President Joe Biden and House Speaker Kevin McCarthy have reached an agreement to resolve the debt-ceiling crisis, but it includes an unexpected provision for SNAP recipients.
Saturday night, Biden and McCarthy announced that they had reached an agreement on the Fiscal Responsibility Act to raise the debt ceiling until 2025. McCarthy was unable to secure the $4.5 trillion in spending cuts he had initially proposed, and Biden was unable to secure a debt ceiling agreement that was completely free of spending cuts.
SNAP Benefits Changes
A set of new employment requirements for the Supplemental Nutrition Assistance Program (SNAP) and Temporary Assistance for Needy Families (TANF) programs is a contentious aspect of the law.
Many Americans between the ages of 18 and 49 who desire to receive SNAP benefits are required to work or complete training programs. This may be the case for “able-bodied adults without dependents.” Eventually, the measure would elevate the maximum age to 54.
Following the publication of the bill’s text, some Democratic legislators criticized the labor requirements.Tuesday, Missouri Representative Cori Bush told reporters, “As a former recipient of food stamps, there is no way I could ever support legislation that would take food from people’s mouths.”
She led her fellow Democrats in proposing an amendment to remove the new SNAP labor requirements from the debt-ceiling law.
Tuesday evening, the Congressional Budget Office (CBO) released its cost estimates for the measure and found that the SNAP proposal could increase the number of Americans receiving these benefits. According to a letter from the CBO to McCarthy, it would exempt veterans, homeless persons, and “people ages 18 to 24 who were in foster care when they turned 18” from the work requirements for SNAP.
A White House official told reporters on a press call on Tuesday that “time limits on SNAP eligibility amplify existing inequities in food and economic security.” McCarthy criticized the CBO’s estimate that the agreement would expand eligibility for SNAP benefits.
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How Employment Requirements Will Be Affected?
Contrary to McCarthy’s and the Republican party’s belief that labor requirements will increase employment, some experts are skeptical.
During a media briefing on Wednesday, Lauren Bauer, a fellow in Economic Studies at the Brookings Institution and the associate director of The Hamilton Project at Brookings, stated that there is not much “evidence that work requirements increase employment” and that she “does not expect there to be an increase in employment among 50- to 54-year-olds as a result of this deal.”
Bauer stated that because a significant portion of this population works in the volatile low-wage labor market, they may be able to add a few additional hours to meet the threshold more consistently. “I would expect to find any response to the policy change there. But it’s quite unlikely.”
In a previous report, CBO also discussed the potential effects on employment, stating that “making the receipt of benefits contingent on working or preparing to work has substantially increased the employment rate of the targeted recipients in TANF during the first year after they enter the program and to a lesser extent in subsequent years.” Work requirements in the Supplemental Nutrition Assistance Program (SNAP) appear to have had less of an influence on employment than those in Medicaid.
An economist at Moody’s Analytics, Bernard Yaros, elaborated on the minimal impact SNAP work requirements would have on employment, telling Insider, “when you look at the dollars and cents that are involved here with the recent SNAP changes, we’re just talking a couple billions of dollars,” and adding, “in the grand scheme of things of the US macroeconomy, it’s not going to really move the needle in terms of really boosting labor supply.”
Yaros stated that “other headwinds to labor supply” such as a “inadequate immigration system” and retiring baby boomers “are much heavier weights on labor supply.”
Despite the negligible impact on employment, many Democratic lawmakers oppose including labor requirements in the agreement to raise the debt ceiling. During a Tuesday call with reporters, the chair of the Congressional Progressive Caucus, Pramila Jayapal, stated that “even with the exemptions, people will have to undergo a process, more bureaucratic red tape, to determine whether or not they qualify for those exemptions.”
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