Comment to Proposed Rule – Revision of Categorical Eligibility in the SNAP RIN 0584-AE62

Below is a copy of the letter PIAC sent to  U.S. Department of Agriculture Secretary Sonny Perdue regarding a proposed rule change which would make millions ineligible for SNAP Benefits

The Proposed Rule – Revision of Categorial Eligibility in the SNAP threatens the safety and health of millions of people. The Supplemental Nutrition Assistance Program (“SNAP”) is a critical pillar of support for millions of Americans and, including children.[1] According to the United States Department of Agriculture, the proposed rule would eliminate benefits for 3.1 million Americans.[2]

Current law allows states to automatically enroll families in SNAP who qualify for other federal benefit programs which reduce the administrative burden. And, more importantly, allows families in some states to make up to 200% of the poverty line — and even have modest savings — and still be eligible for SNAP. The program is called “expanded categorical eligibility.”[3] Forty-three states utilize the program. The goal of “expanded categorical eligibility” is to avoid punishing families who receive modest pay increases or manage to save a rainy-day fund.

The point of assistance programs, like SNAP, is to encourage families to develop independence. In fact, the proposed rule disincentives low-income families from financial independence.

Consider the following:

A worker earning $12.50 an hour with two kids makes 125% of the poverty line and is eligible for $161 in monthly SNAP benefits. The worker is already means-tested, so if that worker received a 50-cents an hour raise ($86 per month), the family’s SNAP benefits are reduced by $31. However, the raise is a net positive because the worker earns $51 more per month. Current law encourages the worker to receive raises because his benefits are proportionally reduced based on his improving financial situation.

However, under the proposed rule, the 50-cent raise places the family at over 130% of the poverty line resulting in the loss of all their SNAP benefits. That means the 50-cent raise will cost the family $75 per month. The same analysis applies to a family that saves $500 in a rainy-day fund as it would exceed SNAP’s asset threshold.[4] 

This effect, known as the “Welfare Cliff,” discourages families from financial independence due to the draconian consequences for modest improvements in their income and savings.[5]

The Government is engaging in a reverse-Robin Hood scheme – taking money from low-income families.

Moreover, changes to SNAP benefits result in unanticipated consequences. A 2019 study by the Congressional Research Service found that changes to the food stamp program would cause 265,000 low-income children to lose access to the free lunch program because families who are ejected from SNAP are no longer automatically enrolled in the school lunch program.[6] While these children may still be eligible for school lunches, their parents were just kicked off SNAP, meaning it isn’t intuitive for them to believe they are eligible for other programs. Furthermore, since they are no longer automatically enrolled, they are required to jump through bureaucratic hoops to receive benefits.

These programs affect real people, with real problems, and real-world consequences. The point of these assistance programs is to help families and solve problems. The proposed rule change does neither. It unnecessarily imperils the health and safety of America’s most vulnerable families.

[1] “SNAP Benefits and the Government Shutdown”Econofact. January 24, 2019.

[2]Regulatory Reform at a Glance Proposed Rule: Revision of SNAP Categorical Eligibility,”.United States Department of Agriculture, July 2019

[3]A Quick Guide to SNAP Eligibility and Benefits,” Center on Budget and Policy Priorities”, October 16, 2018

[4] Judd Legum, “Starve the Poor,” Popular Information, July 24, 2019

[5] Derek Thomas, “The Cliff Effect: One Step Forward, Two Steps Back – Policy Design as a Disincentive for Economic Mobility” Indian Institute for Working Families, retrieved from file:///C:/Users/muttl/Downloads/16414-Article%20Text-23094-1-10-20131203.pdf

[6]The Supplemental Nutrition Assistance Program (SNAP): Categorical Eligibility,” Congressional Research Service, July 26, 2019

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