More SNAP Changes: Restoring Thrift

Four years ago, the federal government orchestrated the largest year-to-year growth in Supplemental Nutrition Assistance Program (SNAP) benefits in history. While some cheered this expansion, many scholars argued that the maneuver that generated this increase shouldn't have been allowed to happen. Fortunately, the One Big Beautiful Bill (OBBB) gets SNAP back on track.

At the center of the issue is what's called the "Thrifty Food Plan," which is the formula the USDA uses to set SNAP benefits every year. In short, the formula is designed to determine the cost of a basic but nutritious diet, given the USDA's dietary guidelines. For decades, the Thrifty Food Plan was adjusted yearly to account for the increased costs families saw in their grocery bills. But in 2021, the formula was changed to boost benefits by around 21%, far exceeding inflation.

The precise way the formula was adjusted is complicated and goes beyond the scope of this post, but suffice it to say that both the foods included in the calculation and their cost were changed to increase national SNAP expenditures by roughly $200 billion over ten years, all without an act of Congress. Historically, major changes to the Thrifty Food Plan beyond inflationary cost increases have been the result of legislation. Such a significant change without explicit approval led many to call for its immediate reversal, arguing the move violated federal law and years of precedent.

After several years of higher SNAP spending, the OBBB finally addresses the issue created in 2021. The law now ties Thrifty Food Plan increases to inflation and specifies how often the foods included in the calculation can be re-evaluated. While this may not seem like some groundbreaking change, it's an important step to protect against future bureaucratic attempts to expand welfare benefits without congressional approval, and could ultimately save Missouri taxpayers money.

As I wrote recently, in an effort to improve SNAP's program integrity, the OBBB will soon start putting states on the hook for a portion of benefit costs if they can't get their payment error rates under control. Keep in mind that until the OBBB is fully implemented, the federal government covers 100% of all SNAP benefits. Meanwhile, states have overpaid recipients nearly 10% of the time. By changing the incentives, states now have a reason to lower their error rates, which should reduce wasteful spending. The Thrifty Food Plan change will also help states (maybe including Missouri) that become responsible for a portion of benefit costs (because their payment error rates are too high) from being subject to unanticipated large program cost increases in future years.

The Thrifty Food Plan changes will help rein in the administrative state and encourage states to be better stewards of taxpayer money. Missouri's policymakers and taxpayers should welcome the return of thrift to SNAP.