Congress is gearing up for votes in the Senate and House in the coming weeks as negotiations on the budget reconciliation process continue. As we’ve written about previously, the House budget resolution includes $230 billion in proposed cuts to SNAP.
According to the USDA Food and Nutrition Service (FNS), the Supplemental Nutrition Assistance Program (SNAP) assisted about 260,000 Iowans every month in federal FY 2024. Over that time period, Iowans on SNAP received a collective $529 million in benefits that were paid for in full by the federal government.
Like every other state, Iowa has a 50% share on administrative costs with the federal government to operate the program through the Iowa Department of Health and Human Services. From the latest available data (state fiscal year 2022), Iowa paid $21.8 million in administrative costs to bring in $880 million in benefits to low-income Iowans. Not a bad return on investment, especially when you take into account SNAP’s economic multiplier effect of 1.54.
Since the creation of the modern SNAP program, it has operated in this fashion, with the federal government fully covering the cost of benefits, and sharing administrative costs with the states. Now, this long-standing policy is under threat in Congress.
The U.S. House budget resolution calls for $230 billion in cuts to SNAP. Congress has three options to come up with such massive cuts: slashing benefits, kicking people off the program, or shifting some of the cost of benefits (and the blame for unpopular cuts) to state legislatures. It is looking increasingly likely that Congress will take this third option.
If Iowa were required to cover even 10% of SNAP benefit amounts, it would have cost the state $53 million in FY 2024, and would cost Iowa an estimated $502 million from 2026-2034. This amount could go even higher. President Trump’s 2018 budget proposed imposing a 10% cost-share with states for SNAP benefits and shifting to 25% over time (which would have cost $131 million to the state of Iowa in FY 2024). And if we were to see an economic downturn drive higher program enrollment, that would only add to the state’s costs and pressure on the state budget.
So how would the state of Iowa come up with an extra $53-130 million every year to cover these added costs? There are fears that for the first time, Congress could authorize states to directly reduce SNAP benefits amounts, which are already largely inadequate. If this were to happen, it would severely threaten Iowans’ food security.
Even without the authority to reduce benefit amounts, states may explore policy options to remove people from SNAP in an effort to bring down program costs. It certainly wouldn’t be anything new for the Iowa legislature, where we have seen many bills introduced over the past few years that attempt to restrict eligibility and make it more difficult to access SNAP (and that’s with the federal government fully covering benefit amounts). Added pressure on the state budget could also lead to cuts to other critical social service programs.
Why is Congress even discussing such massive cuts to SNAP, Medicaid, and school meals? Mainly to pay for tax cuts for the wealthy. In fact, the total amount of cuts to SNAP and Medicaid in the House budget resolution ($1.1 trillion) is the exact same amount as the tax cuts included for the top 1% of income earners.
As budget negotiations continue to heat up in Congress, it’s important our elected officials hear from Iowans loud and clear: no cuts to SNAP, and that includes no shifting benefit costs to states. A cut is a cut is a cut. A cost-shift just shifts the blame.
Iowa food banks, food pantries, and other anti-hunger organizations continue to assist record-breaking numbers of Iowans. We should be doing more to support Iowans facing food insecurity, not slashing funding to SNAP. If you haven’t already, please contact your Senators and U.S. Representative today and urge them to protect SNAP!