Millions face delayed tax refunds, cuts to food stamps as White House scrambles to deal with shutdown’s consequences

Food stamps for 38 million low-income Americans would face severe reductions and more than $140 billion in tax refunds are at risk of being frozen or delayed if the government shutdown stretches into February, widespread disruptions that threaten to hurt the economy.

The Trump administration, which had not anticipated a long-term shutdown, recognized only this week the breadth of the potential impact, several senior administration officials said. The officials said they were focused now on understanding the scope of the consequences and determining whether there is anything they can do to intervene.

Thousands of federal programs are affected by the shutdown, but few intersect with the public as much as the tax system and the Department of Agriculture’s Supplemental Nutrition Assistance Program, the current version of food stamps.

The partial shutdown has cut off new funding to the Treasury Department and the USDA, leaving them largely unstaffed and crippling both departments’ ability to fulfill core functions.

The potential cuts to food stamps and suspension of tax refunds illustrate the compounding consequences of leaving large parts of the federal govern­ment unfunded indefinitely — a ­scenario that became more likely Friday when President Trump said he would leave the government shut down for months or even years unless Democrats gave him money to build a wall along the U.S.-Mexico border.

The SNAP program is rare among federal initiatives because it requires annual funding from Congress, even though its existence is automatically renewed.

Congress has not allocated funding for SNAP beyond January, and the program’s emergency reserves would not cover even two-thirds of February’s payments, according to past disbursements. Last September, the most recent month for which data is available, SNAP disbursed $4.7 billion in benefits to recipients across every U.S. state.

Lawmakers last year appropriated $3 billion into a “contingency” fund for SNAP. USDA officials would not comment on the status of the $3 billion, but if all of that money is still available, it would cover just 64 percent of February’s obligations.

Agency officials have not said how they would address the shortfall, including whether they would prioritize who receives food aid or cut benefits for everyone across the board.

If the shutdown continues through March, there would be no remaining money for benefits.

“We are currently looking at options for SNAP,” said Tim Murtaugh, a spokesman for the Agriculture Department. “The best course of action would be for Congress to pass a legitimate appropriations bill to the president to end the lapse in funding.”

 

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