Published July 2, 2025
The Senate-passed budget reconciliation bill is now headed back to the House, where a final vote is expected today or tomorrow. Although the Senate version costs slightly less overall, its provisions are more punitive and far-reaching in their harm. Most of the bill’s core provisions remain unchanged. The few amendments made — largely to comply with parliamentary rules or secure enough Republican votes — further underscore the bill’s inequities. Below is an overview of the most consequential changes. A full side-by-side comparison of the House and Senate versions can be found [here].
A Misleading Fiscal Narrative
As House Republicans review the Senate Bill, they are claiming the Senate bill “saves money for taxpayers” and “will only have positive income effects,” but those claims are deeply misleading. The bill’s primary beneficiaries are the ultra-wealthy. A recent analysis found that the House-passed version of the reconciliation bill would result in an unprecedented transfer of income from low- and middle-income Americans to the wealthiest households. It would reduce income for the poorest 20 percent of Americans by an average of 3.8 percent, while increasing income for the wealthiest 20 percent by 3.7 percent — a striking 7.5 percentage-point disparity.
The economic damage extends beyond household budgets. The bill’s cuts to the Supplemental Nutrition Assistance Program (SNAP) and other basic needs programs would immediately reduce local tax bases, especially in rural and economically challenged communities. If all states conform to the proposed law, state income tax revenues would drop by an estimated $3.7 billion in 2026 alone — a 0.8 percent decline. Meanwhile, farmers stand to lose roughly $24 billion1 over the next decade as SNAP recipients’ reduced purchasing power diminishes demand for agricultural products. Every lost dollar in federal support also means one fewer dollar for essential public services — schools, public safety, roads, libraries, afterschool programs, and parks. For context, every $1 in SNAP spending generates up to $1.80 in economic activity, particularly during economic downturns, supporting grocers, wholesalers, truckers, and farmers alike.
New Changes to the Senate Bill
Cost-Sharing Shift, Section 10105
The Senate bill maintains the cost-share provision, albeit with a few caveats added to win Republican support. As previously discussed, this provision is among the most harmful in the reconciliation package — it introduces an unprecedented requirement for states to contribute to the cost of food benefits in SNAP beginning in fiscal year 2028.
Under the current House bill, every state would pay at least 5 percent, with rates climbing to 25 percent for states with error rates above 10 percent. The Senate bill lowers the tiers slightly, but still imposes costs on states with error rates as low as 6 percent. These payments would come in addition to increased administrative cost obligations, straining state budgets already grappling with limited resources.
Federal data released this week showed that 44 states have payment error rates at or above 6 percent, triggering mandatory Corrective Action Plans and making most states vulnerable to heightened cost-sharing under the proposed formula. While Republicans have framed the measure as a push for program integrity, they simultaneously included carve-outs that undercut those claims, most notably, a one-time delay option for states with exceptionally high error rates.
Specifically, if a state’s fiscal year (FY) 2025 or FY 2026 payment error rate — when multiplied by 1.5 — equals or exceeds 20 percent, it may delay cost-sharing implementation until FY 2029 or FY 2030, respectively. This delay may only be used once and cannot be applied to both years. Additionally, to determine cost-sharing in FY 2028, states may elect to use their error rate from either FY 2025 or FY 2026. Beginning in FY 2029 and thereafter, the applicable cost-share will be based on the state’s error rate from three years prior.
Based on FY 2024 data, states such as Alaska, Florida, Georgia, Maryland, Massachusetts, New Jersey, New Mexico, New York, Oregon, and the District of Columbia could qualify for the one-time delay, though the provision may perversely incentivize states to tolerate high error rates to postpone financial obligations.
Despite these temporary reprieves, all states will eventually bear the financial burden. See table of the 20-year error rates. Even states with historically low error rates will face new, mandatory obligations under the Senate bill. State leaders across the country, including 23 governors and legislators from Nebraska, have warned that they may not be able to continue operating SNAP without cutting essential services, raising taxes, or pulling from other vital programs. With the federal government already requiring states to submit detailed Corrective Action Plans to reduce errors and holding them financially accountable for mistakes, this proposed cost- shift not only duplicates existing accountability mechanisms but it threatens to undermine the entire SNAP program.
Expanded Work Requirements, i.e., Time Limits, Section 10102 (participants must prove that they work at least 20 hours a week; if not, they can only receive SNAP for three months in three years).
The Senate bill also includes an aggressive expansion of time-limited benefits by raising the age for Able-Bodied Adults Without Dependents (ABAWDs) subject to work requirements from 54 to 64. It also narrows the definition of a dependent child to those under 14, limits caregiving exemptions, and — unlike the House version — removes current protections for veterans, individuals experiencing homelessness, and youth aging out of foster care. While Alaska and Hawaii may apply for a one-time waiver by December 31, 2028, based on an unemployment rate that is at or above 1.5 times the national unemployment, the U.S. Department of Agriculture (USDA) would retain full discretion to approve or revoke them.
This change significantly expands the number of people at risk of losing SNAP for failing to meet a 20-hour-per-week paid work requirement, even if they are already providing unpaid caregiving or face employment barriers. Losing access to food benefits does not reduce household needs. In fact, it may increase hardship for families still struggling to cover basic expenses.
Research consistently shows that SNAP’s time limits are not effective at increasing employment. Instead, they often result in eligible individuals losing benefits due to burdensome paperwork and administrative red tape. Since these policies were first introduced under the 1996 Personal Responsibility Act, deep poverty has increased among childless adults, underscoring that these measures punish rather than empower.
Restrictions on Noncitizen Eligibility, Section 10108
The bill maintains SNAP eligibility for U.S. citizens, nationals, certain lawful permanent residents, and Cuban nationals, and adds back Haitian nationals. However, it continues to exclude many legal immigrants with humanitarian protections.
Specifically, it removes eligibility for lawfully present individuals such as refugees, those granted asylum, and certain survivors of domestic violence, human trafficking, or other humanitarian crises — people often rebuilding their lives after trauma or persecution.
This provision has minimal fiscal impact — 95.2 percent of SNAP participants are U.S. citizens — but inflicts disproportionate harm on vulnerable communities. It is both unnecessary and unjust.
Harmful SNAP Provisions Remain Largely Unchanged: A Summary of Key Impacts
While the amendments above were made to secure Senate passage, most of the bill’s SNAP-related provisions remain unchanged, threatening to undermine access to food and state capacity to administer benefits.
Administrative Cost-Sharing, Section 10106: Beginning in FY 2027, the federal government will reduce its share of SNAP administrative costs from 50 percent to 25 percent, requiring states to shoulder the remaining 75 percent. This significant cost-shift will strain already tight state budgets, reduce the ability of agencies to manage the program effectively, and likely result in service delays and staffing reductions.
Internet Cost Exclusion, Section 10104: Households will no longer be able to include internet service costs when calculating their excess shelter deduction. This change penalizes families with low incomes who rely on internet access for work, education, and health care by reducing their SNAP benefits, despite internet being an essential expense.
SNAP-Ed Defunding, Section 10107: The bill defunds SNAP-Ed, effective after FY 2025, ending nutrition education and obesity prevention efforts. Families, especially those with children, will lose access to guidance that supports healthier food choices and long-term well-being.
Thrifty Food Plan (TFP) Limits, Section 10101: Re-evaluations of the TFP — which determines SNAP benefit amounts — will be limited to once every five years and must be cost-neutral. This restriction will prevent SNAP benefits from keeping pace with rising food costs, eroding families’ purchasing power over time and increasing hardship for program recipients.
Utility Deduction Limits, Section 10103: Reduces a state option to calculate shelter costs based on household eligibility for fuel assistance for older adults or households with members with a disability, as part of the Standard Utility Allowance calculation, which is part of the costs of living that impact the monthly SNAP benefit amount. See full explanation here. This change excludes many low-wage families who struggle with high utility bills but do not meet the new eligibility criteria, particularly in regions with high living costs or extreme weather.
Work Requirement Waiver Restrictions: The USDA would be barred from granting work requirement waivers except in areas with unemployment rates above 10 percent. This undermines states’ flexibility to respond to local labor market conditions, meaning residents in economically distressed areas that fall below the threshold will still lose benefits.
These cuts won’t just affect individual households. State agencies will face rising operational costs and fewer resources, potentially leading to layoffs and reduced program capacity. Local grocers — especially in rural and underserved communities — may lose SNAP customers, threatening their viability and reducing food access. If stores close, entire communities could face longer travel distances for basic groceries and an overall weakened economic infrastructure.
1 Farmers receive 24.3% of every dollar spent on groceries (i.e., food at home) and SNAP participants cut their food purchases by roughly half for every dollar that they lose in benefits (page 15: “the marginal propensity to consume food at home, which find estimates near 0.5 or above”).
The Senate bill cuts $197B from SNAP. Divided by 2 to get the reduction in spending by SNAP participants = $98.5B.
$98.5B x 0.243 (amount of every dollar spent on groceries that goes to farmers) = $23.9B.
