LA SNAP changes to help most poor, taxpayers

Louisiana may have whiffed on one kind of food stamp policy, but starting next month as a consolation prize it looks to emulate the rest of the south on another kind that will save taxpayer dollars and stimulate economic growth.

 This spring, state executive branch officials wisely planned to opt out of an expansion of school meals program hawked by the federal government to include cash payments during the summer. Unfortunately, the Legislature blinked and mandated it, costing the state several million dollars to add already to generous Supplemental Nutritional Assistance Program benefits for families with children.

But, fortunately, legislators (in practice, Republicans) came through with Act 308. The law, which takes effect at the beginning of next month, disallows the state from seeking exceptions from SNAP waivers in regards to able-bodied adults without dependents (ABAWDs), where the program requires some hours of work, volunteering, or studying in order to draw, depending upon income level for a single individual, as much as about $10 a day for unprepared food.

However, those restrictions never have applied in Louisiana – until next month. Since the general overhaul of cash welfare government benefits sin the 1990s, the state always applied for and received waivers (except for a brief period at the end of Republican former Gov. Bobby Jindal’s tenure) to these requirements, some of which could apply at the state level and others for parishes only that depended upon benchmarks in unemployment or a nebulous measurement of “sufficient” jobs. Much of the time policy-makers asked for the entire state to qualify.

The Democrat Pres. Barack Obama Administration significantly relaxed SNAP standards but eventually the Republican Pres. Donald Trump Administration largely restored these. Then the Wuhan coronavirus pandemic hit and the floodgates were opened for SNAP reception that the Democrat Pres. Joe Biden Administration didn’t close until last year, which allowed the state to suspend the requirements everywhere. That about halved the number of parishes that qualified, and in fewer than three weeks none now will.

Much debate surrounds the impact of dropping waivers for ABAWDs. Indisputably this saves taxpayer dollars, although few relatively at the state level since the federal government affords all the benefits distributed with states picking up about half the costs (which runs in the $65 million range for all paid by Louisiana), not only because benefits to those who once qualified no longer are paid, but also because benefits to those who once erroneously received these – in Louisiana, an official net of 3.76 percent for 2023, most of which goes to ineligible people (and likely considerably underestimates the actual rate; for example, missing combined households who give false addresses to dodge income requirements and household size limits.)

ABAWDs make up about 15 percent of Louisiana recipients, and past experiences of other states dropping waivers show most of that will disappear as a result of ending waivers, ranging from 70 to 94 percent. Less certain is by how much employment will expand by the sloughing off.

Particularly leftist media and interest groups spread misinformation that denying waivers doesn’t impact employment. Some studies show minimal impact, but a broader review of quality research demonstrates positive employment effects and associated significant increases in wealth of those once receiving waivers (as well as potentially other positive externalities, such as decreases in homelessness or property crime commission).

Yet even if minimal increased employment had occurred, in these instances no significant increases in utilization of other welfare programs ensued after halting waivers. Given the steep declines in numbers, this indicates that SNAP for these folks largely was a superfluous add-on that freed up spending on discretionary consumables; without SNAP they shifted away from spending on discretionary items in favor of food. This suggests with the end of waivers that few ABAWDs would be pushed into some sort of food crisis given their ability to solve it through finding employment and/or cutting back on discretionary spending.

Thus, over the next year Louisiana should enjoy saving hundreds of millions of dollars for the U.S. Treasury, several millions in administrative costs for its taxpayers, and something of a boost in the labor pool while tens of thousands of former recipients find themselves better off through working or choosing to work more consistently. The state finally will have gotten into step with its regional neighbors, most of whom have outperformed it dramatically economically in the past eight years.