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2 History, Background, and Goals of the Supplemental Nutrition Assistance Program The U.S. Department of Agriculture (USDA) includes among its goals to increase food security and reduce hunger by increasing access to food, a healthful diet, and nutrition education for low-income Americans. Nutri- tion assistance programs offered by USDA include the Supplemental Nu- trition Assistance Program (SNAP); the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC); the National School Lunch and School Breakfast (School Meals) Programs, including summer food service; the Child and Adult Care Food Program (CACFP); Food Assis­ance for Disaster Relief; the Emergency Food Assistance Program; t the Food Distribution Program on Indian Reservations; and food distribu- tion programs such as the Commodity Supplemental Food Program. SNAP, formerly called the Food Stamp Program, is the nation’s largest nutrition assistance program and a key automatic stabilizer of family well-being during economic downturns. In fiscal year (FY) 2011, SNAP served more than 46 million Americans at a cost of more than $75 billion (FNS, 2012a). This chapter reviews the history of SNAP, the SNAP benefit formula and eligibility, the definition of the SNAP allotment, trends in program partici- pation and costs, and trends in food insecurity and poverty and how they are affected by the SNAP program. The final section presents conclusions. ­ MILESTONES IN THE HISTORY OF THE SUPPLEMENTAL NUTRITION ASSISTANCE PROGRAM SNAP is administrated by USDA in cooperation with state social service agencies. The authorizing legislation states that the program is intended to 27

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28 SUPPLEMENTAL NUTRITION ASSISTANCE PROGRAM BOX 2-1 The Thrifty Food Plan The Thrifty Food Plan (TFP) is a model-based market basket of foods that represents a nutritious diet at minimal cost and serves as the basis for establishing the maximum Supplemental Nutrition Assistance Program (SNAP) benefit. TFP market baskets stipulate the type and quantity of foods for home consumption that correspond to a nutritious and low-cost dietary pattern at the level of the maximum SNAP benefit. Revisions in the last update, in 2006, reflected recent changes in dietary guidance, as well as new information on food composition, consumption patterns, and inflation-adjusted food price changes. It should be noted, however, that some nutrient goals, such as reducing sodium and increasing vitamin E and potassium intake for certain age groups, cannot be met without substantial changes to usual dietary patterns and/or changes in current food manufacturing processes. “alleviate hunger and malnutrition” by “permit[ing] low-income house- holds to obtain a more nutritious diet through normal channels of trade.”1 Today this goal is accomplished through the issuance of monthly benefits in the form of Electronic Benefit Transfer (EBT) cards that can be used in retail food stores. The SNAP benefit is based on the Thrifty Food Plan (TFP), which is intended to provide a minimal-cost, healthy diet based on household size (see Box 2-1) (Carlson et al., 2007a). Households with very little or no income receive the full TFP amount. Other households receive the TFP amount minus 30 percent of their net income because the SNAP program assumes that each household with in- come can contribute 30 percent of that income to the purchase of food. To the extent that 30 percent of household income is insufficient to purchase an amount of food equal to the TFP market basket, the SNAP benefit is issued in an amount that, combined with 30 percent of household income, totals the TFP amount for that household size (FNS, 2012b). For example, a household of four people with net income of $1,000 per month is ex- pected to spend $300 per month of its net income for food. Because it needs $612 to purchase the TFP market basket, SNAP issues the household $312 in benefits.2 Eligibility for benefits is based on a gross income limit of 130 percent of the federal poverty threshold for a given household size, and net income may not exceed 100 percent of that threshold (households 1  Food and Nutrition Act of 2008, Public Law 110-246, Sec. 2, pp. 1-2. 2  This example does not incorporate the temporary increase in SNAP benefits under the American Recovery and Reinvestment Act of 2009 (Public Law 111-5).

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HISTORY, BACKGROUND, AND GOALS OF SNAP 29 that contain an elderly or disabled person are exempt from the gross in- come test). The TFP, basic eligibility rules, and benefit levels are the same throughout the contiguous United States. See Figure 2-1 for a timeline of the dates of key SNAP legislation, as well as changes in participation and average benefit amounts over time. The Early Program SNAP was preceded by the original Food Stamp Program of 1939 and the pilot programs of the early 1960s. The 1939 program was initiated to align growing food surpluses with a concern for the needs of the poor as the country emerged from the Great Depression. The program grew out of a commodities distribution program in which commodities were purchased for a nonprofit, noncapital corporation, the Federal Surplus Relief Corpora- tion, whose goal was to encourage domestic consumption of surplus food as a source of unemployment relief. With the new program, people on relief (public assistance) purchased orange stamps for $1 each, up to an amount approximately equal to their normal monthly food expenditure. For every orange stamp they purchased, they received a blue stamp worth 50 cents. The orange stamps could be used to buy any food, while the blue stamps were for foods USDA deemed surplus. The program operated in about half of U.S. counties and served about 4 million people a month at its peak (FNS, 2012c). The Secretary of Agriculture’s 1939 annual report3 included the following description of the program: “In times of great agricultural surpluses, which usually are accompanied by great unemployment, it will be there to do a minimum job in terms of minimum diets below which the public health would be endangered. The broader market made it possible for farmers in times of stress will help to stabilize our whole economy” (p. 719). Not surprisingly, the program was widely popular with the gen- eral public, participants, and grocers. By 1943, however, the program was terminated because of reduced availability of surpluses due to the war effort and a decline in unemployment levels (FNS, 2012d). The Program of the 1960s and the Food Stamp Act of 1964 Nonetheless, the Food Stamp Program was not forgotten, and interest in the program continued until 1960, when it again became a reality. Dur- ing his presidential campaign in West Virginia, Senator John F. Kennedy promised to start a food stamp program if elected. His first executive order on January 21, 1961 (White House, 1961), expanded food distribution pro- grams and was followed by a February announcement that USDA would 3  Food Stamp Act, HR 7940, 95th Congress (1977-1978).

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30 560,000 4,300,000 21,000,000 20,000,000 17,200,000 40,300,000 participants participants participants participants participants participants 0.3% of the population 2.1% of the population 9.3% of the population 8.0% of the population 6.1% of the population 13.0% of the population ERISTICS 1960 1970 1980 1990 2000 2010 KEY SNAP LEGISLATION 1964 Formally established federal 1982 EBT 1996 Food Stamp program Added the gross income test 2009 Electronic benefit transfer Welfare reform and allowed states to require Temporarily increased the cards provide SNAP participants to look for work 1996 current maximum benefit produced major benefits electronically Major changes: eliminated eligibility for many by 14 percent cutbacks to the Food legal immigrants; placed a time limit on food Stamp program stamp receipt for certain groups; and reduced 1971 the growth of the maximum benefit Simpli f ied Established uniform national standards Under subsequent amendments, the of eligibility and work requirements maximum benefit will fall back to its Reporting unadjusted amount in November 2013 1988, 1990 Established Electronic Benefit Transfer card 2002 Farm Bill offered as an official alternative to issuing benefits 2002 states opportunities Offered states opportunities to streamline the application and to streamline the reporting processes and reinstated application process eligibility for certain groups denied 1977 benefits under the 1996 legislation Established income eligibility guidelines; formalized income exclusions and deductions 2008 2008 Increased benefits by raising the minimum standard Farm Bill increased deduction and increased minimum benefits for benefits and one- and two-person households changed the name of the program Average Benefit per Person per Day $2.49 1980 $2.71 1990 $2.67 2000 $3.97 2010 to SNAP (i n f lation-adjusted dollars) CBO CBO FIGURE 2-1  SNAP timeline. SOURCE: CBO, 2012.

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HISTORY, BACKGROUND, AND GOALS OF SNAP 31 initiate a series of food stamp pilot programs. Starting with eight sites, the initiative eventually expanded to 43. The success of these pilot programs led President Lyndon Johnson to request in 1964 that a permanent Food Stamp Program be enacted.4 He signed such a program into law later that year under the auspices of his “War on Poverty” (FNS, 2012d). The original blue and orange stamps were replaced with food cou- pons, which participants were still expected to purchase. The so-called purchase requirement was considered essential to ensuring that the food stamp benefit would equal the cost of a healthy diet for the family’s size. State welfare agencies would determine eligibility, and households not on public assistance could apply at those offices. Any food for home consump- tion could be purchased except imported foods (exceptions were made for coffee, tea, and bananas). Alcohol and tobacco purchases were specifically prohibited. Counties were added to the program as they made requests and appropriations allowed. By April 1965, there were more than half a million participants, and by the time of the next major program changes, in Febru- ary 1971, there were 10 million participants (FNS, 2012c). The 1970s: National Eligibility Standards, Nationwide Expansion, and Elimination of the Purchase Requirement Program revisions in 1971 replaced the state-by-state rules with national ­ eligibility standards.5 In 1974, the Food Stamp Program expanded across the nation. Before the nationwide expansion, many counties operated com- modity distribution programs in lieu of the Food Stamp Program, in part because the commodities were intended to cover a family’s full food needs for a month with no cash contribution. The next major changes to the Food Stamp Program resulted from the Food Stamp Act of 1977.6 The purchase requirement ensured that a family would receive coupons valued at what USDA determined to be the cost of a healthy diet; however, it had a depressing effect on program par- ticipation. After heated debate, the purchase requirement was eliminated, and participants were to receive only the formerly free portion of their benefit in coupons; they were expected to continue to buy a healthy diet by supplementing their coupons with cash (the 30 percent of net income rule). Following implementation in 1979, the reforms did indeed result in a greater percentage of eligible households participating in the program; dur- ing the month in which the purchase requirement was lifted, participation increased by 1.5 million over the previous month (FNS, 2012c). 4  Food Stamp Act of 1964, Public Law 88-525. 5  Amendments to the Food Stamp Act of 1964, Public Law 91-671. 6  Public Law 88-535.

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32 SUPPLEMENTAL NUTRITION ASSISTANCE PROGRAM Many other significant changes were included in the 1977 law, but one change that did not make the final cut was an attempt to limit the types of foods that could be purchased, excluding those with low nutritional value. The bill did require that food stamp funds be given to the Expanded Food and Nutrition Education Program (EFNEP) operated by the USDA Exten- sion Service, to increase its ability to educate food stamp participants in nutrition7 (see Chapter 4 for further information). The 1980s Through Today In the 1980s, legislators expressed concern about the size and cost of the Food Stamp Program, and subsequent legislation, among other things, limited participation by requiring households to meet a gross income test and decreasing the frequency of cost-of-living adjustments for allotments (FNS, 2012c). Legislation in 19888 increased the TFP by 3 percent in rec- ognition of the time lag between the cost-of-living adjustments and their implementation over time. Later in that decade, the 3 percent increase was eliminated.9 As part of the 1996 Welfare Reform Act,10 a number of changes were made to the Food Stamp Program, including giving states greater adminis- trative control, eliminating eligibility for legal noncitizen residents11 (par- tially restored in the Farm Security and Rural Investment Act of 2002 [Farm Bill]12), limiting eligibility for able-bodied adults without dependents, and officially adopting the EBT system for benefit delivery (Committee on Ways and Means, 2004). The EBT system went nationwide in 2002. It is designed to reduce fraud in the program and potential stigma resulting from the use of paper coupons (FNS, 2012c). In April 2009, as part of the American Recovery and Reinvestment Act,13 a 13.6 percent increase was added to the TFP for most households (about $80 for a family of four) in an effort to help jump-start the economy and in recognition of the economic challenges faced by program partici- pants. This increase in the TFP, which translated into a higher maximum benefit amount, is scheduled to expire on October 31, 2013. 7  ood F Stamp Act of 1977, Public Law 95-113, Stat. 913-1045. 8  Hunger Prevention Act of 1988, Public Law 100-435, 102 Stat. 1645-1677. 9  Personal Responsibility and Work Opportunity Reconciliation Act of 1996, Public Law 104-193. 10 Personal Responsibility and Work Opportunity Reconciliation Act of 1996, Public Law 104-193. 11 Legal immigrants must live in the country at least 5 years before receiving benefits. 12 Public Law 107-171. 13 Public Law 111-5, Title 1, Sec. 101.

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HISTORY, BACKGROUND, AND GOALS OF SNAP 33 SNAP BENEFIT FORMULA AND ELIGIBILITY Benefit Formula Participants’ monthly benefits, accessed using an EBT card, allow them to purchase food items for use at home, as well as seeds and plants to pro- duce food. Consistent with its original design, SNAP is intended to supple- ment money a household has available for food purchases as described earlier. The purchasing power of the benefits, however, is affected by changes in food prices over the benefit period, as well as by other costs, such as those for fuel and shelter, and employment and income volatility. The cost-of-living adjustment for the TFP is discussed below. Other adjust- ments to reflect the cost of living are applied to the shelter deduction, the standard deduction, and the resource limit (FNS, 2012b). Box 2-2 provides a basic overview of the SNAP benefit formula. The SNAP allotment for a household is determined by the maximum benefit guarantee, the benefit reduction rate, and net income. For purposes BOX 2-2 SNAP Benefit Formula Calculation of the SNAP allotment is based on the maximum monthly benefit, which in turn is based on the cost of the Thrifty Food Plan minus 30 percent of the applicant’s net income, or as: SNAP allotment = G – 0.3 × Yn, where G is the maximum monthly benefit, which varies by household size but is fixed across the contiguous 48 states and the District of Columbia (higher in Alaska and Hawaii), and Yn is net income. Net income, Yn, is calculated by sub- tracting a number of deductions from gross income, Yg, which consists of most sources of private income and some transfer income. Specifically, net income is Yn = Yg – (0.2 × earnings) – child support – standard deduction – dependent care deduction – excess shelter deduction – (out-of-pocket medical costs – 35), where earnings refer to labor market income, child support is payments made for children for whom paternity is established, the standard deduction is a deduction received by all households to cover emergency or unusual expenses, dependent care includes child and adult care expenses, the shelter deduction is for persons facing very high housing costs as a fraction of their income, and out-of-pocket medical expenses encompass those costs not reimbursed by private or public insurance for persons aged 60 and older and the disabled.

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34 SUPPLEMENTAL NUTRITION ASSISTANCE PROGRAM of the SNAP program, a household is defined as individuals who live ­ together and who generally buy and consume meals together. If the indi- viduals are related by birth, marriage, or adoption, they are counted as part of the household (except that a person aged 60 or older who is incapable of preparing his or her own meals may be treated as a separate household); if the individuals are not related and do not share meals, they can apply separately (FNS, 2012b). The maximum benefit, for the 48 contiguous states and the District of Columbia for FY 2012, is shown in Table 2-1 (the amounts for Alaska and Hawaii are higher). As was the case in earlier versions of the program, the benefit reduction rate is fixed across the nation at 30 percent under the expectation that households should be responsible for about a third of their monthly food expenses, although with the formal deductions, the rate is effectively reduced to about 15‑20 percent (Ziliak, 2008). As depicted in Box 2-2, several expenses are deducted from household gross income to arrive at net income. SNAP allows 20 percent of labor m ­ arket earnings to be deducted from gross income to account for work- related expenses such as transportation.14 Child support payments are deducted. All households receive a standard deduction intended to cover emergency and unusual household expenses; the amount of this deduction varies by household size ($147 in FY 2012 for households comprising one to three people, $155 for households of four or more people). The excess shelter deduction takes effect when households spend 50 percent or more of their income on housing after all other deductions, and is capped at $459 in FY 2012 for the contiguous United States (FNS, 2012b). The standard deduction is set at 8.31 percent of the income eligibility standard for each household size (but not to exceed 8.31 percent for a household of six). It is adjusted each fiscal year to reflect changes for the 12‑month period ending the preceding June 30 using the Consumer Price Index (CPI) for All Urban Consumers for items other than food (BLS, 2012).15 The shelter deduction (see Chapter 5) is adjusted to reflect changes for the fiscal year using the CPI for All Urban Households for the previous 12-month period ending the preceding November 30.16 These income deductions are discussed further in Chapter 5. The deduction for out-of-pocket medical costs in excess of $35 is allowed only for those aged 60 and older and the disabled. If net income is zero or negative, the household qualifies for the maxi- mum benefit. At the other extreme, the SNAP allotment can, in theory, be zero, but USDA sets a nominal benefit floor ($16 in FY 2012 for one- to 14  Food Stamp Act of 1977, Public Law 95-113. 15  7 C.F.R., Vol. 4, § 273.9 (d)(1). 16  C.F.R., Vol. 4, § 273.9 (d)(6)(ii). 7

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HISTORY, BACKGROUND, AND GOALS OF SNAP 35 TABLE 2-1  Maximum SNAP Benefits for the 48 Contiguous States and the District of Columbia (October 1, 2011, Through September 30, 2012) Number of Persons Monthly Amount ($) 1 200 2 367 3 526 4 668 5 793 6 952 7 1,052 8 1,202 Each additional person 150 SOURCE: FNS, 2012b. two-person households in the 48 contiguous states and the District of C ­ olumbia [FNS, 2012e]). About 80 percent of all benefits are used within the first 2 weeks of issuance, and more than 91 percent of all benefits are used by the 21st day (FNS, 2012f). This has led some people to suggest that benefits might be issued semimonthly to smooth use over the month (Orszag, 2012; Wilde, 2007). Among the arguments made in favor of such semimonthly delivery of benefits is that evidence suggests the caloric intake of SNAP recipients declines 10 to 15 percent at the end of the month (Shapiro, 2005), and ad- missions to hospitals for hypoglycemia increase significantly among food in- secure diabetics (Seligman et al., 2011). This change, however, could result in increased program administration costs and possibly reduced flexibility for bulk purchases among SNAP beneficiaries. The committee is unaware of any instances in which implementation of benefits more frequently than once monthly has occurred.17 Basic Eligibility Basic eligibility for SNAP requires passing two income tests and two asset tests. The gross income test requires that gross income be less than 130 percent of the federal poverty threshold for the household size, while the net income test requires that net income be less than 100 percent of the poverty threshold (see Table 2-2 for FY 2012 limits). The gross income test is waived for households containing persons aged 60 and older and those receiving certain disability payments, although the net income test still ap- plies. The asset tests are a liquid asset test of $2,000 ($3,250 for persons 17See   ttp://www.fns.usda.gov/snap/ebt/issuance-map.htm (accessed October 11, 2012). h

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36 SUPPLEMENTAL NUTRITION ASSISTANCE PROGRAM TABLE 2-2  SNAP Income Limits for the 48 Contiguous States and the District of Columbia (October 1, 2011, Through September 30, 2012) Number of Persons Gross Income Limit ($/month) Net Income Limit ($/month) 1 1,180 908 2 1,594 1,226 3 2,008 1,545 4 2,422 1,863 5 2,836 2,181 6 3,249 2,500 7 3,633 2,818 8 4,077 3,136 Each additional person 414 319 SOURCE: FNS, 2012b. aged 60 and older or disabled); such assets include, for example, most forms of cash, checking accounts, savings, stocks, and bonds, and a vehicle value test of $4,650 (FNS, 2012b). The value of the home is excluded from the asset test (FNS, 2012b), as is the earned income tax credit. However, if the earned income tax credit is not spent for more than 12 months, any remaining amount is counted as a resource (some states have shorter windows).18 The asset limit is adjusted each fiscal year to reflect changes in the CPI for All Urban Households, rounded down to the nearest $250 increment (FNS, 2011). Most states (36) waive the value of all vehicles, and an additional 15 waive the value of the primary vehicle (FNS, 2010). Categorical Eligibility Most recipients of Temporary Assistance for Needy Families (TANF), Supplemental Security Income (SSI), and General Assistance are categori- cally eligible for SNAP and thus not subject to the above income and asset tests (FNS, 2012b). In 2010, some 24 percent of the SNAP caseload was categorically eligible for this reason, compared with 42 percent in 1996. The TANF-only share of the caseload declined from 37 percent in 1996 to 8 percent in 2010, mainly because of the decline in TANF recipients fol- lowing welfare reform (Eslami et al., 2011). Under broad-based categorical eligibility, households may become cat- egorically eligible based on the receipt of noncash assistance from TANF or state maintenance-of-effort money. The noncash benefits range from receipt of brochures made available in certification offices to actual enrollment in 18  Tax Relief Unemployment Insurance Reauthorization and Job Creation Act of 2010, Public Law 111-312, Sec. 728.

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HISTORY, BACKGROUND, AND GOALS OF SNAP 37 employment programs. Some 47 states use noncash categorical eligibility for gross income eligibility, and of these, 41 states use the broadest defini- tion (FNS, 2010). These state options have become controversial. DEFINITION OF THE SNAP ALLOTMENT The Economy Food Plan and Individual Benefits The Economy Food Plan, first established in 1961, was used to deter- mine maximum food stamp benefits until 1975, when a U.S. Circuit Court ruled that the plan did not adequately address the needs of individuals of different sexes and ages. The court ruled that “substantially all recipients” should have access to a healthy diet and directed the Secretary of Agri- culture to issue regulations that would either individualize allotments or “increase the ‘average’ allotment so that virtually all recipients are swept within it.”19 In response to the court’s guidance, in January 1976 the Secretary replaced the Economy Food Plan with the TFP at the same cost level, and the Food Stamp Act of 1977 changed the proposal to specifically support that administrative action. Today’s statute (1) specifies that the TFP is the basis of the SNAP maximum benefit, (2) defines a reference family’s age and sex composition (see next section), and (3) requires annual updates to reflect the cost of the plan. Further, the statute makes clear that the TFP is the basis of the benefit “regardless of [a household’s] actual composition.”20 The Thrifty Food Plan The TFP is “an assortment of foods that represents as little change from average food consumption of families with relatively low food costs as required to provide a nutritious diet, while controlling for cost.”21 As depicted in Figure 2-2, the TFP provides a market basket for each of 15 age-sex groups. For SNAP purposes, however, the plan bases maximum benefits on the market basket for a household comprising a male and f ­emale aged 19-50 and two children aged 6-8 and 9-11. This is called the “reference family,” meaning that the TFP maximum benefit is based on this four-person family composition. A 5 percent waste factor is factored in, and economies of scale are applied by household size. 19  Rodway v. United States Department of Agriculture, 514 F.2d 809, 168 (U.S. App. D.C. 387, 1975). 20  Food and Nutrition Act of 2008, Public Law 110-246, Sec. 4, p. 1-8. 21  90th Congress, 1st session, House Agriculture Committee Report no. 95-464, pp. 186- 187 (June 1977).

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46 SUPPLEMENTAL NUTRITION ASSISTANCE PROGRAM TABLE 2-3  Distribution of SNAP Participants by Age Category Over Time Number of Participants in Thousands (% of caseload) Nonelderly Fiscal Year Preschool School Age Adults Elderly Adults 1997 4,046 (17.5)   7,825 (33.8)   9,385 (40.6) 1,834 (7.9) 2000 2,846 (16.7)   5,919 (34.6)   6,623 (38.7) 1,702 (10.0) 2003 3,541 (16.9)   7,087 (33.9)   8,514 (40.7) 1,788 (8.5) 2006 4,243 (16.6)   8,361 (32.7) 10,763 (42.1) 2,229 (8.7) 2009 6,317 (15.9) 12,199 (30.7) 18,121 (45.6) 3,121 (7.9) NOTE: FY = fiscal year. SOURCES: FNS, 1999, 2001, 2004, 2007, 2011. TABLE 2-4  Distribution of Participants by Benefit Amount, Household Size, and Takeup Rate Over Time Household Characteristic FY 1997 FY 2000 FY 2003 FY 2006 FY 2009 Percent of SNAP households 22.7 20.2 25.9 32.1 37.4 receiving maximum benefit Mean household size  2.4  2.3  2.3  2.3  2.2 Percent of SNAP-eligible 64.0 56.7 56.4 68.9 72.2 population receiving any benefit Dollar value of average benefit 0.78 0.80 0.92 1.03 1.37 per person per meala Fraction of households with 24.2 27.2 28.2 29.7 29.4 earnings NOTE: FY = fiscal year. aCalculated as average monthly benefit (based on aggregate program participation data) per person, divided by 91.5 meals/month. SOURCES: Cody and Castner, 1999; Cunnyngham, 2001; Cunnyngham and Brown, 2004; Leftin et al., 2011; Wolkwitz, 2007. households received 91 percent of the total benefits, in dollar terms, of the amount that would have been spent if the takeup rate were 100 percent (Leftin et al., 2011). Program costs for SNAP are almost entirely in the form of benefits and are covered by the federal government, the exception being for a small por- tion of administrative expenses paid for by state governments. Figure 2-4 demonstrates that program outlays have increased in lockstep with partici- pation and that the growth in inflation-adjusted spending differs little from

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HISTORY, BACKGROUND, AND GOALS OF SNAP 47 Program Costs in Dollars (Billions) Average Benefits (Dollars) FIGURE 2-4  Trends in nominal and real SNAP expenditures, 1969-2011. SOURCES: FNS, 2012a; GPO, Figure 2-4.eps 2012. bitmap nominal growth.35 In the last decade, nominal spending (fixed value or price) rose 342 percent, while real spending (change in value or price over time) increased almost 250 percent, such that by FY 2011, program costs were in excess of $75 billion, making SNAP one of the largest programs in the social safety net. Although total costs have grown rapidly, inflation- adjusted per-recipient benefits changed little over the past three decades until the increases under the ARRA were instituted.36 TRENDS IN FOOD INSECURITY AND POVERTY A central goal of SNAP is to alleviate hunger and malnutrition by in- creasing resources for the purchase of food for a nutritious diet. In 1995, USDA began monitoring food security (see Box 2-3) by means of the annual Food Security Supplement to the monthly Current Population Survey (CPS), 35 Inflation is measured using the chain-weighted personal consumption expenditure deflator with 2011 base year. 36 Public Law 111-5.

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48 SUPPLEMENTAL NUTRITION ASSISTANCE PROGRAM BOX 2-3 Food Insecurity Food security is access at all times to enough food for an active healthy life. Food insecurity exists when there is inadequate or unsure access to enough food for active, healthy living. In 1995, the U.S. Department of Agriculture (USDA) be- gan collecting data on food access, food adequacy, spending on food, and sources of food assistance for the U.S. population. Data are collected annually through a food security survey conducted by the U.S. Census Bureau, and are used as a source of information on the prevalence and severity of food insecurity in U.S. households. In the 18-item Core Food Security Module (CFSM), households are placed in one of four mutually exclusive groups: high food security, marginal food security, low food security, and very low food security. Most analyses refer to food insecurity, which combines the latter two categories. Categories of Food Insecurity USDA Classification Number of Affirmative Responses to the CFSM High food security 0 Marginal food security 1 or 2 Low food security 3-5 Very low food security 8 or more in households with children; 6 or more in households without children SOURCES: http://www.ers.usda.gov/topics/food-nutrition-assistance/food-­security- in-the-us.aspx (accessed April 8, 2013); Anderson, 1990; NRC, 2006. a nationally representative survey carried out by the U.S. Census Bureau.37 In December of each year since 2001, about 50,000 households have responded to a series of 18 questions (10 if no children are present) that make up the Core Food Security Module (CFSM) in the CPS (see Appendix F for the list of questions). Each question is designed to capture some aspect of food insecurity, and some questions include the frequency with which that aspect manifests. Respondents are asked about their food security status in the last 30 days, as well as over the past 12 months, and about food spending and the use of federal and community food assistance programs. The 18-item food security scale is intended to capture self-­ ssessed concerns/anxiety over lack a of access to healthy and safe foods owing to a lack of economic resources. It is measured at the household level and thus does not identify who in the household is experiencing food insecurity. 37  For discussion of the history of food insecurity measures, see NRC (2006).

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HISTORY, BACKGROUND, AND GOALS OF SNAP 49 A report from the National Research Council (NRC) of the National Academy of Sciences reviews the concepts and methodology for measur- ing food insecurity and hunger. It recommends that USDA no longer refer to the more severe forms of food insecurity as “hunger” since hunger is a physiological condition experienced at the individual level and not necessar- ily at the household level (NRC, 2006). In line with this recommendation, USDA has classified the most severe form of food insecurity as “very low food secure,” which it identifies if a household answers affirmatively to six or more (eight or more if children are present) questions on the CFSM. The NRC (2006) report includes the recommendation that USDA continue to measure and monitor food insecurity regularly in a household survey. It recommends further that, given that hunger is a separate concept from food insecurity, USDA undertake a program to measure hunger, which is an important potential consequence of food insecurity. The report also con- cludes that exclusive reliance on trends in the prevalence of food insecurity would not be an appropriate measure of the effectiveness of food assistance programs such as SNAP. For program evaluation purposes, it is important to know what effect SNAP has on food insecurity. As discussed here and in Chapter 2, however, a challenge facing evaluation of the impact of SNAP on food insecurity is the prospect of reverse causality; that is, food insecure households may self-select into SNAP. Several authors have used sophisti- cated econometric techniques to model the self-selection process and, after controlling for nonrandom selection, generally have found that SNAP re- duces food insecurity (Gundersen and Oliveira, 2001; Kreider et al., 2012). Figure 2-5 shows trends in 12-month prevalence rates of food insecu- rity and very low food security among U.S. households from 1995 through 2011. Prevalence rates for 1996 and 1997 were adjusted for the estimated effects of differences in data collection screening protocols used in those years. The supplements were conducted in various months in the initial years but since 2001 have been fielded in December, which implies that the 12-month recall refers to the actual year of the survey. The fraction of households experiencing food insecurity or very low food security held fairly steady until the Great Recession that began at the end of 2007. There- after, food insecurity increased by 31 percent and very low food security by 32 percent, although both indicators fell slightly between 2009 and 2011 as the economic recovery began to gain traction. These trends in food insecurity must be interpreted in the context of other factors that may impact access to food for low-income households, including changes in income distribution across the low-income range, non- cash assistance (e.g., participation in other assistance programs), and other basic household needs (Nord, 2007). Indeed, an apparent contradiction in Figure 2-5 is that as SNAP participation and expenditures accelerated in the latter half of the past decade, food insecurity accelerated as well. In

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50 SUPPLEMENTAL NUTRITION ASSISTANCE PROGRAM 16 14 12 Percent of households 10 8 Food insecurity 6 Very low food security 4 2 0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Year FIGURE 2-5  Trends in prevalence rates of food insecurity and very low food secu- Figure 2-5.eps rity in U.S. households, 1995-2011. NOTE: Prevalence rates for 1996-1997 were adjusted for the estimated effects of differences in data collection and screening protocols used in those years. SOURCE: ERS, 2012. Calculation by ERS based on Current Population Survey Food Security Supplement data. fact, SNAP recipients are twice as likely as SNAP-eligible nonrecipients to report being food insecure (Tiehen et al., 2012). (A similar contradiction is seen in Figure 2-6, presented later in this section.) Because participation in SNAP is not likely to be unrelated to food security status, a selection problem arises in evaluating the effect of the program on food insecurity (Currie, 2003). Studies evaluating non­ andom r selection by nonexperimental statistical methods (e.g., Gundersen and Oliveira, 2001; Kreider et al., 2012; Mykerezi and Mills, 2010; Yen et al., 2008) generally have found that SNAP reduces food insecurity. A broader metric of the effect of SNAP on the well-being of individuals and households is the antipoverty effectiveness of the program. While the provision of food assistance has a modest effect on household work effort (Hoynes and Schanzenbach, 2011), it increases household resources for the purchase of food and thus should reduce the incidence and severity of poverty by freeing up income for the purchase of other goods and services (Tiehen et al., 2012; Ziliak, 2011). Ziliak (2011) used data from the Annual Social and ­ Economic Supplement of the CPS to estimate the number of persons lifted out of poverty by SNAP in any given year from 1999 to 2009. Figure 2-6 shows that the antipoverty effectiveness of SNAP increased over the decade, with

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HISTORY, BACKGROUND, AND GOALS OF SNAP 51 FIGURE 2-6  Trends in number of persons in poverty, exclusive and inclusive of SNAP benefits, 1999-2009. Figure 2-6.eps SOURCE: Ziliak, 2011. bitmap about 2 million people being lifted out of poverty each year through 2003, rapidly increasing to 4.5 million in 2009, most likely because of expanded generosity of benefits in response to the recession. Using the same CPS data as Ziliak (2011), Tiehen and colleagues (2012) found that SNAP participa- tion had an even larger impact on reducing the depth and severity of poverty. Their estimates showed that SNAP benefits led to an average annual decline of 4.4 percent in the incidence of poverty from 2000 to 2009, while the depth and severity of poverty declined 10.3 and 13.2 percent, respectively.38 SUMMARY Although the basic design of SNAP (with the exception of national eligi- bility standards and elimination of the purchase requirement) has remained 38  The incidence of poverty refers to the percentage of the population below the poverty line, while depth and severity refer to how far below the line a given poor person’s income is. The latter measures differ in the weight given to families farther below the poverty line, with the severity measure giving more weight than the depth measure to the poorest poor.

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52 SUPPLEMENTAL NUTRITION ASSISTANCE PROGRAM unchanged since the 1964 law was enacted, the program has undergone many substantial changes that have resulted in its expansion and retrac- tion over the years. These changes often have brought new complexities to program administrators and applicants. The legislation governing today’s program has specific eligibility requirements and administrative procedures that make SNAP more complex than other social programs. Even as many features of the program limit its ability to be responsive to an individual household’s needs, many other features, such as income deductions, are designed to make it more responsive. Striking a balance between a more targeted and a more accessible benefit has been an ongoing tension in the program. The size and the cost of the program make it a target for budget cuts, and even relatively small adjustments have the potential to impact a significant number of Americans. Over the years, debates have continued about whether the program should be more of a nutrition or an income maintenance program (includ- ing whether the in-kind benefit should be replaced by a cash allotment); to what extent, if any, the program should limit food choices; what responsi- bilities participants should be expected to have (e.g., whether they, as is now the case, should be required to seek employment if able-bodied); whether geographic distinctions should be applied in determining need and/or ben- efit levels; and what the program’s role should be in providing nutrition education and reaching out to eligible nonparticipants. Other debates have centered on the adequacy of the TFP, whether expecting households to de- vote 30 percent of their net income to the purchase of food is realistic, and how net income should be defined. For example, households are expected to pay up to 50 percent of their net income for shelter with no commen- surate reduction in the amount of their remaining income that should be considered available for food purchases—they are still expected to spend 30 percent of their net income for food. These and other issues have con- tinued to be debated since the inception of the permanent program in 1964 and are discussed in further detail in the ensuing chapters of this report. REFERENCES Anderson, S. A. (1990). Core indicators of nutritional status for difficult-to-sample popula- tions. Journal of Nutrition 120:1557-1600. Blisard, N., and H. Stewart. 2006. How low-income households allocate their food budget relative to cost of the Thrifty Food Plan, ERR-20. Washington, DC: USDA, ERS. http://webarchives.cdlib.org/sw15d8pg7m/http://ers.usda.gov/Publications/err20 (ac- cessed July 5, 2012). BLS (Bureau of Labor Statistics). 2012. Consumer Price Index: All urban consumers. ftp://ftp. bls.gov/pub/special.requests/cpi/cpiai.txt (accessed June 4, 2012).

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HISTORY, BACKGROUND, AND GOALS OF SNAP 53 Carlson, A., M. Lino, W. Y. Juan, K. Hanson, and P. P. Basiotis. 2007a. Thrifty Food Plan, 2006, CNPP-19. Washington, DC: USDA, CNPP. http://www.cnpp.usda.gov/­ Publications/FoodPlans/MiscPubs/TFP2006Report.pdf (accessed May 31, 2012). Carlson, A., M. Lino, and T. Fungwe. 2007b. The Low-Cost, Moderate-Cost, and Liberal Food Plans, 2007, CNPP-20. Washington, DC: USDA, CNPP. http://www.cnpp.usda. gov/publications/foodplans/miscpubs/foodplans2007adminreport.pdf (accessed July 26, 2012). CBO (Congressional Budget Office). 2012. The Supplemental Nutrition Assistance Program— Infographic. http://www.cbo.gov/publication/43174 (accessed May 31, 2012). Cody, S., and L. Castner. 1999. Characteristics of food stamp households: Fiscal year 1997. Submitted by Mathematica Policy Research, Inc. to U.S. Department of Agriculture, Food and Nutrition Service, Alexandria, VA. http://www.fns.usda.gov/ora/menu/Published/ snap/FILES/Participation/char97.pdf (accessed May 24, 2012). Committee on Ways and Means. 2004. Background material and data on programs within the jurisdiction of the Committee on Ways and Means (Green Book). Wash- ington, DC: Government Printing Office. http://www.gpo.gov/fdsys/search/pagedetails. action?granuleId=&packageId=GPO-CPRT-108WPRT108-6 (accessed June 4, 2012). Cunnyngham, K. 2001. Characteristics of food stamp households: Fiscal year 2000. Submit- ted by Mathematica Policy Research, Inc. to U.S. Department of Agriculture, Food and Nutrition Service, Alexandria, VA. http://www.fns.usda.gov/ora/menu/Published/snap/ FILES/Participation/2000Characteristics.pdf (accessed May 24, 2012). Cunnyngham, K., and B. Brown. 2004. Characteristics of food stamp households: Fiscal year 2003. Submitted by Mathematica Policy Research, Inc. to U.S. Department of Agricul- ture, Food and Nutrition Service, Alexandria, VA. http://www.fns.usda.gov/ora/menu/ Published/snap/FILES/Participation/2003Characteristics.pdf (accessed May 24, 2012). Currie, J. 2003. U.S. food and nutrition programs. In Means-tested transfer programs in the United States, edited by R. Moffitt. Chicago, IL: University of Chicago Press. Pp. 199-290. ERS (Economic Research Service). 2012. Trends in prevalence rates of food insecurity and very low food security in U.S. households, 1995-2011. http://ers.usda.gov/media/246942/ trebds.xls (accessed September 17, 2012). Eslami, E., K. Filion, and M. Strayer. 2011. Characteristics of Supplemental Nutrition As- sistance Program households: Fiscal year 2010. Submitted by Mathematica Policy Research, Inc. to U.S. Department of Agriculture, Food and Nutrition Service, Alex- andria, VA. http://www.fns.usda.gov/ora/menu/Published/snap/FILES/Participation/20 10Characteristics.pdf (accessed May 24, 2012). FNS (Food and Nutrition Service). 2010. Supplemental Nutrition Assistance Program: State options report. Washington, DC: USDA, FNS. http://www.fns.usda.gov/snap/rules/ Memo/Support/State_Options/9-State_Options.pdf (accessed July 16, 2012). FNS. 2011. Supplemental Nutrition Assistance Program (SNAP): Eligibility, certification, and employment and training provisions: Proposed rule. Federal Register 76(86):25414-25458. FNS. 2012a. Supplemental Nutrition Assistance Program participation and costs. http://www. fns.usda.gov/pd/SNAPsummary.htm (accessed May 24, 2012). FNS. 2012b. Supplemental Nutrition Assistance Program: Eligibility. http://www.fns.usda.gov/ snap/applicant_recipients/eligibility.htm (accessed July 16, 2012). FNS. 2012c. A short history of SNAP. http://www.fns.usda.gov/snap/rules/Legislation/about. htm (accessed June 1, 2012). FNS. 2012d. From food stamps to the Supplemental Nutrition Assistance Program. http:// www.fns.usda.gov/snap/rules/Legislation/timeline.pdf (accessed July 17, 2012). FNS. 2012e. FY 2012 minimum SNAP allotment. http://www.fns.usda.gov/snap/government/ FY12_Minimum_Allotments.htm (accessed July 19, 2012).

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54 SUPPLEMENTAL NUTRITION ASSISTANCE PROGRAM FNS. 2012f. Building a healthy America: A profile of the Supplemental Nutrition Assistance Program. Alexandria, VA: USDA, FNS. http://www.fns.usda.gov/ora/MENU/published/ snap/FILES/Other/BuildingHealthyAmerica.pdf (accessed May 22, 2012). GPO (Government Printing Office). 2012. Economic report of the President: Table B-6: Chain- type quantity indexes for gross domestic product, 1963-2011. Washington, DC: GPO. http://www.gpo.gov/fdsys/pkg/ERP-2012 (accessed May 24, 2012). Gundersen, C., and V. Oliveira. 2001. The food stamp program and food insufficiency. Ameri- can Journal of Agricultural Economics 83(4):875-887. Hanson, K., and M. Andrews. 2008. Rising food prices take a bite out of food stamp ben- efits, EIB-41. Washington, DC: USDA, ERS. http://www.ers.usda.gov/publications/­ ib- e economic-information-bulletin/eib41.aspx (accessed July 5, 2012). HHS and USDA (U.S. Department of Health and Human Services and U.S. Department of Agriculture). 2005. Dietary guidelines for Americans. 6th ed. Washington, DC: U.S. Govern­ ent Printing Office. http://www.health.gov/dietaryguidelines/dga2005/­ ocument m d (accessed June 4, 2012). Hoynes, H. W., and D. W. Schanzenbach. 2012. Work incentives and the Food Stamp Pro- gram. Journal of Public Economics 96(1):151-162. IOM (Institute of Medicine). 1997. Dietary reference intakes for calcium, phosphorus, mag- nesium, vitamin D, and fluoride. Washington, DC: National Academy Press. IOM. 1998. Dietary reference intakes for thiamin, riboflavin, niacin, vitamin B6, folate, ­ itamin B12, pantothenic acid, biotin, and choline. Washington, DC: National Academy v Press. IOM. 2000. Dietary reference intakes for vitamin C, vitamin E, selenium, and carotenoids. Washington, DC: National Academy Press. IOM. 2001. Dietary reference intakes for vitamin A, vitamin K, arsenic, boron, chromium, copper, iodine, iron, manganese, molybdenum, nickel, silicon, vanadium, and zinc. Wash- ington, DC: National Academy Press. IOM. 2005a. Dietary reference intakes for energy, carbohydrate, fiber, fat, fatty acids, choles- terol, protein, and amino acids. Washington, DC: The National Academies Press. IOM. 2005b. Dietary reference intakes for water, potassium, sodium, chloride, and sulfate. Washington, DC: The National Academies Press. Kabbani, N., and P. E. Wilde. 2003. Short recertification periods in the U.S. Food Stamp Program. Journal of Human Resources 38(Suppl.):1112-1138. Klerman, J. A., and C. Danielson. 2003. The transformation of the Supplemental Nutrition Assistance Program. Journal of Policy Analysis and Management 30(4):863-888. Kreider, B., J. V. Pepper, C. Gundersen, and D. Joliffe. 2012. Identifying the effects of SNAP (food stamps) on child health outcomes when participation is endogenous and mis­ reported. Journal of American Statistical Association 107(499):958-975. Leftin, J., A. Gothro, and E. Eslami. 2010. Characteristics of Supplemental Nutrition Assistance Program households: Fiscal year 2009. Submitted by Mathematica Policy Research, Inc. to U.S. Department of Agriculture, Food and Nutrition Service, Alexandria, VA. http:// www.fns.usda.gov/ora/menu/Published/SNAP/FILES/Participation/2009Characteristics. pdf (accessed May 29, 2012). Leftin, J., E. Eslami, and M. Strayer. 2011. Trends in Supplemental Nutrition Assistance Program participation rates: Fiscal year 2002 to fiscal year 2009: Final report. Submit- ted by Mathematica Policy Research, Inc. to U.S. Department of Agriculture, Food and Nutrition Service, Alexandria, VA. http://www.mathematica-mpr.com/publications/PDFs/ nutrition/trends2002-09.pdf (accessed July 5, 2012). Lin, B. H., and A. Carlson. 2010. SNAP benefits and eating out: Wise choices required. Amber Waves, http://webarchives.cdlib.org/sw1vh5dg3r/http://www.ers.usda.gov/AmberWaves/ March10/Findings/SnapBenefits.htm (accessed July 5, 2012).

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HISTORY, BACKGROUND, AND GOALS OF SNAP 55 MA DTA (Massachusetts Department of Transitional Assistance). 2011. It’s HIP to be healthy: The Massachusetts Healthy Incentives Pilot. Presented to the Massachusetts Food Policy Council, October 7, 2011. http://www.mass.gov/agr/boards-commissions/docs/DTA-­ presentation-Food-Policy-Council-10-7-11.pdf (accessed July 19, 2012). Mabli, J., and C. Ferrerosa. 2010. Supplemental Nutrition Assistance Program caseload trends and changes in measures of unemployment, labor underutilization, and program policy from 2000 to 2008. Submitted by Mathematica Policy Research, Inc. to U.S. Department of Agriculture, Food and Nutrition Service, Alexandria, VA. http://www.­ athematica-mpr. m com/publications/PDFs/nutrition/SNAP_caseloads.pdf (accessed July 16, 2012). Mabli, J., S. Tondella, L. Castner, T. Godfrey, and P. Foran. 2011. Dynamics of Supple- mental Nutrition Assistance Program participation in the mid-2000s. Submitted by Decision Demographics to U.S. Department of Agriculture, Food and Nutrition Service, ­ Alexandria, VA. http://222.fns.usda.gov/ora/MENU/Published/snap/FILES/Participation/­ DynamicsMid2000.pdf (accessed December 14, 2012). Mykerezi, E., and B. Mills. 2010. The impact of Food Stamp Program participation on house- hold food insecurity. American Journal of Agricultural Economics 92(5):1379-1391. NCP (National Consumer Panel). 2012. National Consumer Panel. https://www.ncponline. com/panel/US/EN/Login.htm (accessed July 26, 2012). Nord, M. 2007. Characteristics of low-income households with very low food security: An analysis of the USDA GPRA Food Security Indicator, EIB 25. Washington, DC: USDA, ERS. http://www.ers.usda.gov/publications/eib-economic-information-bulletin/eib25.aspx (accessed July 5, 2012). NRC (National Research Council). 2006. Food insecurity and hunger in the United States: An assessment of the measure. Washington, DC: The National Academies Press. OIG (Office of the Inspector General). 2009. Supplemental Nutrition Assistance Program benefits and the Thrifty Food Plan: Audit Report 27703-1-KC. Washington, DC: USDA, OIG. http://www.recovery.gov/Accountability/inspectors/Documents/27703-1-KC%20 Final%20Report%20FOIA%20%2812-8-09%29.pdf (accessed June 4, 2012). Orszag, P. 2012. End-of-month hunger hurts students on food stamps. http://www.­bloomberg. com/news/2012-04-03/end-of-month-hunger-hurts-students-on-food-stamps.html (accessed July 16, 2012). Ratcliffe, C., S.-M. McKernan, and K. Finegold. 2008. Effects of Food Stamp and TANF poli- cies on Food Stamp receipt. Social Service Review 82(2):291-334. Seligman, H. K., E. A. Jacobs, A. Lopez, U. Sarkar, J. Tschann, and A. Fernandez. 2011. Food insecurity and hypoglycemia among safety net patients with diabetes. Archives of Internal Medicine 171(13):1204-1206. Shapiro, J. M. 2005. Is there a daily discount rate? Evidence from the food stamp nutrition cycle. Journal of Public Economics 89(2-3):303-325. Tiehen, L., D. Joliffe, and C. Gundersen. 2012. Alleviating poverty in the United State: The critical role of SNAP benefits, ERS-132. Washington, DC: USDA, ERS. http://www.ers. usda.gov/publications/err-economic-research-report/err132.aspx (accessed July 5, 2012). U.S. Census Bureau. 2012. Population estimates. http://www.census.gov/popest/data/­historical/ index.html (accessed May 24, 2012). USDA (U.S. Department of Agriculture). 2005. MyPyramid food intake patterns. http://www. choosemyplate.gov/food-groups/downloads/MyPyramid_Food_Intake_Patterns.pdf (ac- cessed June 4, 2012). USDA. 2011. Letter from Jessica Shahin, Associate Administrator, Supplemental Nutrition Assistance Program USDA, to Elizabeth Berlin, Executive Deputy Commissioner, New York State Office of Temporary and Disability Assistance. August 19, 2011. http:// www.foodpolitics.com/wp-content/uploads/SNAP-Waiver-Request-Decision.pdf (ac- cessed June 5, 2012).

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