Snip the SNAP: the Economic Implications of the US’s SNAP Benefit Reduction Plan

By: Renee Sharapov

It seems as though Democrats and Republicans have been snapping at each other all month during the government shutdown, clashing over conflicting priorities for the new budget set to be finalized later this year. Of all the contentious topics, the one taking over the headlines is the future of the Supplemental Nutrition Assistance Program (SNAP). A system that provides food benefits to low-income families and helps them afford nutritious food necessary for their health and well-being.

​Typically, an American household qualifies for SNAP benefits if it earns a gross monthly income at or below 130% of the federal poverty level, and a net monthly income at or below 100% (USDA). Eligibility is also determined by how much they hold in cash, investments, and other assets. One exception to this, is that households with individuals aged 60 or older, or those with disabilities, only need to meet the net income requirement. However, administration of the program varies from state to state, as each local government has control over certain aspects. For instance, they can decide the extent of benefits given to individuals receiving other Temporary Assistance for Needy Families (TANF)-funded benefits, whether they label vehicles as household assets, and whether child support payments should be included in income calculations (Desilver).

​From the time it was implemented during the Great Depression, SNAP has saved millions of Americans from extreme poverty and provided great relief to low-income families . In the first eight months of 2025 alone, it was estimated that 42.4 million people in 22.7 million households received monthly SNAP benefits. At the program's peak in November 2022, the average monthly benefit was $259.50 per person and $493.76 per household. Most recently, in May 2025, the national average per-person and per-household benefits were $188.45 and $350.89, respectively (Desilver).

​Despite the extensive number of dependents on the program, the 42-day government freeze caused a pause in the administration of SNAP benefits and ended with a tightened tax, spending, and policy document (Kekatos). Under the megabill and new budget, work requirements for SNAP have been increased, eligibility rules have been tightened, new cost-sharing obligations have been imposed on states, and several other changes have been introduced. As a whole, the Congressional Budget Office has estimated that the listed changes will reduce federal spending on SNAP by $186.7 billion over the next decade (Desilver).

To get both an economic and social perspective on the matter, we talked to Dr. Alice Temnick, an economics teacher at the United Nations International School of New York. She explained that SNAP Benefits are automatic stabilizers, specifically used to counter extreme fluctuations in economic activity without direct intervention by policymakers. During a period of positive economic growth, fewer unemployed individuals file claims, and fewer people qualify for benefits. However, in a recession, payments rise automatically as more workers lose their jobs and become eligible for the program.

When looking at the program from a social lens, Dr. Temnick suggested that tightening SNAP benefit availability will reduce individuals’ ability to meet basic necessities and decrease trust in the justice system. From an economic perspective, she emphasized the profound impacts that this change could have on small businesses across the country. As household income decreases, more people begin to ration their income spent on food, reducing business revenue. This could be especially costly for low-income neighborhoods, as SNAP spending is often a large portion of total sales.

On a wider economic scale, the new SNAP restrictions could have costly implications for the U.S. GDP. Many economists argue that SNAP benefits have a large multiplier effect since benefit money is spent on food, which in turn generates revenue for business owners and producers who then spend their income in markets, fueling a productive cycle. The USDA estimates that every one dollar in SNAP benefits generates $1.50 in economic activity, making the program beneficial for the overall economy. Because the U.S. spends about $8 billion a month on SNAP benefits, this multiplier effect means that SNAP benefits could have an economic impact of $12 billion a month, noted James Ziliak, the founding director of the Center for Poverty Research at the University of Kentucky. When SNAP benefits are reduced, business revenue will also further decrease investments, which can ultimately hurt the U.S. GDP in the long term (“The Loss of SNAP Benefits Could Have Ripple Effects across the Economy”).

​As Dr. Temnick stated, “Poverty will increase across the nation,” highlighting the new budget's impacts for both the economy and citizens of the U.S. She herself led an initiative donating food to local shelters, hoping to emphasize the importance of community institutions in supporting families and local economies. Now, as we enter this new era of U.S. spending, we can only wait to see the impacts take effect.

Works Cited

Desilver, Drew. “What the Data Says about Food Stamps in the U.S.” Pew Research Center, 14 Nov. 2025, www.pewresearch.org/short-reads/2025/11/14/what-the-data-says-about-food-stamps-in-the-us/#who-is-eligible-for-food-stamps. Accessed 28 Nov. 2025.

Kekatos, Mary. “SNAP Is Back, but Millions of Americans Could Lose Benefits due to New Restrictions.” ABC News, 18 Nov. 2025, abcnews.go.com/Health/snap-back-millions-americans-lose-benefits-due-new/story?id=127593186. Accessed 28 Nov. 2025.

“The Loss of SNAP Benefits Could Have Ripple Effects across the Economy.” Marketplace.org, 2025, www.marketplace.org/story/2025/10/28/the-loss-of-snap-benefits-could-have-ripple-effects-across-the-economy.

USDA. “SNAP Eligibility | USDA-FNS.” Usda.gov, 1 Oct. 2021, www.fns.usda.gov/snap/recipient/eligibility. Accessed 28 Nov. 2025.