FRAC Statement: New IOM Report Outlines Steps to Address Benefit Adequacy

Washington, D.C. – January 17, 2013 – Research has long shown and lines at food pantries have long demonstrated that benefit levels for the Supplemental Nutrition Assistance Program (SNAP) are too low, and today’s new Institute of Medicine (IOM) report on benefit adequacy reaffirms that point. Not only did IOM recognize that benefits are too low, but it also acknowledged flaws in how they are calculated and outlines important recommendations to remedy the problem. Since inadequate benefits in SNAP harm health, early childhood development, and learning, fixing the problem is essential to the nation’s social, economic, and fiscal goals.

The report is clear: SNAP benefits are inadequate, and it is time for the U.S. Department of Agriculture and for Congress to take up this issue.  One in six Americans struggle with hunger, and they need action now.

The report also underscores that recent proposals in Congress to cut SNAP benefits by billions of dollars would worsen health and hunger for struggling children, seniors, and working families. Some of the flaws the IOM committee point to (e.g., the lag in SNAP benefits keeping up with inflation; and the failure to fully account for shelter costs) are due to previous cuts made by Congress. Congress needs to fix the problems rather than doubling down on harming the most vulnerable Americans.

As Congress starts fresh on a Farm Bill this year, protecting and strengthening SNAP must be a top priority.

The report contains many valuable recommendations to address benefit adequacy issues. FRAC has long supported many of these adjustments and urges USDA as well as Congress to move forward on addressing benefit adequacy. Steps include:

  • Acknowledging and accounting for the cost-time trade-offs in obtaining a nutritious diet that currently make the SNAP allotment inadequate for most families (e.g., applying a time adjustment multiplier to the cost of the Thrifty Food Plan; adjusting the earned income deduction to reflect time pressures for working participants);
  • Raising the shelter deduction;
  • Closing the gap created by the current 16 month time-lag in the Thrifty Food Plan cost-of-living adjustment;
  • Revising the outdated assumption that households have 30 percent of their income to spend on food to reflect the actual current purchasing behaviors of U.S. households;
  • Adjusting the net income calculation to better reflect the ability of SNAP participants to purchase food (e.g., earned income deduction, cap on the excess shelter deduction, and expansion of the out-of-pocket medical deduction to the nonelderly, nondisabled population); and
  • Taking into account the impact of limited food access on the ability of program participants to purchase a variety of affordable, healthy foods.

To address inadequate benefit levels, FRAC also recommends replacing the Thrifty Food Plan (the lowest cost of USDA’s four food plans, and the basis for calculating SNAP benefits) with the Low Cost Food Plan. A detailed analysis FRAC released in December 2012 – Replacing the Thrifty Food Plan in Order to Provide Adequate Allotments for SNAP Beneficiaries (full report and summary) – reviewed the extensive evidence that SNAP benefits are built on a standard that is not adequate to meet need. While the IOM discusses this remedy in the context of high cost areas, the report misses an opportunity to fully explore moving to the Low Cost Food Plan.

The IOM does make a recommendation that could complicate the current process. It recommends that USDA examine the possibility of addressing the impact of food price variation in different regions of the country by making food price adjustments in the maximum benefits for both high and low cost areas. Such an adjustment, FRAC notes, would create a more complicated program that might harm participation and political support, and be subject to Congressional choices of “winners” and “losers” in a difficult process. A better solution is to adjust the allotment to a more adequate level for all and make deductions (e.g., shelter) adequate to reflect key variables of living costs.

This report should be the starting point for USDA and Congress to move forward to address benefit adequacy and make the changes necessary to positively impact the health and nutrition of millions of Americans.