Angela Rachidi and Erik Randolph propose helpful reforms to a struggling federal program.
The Supplemental Nutrition Assistance Program (SNAP) plays a vital role in providing food assistance to low-income households in the United States. Like other means-tested government programs, SNAP benefits gradually decrease as household income rises, ensuring that resources are directed to those most in need. However, the structure of SNAP benefits can lead to abrupt reductions when households reach certain income thresholds. In some cases, families may lose at least as much in SNAP benefits as they gain in earnings, a phenomenon known as the “benefit cliff.” This can influence employment decisions, potentially discour- aging individuals from accepting higher-paying jobs orincreasing their work hours.
SNAP’s benefit cliffs are deeply concerning for several reasons. Not only do benefit cliffs discourage work and impede upward mobility for households, but the prospect of an abrupt drop in benefits can create income instability and demoralize individuals who seek higher pay or additional work. Furthermore, benefit cliffs have broader economic impacts by reducing the availability of prime-age workers to employers and decreasing worker productivity.
This report outlines a policy proposal that would substantially lessen employment disincentives in SNAP by eliminating benefit cliffs while returning program expenditures to historical norms. To do so, the proposed policy would reform certain features of the benefit structure that impede a gradual phaseout, ensuring that SNAP benefits taper to zero as households approach the gross income limit. At a time when policymakers need to constrain government costs to address the country’s broader fiscal crisis, this proposal would also reduce government expenditures, saving as much as 27 percent of program costs.
SNAP is the United States’ largest food assistance program. It provides low-income households with a monthly benefit to be used at authorized food retailers. After several years of sharply increased SNAP spending during the pandemic, SNAP benefit costs still topped $94 billion in fiscal year 2024.
