The Pitfalls of Food and Nutrition Block Grants

The Pitfalls of Food and Nutrition Block Grants

The Supplemental Nutrition Assistance Program (SNAP), the largest federal anti-hunger program in the United States, is perhaps the most important income supplement for low-income individuals. Every few years, a debate reemerges in Congress around block granting SNAP. The debate highlights the tradeoff between the cost savings of block grants versus the stability of the program to participants. Block grants can provide states with flexibility over SNAP requirements. However, keeping SNAP as an entitlement program will better provide benefits to individuals in need. Instead of reviving politically contentious debates each time Congress discusses SNAP block grants’ budget, Congress should maintain SNAP’s current entitlement program to better to prioritize anti-hunger goals. This blog discusses two case studies, the Nutritional Assistance Program (NAP) in Puerto Rico and the Temporary Assistance for Needy Families Program (TANF), which illustrate the negative consequences of block granting programs and why Congress should resist this move.

The Supplemental Nutrition Assistance Program: Background and History

SNAP is an entitlement program in which the federal government provides an unfixed amount of funds that rise or fall with enrollment rates and other factors. The federal government funds all SNAP benefit costs while the states split the administrative costs and administer the funds. Many states also supplement federal funds with their own funds. About 14 percent of the U.S. population, or 21.1 million households and 42 million people overall, receive SNAP benefits.

SNAP serves three purposes: 1) to enable the poor to have nutritionally adequate diets, 2) to help stabilize individual budgets and the U.S. economy, and 3) to supplement the income of the poor. Crucially, 13 percent of the U.S. population is food insecure. In addition to addressing food insecurity, SNAP has contributed to higher birth weights and improved infant health. SNAP also helps to stimulate the economy: about $5 in food stamp benefits generates approximately $9 of economic activity in local communities. The federal government spent $68 billion on SNAP in 2018. In fiscal year 2018, individual recipients received an average benefit of $127 per month, while households received an average of $256 per month.

Proposals to Administer SNAP via Block Grants

Some officials want to block grant SNAP to help control the costs of the program. Block grants are one way that the federal government provides money to the states through a fixed amount of funding that gives states more control over the program. Some analysts contend that SNAP’s budget is unsustainable due to the increased benefits and relaxed eligibility standards, each resulting in higher program costs. Advocates of SNAP block grants also assert that states should be responsible for managing social welfare programs like SNAP. They also contend that substantial cost savings will result when SNAP is administered through block grants instead of as entitlement funds. Some scholars have found that block granting SNAP would decrease SNAP expenditures by $125 billion over 10 years, by decreasing the government’s overall cap on SNAP as well as federal administrative paperwork requirements.

Block granting SNAP could also mean that states have more authority to administer SNAP by setting their own eligibility criteria and benefit levels specific to that state’s needs. The most recent public dispute over block granting SNAP emerged during the initial 2018 Farm Bill discussions where the 105th Congress debated administering SNAP through block grants. The Farm Bill proposal led to the “Agenda for Renewed Opportunity” program, which was an idea from former Wisconsin Representative Paul Ryan. Ryan first floated this sort of anti-poverty proposal, known as “Expanding Opportunity in America,” in 2014. Under Ryan’s proposal, states could apply for and consolidate eleven safety net and anti-poverty related programs, including SNAP, into a single capped block grant that included housing vouchers, child care, and other anti-poverty programs. Ultimately, Congress did not authorize the 2018 Farm Bill to administer SNAP through block grants, but similar proposals continue to reemerge throughout various SNAP debates.

Why SNAP Should Remain an Entitlement Program

There are several reasons why the federal funding of SNAP block grants would make it hard to get money to the individuals who need it most. First, block grants set funding at a fixed amount, eliminating the guarantee that a program like SNAP can meet the needs of all those who are, or become, eligible. Even if the amount changes each year as conditions change, the funding would not be flexible enough to meet the current need. Second, block grants allow states to divert funding to fill budget shortfalls. Laws could try to prohibit such funding diversions, but as the Temporary Assistance for Needy Families Program (TANF) case study will show, it is difficult to limit state discretion once states receive block grants for a program because discretion is a main feature of block grants. Third, block grants lead to less access to essential food benefits because there would be limited federal oversight. The federal government might still oversee the funds, but it would not have the final say on the main aspects of the program such as program eligibility or data evaluation. By examining two case studies of block grants for anti-poverty programs—the Nutritional Assistance Program in Puerto Rico and TANF—it becomes clear that SNAP block grants would be detrimental to those who live in poverty.

Puerto Rico: A Case Study of Food Assistance via Block Grants

The SNAP budget includes block grants for food assistance in Puerto Rico, which is known as the Nutritional Assistance Program. President Ronald Reagan made many cuts to NAP in 1982. Consequently, Puerto Rico receives a fixed level of annual funding for food assistance from the federal government regardless of need. NAP went from being an entitlement program to a block grant in 1982, when Puerto Rico received a limit of $825 million in funding. In 1981, before NAP was a block grant, Puerto Rico received $915 million. Block grants continue to cap Puerto Rico’s funding irrespective of actual need or food insecurity.

The United States has saved money by providing Puerto Rico food assistance through block grants, but the changes have resulted in some drawbacks. The United States Department of Agriculture (USDA) has determined that if Puerto Rico participated in SNAP instead of the current block grant, Puerto Rico would spend about 23 percent more on household food assistance and would serve more individuals through the program. NAP substantially reduced the percentage of Puerto Rican residents who receive food assistance from 56 percent in 1981 to 26 percent in 2004. In 2018, NAP received about $1.92 billion in federal funding. However, about one-third of Puerto Rico’s adult residents experience food insecurity, which is over two times the food insecurity in the United States. The poverty rate in Puerto Rico in 2018 was 43.1 percent, which is significantly higher than the U.S. national poverty rate of 13.1 percent. The federal government could reduce Puerto Rico’s food insecurity if NAP was more responsive to need, but this responsiveness is currently impossible due to NAP’s status as a block grant.

TANF: Another Example Block Grant Program

TANF further demonstrates some of the problems that occur when programs are funded by block grants. As a result of block grants, states have wider discretion to fight poverty by funding programs not directly related to poverty, such as parenting workshops and other programs supporting two-parent families and discouraging out-of-wedlock parenting. After welfare reform occurred, which spawned TANF, the number of participants receiving welfare benefits declined. Aid to Families with Dependent Children, the predecessor to TANF, served 13.42 million recipients in 1995. However, TANF served only 4.12 million people in 2015. Studies show that 60 percent of those who stopped receiving benefits went on to find jobs, although it is unclear how long former welfare recipients stayed employed. Additionally, 42 percent of welfare recipients were employed or participated in job preparation activity in 2009, compared to 19 percent of welfare recipients in 1994. Analysts contend that race is one of the reasons why there are fewer TANF participants, as findings show that states with higher black residents have developed less generous and more restrictive TANF programs.

Studies have found that states can better help families who struggle in poverty if those states spend more money on basic assistance. It is true that block grants helped lower TANF spending costs from $16.5 billion in 1997 to $11.1 billion in 2015. However, block grants provide no automatic mechanism where the federal government grants states with additional funds during economic downturns. The law could technically create such automatic mechanisms in challenging economic times. However, if conservatives were able to garner enough support to block grant SNAP, it is likely that their priority during an economic downturn would be to lower SNAP’s overall budget by eliminating the current entitlement nature of block grants—not to create automatic funding mechanisms that would support people during challenging times. Yet programs need the ability to expand and adjust quickly to meet various communities’ economic need during such economic downturns. The government established a TANF Contingency Fund to help address need during the Great Recession, for instance, which expanded the limited TANF funds available to address the increased need individuals faced during the Great Recession. However, states were reluctant to use the funds to distribute to individuals in need because of its fast-approaching expiration date: states did not want to pay additional cash to recipients once the contingency funds expired.

Conclusion

SNAP should not be administered through block grants. Block granting SNAP would cause states to have different and thus unequal eligibility requirements, curtail states’ ability to respond accordingly in economic downturns, and increase food insecurity through insufficient program funding—a particularly dangerous consequence now, since the COVID-19 pandemic disproportionately afflicts communities of color. The federal government should be able to adjust SNAP’s benefits and criteria based on the economic situation, not its capped program budget. The benefits of keeping SNAP as an entitlement program clearly outweighs the benefits of block granting SNAP.

 

Molly Lao: Diversity Editor, California Law Review, Berkeley Law Class of 2021.

Recommended Citation: Molly Lao, The Pitfalls of Food and Nutrition Block Grants, Calif. L. Rev. Online (Jan. 2021), https://www.californialawreview.org/food-nutrition-block-grants.

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