Biden and McCarthy's plan to change SNAP work requirements in the debt-ceiling deal could actually expand benefits — but not employment

• The debt-ceiling deal includes new work requirements for SNAP recipients.
• The CBO estimated the new requirements could actually expand benefits through the program.
• But contrary to a common GOP belief, some economists don't think requirements will boost employment.

President Joe Biden and Speaker of the House Kevin McCarthy finally have a deal to address the debt-ceiling crisis — but it included an unexpected twist for food-stamp recipients.

On Saturday night, Biden and McCarthy announced they had come to an agreement on raising the debt ceiling until 2025 in legislation called the Fiscal Responsibility Act. After months of stalemate, neither party got exactly what they wanted — McCarthy was unable to get $4.5 trillion in spending cuts that he initially proposed, while Biden did not get an entirely clean debt ceiling deal without any cuts attached.

One particularly contentious element of the bill is a set of new work requirements for the Supplemental Nutrition Assistance Program (SNAP) and Temporary Assistance for Needy Families (TANF) programs.

Many Americans who wish to receive SNAP benefits have to work or complete training programs if they are between the ages of 18 and 49. That can be the case for an "able bodied adult without dependents." The bill would eventually raise the maximum age to 54.

After the text of the bill was released, some Democratic lawmakers criticized the work requirements.

"As somebody who was a food stamp recipient, there is absolutely no way I can see myself green-lighting something that will take food from people's mouths," Missouri Rep. Cori Bush told reporters on Tuesday. 

She led some of her Democratic colleagues in introducing an amendment to remove the new SNAP work requirements from the debt-ceiling bill.

But the Congressional Budget Office (CBO) released its cost estimates of the bill on Tuesday evening, and it found that the SNAP proposal could actually end up expanding the number of Americans who receive those benefits. It would exempt veterans, homeless people, and "people ages 18 to 24 who were in foster care when they turned 18" from the work requirements for SNAP, according to a CBO letter to McCarthy.

"During the 2025–2030 period, when the group of people up to the age of 54 would be subject to the work requirement and the new exclusions were in effect, approximately 78,000 people would gain benefits in an average month, on net," the CBO letter said, adding that this would mean about a 0.2% increase "in the total number of people receiving SNAP benefits."

A White House official told reporters on a Tuesday press call that "time limits on SNAP eligibility amplify existing inequities in food and economic and economic security."

"At the President's insistence, SNAP changes are temporary, sunsetting at 2030, which provides an opportunity to reevaluate them," the official added.

Still, McCarthy criticized the CBO's estimate that the deal would expand SNAP eligibility. 

"Come see me in a year, and I'll show you how much we actually saved," McCarthy told reporters on Tuesday night. "You watch — a lot of people are going to get jobs now."

How the work requirements will impact employment

Despite McCarthy and Republicans' belief that work requirements will bolster employment, some experts aren't so sure.

Lauren Bauer, a fellow in Economic Studies at the Brookings Institution and the associate director of The Hamilton Project at Brookings, said during a media briefing on Wednesday that there's not that much "evidence that work requirements increase employment" and she "doesn't expect there to be any increased employment among the 50- to 54-year olds based on this deal."

"There might be a little bit, as I said before, because a substantial portion of this population works in the volatile low-wage labor market that they might be able to tack on a few extra hours to more consistently meet that threshold," Bauer said. "That is where I would expect to see any response to the policy change. But it's quite unlikely."

CBO also noted in a previous report the potential impacts on employment, writing in its report that "making the receipt of benefits contingent on working or preparing to work has substantially increased the employment rate of the targeted recipients in TANF during the year after they enter the program and by a smaller amount in later years. Work requirements in SNAP have increased employment less; in Medicaid, they appear to have had little effect on employment."

Bernard Yaros, an economist at Moody's Analytics, elaborated on the minimal impact SNAP work requirements would have on employment, telling Insider that "when you look at the dollars and cents that are involved here with the recent SNAP changes, we're just talking a couple billions of dollars," and added that "in the grand scheme of things of the US macroeconomy, it's not really going to move the needle in terms of really boosting labor supply."

Yaros said that "other headwinds to labor supply" like an "insufficient immigration system" as well as baby boomers who are deciding to retire "are much bigger weights on labor supply."

Despite the minimal impact on employment, many Democratic lawmakers don't want to see any work requirements in the debt-ceiling deal. Chair of the Congressional Progressive Caucus Pramila Jayapal told reporters during a call on Tuesday that "even with the exemptions, it's going to mean that people have to go through a process, more bureaucratic red tape, to determine whether or not they qualify for those exemptions."

"I think it goes to the principle of this bureaucratic red tape that we call work requirements," Jayapal said. "They do not do anything to get people back into work. That is what reams of data have shown. They are extremely detrimental to getting assistance to people that need it the most."