Welfare Indicators and Risk Factors: Fourteenth Report to Congress. The American Recovery and Reinvestment Act of 2009 and Welfare Benefits

09/22/2015

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 as “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: tax cuts and benefits for working families and businesses; funding for federal contracts, grants and loans11; and funding for entitlement programs.  The SNAP, TANF, and SSI entitlements all were temporarily impacted by the ARRA legislation.

Supplemental Nutrition Assistance Program (SNAP)

Households are eligible to receive SNAP benefits based on household income, assets, and certain basic expenses.  ARRA increased benefits for all households and temporarily expanded program eligibility for jobless adults12.  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 39 million people13 were eligible for SNAP benefits in a typical month and 27 million (71 percent) took-up the program.  By 2012, 51 million people were eligible for SNAP and 42 million participated in the program resulting in a participation or “take-up” rate of 83.1 percent14.  According to SNAP administrative data, the SNAP caseload increased from 28.2 million participants in 2008 to 46.6 million in 2012, an increase of 65.2 percent.  In an average month in fiscal year 2012 (ending September 30, 2012), SNAP provided benefits to 14.8 percent of the population.  The average benefit in 2012 was $133.41 per person per month and the total Federal expenditure for the program was $78.4 billion. 

ARRA increased SNAP benefit levels for all households.  Maximum benefits increased by 13.6 percent, or $80 per month for a family of four[5].   Because SNAP benefit amounts are based on household net income, the ARRA benefit increase was effectively a constant dollar increase for each household size.  Therefore, 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, $588 before ARRA, and $668 after ARRA, for a household of four.

Figure SUM 2b.  Number & Percent of Children Receiving SNAP (Food Stamps), 1980–2012

Number & Percent of Children Receiving SNAP (Food Stamps), 1980–2012

Source:  U.S. Department of Agriculture, Food and Nutrition Service Characteristics of Supplemental Nutrition Assistance Program Households: Fiscal Year 2012 and earlier reports, http://www.fns.usda.gov/characteristics-supplemental-nutrition-assistance-program-households-fiscal-year-2012; 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 to the Emergency Contingency Fund (Emergency Fund), which is administered by the Office of Family Assistance within the Administration for Children and Families16. The funds were intended to provide 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 were awarded on a first-come, first-served basis, and were used in the same way that the annual Federal TANF block grants funds were spent, except a jurisdiction could not transfer the funds to other ACF block grant programs.  States, tribes, and territories were eligible to receive the funds through September 30, 2010.  Emergency Funds were reimbursed to these jurisdictions for 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.

Supplemental Security Insurance (SSI)

The ARRA 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.

The Recovery Act also provided a one-time payment to Veterans Affairs (VA) and Railroad Retirement Board (RRB) beneficiaries.  The VA and RRB were responsible for paying individuals under their respective programs.  However, if someone received Social Security and SSI, VA or RRB benefits, he or she would receive only one $250 payment.


11 http://www.recovery.gov/About/Pages/The_Act.aspx

12 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.aspx and FNS Key Data, Nation Data Bank, Table 2, 2008 and 2012.

13 Note that while these participation rates are for individuals, Indicator 4 shows the participation rates for households.

14 Sources: SNAP Program Operations data, SNAP QC data, and CPS ASEC data for the years shown. http://www.fns.usda.gov/system/files/ops/Trends2010-2012.pdf

15 http://www.ers.usda.gov/amberwaves/June11/features/foodsecuritysnap.htm

16 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=82b17b73ae63786a4dd9d3e212008aa8

 

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