CBO – “The Supplemental Nutrition Assistance Program (SNAP, formerly known as Food Stamps) provides benefits to low-income households to help them buy food. Total federal expenditures on SNAP amounted to $76 billion in fiscal year 2014. In an average month that year, 47 million people (or one in seven U.S. residents) received SNAP benefits. Some policymakers have expressed a desire to scale back the program significantly to reduce federal spending. In this report, CBO examines several options for doing so and their effects on the benefits that would be received by households with different amounts of income. Who Receives SNAP Benefits? Most people receiving SNAP benefits live in households with very low income, and SNAP benefits represent a significant supplement to their income. In fiscal year 2013, about 85 percent of households receiving benefits had monthly income (excluding SNAP benefits) below the federal poverty guidelines. (Those guidelines are commonly known as the federal poverty level, or FPL; for a household of three, the FPL in 2015 is about $1,700 per month, or about $20,000 per year.) SNAP benefits boosted monthly income for participating households by 36 percent, on average, in 2013. A household’s SNAP benefits are calculated according to its income and size. The maximum benefit for a household of three in the contiguous United States is currently $511 per month, or about $5.60 per person per day. However, if a household’s income (minus allowable deductions, such as those for housing expenses) increases, each additional dollar in income reduces SNAP benefits by 30 cents—until its income reaches a certain threshold, at which point benefits are stopped altogether. How Would Reducing SNAP Benefits Affect Households’ Income? CBO examined what would happen to households’ income if spending on SNAP in 2016—which CBO currently projects to be about $77 billion—was cut by 15 percent. Such a decline would save $11.5 billion in 2016, putting inflation-adjusted spending roughly on par with spending in 2009. Specifically, CBO examined three illustrative options, each of which would cut federal spending on SNAP in 2016 by 15 percent (see figure below):

• Reducing SNAP benefits for all participants by reducing the maximum benefit by 13 percent and leaving other program rules unchanged (which would result in benefit cuts for all beneficiaries);
• Increasing the rate at which benefits decline from the maximum benefit, as a household’s income (minus allowable deductions) increases, from 30 percent of the additional income to 49 percent; and
• Reducing the monthly income limit for eligibility from 130 percent to 67 percent of the FPL, while maintaining benefit amounts for those who remain eligible (including households with elderly or disabled members and households eligible because they receive cash assistance from certain other programs).”