Food Stamp Folly
“We all do better when we all do better” was the late Minnesota Senator Paul Wellstone’s simple, yet profound, statement of economic truth. In a stable, sustainable economy no one should be left behind even if they are poor or not as “productive.” This is not just kindness or charity. It is a recognition that an economy, like a chain, is only as strong as its weakest link.
The Supplemental Nutrition Assistance Program (SNAP – formerly called food stamps) illustrates how Paul Wellstone’s economic principle works in the real world. It is an example of how helping poor people is good for everyone else. The current administration’s mean-spirited, shortsighted cuts to the SNAP program will not be good for anyone. Poor people will have less to eat and more food insecurity. But the rest of us will also suffer from the broader economic impact of cutting food assistance.
Numerous studies have proven that adequate nutrition is essential for child development. The better diet provided by SNAP benefits leads to better individual health, educational achievement, employment and thus higher earnings and more tax contributions in later life. The Center on Poverty and Social Policy at Columbia University says every $1 cut in SNAP benefits will ultimately cost society $14 to $20 in other social costs like child protective services, criminal justice actions or health care usage. The Center for Budget and Policy Priorities says, “Every $1 invested in SNAP for children returns $62 in value over the long-term.”
The FY 2026 budget enacted in July cuts SNAP by $186 billion over 10 years. This is expected to reduce, or eliminate, food assistance for millions of individuals and families. The new budget will also shift significant costs to state governments and require more unproductive paper shuffling to document work requirements.
The broader impact of SNAP cuts is explained in a Pitchfork Economics podcast featuring Lily Roberts, Managing Director for Inclusive Growth at the Center for American Progress (“Why Gutting SNAP Makes the Economy Worse for Everyone, June 3, 2025). In the interview, Ms. Roberts talks about the value of SNAP and how multiple “deliberately complicated” changes to the program “set us up for terrible long-term consequences for the program and for the economy” (and for people).
In the past SNAP helped 42 million low income individuals and families. Eighty percent of SNAP households include children, seniors or a disabled person. Forty percent (16.9 million) were children, 18% (7.8 million) were seniors 60 or older and 11% (4.5 million) were disabled. Lily Roberts says most SNAP households have at least one person employed.
Ms. Roberts says SNAP is not a “very generous program.” A typical SNAP household receives only $2 per person per meal. Despite being a very small amount this is vital support for poor families. Six dollars a day for each family member can prevent malnutrition. In 2024 the total federal cost of SNAP was $100.3 billion. The monthly average benefit per recipient was $183.
SNAP, in the past, was federally funded and had very low federal and state administrative costs. So almost all the money went directly to benefits. All SNAP benefits are spent in local grocery stores sustaining local jobs and businesses. This makes SNAP the most efficient and effective anti-poverty program in the country. Every dollar of SNAP benefits generates $1.54 for the local economy. Cuts to SNAP will reduce this cash flow and the impact of this multiplier effect.
For the same economic reasons SNAP has a stabilizing impact on the whole economy. By providing direct cash input to local economies, SNAP helps keep recessions from becoming depressions. During economic downturns SNAP participation increases and in good times decreases (to some degree) smoothing out the economy. This is possible because of the federal funding. States, because they have to have balanced budgets, can not respond to changing conditions quickly.
Most people think of SNAP as support for the inner city poor. But according to Lily Roberts rural and small town areas have higher rates of SNAP participation and will be hurt more than urban areas. Many sources point out that farmers will also lose income. Estimates are farm revenue may decline by $30 billion because of the cuts to SNAP. Ironically many of these rural and small town people voted for Trump.
Cuts to SNAP will impact people who have never needed this assistance. Obviously grocery store owners, farmers, food processing and and distributing businesses will see reduced sales from poor people having less money to spend on food. SNAP recipients will have less money for other expenditures and this will impact other businesses. Economists predict unemployment will rise, some businesses may reduce staff or close, sales tax revenues will decrease and local economies will be weakened.
According to Ms. Roberts, many rural counties have few grocery stores and many of them have significant income from SNAP recipients. She says, “Our analysis showed that there are 27,000 retailers in over 300 counties that are at risk of significant financial harm and potentially closure just because of these cuts to SNAP. They’re located in places where a large percentage of local residents use SNAP, and they’re also by and large in places where there are already very few options for places to buy food. Food Deserts.“ Stephanie Johnson with the National Grocers Association says, “Some stores in low-income neighborhoods have more than 50 percent SNAP sales. A 20 percent cut to SNAP would make it very difficult for stores like this, in food deserts, to remain open.”
Obviously, as Ms Roberts points out, “if you can’t buy groceries without driving for an hour or two, you basically can’t live in a community anymore, and it becomes incredibly hard for that community to attract jobs or retain the residents that it has.” Food deserts can become economic deserts with declining populations impacting property values, construction, schools, local business, the tax base and creating many other problems.
SNAP, like other government services, supports the the whole country by improving the lives of people and providing economic stability. And it does these good things for only 1 1/2% of the annual federal budget. SNAP is a bargain.
Cutting SNAP is bad public policy. “We all do better when we all do better”