Just How Effective Are SNAP, Child Tax Credit and State Safety Net Programs at Providing for Low-Income Residents?
Written by
Vance Cariaga
Edited by
Daria Uhlig
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The United States has no shortage of social safety net programs designed to help low-income and marginalized Americans overcome financial challenges that prevent them from having access to adequate housing, food, healthcare and other essentials. While many of the programs are effective at fulfilling their missions, there are also variations in their effectiveness based on where you live and how much income you earn.
A recent study from the Brookings Institution analyzed government safety net programs such as the Supplemental Nutrition Assistance Program (SNAP), the Child Tax Credit (CTC) and Temporary Assistance for Needy Families (TANF) to learn how effective they are at helping households that have a tough time making ends meet. One thing the organization learned is that government spending on programs isn’t necessarily the best gauge of determining their effectiveness.
As the Brookings Institution noted, high per-capita spending in a state “might be because its safety net policies are generous, or it might be because there is a high poverty rate in the state.” Increases in spending during recessions might arise because “states change their program rules or because more families are facing hardship and qualify for existing programs.”
To provide a better overview of a program’s effectiveness, Brookings developed a “generosity index” designed to calculate benefits that are “theoretically available to a fixed group of single-parent families if they lived in different states and years and fully accessed programs they qualified for.” The idea is to provide metrics that are consistent across different places and time periods.
For example, the analysis found that the generosity index for TANF — which provides cash assistance to low-income families with children — “varies significantly” across states. As recently as 2019, benefits ranged from $363 in Mississippi to $3,379 in Wyoming.
“From the national perspective, the inflation-adjusted value of the TANF benefit index has generally been in decline since 2001,” study co-authors Gabriela Goodman and Tara Watson wrote. “However, from 2018 to 2021, TANF benefits increased by 10% because some states changed their program rules to increase generosity.”
The Brookings Institution also found that Earned Income Tax Credits “typically comprise a small share of total safety net benefits” — despite the fact that the average state EITC index has increased by around 150% since 2001.
As for SNAP, which provides food purchasing assistance to eligible households: The Brookings Institution found that “not all states receive equal SNAP funding for families in similar circumstances.” For example, Alaska and Hawaii have different rules reflecting the higher cost of living in those states.
“In addition, because TANF benefits are considered in the income eligibility determination for SNAP, families in states with less generous TANF programs are eligible for more federal SNAP support,” Goodman and Watson wrote.
The Child Tax Credit benefited from a COVID-era expansion that in 2021 raised the maximum refundable CTC for children 17 and under. The CTC also became temporarily available to families with less than $2,500 in earnings, which had not previously been the case, Brookings noted.
“There was a monumental 458% increase in the CTC generosity index between 2020 and 2021 due to these changes,” Goodman and Watson wrote
But those increases didn’t last long. In 2022, the CTC returned to 2020 levels and is slated to return to its 2017 level after 2025 “in the absence of additional legislation.” Beginning in 2026, the CTC will be reduced by half, to $1,000; the earnings phase-in will increase to $3,000; and the credit will phase out at 5% above $75,000 ($110,000 for joint filers) instead of the current 5% above $200,000 ($400,000 for joint filers), according to the Tax Foundation.
The Brookings Institution ultimately found that the generosity index has “been increasing since 2001,” with a spike during the pandemic. At the same time, there are “significant safety net generosity disparities” by state, which means that the amount of government help you receive is largely determined by where you live.
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