In this piece, we analyze how changes to the Supplemental Nutrition Assistance Program (SNAP; formerly the Food Stamp Program) that are now law due to the One Big Beautiful Bill Act (OBBBA) will affect the program’s response to recessions. At a time of significant uncertainty about the direction of the economy, OBBBA makes structural changes to SNAP that we find will result in the program being substantially and detrimentally less responsive to deteriorating or poor economic conditions. Unless OBBBA’s SNAP cuts are reversed, those cuts will greatly diminish or end SNAP’s critical role as a national automatic stabilizer.
Economic recessions result in widespread pain: an increased likelihood of job loss, longer unemployment spells, less access to credit, financial stress, business closures, reduced tax revenues, and lower economic growth. Not all economic downturns are nationwide; they can be local or regional due to factors such as the decline of a regional economic sector, plant closures, or natural disasters. When there is a recession, policymakers can employ a range of fiscal and monetary policy tools to address hardship and temper the depth and duration of the downturn; but, it takes time to recognize that a recession has started, then it takes time to put together and pass pertinent legislation or adjust monetary policy, and then it takes time for resources to hit the ground.
As economic conditions deteriorate, some policies—often referred to as automatic stabilizers—do not require any policymaker action at all to kick in. Historically, SNAP has been a key automatic stabilizer because when people lose their jobs or experience a decline in income and become newly eligible for SNAP, they can enroll in the program and quickly receive and spend benefits at grocery stores. SNAP not only helps to provide a basic need, resources to put food on the table, but because recipients spend the benefits immediately in their local communities, the program also helps stabilize and stimulate the economy. These dynamics are temporary: As economic conditions improve and need dissipates, SNAP enrollment and attendant spending declines.
The policy change under OBBBA that will most severely undercut SNAP’s role in fighting recessions is the transfer, for the first time, of significant program costs from the federal government onto states. We expect that changing the structure of SNAP by ending guaranteed full federal funding of program benefits, as OBBBA does, will almost certainly lead some states to cut SNAP participation substantially and is likely to lead other states to end their participation in the program entirely. This post-OBBBA dynamic will worsen as economic conditions deteriorate: Nearly all states must balance their budgets even in recessions, when their revenues are declining, and will feel pressures to cut SNAP. As a result, instead of expanding during recessions in tandem with the economy’s contraction, SNAP is likely to contract, too, causing the economy to weaken still further.
OBBBA also changes SNAP work requirement policy, undermining SNAP’s role both in providing support for workers who lose their jobs and in stimulating local economies experiencing job loss during economic downturns. Older Americans between the ages of 55 and 64 and parents without children under age 14, both without a proven work-limiting disability, will be newly subject to time limit work requirements alongside people between the ages of 18 and 54 without dependents or a proven work-limiting disability. OBBBA ended exemptions from time limit work requirements for veterans, those experiencing homelessness, and former foster care youth.
Additionally, OBBBA severely curtails states’ ability to request waivers from time limit work requirements when local economies are struggling by limiting waivers to areas with unemployment rates of at least 10 percent, an employment level well above that experienced in many parts of the country even in deep recessions. USDA will terminate all existing waivers on November 2, 2025. Conditioning SNAP eligibility on work when the economy contracts and/or labor market conditions are poor will penalize workers who have recently lost their jobs or income, making it harder for them to get back on their feet and back to work.
The Hamilton Project has produced extensive research on countercyclical policy and commissioned dozens of policy proposals about how to best combat recessions, including the volumes Recession Ready and Recession Remedies. Delivering timely, targeted, and temporary resources to those most in need and most likely to spend those resources quickly through automatic stabilizer programs like SNAP is critical to making a recession more shallow and shorter. Policymakers could pursue a different course, reforming SNAP to be even more effective, both in general and in responding to recessions.
For example, we have proposed that a temporary increase in federally funded SNAP benefits should automatically kick in when the economy contracts, as should a nationwide suspension of SNAP work requirements. Such policies, which are similar to those Congress enacted during the last two recessions, would protect Americans from some of the hardship that comes with a recession, break the relationship between work and program eligibility when there are many fewer jobs available, and stimulate the economy during recessions by targeting resources that will be spent quickly to those in need. However, these countercyclical SNAP policies, as well as Congress’ response during the Great Recession and the COVID-19 recession, reflect SNAP prior to OBBBA.
The best policy response to the SNAP changes in OBBBA is for Congress to undo the SNAP changes in OBBBA.
Short of that, Congress should prioritize annulling the structural change that pushes a portion of SNAP benefit costs onto states before it takes effect. Congress and the U.S. Department of Agriculture (USDA) should also consider reinstating the prior criteria for SNAP work requirements and waivers of those requirements, or at a minimum, reconciling SNAP work requirement waiver rules with the new Medicaid work requirement waiver rules in OBBBA, as they differ in important ways without any justification being provided for the divergence (other than the need for the congressional committees that wrote OBBBA to meet steep, pre-set spending-cut targets). In addition, while we believe that the evidence supports ending SNAP time limit work requirements in policy and practice, Congress should at least repeat past precedent by suspending time limit work requirements nationwide when there is a recession.
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