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

03/01/2014

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: tax cuts and benefits for working families and businesses, funding for federal contracts, grants and loans9 and funding for entitlement programs. The SNAP, TANF, and SSI entitlements all were impacted by the ARRA legislation.

Supplemental Nutrition Assistance Program (SNAP)

Households were eligible to receive SNAP benefits based on household income, assets, and certain basic expenses. ARRA increased benefits for all households and expanded program eligibility for jobless adults10. 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 people were eligible for SNAP benefits in a typical month but only 27 million (71 percent) actually took-up the program. By 2011, the participation rate had increased to 79 percent. According to SNAP administrative data, the SNAP caseload increased from 28.2 million participants in 2008 to 44.7 million in 2011, an increase of 59 percent. In an average month in fiscal year 2011 (ending September 30, 2011), SNAP provided benefits to 14.4 percent of the population. The average benefit was about $133.85 per person per month and the total Federal expenditure for the program was $75.7 billion.

ARRA increased SNAP benefit levels based on the number of qualifying people in the household. Maximum benefits increased by 13.6 percent, or $80 per month for a family of four11. 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), 1980–2011

Rate (percent)
Number (millions)

Figure SUM 2b. Number & Percent of Children Receiving SNAP (Food Stamps), 1980–2011

Source: U.S. Department of Agriculture, Food and Nutrition Service Characteristics of Supplemental Nutrition Assistance Program Households: Fiscal Year 2011 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 to the Emergency Contingency Fund (Emergency Fund), which is administered by the TANF Bureau12. 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.

Subsidized employment could have been in the private sector, in non-profit organizations or in the public sector. Jurisdictions could have chosen to subsidize all or part of the wages of a subsidized employee, and determine the length of the subsidy period. The expenditures could have been for a newly-created job or to prevent a layoff in an existing job, so 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. A jurisdiction could have included employer costs for supervision and training in its costs for purposes of qualifying for 80 percent federal reimbursement per hour. This meant for example, that if a jurisdiction fully subsidized a $10 per hour wage, an employer share of $2.50 for supervision and training could be counted toward the jurisdiction’s costs without additional documentation, resulting in a total cost of $12.50, of which $10 (i.e. 80 percent) would be federally reimbursable. 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, about half the placements were summer jobs for youth13.

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.


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

10 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... and FNS Key Data, Nation Data Bank, Table 2, 2008 and 20011.

11http://www.ers.usda.gov/amberwaves/June11/features/foodsecuritysnap.htm

12 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...

13 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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