Fixing a Food-Stamp Trick

Trump tries to change a rule that evaded asset tests

WSJ editorial. Excerpt:

"The Agriculture Department last week outlined changes to the Supplemental Nutrition Assistance Program, better known as food stamps. The program covered an average 39.7 million people at an annual cost of $64.9 billion in 2018. That number hasn’t declined as fast as you’d expect given 10 years of economic growth and a tight labor market. Recipients averaged 28.2 million in 2008 at a cost of $37.6 billion.

One reason for the expanded rolls is a practice known as “broad-based categorical eligibility.” Federal law prescribes income and asset limits for food-stamp eligibility. But a person can cross-qualify for food stamps if he’s receiving benefits from the welfare program Temporary Assistance for Needy Families (TANF). The good intention is to trim administrative hassle and avoid repeating eligibility tests.

Yet this provision has been diluted in regulations. TANF benefits can include everything from cash to transportation assistance. States can count a person getting a brochure or a toll-free hotline number funded by TANF money as receiving benefits. The practical effect is that states can extend food benefits to more people and skip asset tests. The Obama Administration encouraged states in letters and memos to adopt this standard, and some 40 states allow broad-based categorical eligibility. 

One state conferred auto-eligibility on anyone up to 200% of the poverty line, regardless of assets, “by having a family planning brochure available,” according to a 2015 Agriculture Department Inspector General report. These practices are depressingly common, as states run by both major parties try to grab more federal dollars."