Effective April 1, 2009, the American Recovery and Reinvestment Act of 2009 (ARRA) increased monthly benefits for participants in the Supplemental Nutrition Assistance Program (SNAP) by an average of 15 percent. The increase not only boosted the purchasing power of recipients for nutritious foods but also helped stimulate the economy.

SNAP was originally slated to receive $20 billion over 5 years from ARRA--an important stimulus to the economy. For example, most eligible four-person households have been receiving since April 2009 an $80 increase in their monthly SNAP allotment to spend on groceries (see chart below). ARRA also provided nearly $300 million to States for SNAP administrative expenses in FY 2009 and 2010.

ARRA included several provisions that affect SNAP benefit levels and operations:

• Increased the Thrifty Food Plan (TFP)--and consequently maximum monthly benefit levels--by an average of 13.6 percent. The TFP serves as a national standard for a nutritious diet at minimal cost, and the retail cost of the TFP in June of each year is the basis for SNAP benefit levels that are usually set the following October. Under ARRA legislation, SNAP benefit levels would not be adjusted again until food prices caught up to the new TFP. The Food and Nutrition Service (FNS) estimated that normal food price inflation would not cause food prices to exceed the ARRA-based TFP until about 2014.
• Increased the minimum monthly benefit from $14 to $16.
• Suspended the policy on time limits for SNAP benefits for Able Bodied Adults Without Dependents (ABAWDs) until October 2010. Previously, ABAWDs could receive SNAP benefits for only 3 months every 3 years. ABAWDs still were required to comply with State Employment and Training Programs.
• Increased administrative funding for program operations by State agencies by $145 million in 2009 and $150 million in 2010.

The planned $20 billion ARRA-increase in SNAP benefits has been reduced with passage of the following recent legislation:

• Funding for education, jobs, and Medicaid--legislation enacted in August 2010 terminates the ARRA-increase in SNAP monthly benefits as of March 31, 2014.
• Healthy, Hunger-Free Kids Act of 2010--legislation reauthorizing USDA's child nutrition programs moves the end date for ARRA increases in SNAP benefits forward to October 31, 2013.

The Congressional Budget Office (CBO) estimates that monthly SNAP benefits will drop an average of $10-15 per person (or, about 10 percent) due to this legislation.

The original rationale for increasing SNAP benefits as part of ARRA was that SNAP benefits are spent quickly and have a multiplicative effect on total economic activity. Food security improved for low-income households following the 2009 ARRA increase in SNAP benefits, as seen in the following report:

• Food Security Improved Following the 2009 ARRA Increase in SNAP Benefits, by Mark Nord and Mark Prell, ERS, USDA, April 2011.
  Other relevant research includes:
• An Analysis of Food Stamp Benefit Redemption Patterns , by Carol Olander, Erika Jones, and Steven Carlson, USDA, Office of Analysis, Nutrition, and Evaluation, June 2006.
• Tracing the Impacts of Food Assistance Programs on Agriculture and Consumers: A Computable General Equilibrium Model, by Kenneth Hanson, Elise Golan, Stephen Vogel, and Jennifer Olmstead, FANRR-18, USDA, Economic Research Service, May 2002.

Last updated: Monday, June 04, 2012

For more information contact: John A. Kirlin