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Jul 13, 2017

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A Better Budget: Stop hunger in America

by | Jul 13, 2017

Family Economic Security

President Donald Trump calls his proposed budget for fiscal year 2018, “A New Foundation For American Greatness.” Alternately dubbed the “taxpayer-first budget,” the document proposes $3.6 trillion in cuts over 10 years – largely at the expense of education, health care, housing and services that give low-income individuals and families a chance to maintain financial security – while decreasing taxes for the wealthy.

As Congress considers the proposals under the Trump budget, we at Colorado Center on Law and Policy believe that a true foundation for “American greatness” begins with policies that invest in struggling Americans. To that point, we are publishing a series of analyses entitled, “A Better Budget,” which will examine the importance of programs targeted for reduction or elimination under the Trump budget. We will then outline how policymakers can strengthen – not undermine – the nation’s safety net while building an inclusive, fair and just economy that reflects our American ideals and puts more Americans on a path toward self-sufficiency.

Part Three of the series examines proposed cuts in the federal Supplemental Nutrition Assistance Program (SNAP, formerly known as food stamps), which provides nutrition assistance to low-income people.

Snapshot of SNAP
As the largest federal food program in the United States, SNAP reduces hunger for children, older Americans, people with disabilities and households during economic decline. Given the alarming rates of food insecurity, and diet-related chronic disease around the country, SNAP’s role has perhaps never been more important.

SNAP participation is shown to reduce hunger, benefit children’s learning ability, improve health, lift families out of poverty and strengthen economic self-sufficiency for women. Furthermore, research from the U.S. Department of Agriculture shows that every $5 in SNAP benefits generates $9 of economic activity in local communities. The program has a proven track record of connecting Coloradans to vital nutritional resources.

SNAP ensures that families and individuals can purchase groceries, with the average benefit being about $1.40 per meal, per person, or about $130 a month. SNAP’s upper-income limit is 130 percent of the Federal Poverty Level (FPL).

In fiscal year 2016, SNAP reached 44.2 million participants in the U.S, or 14 percent of the population. In the same year, SNAP reached 476,000 Coloradans or 9 percent of the state population. The program supports 235,000 Colorado kids. In fact, almost 74 percent of SNAP participants in Colorado are families with children while almost 25 percent are families with members who are elderly or have disabilities.

Nearly 48 percent of SNAP recipients are in working families. According to estimates from the Center on Budget and Policy Priorities, SNAP kept an average of 117,000 people out of poverty in Colorado – including 55,000 children – every year between 2009 and 2012. Close to 70,000 Coloradans in rural counties relied on SNAP in 2016, totaling $102 million in benefits, according to Hunger Free Colorado. Meanwhile, Moody’s Analytics estimates that SNAP benefits pumped about $728 million into Colorado’s economy in 2016. Yet, Colorado ranks only 45th in the nation in SNAP access and lost out on more than $686 million in grocery sales due to a significant lag in SNAP enrollment. Currently, only three out five eligible Coloradans are enrolled in the program, leaving 350,000 eligible-but-not-enrolled citizens who are needlessly going hungry.

Funding for SNAP benefits comes from the USDA, but the administrative costs are split 50-50 between the state and federal governments.

Proposed cuts: SNAP
Though Colorado has not done a good job harnessing available federal SNAP dollars for its neediest citizens, President Trump’s budget would roll back any progress the state has made. Trump’s proposed cuts would strip nearly $200 billion from SNAP over a 10-year period – fundamentally changing SNAP’s structure. In fact, Trump’s budget would shift 25 percent of the burden of SNAP funding to the states by 2023 – money Colorado does not have.

Coming up with this money would have taken $182 million from Colorado’s 2016 budget. In total, the state share adds up to up to a $1.3 billion hit over the next decade. The budget also attempts to cut costs by targeting recipients of SNAP’s minimum benefit – including seniors and the disabled, who already receive a paltry $16 in benefits per month. According to Hunger Free Colorado, an estimated 15,000 of these most at-risk Coloradans would be targeted by these cuts.

A report from the Center on Budget and Policy Priorities says under the Trump budget, SNAP households nationwide would receive roughly $12 billion less each year. That would cut benefits by more than $25, per person, per month. To make matters worse, these cuts would come at a time when food costs are expected to rise because of the Trump administration’s “crackdown” on immigrant labor and foreign trade.

While the budget proposal purports to realize cost savings by tightening work requirements on SNAP recipients who are unemployed – it should be noted that most able-bodied SNAP recipients are already working. Colorado is among the states with a SNAP work requirement.

Trump’s budget eliminates a state option that lets states raise SNAP’s gross income eligibility level higher than 130 percent FPL. The budget also forces states to limit benefits to three months for individuals who are not working 20 hours per week – unless they have children. That would mean about 1 million unemployed Americans would no longer have access to food assistance.

“SNAP is an efficient program without much room for cuts,” said Victoria Palacio of CLASP in a recent commentary. “It responds to economic and population changes, expanding when need rises and contracting when need declines. Cutting SNAP by $193 billion over 10 years wouldn’t permit the flexibility needed to combat hunger.”

Palacio added that dramatic cuts in SNAP would also “undermine the physical and mental health in our most vulnerable communities” and shift the burden to states that can’t shoulder the additional expense – especially in times of recession when SNAP is most needed.

As part of the cost shift to states, the Agriculture Department under the Trump budget would let states cut benefit levels as a cost-management tool – meaning that low-income families, seniors and people with disabilities would no longer be guaranteed access to a basic diet. Instead, states’ ability to pay for SNAP benefits will drive the benefit level. That provision doesn’t bode well for Colorado, which has constitutional budgetary constraints that would make additional funding for SNAP highly unlikely, if not impossible.

The budget also proposes raising revenue for SNAP by making retailers pay an application fee for accepting food stamps. Though Trump’s budget claims the government can raise $2.3 billion in revenue a year through such a policy, it is simply an unworkable idea because small retailers – particularly in rural parts of the country – would probably prefer to avoid the hassle and the fees associated with applying, leaving SNAP-eligible residents without a local food source.

Combined with proposed cuts in education and training, affordable housing and Medicaid, the SNAP cuts would hurt millions of Americans with lowncomes and force states to reduce benefits for their neediest residents – with a devastating effect on the health and economic well-being of their communities.

What policymakers should do
Although SNAP is absolutely essential for low-income families, the program has not kept up with the changing realities of food costs and consumption. Currently, benefits are determined by the cost of a food budget known as the Thrifty Food Plan (or TFP).

Using a formula set in the 1970s, the TFP assumes that low-income households can spend an unlimited amount of time preparing food from scratch. That makes food preparation more challenging for time-strapped working families, those without a full kitchen in their residence and those who are forced to move frequently, and makes it harder to stretch SNAP dollars for those looking for convenient and healthy fare.

According to a 2016 policy proposal from The Hamilton Project, the SNAP benefit is insufficient because the maximum benefit amount is “based on an increasingly unrealistic market basket of food.” The Hamilton Project estimates that 87 percent of SNAP recipients lack the time and resources to meet their families’ nutritional needs. The TFP formula also doesn’t account for variation of food prices in different parts of the country.

To address this concern, The Hamilton Project proposed adding a 20 percent inflation factor to the TFP to increase the maximum benefit for a four-person household from $649 per month to $779 per month. The report also proposed relaxing the constant-cost constraint of the TFP to include geographic price adjustments. The proposal would undoubtedly raise the cost of SNAP, but such an investment would undoubtedly reduce hunger and poverty.

Other proposals for improving the program:

* Support the “Closing the Meal Gap Act of 2017” – Sponsored by Rep. Alma Adams, D-N.C. and introduced in March, the legislation would require the USDA to make adjustments to account for household size, changes in the cost of a diet and the costs of food in specified areas. The bill exempts those who are not offered a position in a SNAP Employment and Training program from the SNAP work requirements .

* Take lessons from states. In 2004, Oregon adopted a five-year plan to end hunger in the state. The plan included strategic outreach to vulnerable populations and improved business processes. It also proposed expediting the SNAP enrollment process, improving customer service for the program and improving performance metrics for accuracy, timeliness and access. In 2008, Maryland launched a No Kid Hungry campaign that enrolled 15 percent more households with children under 18 in SNAP. In 2015, Pennsylvania launched an effort to improve food security by leveraging federal, community and state resources, enhancing public-private partnerships and improving outreach, awareness and advocacy.

Clearly, SNAP is critical to reducing hunger and forging pathways from poverty in Colorado and nationwide. To that point, dramatic cuts in the program would undermine struggling families’ efforts to put food on the table, make ends meet and secure or maintain employment. Trump’s budget would also hurt state economies and create hardships and burdens for families and. We think that’s the wrong direction for Colorado and our nation, and we urge stakeholders nationwide and statewide to identify new goals and strategies to end hunger.

In the meantime, please encourage Colorado’s congressional delegation to reject Trump’s budget cuts to SNAP in favor of policies that reduce hunger, increase access to healthy and nutritious food, and invest in Colorado.

– By Bob Mook

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HEALTH:
HEALTH FIRST COLORADO (MEDICAID)

Health First Colorado is the name given to Colorado’s Medicaid program. Medicaid provides public, low-cost health insurance to qualifying adults and children. It is an entitlement program funded by the federal, state, and county governments and is administered by counties in Colorado. Those who are required to pay must pay a small co-pay when receiving certain health care services.

State Department: Department of Health Care Policy and Financing

Eligibility: Most adults 18 to 64 are eligible for Medicaid in Colorado if their household income is at or below 133% of the federal poverty limit (FPL). Pregnant women are eligible with incomes of up to 195% FPL, while children under 18 may be eligible if the live in a household with income at or below 142% FPL. Some adults over 65 may also be eligible for Medicaid.

Program Benefits: Through Medicaid, low-income Coloradans are eligible for a range of health care services at little to not cost. Services provided include doctors visits, prescription drugs, mental health services, and dental care. Co-pays for certain individuals may be needed for certain services.

Program Funding and Access: Colorado funds our Medicaid program through state and federal dollars. Medicaid is an entitlement program, which means that all who are eligible for Medicaid can access the program, regardless of the funding level in a given year. This does not mean that it is always easy to access Medicaid, even when eligible. And since the program is administered by counties, funding levels for county staff and other administrative roles can make it easier or harder for Coloradans to access the program. On top of this, not all medical providers accept Medicaid which limits the ability of Coloradans to seek health services even if enrolled, such as if the nearest provider is a 2+ hour drive away.

Note: This data is from before the pandemic and does not reflect changes in enrollment rules during the COVID-19 pandemic and public health emergency.

Statewide Program Access 2015-19: Over the study period of this report, an average of 89.0% of the population at or below 133% of FPL (i.e., the population who is likely to be eligible for Medicaid) were enrolled in Medicaid in Colorado.

FOOD SECURITY:
SUPPLEMENTAL NUTRITION ASSISTANCE PROGRAM (SNAP)

The Supplemental Nutrition Assistance Program or SNAP helps low-income Coloradans purchase food by providing individuals and families with a monthly cash benefit that can be used to buy certain foods. SNAP is an entitlement program that is funded by the federal and state governments and administered by counties in Colorado.

State Department: Department of Human Services

Eligibility: Currently, Coloradans qualify for SNAP if they have incomes below 200% FPL, are unemployed or work part-time or receive other forms of assistance such as TANF, among other eligibility criteria. Income eligibility for SNAP was different during the study period of this report than today—it was 130% FPL back in 2019 for example. The US Department of Agriculture uses the population at or below 125% FPL when calculating the Program Access Index (or PAI) for SNAP. We follow this practice in our analysis despite Colorado currently having a higher income eligibility threshold.

Program Benefits: SNAP participants receive a monthly SNAP benefit that is determined by the number of people in their household and their income. Benefit amounts decrease as income increases, helping households avoid a sudden loss of SNAP when their incomes increase, even by a minor amount. Benefits are provided to an Electronic Benefit Transfer (EBT) card that can be used to purchase eligible food items, such as fruits and vegetables; meat, poultry, and fish; dairy products; and breads and cereals. Other items, such as foods that are hot at their point of sale, are not allowable purchases under current SNAP rules.

Program Funding and Access: SNAP, like Medicaid, is a federal entitlement program. This means that Colorado must serve any Coloradan who is eligible for the program. As such, funding should not be a limit to how many Coloradans can be served by the program. However, funding for administration of SNAP at the state and county level can limit the ability of county human service departments to enroll those who are eligible. Other program rules and administrative barriers can make it difficult for Coloradans to receive the benefits they are legally entitled to receive.

Statewide Program Access 2015-19: Over the study period of this report, an average of 61.1% of the population at or below 125% of FPL (i.e., the population who is likely to be eligible for SNAP) were enrolled.

FOOD SECURITY:
SPECIAL SUPPLEMENTAL NUTRITION PROGRAM FOR WOMEN, INFANTS AND CHILDREN (WIC)

The Special Supplemental Nutrition Program for Women, Infants, and Children, also know as WIC, provides healthcare and nutritional support to low-income Coloradans who are pregnant, recently pregnant, breastfeeding, and to children under 5 who are nutritionally at risk based on a nutrition assessment.

State Department: Department of Public Health and Environment

Eligibility: To participate in WIC you must be pregnant, pregnant in the last six months, breastfeeding a baby under 1 year of age, or a child under the age of 5. Coloradans do not need to be U.S. citizens to be eligible for WIC. In terms of income, households cannot have incomes that exceed 185% FPL. Families who are enrolled in SNAP, TANF, Food Distribution Program on Indian Reservations (FDPIR), or Medicaid are automatically eligible for WIC. Regardless of gender, any parents, foster parents, or caregivers are able to apply for and use WIC services for eligible children.

Program Benefits: WIC provides a range of services to young children and their parents. These include funds to purchase healthy, fresh foods; breastfeeding support; personalized nutrition education and shopping tips; and referrals to health care and other services participants may be eligible for.

Program Funding and Access: WIC is funded by the US Department of Agriculture. The state uses these federal funds to contract with local providers, known as WIC Clinics. In most cases, these are county public health agencies, but that is not the case in all Colorado counties. Some WIC Clinics cover multiple counties, while others are served by multiple clinics. Private non-profit providers are also eligible to be selected as a WIC Clinic.

Statewide Program Access 2015-17: Between 2015 and 2017, an average of 52.2% of the population eligible for WIC were enrolled in the program in Colorado.

Financial Security:
Colorado Works

Colorado Works is the name given to Colorado’s program for Temporary Assistance to Needy Families or TANF. It is an employment program that supports families with dependent children on their path to self-sufficiency. Participants can receive cash assistance, schooling, workforce development and skills training depending on the services available in their county.

State Department: Department of Human Services

Eligibility: In general, Coloradans are eligible to enroll in TANF if they are a resident of Colorado, have one or more children under the age of 18 or pregnant, and have very low or no income. For example, to be eligible to receive a basic cash assistance grant through TANF, a single-parent of one child could not earn more than $331 per month, with some exclusions—and would only receive $440 per month (as of 2022). That said, there are other services provided by counties through TANF that those with incomes as high as $75,000 may be eligible for. In addition to these, participants in TANF are required to work or be pursuing an eligible “work activity” or work-related activity. Any eligible individual can only receive assistance if they have not previously been enrolled in TANF for a cumulative amount of time of more than 60 months—this is a lifetime limit that does not reset. Counties may have additional requirements and offer benefits that are not available in other counties in Colorado.

Program Benefits:  While the exact benefits that one is eligible for under TANF can vary, all qualified participants are eligible to receive a monthly cash payment, call basic cash assistance. Other than cash assistance, counties are have a lot of choice in how to use their TANF funding; generally a use of TANF funds is appropriate so long as it advances one or more of the four purposes of the program: (1) provide assistance to needy families so that children can be cared for in their own homes or in the homes of their relatives; (2) end the dependence of needy families on government benefits by promoting job preparation, work, and marriage; (3) prevent and reduce the incidence of out-of-wedlock pregnancies; and (4) encourage the formation and maintenance of two-parent families.

It is important to note that those eligible for TANF are also eligible for many of the other programs we’ve included in this report, such as SNAP, Medicaid, and CCCAP.

Program Funding and Access: Colorado funds its TANF program through funds received from the federal government through the Temporary Assistance for Needy Families block grant. Most of the federal funds are allocated by the state to counties, which are required to provide a 20% match of state funding. Federal and state rules allow the state and counties to retain a portion of unspent funds in a TANF reserve.

Statewide Program Access 2015-19: Over the study period of this report, an average of 50.7% of the population at or below 100% of FPL (i.e., the population who is likely to be eligible for TANF) were enrolled in TANF in Colorado.

EARLY LEARNING:
COLORADO CHILD CARE ASSISTANCE PROGRAM (CCCAP)

The Colorado Child Care Assistance Program provides child care assistance to low-income families and caregivers living in Colorado in the form of reduced payments for child care. It is a program funded by the federal, state, and county governments and is administered by counties in Colorado. The share owed by parents/caregivers is determined on a sliding scale based on the family’s income.

State Department: Department of Early Childhood Education

Eligibility: Counties set eligibility for families separately, but must serve families with incomes at or below 185% of the Federal Poverty Limit. Families accepted to the program are no longer eligible once their income exceeds 85% of the state median income. Parents or caregivers must be employed, searching for work, or engaged in another approved activity to be eligible for CCCAP. Parents and caregivers enrolled in Colorado Works (Temporary Assistance to Needy Families or TANF) or in the child welfare system are also eligible to participate in CCCAP. Generally, CCCAP serves families with children under 13, although children as old as 19 may be eligible under certain circumstances.

Program Benefits: If a family is eligible for CCCAP and has income, they may likely have to pay a portion of their child’s or children’s child care costs each month. The amount that families owe is based on their gross income, number of household members, and the number of children in child care in the household. As such, households tend not to experience a benefit cliff with CCCAP when they see their incomes increase

Program Funding and Access: Colorado funds the CCCAP program using federal dollars it receives from the Child Care and Development Block Grant program. The state allocates federal and state funds to counties using a formula that takes into account factors like current caseloads and the number of eligible residents. Assistance is available until the county’s funds are spent, so the number of families that can be served is often a function of how much funding is available and the income and composition of the household that applies. It is not uncommon for counties to overspend or underspend their allocations of funds. The state reallocates unspent funds from counties who underspent to those who overspent. While underspending could indicate a problem with the way a county administers its CCCAP program, it could just as likely be a sign that there are few providers in the county who participate in CCCAP—or a lack of providers generally.

Statewide Program Access 2015-19: Over the study period of this report, an average of 10.8% of the population at or below 165% of FPL and younger than age 13 (i.e., the population who is likely to be eligible for CCCAP) were enrolled in CCCAP.

Housing:
HUD rental assistance programs

The US Department of Housing and Urban Development (HUD) has three housing assistance programs that we look at together: Housing Choice Vouchers (Section 8), Project-based Section 8, and Public Housing. In Colorado, these programs provided assistance to over 90% of the households who received federal housing assistance from all HUD programs. Through federally funded, local or regional public housing agencies (PHAs) are the agencies that administer these programs, through not all are available in all counties. These are not the only programs available in Colorado that assist households afford the cost of housing, such as units funded through federal and state tax credit programs.

State Department: Department of Local Affairs

Eligibility: Generally, households with incomes under 50% of the area median income (AMI) of the county they live in are eligible for these rental assistance programs, although PHAs have discretion to select households with incomes at higher percentages of AMI. That said, HUD requires that 75% of new vouchers issued through the Housing Choice Voucher/Section 8 program in a given year are targeted to households with incomes at or below 30% of AMI. PHAs are also able to create criteria that give priority to certain types of households who are on waiting lists for these programs.

Program Benefits: These rental assistance programs help households afford the cost of housing by reducing their housing costs to around 30% of their household income. In the case of the Housing Choice Voucher program, the PHA pays the voucher holder’s landlord the remaining portion of the rent.

Program Funding and Access: Funding and access are both challenges for these rental assistance programs. In addition to limitations on the number of public housing units or housing vouchers a PHA can manage or issue, lack of funding compared to the need constrains the ability of PHAs to assist low-income households. In 2020, Coloradans were on waitlists for Housing Choice Vouchers for an average of 17 months. Waitlists also exist for the other rental assistance programs.

Statewide Program Access 2015-19: Over the study period of this report, an average of 21.1% of renter households with incomes at or below 50% AMI (i.e., the population who is likely to be eligible for HUD rental assistance programs) were living in subsidized housing.