Looming Cut to CalFresh Will Slash Households’ Food Budgets, Drain Millions of Dollars From California Economy

October 30, 2013

This Friday, November 1, all Californians who receive food assistance through the federal Supplemental Nutrition Assistance Program (SNAP, known in California as CalFresh) will see a significant drop in their already-modest benefits. Benefits will decline by 7 percent on average, or about $10 per person per month. The maximum monthly food benefit for a family of four, for example, will be cut by $36.

With the poverty rate in California still one-third above the pre-recession level, and many counties still struggling with double-digit unemployment, the deep cuts to households’ food budgets come at a terrible time.

By the Numbers…

Here’s a rundown — by the numbers — of what the SNAP/CalFresh cuts will mean for California:

  • 4.2 million — The number of CalFresh recipients in California who will be affected by the cut.
  • 67 percent — The share of CalFresh households affected by the cut that include children.
  • $1.40 — The average CalFresh benefit per person, per meal after the cut.
  • 21 — The number of meals lost in the course of a month for a family of four.
  • $457 million — The federal dollars that will be lost in California due to SNAP benefit cuts in the coming federal fiscal year. The federal government pays the full cost of SNAP/CalFresh benefits for households.
  • 8 in 10 — Share of the benefit dollars lost in California that would have gone to households with children.
  • $1.79 — The boost to the economy provided by every additional dollar spent on SNAP benefits, according to the USDA’s Economic Research Service.

Deeper Cuts to Food Assistance Could Be on the Way

The sudden reduction in SNAP/CalFresh benefits is occurring because an increase provided in the 2009 American Recovery and Reinvestment Act (ARRA) — intended to spur economic growth and prevent hunger in low-income households — expires at the end of October. The higher benefit level was originally supposed to stay in place until annual inflation adjustments caught up, softening the transition for low-income households, but Congress later accelerated the sunset date.

Unfortunately, there is no sign that Congressional leaders plan to halt the SNAP benefit cut. In fact, when House and Senate members meet today to begin formal negotiations on the federal Farm Bill, they will be debating whether to make even deeper cuts to SNAP. The House recently passed legislation that would cut $39 billion from the program over the next decade, potentially eliminating assistance for nearly 4 million people nationwide in the first year alone. Even the Senate’s version of the Farm Bill would cut $4.1 billion from the program over the next 10 years.

In focusing on whether and how much to cut SNAP benefits, the debate in Congress ignores mounting evidence that SNAP is one of the most effective federal programs for fighting poverty and shielding children from the effects of hunger. According to the USDA, the ARRA increase in SNAP benefits cut the number of “food insecure” households in which one or more persons had to skip meals or otherwise eat less — by half a million nationwide in 2009. In addition, recent research demonstrates that early childhood access to food assistance is associated with significantly better outcomes in terms of health, educational attainment, earnings, and self-sufficiency in adulthood.

The Case for Investing in — Rather Than Cutting — SNAP

What if, instead of debating how much to cut SNAP, policymakers were seeking ways to make SNAP dollars go even further toward fighting hunger, improving health, and stimulating local economies? Instead of undermining a program that was one of the strongest elements of the nation’s response to the recent recession, we could be deploying proven strategies to expand SNAP’s reach. For example, we could be ensuring that children get enough to eat when school’s out by providing a summertime benefit increase to families with kids, an innovation that has been shown to significantly increase children’s food security in preliminary studies. Or we could be encouraging healthy food choices by offering incentives for SNAP/CalFresh participants to buy nutritious foods (such as fruits and vegetables) and expanding capacity for the use of Electronic Benefits Transfer (EBT) cards at farmers’ markets.

Last year, SNAP lifted more Americans out of poverty than in any other year on record. At a time when many households in California and across the nation are still struggling to make ends meet, such a program is not just worth preserving — it’s worth strengthening.

— Hope Richardson

CalFresh Food Assistance: Another ARRA Success Story

July 26, 2011

Here’s another piece of good news about the American Recovery and Reinvestment Act of 2009 (ARRA): The ARRA reduced the number of low-income US households who reported hunger or the threat of hunger in 2009, even as the nation’s unemployment rate surged during the most severe economic downturn in the post-World War II era. This finding comes from a rigorous analysis by the US Department of Agriculture (USDA). The study assessed the impact of the ARRA’s nutritional assistance provisions, including a 13.6 percent boost to food benefits provided by the federal Supplemental Nutrition Assistance Program (SNAP), formerly known as food stamps and called CalFresh in California.

The study concluded that the ARRA not only helped to boost both SNAP enrollment and families’ food spending, but also “improved food security among low-income households during a period of tough economic conditions.” Specifically, 530,000 fewer low-income households experienced hunger or the threat of hunger in 2009 than would have been the case without the ARRA, according to the report. Further underscoring the ARRA’s positive impact on food security, the researchers found that households who were ineligible for SNAP benefits because their incomes were slightly too high did not fare as well: “Food spending increased by a smaller amount and food security did not improve” for these families, the researchers concluded.

Millions of Californians facing prolonged joblessness and reduced incomes during the painfully slow economic recovery have benefited from the ARRA’s improvements to food assistance. As CBP Executive Director Jean Ross noted yesterday on KPCC, the number of CalFresh recipients – most of whom are children – has increased steadily since California employment peaked in 2007, rising by 82 percent from just over 2 million in July 2007 to 3.7 million in May 2011. In the aggregate, CalFresh families receive more than $500 million per month in 100 percent federally funded food benefits, all of which is spent at grocery stores throughout the state, thereby boosting local economies. Certainly, CalFresh has room for improvement, as we’ve pointed out before. But for now, as the state struggles to recover from the Great Recession, it’s hard to argue with success.

— Scott Graves

Recovery Act Helped Prevent a Rise in Poverty

January 7, 2011

Here’s more good news about the impact of the American Recovery and Reinvestment Act of 2009 (ARRA) during the longest and deepest recession in the post-World War II era: Several provisions of the ARRA, including increased Unemployment Insurance (UI) benefits and the expansion of tax credits for working families, helped prevent any rise in poverty in 2009, even as the nation’s unemployment rate reached into the double digits. This finding comes from the Center on Budget and Policy Priorities’ (CBPP) analysis of the US Census Bureau’s alternative poverty measures. These measures differ from the official poverty rate in several ways. For example, while the official measure determines whether families are living below the poverty line based solely on their cash income, the alternative measures count a broader array of income sources, including tax credits and non-cash assistance, such as that of the Supplemental Nutrition Assistance Program (SNAP), formerly called food stamps. The recommendations for improving poverty measures were made by a blue-ribbon National Academy of Sciences panel in the mid-1990s.

The CBPP’s analysis shows that the ARRA kept more than 4.5 million people out of poverty in 2009, including:

  • 1.3 million people through federal extensions and expansions of UI benefits;
  • 1.5 million people through improvements in the Child Tax Credit and Earned Income Tax Credit;
  • Nearly 1 million people through the Making Work Pay Credit; and
  • 700,000 people through an increase in SNAP benefit levels.

While these findings do not mean that 2009 was a stellar year for low-income families, they provide further evidence that the ARRA helped to mitigate the impact of the Great Recession. In fact, based on these findings, the CBPP concludes that the ARRA was “one of the single most effective pieces of antipoverty legislation in decades.”

— Alissa Anderson

The Economy Is Not Like the Weather

September 3, 2010

Weather metaphors for the economy abound. We face “economic headwinds,” we “weather the economic storm,” and we hope for “sunny skies ahead.” Although visually compelling, comparing the economy to the weather is misleading. We can’t change weather conditions, but we can change conditions in the economy.

Take our sky-high unemployment rate. A survey released this week shows that nearly two out of three Americans believe policymakers can’t do anything to bring down the jobless rate. Instead, they say, “we just have to wait until the private-sector economy improves” – hunker down and ride it out, like waiting for a hurricane to pass. Not true. When the private sector isn’t hiring, public dollars keep the economy going. And they have: The nonpartisan Congressional Budget Office estimates that between 1.4 million and 3.3 million people nationwide owe their jobs to the American Recovery and Reinvestment Act of 2009 (ARRA). In other words, without the swift efforts of policymakers early last year, the unemployment rate would be even higher and the devastation of the recession far greater.

Why don’t many people realize that we have the ARRA to thank for preventing an even deeper downturn and an even weaker job market? Christina Romer, who just stepped down as chair of the President’s Council of Economic Advisers, suggests it’s “because the [ARRA] was a mixture of hundreds of measures, many of which don’t come with Recovery Act signs or easily identifiable links to the Act….” For example, one of the “best-kept secrets” of the recovery act is the TANF Emergency Fund, which California counties have successfully used to put thousands of families back to work, while also helping businesses stay afloat or expand during tough economic times.

Recovery efforts have pumped much-needed dollars into cash-strapped local communities, as we’ve documented here, but those dollars are starting to run out, and state and local budget cuts present the greatest threat to continued recovery. In fact, data released this morning show that nationwide, state and local governments cut another 10,000 jobs in August. That’s why it’s more important than ever that policymakers do more to keep the recovery going. Congress could start by extending the TANF Emergency Fund, which is set to expire at the end of the month. By doing so, policymakers will ensure that thousands of California families – and thousands more families in other states – are able to keep their jobs.

— Alissa Anderson

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California Deficit Looms Larger

June 24, 2010

Update 2:55 p.m.:  Moments ago, the Senate failed to achieve the requisite 60 votes needed to take up this bill.

California’s $17.9 billion deficit expanded by approximately $600 million this week and is in danger of becoming even larger by day’s end if Congress fails to pass legislation that would extend aid to states still struggling to emerge from the economic recession.

California – along with at least 29 other states – is closely watching whether the Senate will obtain the 60 votes needed to move a jobs bill that would continue to provide increased federal funding for Medicaid – a key source of revenue helping to shore up lagging state budgets this fiscal year. The American Recovery and Reinvestment Act of 2009 (ARRA) increased the federal government’s share of Medicaid spending in California from the historical 50.0 percent to 61.6 percent, thereby lowering the state’s share to 38.4 percent and freeing up state funds to help balance the budget. The enhanced funding expires December 31, 2010 under current law, but legislation in Congress could extend this higher level of funding through June 30, 2011.

The six-month extension would provide $1.9 billion for California. This week, however, Senate leaders pared down the amount of state aid by one-third, meaning California would receive approximately $1.3 billion. While the reduction is a blow to states, congressional failure to pass any state aid would be more devastating.

The Legislature and the Governor already are struggling to patch the state’s existing $17.9 billion budget gap. The Governor’s, Senate’s, and Assembly’s budget plans all assumed $1.9 billion in federal funds that appeared likely until a short time ago. Without this federal aid, California’s shortfall would widen to $19.8 billion. Furthermore, without this federal aid, budget proposals made by Governor Schwarzenegger, but rejected by the Legislature – such as the elimination of CalWORKs, imposition of copayments for Medi-Cal patients, and elimination of Medi-Cal coverage for Adult Day Health Care services – may resurface as policymakers become increasingly desperate to close the growing budget gap.

– Hanh Kim Quach

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