Wonkblog Explains the Flaws of SNAP Asset Limit

On Saturday, the Washington Post’s Wonkblog published a piece by Mike Konczal explaining why bringing back the SNAP asset limit—a key feature of the House-passed Farm Bill—would be such bad policy, both for families and the state agencies administering the program.

Most people who have been following the Farm Bill debate are familiar with the immense – and growing – size of the proposed cuts. Back in the spring, the House proposed cutting $20.5 billion from the program over ten years, while the Senate offered a comparatively modest $4 billion cut. More recently, the House’s proposal has stretched to a staggering $39.5 billion, which would result in up to 6 million people having a harder time putting food on the table. But while the size of the cuts has become familiar, the particular form the cuts will take is less widely understood. And these details are important.

As detailed in Konczal’s piece, a significant portion of the cuts comes from eliminating a state option known as broad-based categorical eligibility, which enables states to streamline the process of evaluating applications and connecting families to the supports they need by aligning eligibility criteria across services. All but ten states have adopted this policy, which has become increasingly popular as state agencies have had to do more with less as a result of the recession. For most, this means they have effectively eliminated the asset limit for SNAP, and no longer require every applicant to bring in reams of documents to prove just how poor they are (the average SNAP family has about $331 in the bank).

So an immediate positive impact of eliminating the asset limit is that it cuts red tape, both for caseworkers and for families. A longer-term impact is a rethinking of the public benefits system that puts families on a path toward long-term economic security, rather than requiring them to live on the cusp of financial disaster in exchange for an average subsidy of about $1.40 a meal.

The states that haven’t implemented broad-based categorical eligibility continue to impose the federal asset test of $2000 per household. This limit has not increased for over 25 years and requires families to remain firmly in asset poverty, without sufficient resources to cope with an emergency. It’s an outdated rule that reflects an outmoded public assistance system – one that has consistently sent the message to low-income families that they can be penalized for saving. Applicants to these programs know that they will be required to prove they have exhausted all their other resources; consequently, some perceive that even owning a bank account could be a liability, leading them to rely on costly fringe financial services like payday lenders and check cashers.

Yet as the Wonkblog piece rightly notes, “having savings is essential for any kind of real income security, as well as doing things like moving in order to take advantage of a new job.” Requiring families accessing assistance to live at the margins is counterproductive – it keeps families vulnerable, it stifles mobility and long-term planning, and it’s expensive for everyone involved.

A forward-looking safety net would both remove barriers to saving, as states have already begun to do, and connect families with the structures and incentives that make saving possible. The House Farm Bill would completely dismantle this progress, and Mike Konczal is right: that would be cruel AND dumb.