What is the current legal status on the USDA withholding contingency funds for SNAP?
Executive summary
Federal courts have largely rejected the USDA’s legal claim that SNAP’s contingency reserve could not be used during the 2025 shutdown and ordered the department to release previously appropriated contingency funds to keep benefits flowing, but litigation, agency resistance and fiscal limits left payment levels and timing uncertain [1] [2] [3]. Congress later enacted a FY26 appropriations act restoring full-year funding for many programs, yet the law and USDA statements continue to reflect that contingency reserves are finite and may be insufficient to cover a full month’s SNAP costs if another lapse occurs [4] [5].
1. Judicial rebukes: courts say contingency funds must be tapped
Multiple federal judges found USDA’s interpretation of the statute unlawful and ordered the agency to deploy contingency reserves to continue SNAP benefits during the shutdown, with at least one court directing immediate release to EBT processing vendors and another ordering the department to outline a distribution plan [1] [2] [3].
2. USDA’s position and internal reversals: “not available” vs earlier guidance
USDA circulated a memo arguing the contingency fund “is not available to support FY 2026 regular benefits” because the appropriation for regular benefits allegedly no longer exists, a position that contradicted earlier agency shutdown guidance and a previously posted “lapse of funding” plan that said multi‑year contingency funds could fund benefits mid‑year; that earlier plan was subsequently removed from USDA’s website [6] [7] [8].
3. Political and state counterpunch: lawsuits and bipartisan pressure
States led by California and a bipartisan coalition of more than two dozen governors and attorneys general sued, arguing USDA has a statutory duty to use the contingency reserve; the litigation prompted emergency filings and public pressure from hundreds of members of Congress demanding the department release the funds [9] [10] [11].
4. How much is in the reserve and why that matters
Observers and filings estimated SNAP’s contingency reserves at roughly $4.65 billion to between $5 billion and $6 billion—material but less than the roughly $8 billion or more monthly program cost—so even if courts compel release, the reserve alone could not fully substitute for a full‑year appropriation without additional authority or transfers [12] [5] [3].
5. Court orders, partial releases, and practical effects
Courts in Massachusetts and Rhode Island compelled USDA to free contingency funds and allowed states to issue at least a portion of normal benefits—one order required a vendor payment by a set noon deadline to enable roughly 65 percent of normal benefits—while leaving open whether USDA might comply fully, appeal, or seek alternative statutory transfers such as Section 32 funds [2] [8] [3].
6. Continued legal ambiguity and administrative discretion
Despite judicial rulings against USDA’s initial reading, the agency emphasized limits on shifting other permanently appropriated accounts and suggested legal and practical constraints remain; reporting noted the department could face choices about prioritizing other nutrition programs if it redirected certain funds, and it remained unclear whether USDA would fully comply, appeal, or how releases would be administered across states [11] [8].
7. Current legal posture distilled
Legally, courts have concluded USDA’s refusal was inconsistent with statute and have ordered the department to use contingency reserves to sustain SNAP during the shutdown; politically and practically, the USDA initially resisted, some agency guidance was removed, states sued and won interim orders, and the available contingency funds are insufficient to substitute for an annual appropriation without further action—while Congress later passed FY26 appropriations restoring broader funding, the contingency reserve remains finite and its availability in future lapses is explicitly cautioned by USDA [1] [2] [4] [5].