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SNAP is also a stabilizer from the perspective of the American economy. Because the number of families getting benefits increases as unemployment and earnings fall during economic downturns, the program serves the Keynesian function of boosting spending during a recession, which in turn stimulates the American economy at a moment when stimulus is needed. The SNAP program fills both of these stabilizing functions automatically without the need for more legislation because of its open-ended entitlement funding.

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A third function that seems to be less appreciated than the other two is that food stamps supplements the income of working poor and low-income families. [4] Experience with the 1996 welfare reform law shows that many low-income single mothers are capable of finding jobs and working full time, but they tend to have low wages and to live in poverty as a result of their low wages. [5] Sadly, wages at the bottom of the earnings scale have been stagnant or declining for the past three decades, making it increasingly difficult for single mothers – or any other household that depends on the earnings of one low-skilled worker – to escape from poverty even when they work full time. Big Sale Cheap Price Brand New Unisex Cheap Online floral fitted sweater Multicolour TwinSet shFGE
To improve the financial status of these low-income mothers and to increase their incentive to work, Congress has enacted many laws since roughly the mid-1980s that expand or reform the rules of programs that provide cash or in-kind benefits to low-income working families. These programs include the Earned Income Tax Credit, the Child Tax Credit, Medicaid, child care, and of course SNAP. Indeed, this committee and its Senate counterpart, working with the Bush administration, reformed several administrative requirements of the SNAP program in the 2002 Farm Bill to make it easier for states to administer SNAP in cases in which families have earnings. It is widely believed that these reforms led to increased receipt of SNAP by poor and low-income working families. For the foreseeable future, the nation will have millions of low-income single mothers who work and around 25 percent of these mothers and their children will have earnings below the poverty level. [7] Many of them lack the skills to earn more money. As a result, without earnings subsidies such as SNAP, they and their children will live in poverty on a more or less permanent basis despite their work effort.

Combating this problem is the major reason the federal government and the states have developed the work support system. Figure 2, taken from an earlier edition of the Ways and Means Committee’s Green Book, illustrates how effective this system is in helping low-income never-married mothers, the most disadvantaged subgroup of single mothers, get themselves and their children out of poverty. The bar graphs on the left in the first panel are for 1989 before passage of the 1996 Welfare Reform Law; the bar graphs on the right in the first panel are for 2006, a decade after welfare reform. Comparing the first bar graph in each set, it can be seen that the poverty rate for these mothers and children before any government taxes or transfers dropped by nearly 20 percent between the two years (from 48.3 percent to 39.6 percent). That’s because so many more never-married mothers were working in 2006. In the four years following welfare reform, there was a 40 percent increase in the share of these mothers who had jobs, a remarkable performance by any measure. [8] Even so, their earnings alone would have left almost 40 percent of these never-married mothers and their children in poverty in 2006, despite the huge increase in work. When SNAP and other in-kind and social insurance benefits received by the families are counted as income, however, the 2006 poverty rate fell by nearly 25 percent to 29.9 percent. As compared with 1989 when many fewer mothers worked, the combination of increased work and government in-kind and insurance benefits produced a poverty level that was almost 25 percent lower in 2006. Further, when we add the work support benefits that come through the tax code – primarily the EITC and the Child Tax Credit – poverty does not fall at all in 1989 but falls another 13 percent in 2006. The reasons the tax benefits reduced poverty so much in 2006 is that many more of these never-married mothers were working and the tax code benefits are based on earnings.

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