The sign outside a store in Indianapolis indicates that SNAP benefits are accepted, as reported on August 1, 2023. A recent analysis from the Congressional Budget Office suggests that the monthly enrollment in the program will decline under the Republican Tax Cuts and Expenditure Act, with an estimated 10 million people, mainly Medicaid recipients, losing health insurance and subsequently joining the federal food aid program. According to the analysis, this could lead to a decrease of about 2.4 million individuals per month.
Households in the middle income bracket are expected to experience some benefits from the legislation dubbed “big and beautiful” by former President Donald Trump and the GOP. However, it’s noted that significant changes to Medicaid and SNAP will lead to net benefit losses for those at the lower end of the income spectrum.
This legislation, signed by Trump on July 4th, saw adjustments made to Medicaid and SNAP eligibility that passed Congress without any Democratic votes. The Congressional Budget Office’s analysis indicates that these changes, together with federal tax cuts, might result in a 3% resource reduction over the next nine years.
“The impact on household resources is not evenly shared,” the CBO mentioned. “Generally, households towards the bottom of the income distribution will see a decrease, while those in the middle and higher tiers will see an increase in resources.”
The report suggests that families in the lowest two deciles of income will encounter a net resource loss. Households in the 20% middle-income range could expect losses averaging between $800 and $1,200 yearly, which amounts to about 0.8% to 1% of their income. Conversely, for the top 10% of earners, the forecast indicates an increase of roughly 2.7% of their annual income, which averages out to over $13,600 from 2026 to 2034. Interestingly, the bottom 10% of earners are expected to face an approximate decline of $1,200 annually, equating to about 3% of their income prediction.
Projected Loss of Benefits
By 2034, it’s estimated that around 10 million individuals will no longer have access to health insurance, with about 7.5 million of them losing their Medicaid benefits. The CBO outlines that a section of the law introducing new work eligibility requirements for Medicaid recipients could lead to 5.6 million people being cut off from essential care.
Further, the new stipulations for SNAP require some states to contribute to the costs of the program, creating new work requirements for participants. The CBO anticipates that these adjustments in work requirements would result in an additional 2.4 million individuals participating in SNAP programs. Changes in state funding obligations could save the federal government around $41 billion from 2026 to 2034, with most of the burden expected to shift to the states.
However, these new state mandates may also lead to a reduction in benefits for approximately 300,000 people each month. It’s expected that states may respond by tightening eligibility criteria, cutting benefits, or potentially withdrawing from the program altogether.
Criticism of Legislative Impact
In a press release, Congressional Democrats criticized the regressive outcomes projected by the CBO. They highlighted ongoing financial struggles for American families amidst rising costs. Brendan Boyle, a Democratic representative from Pennsylvania, stated, “What are Republicans trying to achieve? They have passed laws that worsen conditions for working families while favoring wealthy tax cuts.”
He continued to emphasize the contrast where the richest 10% may gain $13,600, while the bottom earners experience a loss of $1,200 a year, questioning the morality behind such legislative choices. Both Senate Minority Leader Chuck Schumer and House Minority Leader Hakeem Jeffries echoed similar sentiments in their remarks regarding the situation.
