USDA proposes a rule that would cut 6.3 million people from SNAP, 18% of recipients

The U.S. Department of Agriculture on Tuesday published a proposed rule that would narrow who is automatically eligible for the Supplemental Nutrition Assistance Program, known as SNAP or food stamps. According to an agency analysis in the proposal, reported by CNBC, nearly 18% of SNAP recipients, about 6.3 million people, would lose benefits. Reuters ran the same figure.

What the rule changes

Under current rules, a household that receives benefits from a program funded by Temporary Assistance for Needy Families (TANF) is categorically eligible for SNAP without meeting the federal income test. The Federal Register notice says current regulations count both cash assistance and non-cash or in-kind benefits and services from TANF-funded programs. The proposal would limit categorical eligibility to households receiving TANF assistance as defined in federal regulation 45 CFR 260.31.

CNBC notes that TANF income limits vary by state, generally 130% to 200% of the federal poverty level, while SNAP's limit is generally 130%. The rule says the change would target benefits to "the truly needy" and standardize eligibility.

The numbers behind it

• 6.3 million people, about 18% of recipients, would lose SNAP under USDA's own analysis.
• 1.8 million children would also lose eligibility for free school lunch, because SNAP enrollment confers eligibility for other food aid.
• 5.5 million people have already lost SNAP since the July 2025 tax law cuts, bringing enrollment to about 36 million, per USDA data cited by CNBC.

CNBC says part of that earlier drop reflects states struggling to put the administrative changes in place and to absorb new costs from the law.

Reaction and timeline

Rep. Angie Craig of Minnesota, the top Democrat on the House Agriculture Committee, called the rule "heartless and cruel." The public has 30 days to comment, per CNBC. This is a proposal, not a final rule: USDA must review comments before it can finalize anything, and a final rule can face court challenges.

Who feels it first

SNAP dollars are spent at grocers, convenience stores and farmers markets, so shops in low-income neighborhoods are the first place a caseload drop would show up. Neither USDA nor CNBC quantifies the effect on retailers, and we are not estimating it here. Business owners who accept SNAP can watch their own EBT share of sales and follow the comment docket. Our small-business desk will cover retailer impact if data emerges.

Sources: Federal Register, document 2026-22936; CNBC; Reuters. This is news reporting, not investment advice.