Shutdown Threatens Food Stamps

Jan. 7, 2019
If the government shutdown lasts much longer, it could interrupt the main federal food assistance program.

If the government shutdown lasts much longer, it could interrupt the main federal food assistance program, with potentially profound consequences for food retailers – and their suppliers.

The Supplemental Nutritional Assistance Program (SNAP), often referred to as food stamps, is funded only through January. $3 billion in emergency funds would be the only source of funding in February, and that would cover less than two-thirds of the month’s budget. In addition, most personnel from the USDA’s Office of Food and Nutrition Services, which administers SNAP, have been furloughed.

SNAP is unusual among entitlement programs in that its funding must be approved by Congress every year as part of the annual budget.

SNAP constitutes a source of revenue for several major food retailers, as well as small stores. According to an estimate by CNBC, a proposal floated by the Trump administration in 2017, to cut SNAP by $191 billion by 2028, would cost retailers $70.7 billion in that timeframe, with Walmart alone losing some $18 billion. An executive with Dollar Tree noted in an earnings call last year that the company’s stock price had declined as a result of the removal of half a million recipients from the SNAP rolls in 2016.

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