Indicators of Welfare Dependence: Annual Report to Congress, 2009-2013. The American Recovery and Reinvestment Act of 2009 and Welfare Benefits

04/01/2013

On February 13, 2009, Congress passed the American Recovery and Reinvestment Act, ARRA (Public Law 111-5) in response to the economic crisis, often referred to the “Great Recession”. The Recovery Act had three immediate goals: create new jobs and save existing ones, spur economic activity and invest in long-term growth, and foster levels of accountability and transparency in government spending. The Recovery Act intended to achieve these goals by providing $787 billion in 2009: tax cuts and benefits for working families and businesses, funding for federal contracts, grants and loans12 and funding for entitlement programs. The SNAP, TANF, and SSI programs all were impacted by the ARRA legislation.

Supplemental Nutrition Assistance Program (SNAP)

ARRA increased and expanded program eligibility.13 Households are eligible to receive SNAP benefits based on household income, assets, and certain basic expenses. The USDA’s Food and Nutrition Service (FNS), the agency that administers SNAP at the Federal level, reported that in fiscal year 2008, the year prior to ARRA, an estimated 41 million people were eligible for SNAP benefits in a typical month but only 27 million (66 percent) actually participated in the program. According to SNAP administrative data, the SNAP caseload increased from 28.4 million participants in 2008 to 33.7 million in 2009, an increase of about 19 percent, and one of the largest single-year increases in SNAP history. This large increase in SNAP participation might seem to demonstrate that the ARRA SNAP changes prompted increased participation. It is impossible however to determine from the administrative data alone how much of the participation increase was attributable to ARRA and how much was due to changing economic conditions and other factors. In an average month in fiscal year 2009 (ending September 30, 2009), SNAP provided benefits to 33.5 million people in the United States or 11 percent of the population. The average benefit was about $125 per person per month and the total federal expenditure for the program was $53.6 billion. ARRA also increased SNAP benefit levels based on the number of qualifying people in the household. Benefits for a family of four went up by $80 per month.14

The ARRA benefit increase was implemented as a constant dollar amount for each household size, so the percentage increase was greater for households that had some net income and were therefore eligible for less than the maximum benefit. For example, prior to ARRA, a household of four with a monthly net income of $980 qualified for $294 in SNAP benefits—half the maximum benefit for a household of that size. Under ARRA, that household received $374 in SNAP benefits—an increase of 27.2 percent. Households with no income net of allowable deductions received the maximum SNAP benefit, which varied depending on the number of qualifying persons in the household. Effective in April 2009, ARRA increased benefits of those households by 13.6 percent. ARRA suspended time-limited benefits for non-elderly, non-disabled adults without dependents through September 30, 2010. It also provided States with $300 million in additional administrative funds ($150 million in 2009 and the same amount in 2010) to cover the surging caseloads.

Figure SUM 2c. Number & Percent of Children Receiving SNAP, 1980–2009

Source: U.S. Department of Agriculture, Food and Nutrition Service Characteristics of Supplemental Nutrition Assistance Program Households: Fiscal Year 2009 and earlier reports, http://www.fns.usda.gov/ora/menu/Published/SNAP/SNAPPartHH.htm ; U.S. Census Bureau, http://www.census.gov/popest/data/index.html; calculations by ASPE.

Temporary Assistance for Needy Families (TANF)

The Recovery Act provided up to $5 billion in supplemental funding for an Emergency Contingency Fund (Emergency Fund), administered by the Health and Human Services Administration for Children and Families, Office of Family Assistance.15 The funds provided additional revenue to States, territories, and tribes that had an increase in caseloads and basic assistance expenditures, or had an increase in expenditures related to short-term benefits or subsidized employment. The funds could be used in the same way as the annual federal TANF block grant, except a jurisdiction could not transfer the funds to other block grant programs. States, tribes, and territories were eligible to qualify for funds based on increases in qualifying expenditures through September 30, 2010. Emergency Funds were provided to these jurisdictions to reimburse 80 percent of the cost of increased spending in three areas: basic assistance, non-recurrent short-term benefits, and subsidized employment for low-income parents and youth.

Subsidized employment could have been in the private sector, in non-profit organizations or in the public sector. Jurisdictions could chose to subsidize all or part of the wages of a subsidized employee, and determine the length of the subsidy period. The expenditures could be for a newly-created job or to prevent a layoff in an existing job, as long as the jurisdiction ensured that it complied with requirements against the displacement of other workers, and ensured that the expenditures would provide a job opportunity that would not have otherwise existed to a needy parent or youth. Fourteen states placed over 5,000 people each in subsidized jobs. Four of those states — California, Illinois, Pennsylvania, and Texas — each placed more than 25,000 people, accounting for over half of the national total. Nationwide, over 138,000 placements were summer jobs for youth.16

Supplemental Security Income (SSI)
 
The Recovery Act provided a one-time payment of $250 to adult Social Security beneficiaries and SSI recipients, except those receiving Medicaid in care facilities. To receive the payment, the person had to be eligible for Social Security or SSI during the months of November 2008, December 2008, or January 2009.

13 USDA, Economic Research Service, Report Number 116, “Food Security Improved Following the 2009 ARRA Increase in SNAP Benefits.” http://www.ers.usda.gov/publications/err-economic-research-report/err116...
15 Catalogue for Domestic Assistance, ARRA – Emergency Contingency Fund for Temporary Assistance for Needy Families (TANF) State Program. https://www.cfda.gov/index?s=program&mode=form&tab=step1&id=82b17b73ae63...
16 Subsidizing Employment Opportunities for Low-Income Families A Review of State Employment Programs Created Through the TANF Emergency
Fund. OPRE Report 2011-38, December 2011.
 

 

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