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Wednesday, April 22, 2015

THE DANGER OF TURNING SNAP INTO A BLOCK GRANT

Proponents of turning key safety net programs like SNAP into block grants, as the House budget plan would do, often cite Temporary Assistance for Needy Families (TANF) as a model. But a close look at how states have used TANF funds since it was created in 1996 provides a cautionary tale. The cash assistance safety net for the nation’s poorest families with children has weakened significantly since it became a block grant. Cash assistance caseloads shrunk when TANF was young and the economy was strong, this freed up federal and state funds that had gone to poor families in the form of benefits.  States used the flexibility of the block grant to redirect those funds. Some of the freed-up funds initially went to child care and welfare-to-work programs.  But over time, states redirected much of their TANF funds to other purposes, sometimes to replace state spending on other priorities.  When need increased during the recession, many states did not direct the funds back to core welfare services and instead cut in basic assistance, child care, and work programs.

The proposal to convert SNAP to a block grant would result in $125 billion in cuts to struggling families between 2021 and 2025. This would end benefits, or cut them by an average of almost $55 person for per month, for up to 12 million people. These cuts, though, would cost the economy hundreds of thousands of jobs. Assuming the cuts are evenly distributed across the five years between 2021 and 2025, an updated analysis of a 2012 study estimates that the proposed cuts to nutrition aid would cost the economy 286,000 jobs in the first year alone.


Sources: Center for Budget and Policy Priorities, 4/9/15, Block Grant Dangers; Center for American Progress, 4/13/15, SNAP Cuts