Use of Food Stamps Swells Even as Economy Improves - Congress will have to revisit SNAP later this year when a bill authorizing USDA expenditures expires. Republicans have promised to push for changes, seeking new limits on who can receive benefits and ending the ability of states to ease asset and income limits.

From The Wall Street Journal:

The financial crisis is over and the recession ended in 2009. But one of the federal government's biggest social welfare programs, which expanded when the economy convulsed, isn't shrinking back alongside the recovery.

Enrollment in the Supplemental Nutrition Assistance Program, as the modern-day food-stamp benefit is known, has soared 70% since 2008 to a record 47.8 million as of December 2012. Congressional budget analysts think participation will rise again this year and dip only slightly in coming years.

The biggest factor behind the upward march of food stamps is a sluggish job market and a rising poverty rate. At the same time, many states have pushed to get more people to apply for SNAP, a program where the federal government picks up the tab.

But there is another driver, which has its origins in President Bill Clinton's 1996 welfare overhaul. In recent years, the law has enabled states to ease asset and income tests for would-be participants, with the encouragement of the Obama administration, allowing into the program people with relatively higher incomes as well as savings.

The new rules were designed to encourage people to take advantage of the program before they became destitute. By expanding the pool of potential applicants, they are redrawing the landscape of government assistance. It is one reason why SNAP appears to have evolved from a program that rose and fell with the unemployment rate to a more permanent feature of the landscape.

At 12:07 a.m. on a recent morning, Syrises Myers, 34 years old, moved $70.18 in groceries including milk and ketchup through a scanner at Dominick's grocery store near Chicago. The mother of two, the sole breadwinner for her family, knew the store closed at midnight. But she had to wait a few extra minutes for the federal government to transfer her monthly food-assistance benefits onto the purple debit-style card issued by the state of Illinois.

"If I want to be sure my kids can eat, especially when food is low in the house, I have to go at midnight when the food stamps turn on," said Ms. Myers, a receptionist who earns $11 an hour.

While getting assistance from the program, Ms. Myers has been able to save $5,600 and recently put a $300 down payment on a car. Under older rules, the savings probably would have disqualified her from the program. Under the new, looser tests, that isn't the case.

The food-stamp rolls have swollen since 2008 and are projected to stay that way for years. In 2008, SNAP enrollment was 28.2 million. Unemployment peaked in October 2009 at 10% and was at 7.7% as of February, but SNAP kept growing.

The Congressional Budget Office predicts unemployment will drop to 5.6% by 2017 but that SNAP enrollment will drop slightly to 43.3 million people, down 4.5 million from the current level.

That makes it very different from the other big federal support program, unemployment insurance, which shrinks as the economy improves. Continued jobless claims dropped to 3.1 million in February after peaking at 6.6 million in May 2009.

Kevin Concannon, undersecretary for food, nutrition and consumer services at the Department of Agriculture, said SNAP is working as designed, expanding to extend benefits to more Americans as poverty levels increase. He said USDA officials expect the program to soon begin contracting as the economy improves.

"While the perception may be different, the actual raw numbers, almost 50 million people [under the federal poverty level], is certainly one of the principal reasons why we see the enrollment increases in the SNAP program," he said. A more aggressive effort to get people on the rolls and changes in the eligibility standards were also factors, he said.

The government spent a record $74.6 billion on SNAP benefits last year, roughly equivalent to the combined budgets of the Department of Homeland Security, the Justice Department and the Department of the Interior. Roughly 45% of recipients are children. In 2007, the government spent $30.4 billion on the program.

A version of the food-stamp program was used briefly in the 1930s and 1940s. It was made permanent in the 1960s to tackle poverty, part of an expansion of state and federal social welfare programs including Medicaid.

By 1975, 8% of all Americans received government-paid food assistance. The level hovered between 8% and 11% until 2009. The financial crisis, coupled with the ensuing spike in poverty levels and a number of policy changes, pushed the program to unprecedented levels. Now, 15% of Americans are on SNAP.

The average monthly benefit per person was $133 last year, which can be used to buy household staples such as cereal, meats, fruits and milk.

For an able-bodied American without children, SNAP benefits are usually only offered for a few months. The federal government has waived these rules for most states in recent years because of high unemployment and will likely rescind the waivers when unemployment falls, program experts say.

"Food stamps have actually saved my life, really," said Diane Hendricks, 43, who worked for 12 years at a human-resources agency before losing her job in 2009. She and her husband divorced last year, and she filed for SNAP to help buy groceries for her two children, ages 10 and 5. She now lives with a friend and receives $380 a month in SNAP.

In late February, Ms. Hendricks began working 20 hours a week at a local food pantry, earning $10 an hour. She hopes to stop using SNAP in three months. "The benefits helped me get back on my feet," she said. "It was one less thing to worry about so I was able to look for work."

Food stamps have proven polarizing in Washington, with proponents saying low-income Americans need this kind of taxpayer-funded assistance, and critics warning that programs foster dependence on government support.

House Budget Committee Chairman Paul Ryan (R., Wis.), the former GOP vice-presidential candidate, has proposed turning SNAP into a block-grant program that would give states more control over the program, likely leading to cuts.

At a recent event hosted by The Wall Street Journal, Mr. Ryan said when it comes to anti-poverty programs, policy makers should be asking the questions: "Do we have an economic policy of social mobility, of upward mobility? Are we attacking poverty at the root causes, or are we simply merely treating the symptoms of poverty to make it, you know, easier to tolerate and therefore perpetuate?"

In 2011, as the U.S. unemployment rate began to recede from its 2009 peak of 10%, the number of Americans living below the poverty line remained elevated as people burned through their savings and replaced full-time jobs with part-time work. As of 2011, some 48.5 million people were living in poverty, up from 37.3 million in 2007. But that growth only accounts for roughly half the change in SNAP enrollment.

The newest factor in the program's growth, one that hasn't been tested in past boom-and-bust cycles, stems from policy changes that began almost two decades ago. The 1996 welfare overhaul, coupled with a rule change crafted four years later by the Clinton administration, allowed states to make it easier for residents to qualify for benefits.

In 2001 and 2002, six states adopted rules that eased income and asset requirements for SNAP applicants, making it easier for someone to qualify for the program if they had a low-wage job or some savings. Previously, applicants could be disqualified if they had $5,000 in the bank, or earned slightly more than the poverty threshold.

The goal was to help Americans with government aid before their savings were wiped out. Policy makers wanted to allow newly poor families, such as those where the breadwinner was temporarily unemployed, to have enough money to put gas in the cars and pay phone bills—two necessities for finding and retaining jobs. To qualify for this easier screening process, Americans had to do little more than prove their income levels were low enough to meet certain thresholds.

The change didn't attract much attention until the financial crisis hit. After that, states began aggressively implementing the laxer standards, which allowed cash-strapped states to funnel more federal aid to their residents. The 2009 stimulus law further expanded the program, allowing people to keep the benefits longer than normal and boosting the total level of benefits that a recipient can receive. The expanded benefits expire Oct. 31.

In 2009, with the encouragement of Obama administration officials, 17 states and U.S. territories eased their eligibility requirements, in some cases waiving any policy that restricted the assets a family could retain.

"We believe that increasing the number of states that implement [eased] eligibility will benefit families hurt by the economic crisis, promote savings among low income households, and simplify state policies," Jessica Shahin, a top USDA official, wrote to other federal program overseers in 2009. "Please encourage your States to adopt [the looser rules] to improve SNAP operations in your States."

Eleven more states eased rules in 2010. Today, 43 U.S. states and territories have such expanded eligibility policies. The White House estimates that reversing the eased standards would cause between two million and three million people to lose benefits.

"We decided to adopt [easier] standards in order to prevent [people] from having to spend all of their life savings," said Richard Berry, a GOP-appointed director of the agency that screens applicants in Mississippi, where one out of every three children receive benefits. "We didn't want people to have to become destitute in order to get help."

The resulting change in the program's structure has been profound. In 2006, 18.7% of SNAP households qualified through an easier screening process. In 2011, that number reached 65.8%. The change didn't mean the majority of SNAP beneficiaries had large savings accounts. Rather, it meant that states were no longer checking, according to state guidelines and program officials.

The financial crisis hit North Carolina particularly hard, wiping out thousands of manufacturing and financial-sector jobs. The state's unemployment rate spiked from 4.6% in March 2007 to 11.3% in February 2010. It remained at 9.5% in January. The number of households seeking SNAP benefits in North Carolina also soared, averaging 785,072 in the fiscal year that ended Sept. 30, up 87% from 2008.

The state broadened eligibility rules in 2010, waiving asset limits and allowing households to qualify if their gross income was as much as 200% of the federal poverty level, up from the 130% threshold that had been in place before. Under the change, a family of four with income of $3,842 a month would now qualify, compared with $2,498 previously.

With more entering the program, social service groups began recommending it as an option for struggling families that previously hadn't applied.

That is what happened to Basem Eljauni, a 55-year-old cashier at a Sam's Club in Greensboro, N.C., who lost his two businesses—a grocery store and a gas station—and his $250,000 in savings and investments. The father of six says he now makes around $1,000 a month if he is lucky and supplements his income with about $800 in government-paid food assistance and handouts from charities.

"It's hard to see yourself stuck on food stamps," said Mr. Eljauni. "Amazing—I never thought I was going to be stuck in the system."

Congress will have to revisit SNAP later this year when a bill authorizing USDA expenditures expires. Republicans have promised to push for changes, seeking new limits on who can receive benefits and ending the ability of states to ease asset and income limits.

The Congressional Budget Office said reinstating eligibility limits would save around $4.5 billion over 10 years, a fraction of the program's total cost over that time.

Budget experts believe the program will start contracting next year, but only slowly. It will depend, in part, on whether people like Ms. Myers, the Chicago receptionist, will shift off the program in the coming months, something she said hopes will happen. "I am always looking for a better job," she said. "I do not want to be on food stamps forever."