Food Assistance in American Rescue Plan Act Will Reduce Hardship, Provide Economic Stimulus

Note: This report references data from the Census Bureau’s Household Pulse Survey conducted February 3 – March 1. For more recent data, see CBPP, “Tracking the COVID-19 Recession’s Effects on Food, Housing, and Employment Hardships.”

The American Rescue Plan Act includes $12 billion in key investments to food assistance programs to mitigate the nation’s extraordinarily high levels of hunger and hardship.^[1] The major food assistance provisions:

• Extend through September the Supplemental Nutrition Assistance Program (SNAP) benefit increase in December’s COVID relief package, which will help millions of families and children have enough to eat while injecting additional, high “bang-for-the-buck” stimulus into the economy;
• Help guard against food hardship among children this summer by allowing states to continue the Pandemic-EBT (P-EBT) program, which provides grocery benefits to replace meals that children miss when schools are closed;
• Invest in the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) to modernize the program, support innovative service delivery models, conduct robust outreach, and temporarily raise the amount of fruit and vegetables participants can obtain;
• Increase federal resources for state administrative costs to help states accommodate the increased demand for SNAP; and
• Help address elevated food need in Puerto Rico and certain other U.S. territories.

The Act responds to the alarming growth in food hardship due to the COVID crisis, which has disproportionately affected households with children and communities of color. The number of households struggling to put enough food on the table spiked in the spring of 2020 as the pandemic’s economic effects took hold. It remained nearly three times pre-pandemic levels over the summer and rose more in the fall; in December it reached the highest level ever in comparable Pulse data (available back to late August). Despite modest improvements in early 2021, levels of food hardship remain much higher than pre-pandemic levels.

Some 22 million adults (11 percent) said their household didn’t get enough to eat sometimes or often in the last seven days in the Census Bureau’s most recent survey, conducted February 17 – March 1. That’s far above the most comparable pre-pandemic estimate, which showed that 8.5 million adults (3.4 percent) lived in households that didn’t get enough to eat at some point in all of 2019.^[2]

Food hardship has been especially prevalent among children. Up to 10 million children live in a household where the children aren’t eating enough because they can’t afford enough food, according to our analysis of the Census data.^[3] That’s nine times the 1.1 million children in December 2019 living in households where the children didn’t get enough to eat at any point in the last 30 days.^[4] This raises serious concerns about the crisis’ long-term consequences for children’s health and development. Studies link food insecurity among children with reduced intake of some key nutrients, health problems such as iron deficiency (which is linked with long-term neurological damage), and behavioral issues and mental health conditions. These problems, in turn, can lower children’s test scores, their likelihood of graduating from high school, and their earnings in adulthood.^[5] Even short periods of food insecurity pose long-term risks for children.

Families of color have faced some of the worst hardship, reflecting longstanding inequities — often stemming from structural racism — in education, employment, and other areas that the current crisis is exacerbating. Black and Latino adults were more than twice as likely as white adults to report that their household didn’t get enough to eat: 22 percent and 16 percent, respectively, compared to 7 percent of white adults. Similarly, 19 percent of adults who identify as American Indian, Alaska Native, Native Hawaiian, Pacific Islander, or as multiracial, taken together reported that their household did not get enough to eat.

Racial disparities are even more pronounced for children. Up to 28 percent of children in Black households and up to 23 percent in Latino households (based on the race or ethnicity of the parent) live in households where children didn’t eat enough in the last seven days because the household couldn’t afford it, compared to 10 percent of children in white households. (See Figure 1.)

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Extending Increase in Maximum SNAP Benefit

The American Rescue Plan Act extends through September the temporary 15 percent increase in the maximum SNAP maximum benefit established in the December COVID relief legislation.^[6] The increase amounts to about $28 more per person per month for all participating households, or just over $100 per month in additional food assistance for a family of four. This relief was previously scheduled to end in June, before the economy has likely recovered and while food insecurity will likely still be high. The Congressional Budget Office (CBO) estimates that this three-month extension will cost $3.5 billion in 2021.^[7] (See Table 1 for state-by-state impacts.)

Increasing SNAP’s maximum benefit by 15 percent supports low-income households as well as the overall economy. SNAP is one of the most effective mechanisms both to reach low-income households with resources to address hardship and to provide counter-cyclical help when the economy is weak. A similar SNAP benefit increase in the 2009 Recovery Act lessened food insecurity among SNAP recipients, according to Department of Agriculture (USDA) researchers.^[8] And CBO and Moody’s Analytics rate SNAP expenditures as one of the most effective and efficient supports for the economy during downturns, measured on a “bang-for-the-buck” basis. Every dollar in new SNAP benefits increases gross domestic product by about $1.50 during a weak economy, according to a recent USDA study.^[9]

About 40 percent of the added benefits from the 15 percent benefit increase will go to households with income below 50 percent of the federal poverty level; nearly two-thirds will go to households with children. It is important to note that the previously scheduled June expiration of the benefit increase would have coincided with the end of the school year, when P-EBT — which the American Rescue Plan Act also extended (see below) — was set to expire as well.

In addition to the 15 percent increase, which began in January 2021, many SNAP households are receiving added food assistance under the Families First Coronavirus Response Act’s emergency SNAP allotments. But USDA’s current interpretation of this policy, dating from the Trump Administration, denies those allotments to nearly 40 percent of SNAP households, including many that have the lowest incomes and thus have the most difficulty affording adequate food. At least 12 million of the poorest SNAP participants are missing out, including more than 5 million children (over 40 percent of them under age 6), about 1 million households with elderly members, and 600,000 households with people who have disabilities.^[10]

The Biden Administration announced on January 22^[11] that it would seek to improve the emergency SNAP benefits so they reach the lowest-income households, though the timing of any changes and the amount of emergency allotments that households would receive are unclear.^[12] Together, reaching the lowest-income households through emergency allotments and extending the 15 percent increase would do more to respond to elevated food insecurity than either change alone.

Later this year, policymakers may need to extend the SNAP benefit increase beyond the end of September if the economy still is not fully recovered. But the important changes in the American Rescue Plan Act will go a long way toward easing hardship and boosting the economy this summer.

Strengthening State SNAP Administration and Food Assistance in Territories

The American Rescue Plan Act also includes other food assistance proposals to strengthen the nation’s response to COVID.

Added resources for state SNAP administration. The Act provides $1.135 billion over a three-year period for state administrative costs to help states accommodate the increased demand for SNAP.^[13] USDA plans to distribute $245 million to states in fiscal year 2021 and $445 million in each of fiscal years 2022 and 2023. USDA outlined states’ allowed uses of the funds — to “make investments in their business processes and improve their technology in a way that will increase access” — in guidance it issued in late April.^[14] Though SNAP’s benefits are federally funded, states administer the application and benefit issuance processes, among other activities, and pay 50 percent of administrative costs. Over the past year, states have had to manage increased SNAP caseloads with their systems stretched due to office closures and staff reductions. Many states needed to quickly launch telework capacity and systems modifications to adapt to the need for physical distancing during the pandemic. The additional federal funding does not require a state match, giving states more resources to navigate these challenges. Table 2 includes USDA’s state-by-state figures for the increased federal administrative funding.

Increased food assistance in Puerto Rico and certain other territories. Puerto Rico, American Samoa, and the Commonwealth of the Northern Mariana Islands receive capped block grants for food assistance in lieu of participating in SNAP, which limits their ability to expand due to increased need.^[15] The Act adds $1 billion to those block grants, available through September 2027. This funding, along with $614 million enacted in December for these territories, will enable them to better meet residents’ food assistance needs both in the short term and in coming years as the territories recover from the economic effects of COVID-19.

The increased assistance will help in Puerto Rico’s efforts to recover from a series of challenges, including more than a decade of economic decline, coupled with hurricanes, earthquakes, and an unprecedented, ongoing bankruptcy process.^[16] Puerto Rico residents in many instances have little or no access to key aspects of the nation’s safety net, including SNAP. Despite greater need for help affording groceries, last fall about 1.5 million low-income Puerto Rico residents experienced sharp cuts in food assistance, with average monthly household benefits falling by more than 40 percent (from about $330 to about $190) from summer levels after temporary emergency funding expired.^[17]

SNAP online purchasing and other technology improvements. The Act provides $25 million for USDA to make improvements to online purchasing in SNAP, electronic benefit transfer technology, the use of mobile technologies for SNAP purchases, and technical assistance to retailers on these aspects of SNAP payments. These are important investments that will strengthen and modernize the program.^[18]

Commodity Supplemental Food Program (CSFP). The Act provides $37 million for this program, which provides USDA-purchased food packages to certain low-income elderly individuals and operates in parts of all 50 states, the District of Columbia, Puerto Rico, and five Indian tribal organizations.

Further Protecting Children From Food Hardship

Responding to staggeringly high food hardship among children and stark racial disparities, the American Rescue Plan Act includes several provisions to reduce food hardship among children and young adults.

Extending P-EBT through the summer. The Act invests more than $5 billion to allow this highly successful child nutrition program, which addresses the food needs of low-income children during COVID-related school and child care closures, to provide benefits during the summer and through the remainder of the public health emergency, as long as children are missing out on school meals because of the COVID-19 pandemic.^[19] Under P-EBT, families approved for free or reduced-price school meals receive the value of these missed breakfasts and lunches through a state-issued, SNAP-like benefit card.

Since establishing P-EBT in the Families First law, policymakers have made several improvements, including expanding eligibility to include certain children under age 6. The Act clarifies that this expansion applies to Puerto Rico, the Commonwealth of the Northern Mariana Islands, and American Samoa as well as the states.

P-EBT was previously authorized to continue through September 2021, but because its rules largely align with the school calendar, its benefits would not have been available for the summer months, when school is out of session and children’s food hardship typically increases.^[20] This gap also would have coincided with the end of the 15 percent increase in SNAP benefits, which had been slated to end in June. A summertime P-EBT benefit will create a bridge for families to the next school year, when students hopefully will have returned to their classrooms. This approach is consistent with the Summer EBT demonstration program, a SNAP supplement that has been shown to reduce food insecurity and prompt healthier eating when schools are out for the summer.^[21] Extending P-EBT for the duration of the public health emergency will allow states to provide benefits to families if schools remain closed or offer hybrid instruction in the fall, without the need for further congressional action.^[22]

Providing funds to strengthen and modernize WIC. The Act includes up to $880 million to help more eligible families access WIC’s proven health and developmental benefits and to temporarily increase food benefits.

Participating in WIC is associated with a range of positive outcomes, including healthier births, reduced infant mortality, and improved cognitive development^[23] — areas with stark racial disparities.^[24] Thus, connecting more eligible women and young children to WIC could help address racial disparities in early childhood outcomes.^[25] Yet prior to the pandemic, WIC reached only about half of the low-income women and young children who qualify. With participation lower in fiscal year 2020 than in recent years even as food hardship for families with children soared, WIC is likely reaching an even smaller share of the eligible families now. The additional funding will help enroll more eligible families by investing in these key areas:

• Modernization. WIC has not adopted modernizations that are routine in other programs, like online applications or video appointments. To provide services during the pandemic, states accelerated modernization efforts such as accepting electronic documents and offering telephone appointments, but they’ll need continued support to integrate these steps into ongoing operations and develop technology solutions that are more comprehensive, secure, and widely usable than those that they developed hastily last spring. The Act’s additional funds can support joint efforts by USDA and the Department of Health and Human Services (HHS) to build technologies to modernize WIC’s enrollment and recertification processes, such as building a single online entry point where a family in any state could start a WIC application that would be routed to their local clinic to see if they are eligible.
• Innovation. WIC’s service delivery model has been proven effective, but it’s important to explore alternative approaches that make it easier for eligible families to enroll and continue participating over time. The Act’s additional funds could support, for example, efforts by USDA, HHS, and community-based providers to better integrate WIC into health care settings, such as by embedding WIC appointments into routine prenatal or pediatric appointments.
• Outreach. With WIC coverage declining and the program reaching only about half of eligible families, robust outreach will be important to enroll more eligible families. The Act’s additional funds can support a robust outreach campaign focusing on those who mistakenly believe they are not eligible, fear that participating in WIC could have negative immigration-related consequences, or receive Medicaid or SNAP (and thus are automatically income-eligible for WIC) but have not yet applied.
• Increased fruit and vegetable benefits. WIC currently provides $9 monthly for children and $11 monthly for women for fruits and vegetables of their choosing. The National Academies of Sciences has recommended substantially increasing the fruit and vegetable benefit so participants could come closer to eating recommended amounts. The Act makes funding available, at state option, for a four-month increase in the benefit of up to $35 monthly.^[26] The increase will help families get enough to eat, likely increase consumption of fruits and vegetables, and possibly attract more eligible families to WIC.^[27] It will also offer an opportunity to assess whether a permanent increase would be beneficial.

Providing meals and snacks for young adults in homeless shelters. Children receive meals and snacks at emergency homeless shelters through the Child and Adult Care Food Program (CACFP). The Act temporarily allows young adults ages 18 through 24 who are experiencing homelessness to receive meals and snacks at shelters as well. This provision, designed to ensure that more low-income young adults have access to food assistance, will remain in effect for the duration of the COVID-19 public health emergency; CBO estimates that it will cost $180 million.^[28]