House Republicans narrowly passed their version of President Trump’s “big, beautiful bill” last week, and the legislation contains major changes to SNAP, including expanded work requirements, reduced federal and state exemptions and shifting more of the costs to states. Changes are likely as the Senate takes up the bill, and Kevin Corinth, senior fellow and deputy director of the Center on Opportunity and Social Mobility at the American Enterprise Institute, has a new paper out analyzing the impact of an array of cost-cutting measures for SNAP. Spotlight spoke with Corinth recently; the transcript of that conversation has been lightly edited for length and clarity.

Why don’t we start with what you were trying to do with this paper in a broad sense and then go through the four specific areas you’re focusing on.

Sure. So, as you know, Congress has currently decided that they’d like to extend the individual provisions of the 2017 Tax Cut and Jobs Act. That brings a big fiscal cost, and their goal is to be able to reduce spending on some other programs. Those programs include things like Medicaid but also SNAP. The original target was to reduce spending over the next decade by $230 billion and that’s expected to largely come from the SNAP program. That’s a big reduction because we spend something like a $100 billion per year on SNAP. So, about a $23 billion reduction per year means an almost 25% decrease in spending. And this will probably largely come from benefits.

The goal I had with my report was, in taking as a premise that Congress is going to try to reduce spending on SNAP, look at some of the ways they could feasibly go about doing so, and then evaluating what the implications would be for some important outcomes that policy makers should care about, including effects on targeting—are lower-income people getting a larger share of the benefits or higher income people? I also looked at potential effects on work incentives, meaning whether or not people are deciding to participate in work or not. I wanted to compare and contrast some of these options to provide some evidence to inform what they will ultimately decide on in terms of their reconciliation bill.

And you looked at four major potential reforms, correct?

Correct.

You want to just run through those one by one and give us the highlights of what you found?

Sure. So, first, and probably the clearest and easiest thing they could do, though not necessarily from a political standpoint, would be reducing the maximum SNAP benefit. Currently for a family of three, the maximum monthly benefit is $768 per month. One option is to reduce that amount, and actually in 2021 during the Biden administration, there was an unprecedented increase in this maximum benefit level, raising it by 21%. If you just reversed that increase, that would take the maximum monthly benefit from $768 to $647 in 2025, and that would save something like $200 billion over 10 years, which is about the cost savings they’re looking for.

In terms of the effects of this one, it doesn’t have major effects on work incentives. There is some increase in the incentive to work for people who have higher incomes, but it’s pretty neutral in respect to work. If anything, it improves work incentives. In terms of targeting, it also is relatively neutral, only because everyone’s getting the same reduction in the dollar value of benefits. It’s a smaller percent reduction for the lowest income people. So, overall, it does what Congress wants—it saves about a couple hundred billion dollars over 10 years without any really perverse incentives. I think it’s a reasonable option, but perhaps more difficult politically because it’s hard to say that we’re just going to do a blanket cut to SNAP for everybody, including the elderly and the disabled.

Let’s move on to number two.

Another way to reduce the amount of benefits that at least some people get would be to reduce deductions from income. So, the way SNAP benefits are calculated is, you calculate how much money someone has, the income they receive each month. And then there’s a benefit formula that says if you get more income, we’re going to give you less SNAP benefits. And usually for every dollar that you, that you earn, your SNAP benefits fall by something like 24 cents.

But there are some deductions to your income that will make it so you don’t start losing SNAP benefits right away. There’s a standard deduction that just says, whatever your income is, subtract $204 from that amount, which means we’re not going to actually start reducing your SNAP benefit for the first $200 of income that you receive.

There’s another one called the excess shelter cost deduction, which allows you to deduct money that you spend on housing from your income. These deductions are actually pretty important. They increase people’s SNAP benefits a lot, especially for those who have a low amount of income because they preserve their maximum benefit.

And so, you could potentially save a substantial amount of money by either eliminating some of these reductions or at least relaxing them in some way. In my report, I show the consequences of just getting rid of the standard deduction, getting rid of the excess shelter cost deduction, or both. Any of those options would substantially reduce benefits for families who have more than a little bit of income. It actually, in some ways, improves targeting because those with zero income still get that same maximum benefit. But for higher-income people, their benefits will phase out more quickly, so it really improves targeting.

That could also result in some pretty substantial work disincentives, however. If you got rid of both of the ones I mentioned, the standard deduction and the excess shelter cost deduction, you could reduce the reward from working over the course of a year by about $3,000 for many lower-income families. That’s a big deal in terms of work. So, I think it’s important that policy makers are aware that if they were to just kind of completely get rid of deductions that would this disincentivize work a good deal. If you get rid of some of them or partly weaken them, there’d still be a work effect, although not as large.

And how much would this save, Kevin?

I don’t have any formal cost calculations of this policy change. But my sense from some back-of-the-envelope calculations that I included in the report is that it would probably be well over a $100 billion and maybe a couple hundred billion dollars.

Then how about option 3?

In hindsight, this is probably the most important one because this is in the current House bill, which is expanding work requirements in the SNAP program. Under current law, some recipients are already subject to work requirements, including SNAP recipients who are between the ages of 18 and 54 and who have no dependent children and are not disabled. They’re required to work 80 hours per month in order to maintain their SNAP benefits.

But there is a potential option here to expand those work requirements to a much larger set of individuals in the program, in particular individuals who have kids. We have a cash welfare program that has work requirements for parents with kids, so you could also imagine having work requirements in the SNAP program for families with kids. The House proposal would set forth work requirements on all adults up to age 64 who are non-disabled, unless you have a kid that’s six years old or younger. I did some calculations in this paper that suggest you could get some pretty substantial savings from expanding work requirements, something close to $170 billion over a decade.

In terms of targeting, you have some pretty drastic effects from work requirements. It certainly makes targeting worse, because those who have no income are not working and therefore, they’re going to get less benefits as a result of the work requirements. At the same time, you’re substantially strengthening work incentives because now if you don’t work, you’re going to get less benefits, but if you start to work, you’ll keep getting those same benefits you were getting before.

And option 4?

Number four is something that’s been discussed a lot but hasn’t yet been taken up by the House and that’s ending broad-based categorical eligibility. So broad-based categorical eligibility, or BBCE, says that if you are a state, you can expand eligibility for SNAP to families who would not otherwise be eligible. Under the main statute for SNAP, you’re eligible if your income is below 130% of the federal poverty line. However, there’s another provision that says that if you are a family who’s receiving benefits from the TANF program or related programs, then you can maintain eligibility for SNAP up to 200% of the federal poverty line.

And it turns out that states have kind of gamed this system, effectively increasing the eligibility threshold from 130% of the poverty line to 200% of the poverty line. When states do that, it obviously increases the federal government’s costs for SNAP. If you were to eliminate broad-based categorical eligibility, that would save something like $45 billion over a decade. So, it’s not enough on its own to get the $230 billion goal that the House has, but it would be a substantial portion.

And by doing so, you would actually improve targeting because now you’re reserving benefits only for those who have incomes below that 130% threshold. It doesn’t affect work incentives for most people, but there are a few people who are sort of right at that level of qualifying for SNAP as a result of the broad-based categoric eligibility who might lose benefits as a result of working. So, there is a small share of people whose work incentives are affected, but it would mostly be these higher-income people who we expect to be less susceptible to work incentives anyway.

And you said this is not really being talked about. Is it something that has come up in the past?

It has come up in the past in terms of using rule changes. The first Trump administration tried to get rid of broad-based categorical eligibility and they ended up not getting it through. My sense is that over 40 states are currently using this loophole—red states and blue states.

So, to sum up, if you take politics out of the equation, it sounds like reducing the maximum benefit might be the cleanest way to do this from a purely policy perspective.

I would say that would be the first thing I would do, to just reverse that 2021 increase and get back to that same baseline.

And now, putting the politics back into the equation, which of these options do you think is the most politically palatable? The House seems to feel it’s work requirements. Do you agree with that?

Yes, I agree with that, that that’s the most politically palatable option. It preserves the same level of benefits for those who are seniors and/or disabled and it has this positive feature of encouraging work as well.

And if you had to make a guess on what the SNAP policy looks like in the final version of the “big, beautiful bill” after the Senate engages, what’s your sense of how the Senate will accept or not accept specifically some of the recommendations the House was making?

I guess I’m pretty optimistic on the work requirement piece on both SNAP and Medicaid. It seems like that’s the one piece where you’re not getting some of the same pushback from the more moderate Republicans.