section 25 of the Food
Stamp Act.
b. Amounts include federal funding for work/training programs for food stamp recipients, the federal
share of state/local administrative and issuance costs, and certain federal costs associated with
the program (e.g., printing and redeeming food stamp coupons, monitoring program
compliance, research and evaluation). They do not include: (1) approximately $60 million
a year attributable to federal administrative activities related to food stamps, but budgeted
under a separate Agriculture Department appropriation account for administration of various
federal food assistance programs, and (2) federal payments for administration under Puerto
Rico’s nutrition assistance grant (about $30 million a year, included in the amounts listed for
Puerto Rico’s grant).
Notes for Table 1 are continued on the following page.
19 (...continued)
Agriculture Department budget accounts separate from the Food Stamp Act account.

CRS-13
c. These figures are the block grant amounts specified for each year in the Food Stamp Act.
Included are federal payments for 50% of administrative costs, benefit and work/training
expenses, and funds transferred for a cattle tick eradication project ($12 million a year in
FY1994 and FY1995 and $9 million in FY1996).
d. Annual appropriations include: (1) contingency reserves, (2) a $12 million FY1995 rescission,
and (3) for FY1997, $150 million from the Food Stamp Act appropriation account for the Food
Distribution Program on Indian Reservations and the Emergency Food Assistance program.
e. Other available funds include recouped overpayments and payments from states choosing to pay
for food stamp benefits to noncitizens. In FY1997, $100 million of the total was from
payments from states for benefits to noncitizens, and $49 million was from overpayment
collections. In earlier years, other available funds totaled well under $100 million a year (from
overpayment collections only; state-funded benefits for noncitizens were not authorized until
FY1997).
FY1998 and FY1999. The total Food Stamp Act appropriation for FY1998
was $25.1 billion (P.L. 105-86), $2.5 billion less than the FY1997 figure. This
included money for the regular Food Stamp program and small grants to American
Samoa and the Northern Marianas, $1.2 billion for Puerto Rico’s nutrition assistance
grant program, and funds for the Food Distribution Program on Indian Reservations
and the Emergency Food Assistance program (a total of $175 million). In addition,
$170 million was available from recouped benefit overpayments, state payments for
benefits to noncitizens, and research/evaluation money appropriated to the Economic
Research Service (not the Food and Nutrition Service) — for a total available
amount of $25.3 billion.
However, primarily because of dropping food stamp enrollment and virtually no
increase in average benefits, FY1998 spending for the regular program totaled only
$19.2 billion — well below the $20-$21 billion the Administration had expected
would be spent. In addition, the Food Stamp Act mandated $1.2 billion for Puerto
Rico’s nutrition assistance grant program in FY1998. Thus, total spending was $20.4
billion (or $20.6 billion including money spent from the Food Stamp Act
appropriation on the Food Distribution Program on Indian Reservations and the
Emergency Food Assistance program). This was $4.9 billion (or $4.7 billion) less than
the money available.
As originally enacted, the total Food Stamp Act appropriation for FY1999 was
$22.6 billion (P.L. 105-277 and P.L. 105-379), some $2.5 billion less than FY1998.
This appropriation incorporated funds for the regular Food Stamp program and the
small grants to American Samoa and the Northern Marianas, $1.2 billion for Puerto
Rico’s nutrition assistance grant program, and money for the Food Distribution
Program on Indian Reservations and the Emergency Food Assistance program (a total
of $165 million). In addition, $429 million was originally estimated to be available
from recouped benefit overpayments, state payments for benefits to noncitizens,
unused FY1998 funding for work/training programs, and the Economic Research
Service appropriation (this sum was later reduced) — for an estimated total available
amount of $23 billion under the original appropriation estimates.
But, in order to provide funding for other federal initiatives, a later law making
FY1999 emergency supplemental appropriations (P.L. 106-31; enacted May 21,
1999) rescinded $1.25 billion of the FY1999 Food Stamp Act appropriation. And the
amount available from other sources (recoupments, state payments, unused

CRS-14
employment/training money, the Economic Research Service) was revised downward
to $334 million. This reduced the total Food Stamp Act appropriation to $21.34
billion and dropped the total amount available for FY1999 to $21.67 billion
(including $334 million from recouped benefits, state payments, unused FY1998
work/training money, and the Economic Research Service).
On the other hand, actual FY1999 spending for the regular program was much
less than originally anticipated: $18.1 billion. This, when coupled with Puerto Rico’s
$1.2 billion nutrition assistance grant, meant that FY1999 total spending under the
Food Stamp Act was $19.3 billion for the regular program and Puerto Rico, or about
$19.5 billion if $165 million spent on the Food Distribution Program on Indian
Reservations and food purchases for the Emergency Food Assistance program (both
financed out of the Food Stamp Act appropriation) are included.
Table 2 shows federal food stamp spending (obligations) and the amounts
available (from appropriations and other sources) for FY1998 and FY1999. Spending
from the Food Stamp Act appropriation for the Food Distribution Program on Indian
Reservations and food purchases for the Emergency Food Assistance program is not
set out in the table, although the appropriations figures include money to fund these
two programs ($175 million in FY1998 and $165 million in FY1999).20 On the other
hand, money for food-stamp-related research and evaluation by the Economic
Research Service (under its separate appropriation account) is included in the
available funding and spending figures shown in the table — about $11 million in
FY1998 and $6 million in FY1999 was spent on these activities under the Agriculture
Department’s Economic Research Service appropriation. In earlier years, research
and evaluation money was spent through the Food and Nutrition Service under the
Food Stamp Act appropriation.
20 For information about the Emergency Food Assistance program (EFAP/TEFAP), see The
Emergency Food Assistance Program and Emergency Feeding Needs, CRS Report
RL30164. The Food Distribution Program on Indian Reservations provides federally donated
food items and money for administration as an alternative to food stamp assistance on Indian
reservations opting for this program.

CRS-15
Table 2. Food Stamp Spending and Funding: FY1998 and FY1999
(in millions)
FY1998
FY1999
Regular food stamp
program spending a
$ 19,204
$ 18,087
(Benefits)
(17,062)
(16,021)
(Administration & other
costs) b
(2,142)
(2,066)
Puerto Rico’s nutrition
assistance grant c
1,204
1,236
Total food stamp
spending
20,408
19,323
Food Stamp Act
appropriation d
25,140
21,336
Other available funds e
181
334
Total available funding
25,321
21,670
Notes: Figures generally are obligation amounts from Agriculture Department documents submitted
with the FY2000 and FY2001 budgets. They do not include: (1) about $1.9 billion in state matching
funding for administration and work/training programs and (2) spending (from the Food Stamp Act
appropriations shown in the table) for the Food Distribution Program on Indian Reservations and
the Emergency Food Assistance program.
a. Regular program spending includes (1) small grants to American Samoa and the Northern
Marianas (approximately $5 million a year for each), (2) spending of about $100 million a year
for benefits to some noncitizens financed by state payments, and (3) $2.5 million a year for
“community food projects” authorized under section 25 of the Food Stamp Act.
b. Amounts include federal funding for work/training programs for food stamp recipients, the federal
share of state/local administrative and issuance costs, and certain federal costs associated with
the program (e.g., printing and redeeming food stamp coupons, monitoring retailer
compliance, support for electronic benefit transfer activities, research/evaluation through the
Economic Research Service). They do not include: (1) approximately $60 million attributable
to federal administrative activities related to food stamps, but budgeted under a separate
undifferentiated Agriculture Department appropriation account for administration of various
federal food assistance programs and (2) federal payments for administrative costs under
Puerto Rico’s nutrition assistance grant (nearly $40 million a year, included in the amounts
listed for Puerto Rico’s grant).
c. These figures are the grant amounts specified for each year in the Food Stamp Act. Included are
federal payments for benefits, 50% of administrative costs, and work/training program
expenses.
d. Annual appropriations include contingency reserves and money available from the Food Stamp
Act appropriation account for the Food Distribution Program on Indian Reservations and the
Emergency Food Assistance program ($175 million in FY1998 and $165 million in FY1999).
The FY1999 figure reflects a reduction for a $1.25 billion rescission ordered by P.L. 106-31.
Notes for Table 2 are continued on the following page.

CRS-16
e. Other available funds include recouped overpayments, payments from states choosing to pay for
food stamp benefits to some noncitizens, money appropriated to the Economic Research Service, and,
in FY1999 unused FY1998 funding for work/training programs. In FY1999, for example, these
were: $97 million in recoupments, $98 million from state payments, $6 million for food stamp
research through the Economic Research Service, and $133 million in unused work/training funding.
FY2000. For FY2000, the Administration asked for a total Food Stamp Act
appropriation of $22.477 billion to provide funding for operations under current
law.21 This requested appropriation included money for the regular Food Stamp
program and small grants for American Samoa and the Northern Marianas, $1.3
billion for Puerto Rico’s nutrition assistance grant, funds to support the Food
Distribution Program on Indian Reservations and the Emergency Food Assistance
program, and a $1 billion contingency reserve in case food stamp caseload/benefit
estimates for FY2000 proved to be too low. The Administration’s FY2000 food
stamp budget also assumed $346 million available for spending from recouped benefit
overpayments, state payments for benefits to noncitizens, and unused
employment/training program funds — for a total available of $22.823 billion.
The current-law budget request was supplemented with three proposed changes
to existing law and appropriations allocations that were projected to have a small
effect on food stamp spending in FY2000. First, as part of a larger initiative to
provide benefits to legal immigrants made ineligible by the 1996 welfare reform law,
the Administration proposed to grant food stamp eligibility to legal immigrants who
were lawful residents in August 1996 (the month of enactment for the 1996 welfare
reform law) and who subsequently reach the age of 65 (those who were 65 in August
1996 are already eligible under the terms of 1998 legislation). This initiative would
have required separate legislation and added an estimated $10 million to FY2000 food
stamp benefit costs. Second, the Administration proposed to spend $7 million in
FY2000 on nutrition education and technical assistance (“outreach”) providing
information about food stamps to populations with low food stamp participation rates
such as the elderly and working poor. Finally, the Administration proposed to
provide about $11 million for research and evaluation projects related to food stamps
using the Food Stamp Act appropriation for the Food and Nutrition Service (rather
than the appropriation for the Agriculture Department’s Economic Research Service).
In FY1998 and FY1999, funding for these efforts was provided through the
Economic Research Service appropriation by direction of the annual appropriations
acts; the $11 million proposed by the Administration represented a significant increase
above the $6 million provided through the Economic Research Service in FY1999.
Altogether, these three Administration initiatives were projected to add $28 million
to spending under the food stamp budget account in FY2000 — although the $11
million proposed for research and evaluation would be offset by a reduction in money
provided to the Economic Research Service for food-stamp-related research and
evaluation activities.
On June 8, 1999, the House approved its version of the FY2000 Agriculture
Department appropriations measure (H.R. 1906; H.Rept. 106-157), which included
a total Food Stamp Act appropriation of $21.577 billion. This bill appropriated less
21 The Administration’s FY2000 food stamp budget also requested a $4.8 billion “advance”
appropriation for FY2001.

CRS-17
than requested by the Administration, but without affecting current-law food stamp
benefits/services. Because the required change in food stamp law was not anticipated
to be made, the $10 million requested for the Administration’s initiative for legal
immigrants was not accounted for in the bill. Funding for the Administration’s new
outreach effort ($7 million) was not explicitly included. And the Administration’s
proposal to fund food stamp research and evaluation projects through the food stamp
account and the Food and Nutrition Service was rejected — although the requested
amount ($11 million) was part of the House bill’s Economic Research Service
appropriation. Finally, the House-passed bill differed from the Administration’s
request for FY2000 by reducing the size of the requested contingency reserve from
$1 billion to $100 million.22
On August 4, 1999, the Senate approved its version of the FY2000 Agriculture
Department appropriations bill (S. 1233; S.Rept. 106-80). This included a total Food
Stamp Act appropriation of $21.564 billion. As with the House bill, the Senate
measure appropriated less than requested by the Administration, but with no
anticipated effect on current-law benefits/services. Also like the House bill, the
Senate’s recommendation reduced the size of the requested contingency reserve from
$1 billion to $100 million and did not include money for (1) the Administration’s
initiative for legal immigrants, (2) the Administration’s new outreach effort, or (3) the
Administration’s proposal to fund food stamp research and evaluation projects
through the food stamp account and the Food and Nutrition Service.23 With regard
to funding for research and evaluation activities, the Senate bill, as in the House,
directed money through the Economic Research Service appropriation (although at
a reduced level (estimated to be approximately $6 million vs. the $11 million explicitly
provided by the House). Finally, the Senate bill included $500,000 for a special study
on the recent decline in food stamp participation.
On September 30, 1999, House-Senate conferees on the FY2000 Agriculture
Department appropriations measure reported their agreement (H.Rept. 106-354).
The conference agreement appropriated $21.072 billion – including money for the
regular program (and the small grants to American Samoa and the Northern
Marianas), Puerto Rico’s $1.3 billion nutrition assistance grant, the Food Distribution
Program on Indian Reservations and the Emergency Food Assistance program (a total
of $173 million), and a $100 million contingency reserve. Funding for the
Administration’s initiatives was not included, nor was the $500,000 provided in the
Senate bill for study of the decline in food stamp participation; $6 million was
separately provided for research/evaluation through the Economic Research Service.
The House approved the FY2000 Agriculture appropriations conference report
on October 1, 1999, and the Senate adopted it on October 13, 1999. On October 22,
1999, the House-Senate agreement was enacted as P.L. 106-78.
22 The House-approved bill also did not include the request for a $4.8 billion “advance”
appropriation for FY2001.
23 As with the House bill, the Senate measure did not include the Administration’s request for
a $4.8 billion “advance” appropriation for FY2001.

CRS-18
The enacted FY2000 food stamp appropriation, together with the estimated
$352 million provided from recouped overpayments, state payments, unused work/
training money, and the Economic Research Service appropriation, made about $21.4
billion available for spending under the Food Stamp Act in FY2000. However, the
Administration’s FY2001 budget submission later projected FY2000 spending to be
well under the amount available – $19.8 billion (some $1.6 billion less, or $1.4 billion
less if spending for the Food Distribution Program on Indian Reservations and the
Emergency Food Assistance program is included). The gap between the amount
available and the amount spent now is expected to be even larger as the result of
newer (and lower-than-expected) participation figures. The Administration’s summer
2000 “mid-session” budget review lowered the anticipated FY2000 spending level by
$600 million, to a total of $19.2 billion for the regular program and Puerto Rico, and
the Congressional Budget Office’s July 2000 “baseline” estimate placed FY2000
spending for the regular program and Puerto Rico at a total of about $18.7 billion.
Table 3 shows food stamp spending (obligations) and funding estimates for
FY2000. It includes projected spending and available funding (from all sources) as
estimated in the documents accompanying the Administration’s FY2001 budget
submission. It also shows estimated spending figures after downward adjustment
according to the Administration’s summer 2000 “mid-session” budget review. Not
shown are even lower revised spending estimates by the Congressional Budget Office
and spending from the Food Stamp Act appropriation for the Food Distribution
Program on Indian Reservations and the Emergency Food Assistance program ($173
million).

CRS-19
Table 3. Food Stamp Spending and Funding: FY2000
(in millions)
FY2000: estimate
FY2000: estimate
after summer 2000
submitted with
“mid-session” budget
FY2001 budget
review
Regular food stamp program
spending a
$ 18,495
$ 17,895
(Benefits)
(16,082)
(15,482)
(Administration & other costs) b
(2,413)
(2,413)
Puerto Rico’s nutrition assistance
grant c
1,268
1,268
Total food stamp spending
19,763
19,163
Food Stamp Act appropriation d
21,072
22,132
Other available funds e
352
363
Total available funding
21,424
22,495
Notes: Figures are from documents submitted with the Administration’s FY2001 budget and
adjusted downward to reflect subsequent adjustments to estimated spending figures made during the
Administration’s summer 2000 “mid-session” budget review (i.e., a $600 million reduction
attributed to fewer benefit payments in the regular program). Amounts also do not include: (1) about
$2 billion in state funds for administration and work/training programs and (2) spending for the
Food Distribution Program on Indian Reservations and the Emergency Food Assistance program
($173 million).
a. Regular program spending includes grants to American Samoa and the Northern Marianas
(totaling some $10 million a year), as well as spending for benefits to some noncitizens
financed by state payments (about $100 million) and $2.5 million spent for “community food
projects” authorized under section 25 of the Food Stamp Act.
b. Amounts include federal funding for work/training programs for food stamp recipients, the federal
share of state/local administrative and issuance costs, and certain federal costs associated with
the program (e.g., printing and redeeming food stamp coupons, monitoring retailer
compliance, support for electronic benefit transfer activities, research and evaluation). They
do not include: (1) roughly $60 million attributable to federal administrative activities related
to food stamps, but budgeted under a separate undifferentiated Agriculture Department
appropriation account for administration of various federal food assistance programs and (2)
federal payments for administrative costs under Puerto Rico’s nutrition assistance grant (nearly
$40 million a year, included in the amounts listed in this table for Puerto Rico’s grant).
c. These figures are the Puerto Rico block grant amount specified in the Food Stamp Act for each
year. Included are federal payments for benefits, 50% of administrative costs, and
work/training program expenses.
d. The appropriation figures include (1) contingency reserves ($100 million for FY2000) and (2)
funding available for spending on the Emergency Food Assistance program and the Food
Distribution Program on Indian Reservations ($173 million).
e. Other available funds include recouped overpayments, payments from states choosing to pay for
food stamp to noncitizens, and unused prior-year work/training funds. In FY2000, these were
projected at $102 million, $95 million, and $149 million, respectively. Research and
evaluation funds also are included – as appropriated to the Economic Research Service.

CRS-20
FY2001, the Administration’s Budget. For FY2001, the Administration
asked for a total Food Stamp Act appropriation of $22.132 billion to provide funding
for operations under current law.24 This requested appropriation included money for
the regular Food Stamp program and the small grants for American Samoa and the
Northern Marianas, $1.3 billion for Puerto Rico’s nutrition assistance block grant,
$177 million for the Food Distribution Program on Indian Reservations and food
purchases for the Emergency Food Assistance program, and a $1 billion contingency
reserve in case caseload projections for FY2001 are too low. The FY2001 budget
request also assumed that some $363 million will be available from recouped benefit
overpayments, state payments for benefits to noncitizens, and unused
employment/training program funds – for a total available amount of $22.5 billion.
The current-law budget request was supplemented with three proposed changes
to existing law that were projected to have a minor effect on food stamp spending in
FY2001 (adding some $31 million), but larger effects in later years (e.g., costing about
$130 million in FY2002 and $265 million in FY2003).25 [Note: While these changes
were outlined in budget presentations, legislation to implement them was not submitted
by the Administration. However, the two most important of these proposals (those
dealing with legal immigrants’ eligibility status and the counting of vehicles as assets in
eligibility determinations) were largely subsumed in other legislation – see below and
the discussion of legislation at the end of this report for details.]
First, the Administration proposed to restore eligibility for federally financed food
stamps to two groups of noncitizens who were barred from food stamps by the 1996
welfare reform law. As with its FY2000 budget request, the Administration would have
made eligible persons legally resident on August 22, 1996 (the date of enactment for the
welfare reform change) who subsequently turn age 65 (those who were 65 at enactment
are already eligible under the terms of 1998 legislation). This change would have
affected an estimated 10,000 persons when fully implemented, at an FY2001 benefit
24 Included in the current-law appropriations request were funds to cover the benefit spending
effects of regulatory changes proposed in February 2000 – approximately $80 million in
FY2001 (and over $170-$200 million a year in later years). These revisions, expected to
become effective in late 2000, include: (1) allowing states to disregard vehicles with an equity
value below $1,000 when determining food stamp eligibility, (2) increasing state options as
to how to count the financial resources of ineligible noncitizens residing with eligible persons
(e.g., allowing states to disregard the income of ineligible noncitizens); and (3) significantly
changing federal rules as to income reporting and other administrative requirements to ease
burdens on state agencies and recipients. Also included in the Administration’s current-law
request was $2.5 million for “community food projects” approved in the Freedom to Farm law
(P.L. 104-127) and authorized under section 25 of the Food Stamp Act; funding for these
projects has been included in the regular food stamp appropriation since 1996.
25 The Administration also separately proposed changes in child support enforcement law that
would increase food stamp recipients’ child support income and lower food stamp benefit
costs by some $7 million in FY2001 (rising to over $40 million a year). Thus, Table 4 shows
only a net $24 million benefit cost in the Administration’s FY2001 request with proposed
legislation. Congressional action on child support proposals (incorporated in the pending
Child Support Distribution Act of 2000) is not complete, and, if child support revisions are
enacted, there will be food stamp benefit savings not reflected in the FY2001 enacted
appropriation spending figures.

CRS-21
cost of $10 million, rising to $20 million in FY2002 and $35 million in FY2003. In
addition, the Administration asked to make eligible adult legal immigrants who were
legal residents on August 22, 1996 and live with eligible children (i.e., citizen children
or noncitizen children made eligible by the terms of 1998 legislation). This would have
restored eligibility to about 200,000 legal immigrant adults when fully implemented, at
an FY2001 benefit cost of $15 million, increasing to $75 million in FY2002 and $105
million in FY2003. However, it should be noted that these changes would have allowed
some states that now pay for food stamps for noncitizens ineligible for federally
financed benefits to reduce their costs. A much more expansive restoration of food
stamp eligibility for legal immigrants was included in the Hunger Relief Act (H.R.
3192/S. 1805) and remains under congressional consideration (see discussion of
legislation at the end of this report).
Second, the Administration proposed to allow states to change the rules under
which vehicles are counted as an asset in judging food stamp eligibility. States would
be permitted to conform food stamp rules with those they use in their Temporary
Assistance for Needy Families (TANF) programs. The majority of states completely
disregard the value of one vehicle under their TANF program, while federal food stamp
rules are generally stricter – e.g., the fair market value of most vehicles is counted as
an asset to the extent it exceeds $4,650.26 When fully implemented, this proposal was
anticipated to allow food stamp eligibility for some 245,000 additional people. Federal
benefit costs would rise by $1 million in FY2001, $30 million in FY2002, $120 million
in FY2003, and over $200 million a year in following years. A very similar revision of
vehicles-as-assets rules was advanced in the Hunger Relief Act (H.R. 3192/S. 1805) and
became law as part of the FY2001 Agriculture Department appropriations measure (see
the discussion of legislation at the end of this report).
Third, the Administration proposed to permit states to choose to conform the types
of income they count in the Food Stamp program with the income definition used for
Medicaid eligibility purposes. This would have allowed states to disregard certain types
of income for food stamps that are now disregarded in the Medicaid program but
counted under food stamp rules. The Administration expected that this option would
affect an estimated 17,000 persons at an annual food stamp benefit cost of $5 million.
Finally, in addition to its three legislative proposals, the Administration’s FY2001
food stamp budget (1) proposed that funding for food-stamp-related research and
evaluation be directed through the Food and Nutrition Service (as it was prior to
FY1998) rather than the Economic Research Service, (2) asked for an increase in
funding for research/evaluation activities (from $6 million to $11 million), and (3)
requested $10 million for a nutrition education and program information (“outreach”)
initiative aimed at eligible population groups with low rates of participation.
26 A proposed regulatory change would modify this rule by allowing states to disregard
vehicles with an equity value of less than $1,000. It is scheduled to become effective in late
2000. The significant cost of this regulatory revision (over $100 million a year when fully
implemented) is included in the Administration’s current-law estimates and reduces the cost
of the proposed legislative change regarding vehicles as assets.

CRS-22
FY2001, Appropriations and Estimated Spending. In July 2000, the House
and Senate approved their versions of the FY2001 food stamp appropriation as part of
their respective FY2001 Agriculture Department appropriations bills. In effect, both
measures appropriated more than enough money to maintain anticipated current-law
spending levels for food stamps, even if enrollment declines end and participation turns
upward – i.e., sufficient resources were made available for an average monthly caseload
of 18.8 million persons (well above average participation of 18.2 million people in
FY1999 and 17.2 million persons for the first 10 months of FY2000) and average
monthly benefits of $76 a person (about 4% higher than expected in FY2000).
Nevertheless, they both (1) cut the Administration’s requested $1 billion contingency
fund to $100 million and (2) denied a requested funding increase for food-stamp-related
research while directing research spending through the Economic Research Service (not
the FNS and the Food Stamp Act appropriation as asked for by the Administration).
In addition, no explicit adjustment was made for legislative changes.
The House FY2001 appropriations measure (H.R. 4461; H.Rept. 106-619;
reported May 16, 2000; passed July 11, 2000) appropriated a total of $21.232 billion.27
This was $900 million less than the Administration’s current-law request and $924
million less than the request amount including the net costs of proposed legislation. It
reflected decisions to decrease the requested contingency fund amount from $1 billion
to $100 million and not adjust for any legislative changes. Money for food stamp
research ($6 million, not the $11 million requested) was appropriated to the Economic
Research Service. Whether funding for the Administration’s “outreach” effort ($10
million) was included under the House bill was unclear, although no specific dollar
reduction from the requested appropriation amount (or committee report language)
reflected a decision to deny these funds. Finally, the House bill directed a $25 million
reduction (from $219 million to $194 million) in the amount to be allocated for
employment and training programs for food stamp recipients (although no change in the
appropriation level reflected this). This mandate, however, would not affect FY2001
spending because money made available in earlier years is going unused and building up
in a “reserve” for future use. The real effect of the House directive would be in the
longer term – it would reduce the amount of “new” (i.e., FY2001) money flowing into
the reserve for future use, but not decrease spending in FY2001 itself because the large
reserve that has already been built up can be drawn down.
The Senate’s FY2001 appropriations measure (S. 2536/H.R. 4461; S.Rept. 106-
288; reported May 10, 2000; passed July 20, 2000) appropriated a total of $21.221
billion. As with the House, it reflected decisions to reduce the amount set aside for the
contingency fund by $900 million and not adjust for legislative changes. Again, like the
House, the Senate’s bill appropriated money ($6 million not the $11 million requested)
for food stamp research to the Economic Research Service. But, differing slightly from
the House, it specifically reduced requested food stamp appropriation amount (by $11
million) to reflect the fact that no money from the food stamp account can be spent for
research and specified $500,000 for a study of problems related to applicants’ access
27 As with the Administration’s request, this appropriation included money for the Food
Distribution Program on Indian Reservations ($77 million) and food purchases for the
Emergency Food Assistance program ($100 million).

CRS-23
to food stamp benefits and the recent decline in food stamp participation.28 As with the
House, it was unclear whether funds for the Administration’s $10 million food stamp
outreach project was included.
On October 6, 2000, the House-Senate conference agreement on the FY2001
Agriculture Department appropriations bill was filed (H.R. 4461; H.Rept. 106-948).
It was approved by the House on October 11, 2000, and by the Senate on October 18,
2000. On October 28, 2000, the congressional conference agreement on the FY2001
Agriculture Department appropriations measure was enacted as P.L.106-387.
The FY2001 law appropriates $20.114 billion, substantially less than either the
House or Senate approved, or requested by the Administration. While lower than
earlier recommendations, this amount simply represents a downward adjustment of
$1.107 billion to reflect new estimates of probable FY2001 spending needs made in the
Administration’s summer 2000 “mid-session” budget review – not a “cut” in support
for the program. The House-Senate conferees reduced the Senate’s figure by $1.107
billion. But, with other available funding, there will still be nearly $20.5 billion to
support the regular program, Puerto Rico’s block grant, and other spending under the
food stamp budget account ($100 million in food purchases for the Emergency Food
Assistance program and $80 million for the Food Distribution Program on Indian
Reservations).29 This amount is noticeably above the figure needed to support a
significant rise in food stamp participation and the cost of Food Stamp program changes
also legislated in the FY2001 appropriations law (see the discussion of legislation at the
end of this report).
Table 4 shows estimated spending and available funding under the
Administration’s FY2001 budget and the FY2001 Agriculture appropriations law.
Spending figures are adjusted to reflect the Administration’s summer 2000 “mid-
session” budget review (i.e., reduced costs for benefits because of lower than previously
expected participation in FY2001). The amounts presented for the Administration’s
current-law request do not take its legislative proposals into account, while those shown
for the request (with proposed legislation) reflect the $24 million FY2001 net cost of
the Administration’s legislative package. The figures for the enacted appropriations law
reflect (1) new spending ($40 million, as estimated by the Congressional Budget Office)
from the legislative changes to Food Stamp program rules made by the law, (2) an
estimated $5 million reduction in Puerto Rico’s grant mandated by the agreement, and
(3) a $5 million cut in the Administration’s request for food-stamp-related research.
Money for the Senate-recommended study of applicants’ access to food stamp benefits
and the decline in participation ($500,000) and for the Administration’s $10 million
“outreach” initiative also is included in the enacted law amounts.
28 Also unlike the House bill, the Senate included $7 million for bison meat purchases and
distribution through the Food Distribution Program on Indian Reservations; funding for this
program is covered by the appropriation to the food stamp budget account.
29 The conference agreement added $3 million in funding for bison meat purchases through
the Food Distribution Program on Indian Reservations to the $77 million requested for the
program by the Administration.

CRS-24
Table 4. Food Stamp Spending and Funding: FY2001
(spending adjusted for the summer 2000 “mid-session” budget review; in millions)
FY2001:
FY2001:
Administration
Administration
FY2001: Enacted
request, current
request, with
appropriations law
law
proposed legislation
(P.L. 106-387)
Regular food
stamp program
spending a
$ 18,701
$ 18,725
$ 18,736
(Benefits)
(16,232)
(16,256)
(16,272)
(Admin. & other
costs) b
(2,469)
(2,469)
(2,464)
Puerto Rico’s
nutrition
assistance grant c
1,301
1,301
1,296
Total food stamp
spending
20,002
20,026
20,032
Food Stamp Act
appropriation d
22,132
22,156
20,114
Other available
funds e
363
363
369
Total available
funding
22,495
22,519
20,483
Notes: Figures are derived from documents submitted with the Administration’s FY2001 budget, the
House and Senate Appropriations Committees’ reports on the FY2001 appropriation (H.Rept. 106-619
and S.Rept. 106-288), and the House-Senate conference report on the FY2001 appropriation (H.Rept.
106-948. Amounts differ from those presented in earlier versions of this report and the
Administration’s FY2001 budget primarily because they reflect downward adjustments to spending
estimates made during the Administration’s summer 2000 “mid-session” budget review (a reduction
of $1.107 billion in benefit spending) and include estimated spending due to legislative changes
included in the conference agreement ($40 million for added benefits and a $5 million decrease in
Puerto Rico’s block grant). Amounts do not include: (1) about $2 billion in state funds for
administration/issuance costs and work/training programs and (2) spending for the Food Distribution
Program on Indian Reservations ($77 million in the Administration’s request and $80 million in the
conference agreement) and food purchases for the Emergency Food Assistance program ($100 million).
Substantial spending effects (estimated to total about $80 million in FY2001) resulting from
implementation of regulations proposed in February 2000 are included in all figures. Spending figures
for the regular program shown in this table are slightly higher than the $18.613 billion designated for
“expenses” in the joint explanatory statement of the House-Senate conferees, primarily because
spending from funds provided by states (and other sources) is included.
a. Regular program spending includes grants to American Samoa and the Northern Marianas (totaling
some $10 million), as well as spending for benefits to some noncitizens financed by state
payments (about $100 million).
Notes for Table 4 are continued on the following page.

CRS-25
b. Amounts include federal funding for work/training programs for food stamp recipients, the federal
share of state/local administrative and issuance costs, and certain federal costs associated with
the program (e.g., printing and redeeming food stamp coupons, monitoring retailer compliance,
support for electronic benefit transfer activities, research and evaluation). They do not include:
(1) roughly $60 million attributable to federal administrative activities related to food stamps,
but budgeted under a separate undifferentiated Agriculture Department appropriation account
for administration of various federal food assistance programs, and (2) federal payments for
administrative costs under Puerto Rico’s nutrition assistance grant (nearly $40 million, included
in the amounts listed in this table for Puerto Rico’s grant). Funding and spending for the
Administration’s $10 million “outreach” initiative is assumed in the figures in the table.
c. The $1.301 billion amount is specified for Puerto Rico’s grant in the Food Stamp Act. The $1.296
billion amount reflects the estimated amount of a reduction in the grant required by the terms of
the conference agreement. Included in the grant are payments for benefits, 50% of
administration, and work/training program expenses.
d. The appropriation figures include: (1) contingency reserves ($1 billion proposed by the
Administration and $100 million in the conference agreement) and (2) funding available for
spending on the Emergency Food Assistance Program and the Food Distribution Program on
Indian Reservations ($177 million in total for the Administration’s request and $180 million in
the conference agreement). The do not include separate appropriations to the Economic
Research Service for food-stamp-related research and evaluation (see note e).
e. Other available funds include recouped overpayments, payments from states choosing to pay for food
stamp benefits to noncitizens, and unused prior-year work/training funds. They also include
separate appropriations to the Economic Research Service for research and evaluation in the
conference agreement.
Nonfederal Funding. There are three types of Nonfederal funding in the Food
Stamp program.
! The largest amount is state matching funding for administrative costs
— estimated at about $2 billion for FY2000, up from $1.7 billion in
FY1999. In general, states are responsible for 50% of food stamp
administrative costs (e.g., determining eligibility, issuing benefits).
However, states can pay less than 50% (as little as 40%) if they have
very low rates of erroneous benefit decisions (e.g., four states qualified
for this “enhanced funding” treatment, worth $38 million, in FY1999).
And, beginning with FY1999, over 40 states have effectively been
responsible for somewhat more than 50% of food stamp administrative
costs. P.L. 105-185 (enacted June 23, 1998) requires that the normal
50% federal payment to them for administrative costs be reduced by a
flat annual dollar amount for each state as an adjustment for additional
funding received in their TANF block grants. For each year, this
reduction in federal payments for administrative costs is just over $200
million.
! States pay a matching share of the cost of work/training programs for
food stamp recipients — about $150 million a year in recent years.
! Finally, 12 states have chosen to pay the cost of providing benefits to
some or all legal immigrants barred from federally financed food
stamps by the 1996 welfare reform law (and not restored by 1998
revisions to the law) — estimated at just under $100 million a year.

CRS-26
Legislation
Enacted in the 106th Congress. The Electronic Benefit Transfer Interoperability
and Portability Act (P.L. 106-171; enacted February 11, 2000) requires that, by
October 2002, all states’ electronic benefit transfer (EBT) systems for delivering food
stamp benefits be “interoperable” (i.e., that EBT cards issued by one state be usable to
purchase food items in food stamp retailers in all other states); it also provides a small
amount of federal funding to cover added state costs for doing so.
Section 604 of the FY2001 Defense Authorization law (H.R. 4205/H.R. 5408; H.
Rept. 106-945; enacted as P.L. 106-398 on October 30, 2000) provides for special
family subsistence supplemental allowances for those military personnel who might be
otherwise eligible for food stamp assistance. These allowances (up to $500 a month)
are intended to substantially eliminate the likelihood that military households would be
financially eligible for food stamps.
The FY2001 Agriculture Department appropriations measure (H.R. 4461; H.Rept.
106-948; enacted as P.L. 106-387 on October 28, 2000, and discussed earlier in this
report) includes three important changes to food stamp law, two of which were derived
from proposals advanced in the Hunger Relief Act (H.R. 3192/S. 1805). None of these
revisions were included in either the House or Senate versions of the appropriations
measure; they were added by House-Senate conferees.
! Section 821 of the FY2001 Agriculture appropriations law changes the
terms of Puerto Rico’s nutrition assistance block grant. Prior law fixed
the amount of this grant at $1.301 billion in FY2001 and $1.335 billion
in FY2002; amounts after FY2002 will be determined when the Food
Stamp Act appropriations authorization is next taken up (probably in
2002). The revisions made by the appropriations law require that: (1)
the FY2001 grant amount be the FY2000 figure ($1.268 billion)
inflated by the “food-at-home” component of the Consumer Price
Index and (2) the FY2002 grant amount be the newly calculated
FY2001 figure adjusted for changes in the cost of the “Thrifty Food
Plan” used to determine basic food stamp benefits under the regular
program. It is expected that these changes will result in Puerto Rico’s
grant being about $5 million smaller than under prior law in FY2001
and some $7 million lower than the prior law amount in FY2002.30
! Section 846 of the FY2001 Agriculture appropriations law liberalizes
the treatment of shelter expenses when determining food stamp
benefits.31 Food stamp law increases benefits for those with very
30 These amendments will slightly reduce Puerto Rico’s grants in FY2001 and FY2002. But
changing Puerto Rico’s grant to a “indexed” amounts (as opposed to figures explicitly set out
in food stamp law) will mean that, when food stamp appropriations are reviewed for
reauthorization in 2002, renewing Puerto Rico’s annual grant (at levels automatically
increased for inflation) will not be “scored” as a cost by the Congressional Budget Office.
31 This change in food stamp law derives from a proposal included in the Hunger Relief Act
(continued...)

CRS-27
shelter expenses in relation to their income; it allows the cost of shelter
above a threshold equal to roughly one-third of total household income
to be disregarded (“deducted”) when judging the amount of income a
household has available for food spending. For households without an
elderly or disabled member, prior law limits the disregarded/deducted
amount to $300 a month, thereby restricting the shelter-expense-
related benefit increase available to non-elderly, non-disabled
households (primarily families with children). The amendment included
in the appropriations law raises the limit to $340 (beginning in March
2001) and indexes it annually to the Consumer Price Index beginning
with FY2002. Preliminary estimates place the 5-year cost at $500-
$600 million.
! Section 847 of the FY2001 Agriculture appropriations law liberalizes
the treatment of vehicles when determining financial eligibility for food
stamps.32 For those not receiving assistance under states’ Temporary
Assistance for Needy Families (TANF) programs, the fair market value
of a household’s vehicle generally is counted as a liquid asset, to the
extent it exceeds $4,650.33 The appropriations law amendment allows
states to elect to use their TANF rules governing vehicles as assets
(already applied to TANF households) if they are more liberal –
effective July 2001. Preliminary estimates place the 5-year cost at
approximately $1 billion.
Hunger Relief Act Amendments. Although two major provisions of the Hunger
Relief Act (H.R. 3192/S. 1805) were enacted as part of the FY2001 Agriculture
appropriations law (see above), one additional set of amendments revamping food
stamp eligibility rules for legal immigrants was not. These amendments remain under
consideration by Congress and would remove all categorical limits on food stamp
eligibility for legal immigrants (for general coverage of immigration legislation see
Immigration Legislation and Issues in the 106th Congress, CRS Issue Brief 10044).
Under the omnibus 1996 welfare reform law (P.L. 104-193), food stamp eligibility
for noncitizen legal immigrants was severely limited (illegally present aliens and non-
immigrant aliens were already, and continue to be, ineligible). Later amendments made
by a 1998 law (P.L. 105-185) loosened limitations on legal immigrants somewhat, but
retained several substantial barriers. The categories of legal immigrants who remain
eligible for food stamps are generally limited to: (1) those with long U.S. work histories
covered by Social Security, (2) veterans and active duty military personnel and their
families, (3) refugees and asylees for 7 years after entry, (4) children who legally entered
the country as of August 22, 1996 (the enactment date of the 1996 welfare reform law)
31 (...continued)
(H.R. 3192/S. 1805).
32 This change in food stamp law derives from proposals included in the Hunger Relief Act
(H.R. 3192/S. 1805) and the Administration’s FY2001 budget package.
33 Food-stamp-eligible households are limited to $2,000 in liquid assets ($3,000 for elderly
households), including any amount attributable to the value of a vehicle over $4,650.

CRS-28
so long as they are children, (5) the elderly who were here legally and age 65 or older
as of August 22, 1996, (6) the disabled who were here legally as of August 22, 1996
(including persons who were here but become disabled after that date), and (7) Hmong
refugees from Laos and certain Native Americans living along the Canadian and
Mexican borders. In addition, a number of states have chosen to take advantage of an
option to provide food stamp benefits, at their own expense, to some or all legal
immigrants barred from federal financed food stamps (the majority of these state-
covered legal immigrants are in California).
The legal immigrant provisions of the Hunger Relief Act would remove all the still-
existing food stamp categorical eligibility limits imposed by the amended 1996 law.
This would primarily benefit those who enter(ed) after August 22, 1996, or entered
before that date and have reached age 18 or 65. They would not change the long-
standing provisions of food stamp law barring eligibility to illegally present aliens.
Other facets of the 1996 welfare reform law affecting legal immigrants also would be
affected, most notably rules dealing with immigrants’ sponsors and food stamps. Basic
welfare reform law rules strengthening requirements that legal immigrants’ sponsors’
financial resources be attributed to the immigrant when judging food stamp eligibility
(thereby limiting their access to food stamps based on financial need) would not be
changed. However, immigrants’ sponsors would be excused from certain requirements
that they reimburse the cost of food stamp benefits provided to a sponsored immigrant
if the sponsor is unable because of hardship (e.g., bankruptcy, disability) or experiences
severe circumstances beyond the sponsor’s control.
According to preliminary Congressional Budget Office estimates, these provisions
would have a 5-year cost of just over $900 million in food stamp benefits and affect
400,000-450,000 persons when fully carried out.
Other Legislation. Because of time and budget constraints – or because they
have been overtaken by other legislative initiatives – other significant food stamp
legislative proposals are not likely to be taken up in this session of Congress. They
include:
! initiatives that were included in the Administration’s FY2001 budget
submission (discussed earlier in this report) but subsumed in the
broader provisions of the Hunger Relief Act (discussed above) or
dropped by the Administration (conforming food stamp income
definitions with the Medicaid program);
! provisions in the Food Stamp Outreach and Research for Kids Act
(H.R. 2738/ S. 1800) to encourage outreach to those eligible for food
stamps and help lessen potential administrative barriers to their
participation (e.g., require a variety of outreach activities, federal
inspections of state public assistance agency administrative operations,
and testing of strategies to ensure food stamp participation among
recipients and former recipients of TANF); and
! proposals (in H.R. 3304 and S. 1307) to allow the use of food stamp
benefits to purchase vitamins and nutrition supplements.