Nationwide reductions in the Supplemental Nutrition Assistance Program (SNAP) went into effect on Friday. Under the American Recovery and Reinvestment Act of 2009, the program was expanded to meet hardships individuals and families faced because of the recession. As a result, spending and benefits for the program increased dramatically. Approximately $34 billion in benefits were granted in 2008; in 2012, that figure was approximately $74 billion.
The Center on Budget and Policy Priorities, an organization providing policy research and analysis, explains that provisions to curb the spending have been in place for several years. The sunset date for the program was first set for April 2014 in P.L. 111-226, which passed both houses of Congress, and was signed by the president in 2010. The date was then moved to October 31, 2013, with the passage of P.L.111–296 in December 2010.
The Center on Budget and Policy Priorities also gives figures on the increases, and now decreases, to SNAP that originated in Washington, D.C. Under the American Recovery and Reinvestment Act increases, a family of two received $44 extra per month. For a family of three, it was an additional $63, and a family of four received $80 more. With the sunset provision in place, a family of two will lose $20 per month, $29 less will be given to families of three, and $36 less to families of four.
The cuts have real monetary effects on families who rely on the program to buy groceries, as well as stores that benefit from their business. Annie Crist, a mother of two from Ohio who relies on SNAP, spoke to Bloomberg about the cuts: “What worries me the most is just not being able to make it stretch. The money only goes so far.”
Bloomberg food retail senior analyst Jennifer Bartashus said to the publication, “All retailers who sell food are likely to feel the impact of cuts since people receiving assistance often don’t have excess income to make up the difference.” According to her estimates, half of the $72.9 billion in redeemed food stamp benefits went to stores like Wal-Mart (NYSE: WMT) or Target (NYSE: TGT), and the other half benefited grocery stores.
Kantar Retail’s chief knowledge officer, Bryan Gildenberg, joined Bartashus’s sentiments that retailers are likely to feel the penny pinch, along with consumers. Gildenberg believes discount retailers will be hardest hit, Wal-Mart among them.
Wal-Mart, however, sees some potential in the cuts. The Wall Street Journal reports that Bill Simon, CEO of Wal-Mart, said the cuts will create greater price consciousness among shoppers. ”When price is more important, we’re more relevant,” he said to the newspaper.
Further spending cuts to SNAP are being considered in Washington, D.C. In September, H.R. 3102: Nutrition Reform and Work Opportunity Act of 2013 passed the House of Representatives along partisan lines; it would implement an additional 5 percent cut to SNAP. The White House released a statement saying the administration “strongly opposes” the bill.
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