Administration Proposal Would Cut Over 300,000 People Off Food Stamps

Publication Date: March 2007

Publisher: Center on Budget and Policy Priorities (Washington, D.C.)

Author(s): Stacy Dean; Dorothy Rosenbaum

Research Area: Social conditions

Keywords: Economic projections; Economic inequality; Food insecurity; Income diversity

Type: Report

Abstract:

The President’s budget includes a provision that would cut the Food Stamp Program by $740 million over the next five years (and by $1.65 billion over ten years) by taking more than 300,000 low-income people off the program in an average month. The Administration would achieve these savings by stripping states of flexibility provided in the 1996 welfare law that allows states to coordinate certain aspects of eligibility for the Food Stamp Program with eligibility rules used for state TANF programs. More than 40 states take advantage of this option; a dozen states make very broad use of the option. The impact of the proposed cut would be borne primarily by low-income working families with children. These families would be made ineligible for food stamps because, even though their net income (income after deducting certain expenses such as shelter or child care costs) is below the poverty line, they have gross income modestly above 130 percent of the poverty line (the Food Stamp Program’s gross income limit) or assets modestly above the Food Stamp Program’s $2,000 asset limit. The asset limit has not been changed — or even adjusted for inflation — in more than 20 years. This paper examines the proposed cut.