When states and the federal
government finally end their public health emergencies, it will be a clear sign
that the pandemic phase of COVID-19 is over. However, in unusual ways, states have
a financial disincentive to taking such actions. For example, Congress connected
pandemic-related Supplemental Nutrition Assistance Program (SNAP) benefits to public
health emergency declarations. Consequently, most states have been providing emergency
payments to SNAP households since the start of the pandemic. Not only is this
costing American taxpayers billions of dollars each month, it creates a
financial deterrent for states and the federal government to end their pandemic-related
public health emergencies.

Typically, SNAP households receive less than the maximum allowable benefit, because SNAP benefits are supposed to supplement other income. The March 2020 Families First Coronavirus Response Act recognized that pandemic-related lockdowns would cause an uncertain labor market and authorized states to automatically give all SNAP households the maximum amount for a family their size, even when that family would typically only qualify for a partial benefit. Automatically moving households to the maximum amount—called “emergency allotments”—avoided SNAP households having to report job losses to government offices during the lockdowns to have their benefits adjusted. However, as the economy recovered from the initial pandemic shock, the justification for all households to receive the maximum SNAP benefit has become increasingly questionable.  

Nevertheless, the USDA—the federal agency that oversees SNAP—has authorized states to continue emergency allotments long past their original intent. For states to issue SNAP emergency allotments, the Families First Coronavirus Response Act required “a public health emergency declaration by the [federal] Secretary of Health and Human Services” and “the issuance of an emergency or disaster declaration by a State based on an outbreak of COVID-19”, along with “sufficient data supporting such request.”

These public health emergency declarations have given the vast majority of states the ability to hand out extra SNAP payments throughout the pandemic, long after the initial economic shock. The result has been an increase in total SNAP benefits from $55 billion in 2019 to $108 billion in 2021, helping to more than double the total monthly benefits given out (although other policy changes beyond pandemic-related emergency measures resulted in additional increases).    

Because SNAP benefits are 100 percent federally funded, states that ended their public health emergencies in 2021 lost billions of federal SNAP dollars, but also saved US taxpayers that same amount. The chart below shows total monthly SNAP benefit costs for the 10 states that dropped their emergency allotments sometime in 2021 (blue line), while the red line shows SNAP benefit costs for states that continued them. The SNAP-related cost implications of continued public health emergencies in 2021 are undeniable. Since the start of 2022, additional states have ended their public health emergencies and their SNAP emergency allotments, but in May 2022 28 states were still providing the extra SNAP payments.

This has cost US taxpayers billions of dollars each month, and created a financial disincentive for states and the federal government to end public health emergency declarations. California’s extension request estimated needing over $447 million in May 2022 alone for extra payments in their state, justifying the need because “Businesses have closed or significantly reduced their hours” and “The State’s residents have experienced economic impacts due to job suspensions or losses” because of COVID-19. The March 2022 unemployment rate in California was 4.9 percent, only slightly above the pre-pandemic rate of 4.1 percent. Similarly, Wisconsin officials requested more than $65 million for May 2022 to distribute emergency allotments, citing pandemic-related “economic impacts due to job suspensions of losses.” Wisconsin’s unemployment rate was 2.8 percent in March 2022, the lowest on historical record.

SNAP emergency allotments have outlived their original intent, but the states that are still paying them have little incentive to end the program on their own. Furthermore, USDA officials have shown little fiscal restraint when it comes to SNAP. States will likely wait until the federal government ends the national public health emergency, perhaps sometime this summer or even later, creating another economic shock for SNAP participants who have grown accustomed to the extra payments. Until then, states will continue to dole out these emergency payments at taxpayer expense.

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