How Congress Can Cut Fat From Food Stamps

Strengthening work requirements and requiring states to share the program’s $110 billion annual costs are commonsense first steps

Letter to The WSJ.

"Spending on food stamps has grown 73% since 2019, driven largely by the Biden administration’s unilateral increase in the benefit formula. Despite the influx of spending, the program suffers from rampant waste, fraud and abuse, and too often falls short of achieving its twin goals of improving nutrition and promoting employment. Your editorial “The Case for Fixing Food Stamps” (May 7) highlights two important reforms under consideration by the House Agriculture Committee. Strengthening work requirements and requiring states to share the program’s $110 billion annual costs are commonsense first steps.

The work requirement created in the 1996 welfare reform law is riddled with loopholes. Take, for example, that none of the 5.5 million food-stamp recipients in California will have to work as a condition of welfare until, at the earliest, February 2027. President Biden’s agriculture department signed off on the Golden State’s unusual two-year work-requirement waiver on Jan. 15, which was justified by citing unemployment data from December 2021.

States can also significantly increase the income limit for the program and waive the asset limit altogether, using another loophole known as Broad-Based Categorical Eligibility, or BBCE. By providing a “benefit” as minor as a government-funded informational pamphlet, state agencies can add millions of welfare recipients to the rolls who shouldn’t actually be eligible.

There is no federal-state cost sharing in the food-stamp program, but because states oversee its administration, there is no incentive to police fraud. States are penalized by the federal government for having high payment errors. BBCE, however, helps them paper over any such mistakes to avoid fines. By making households “categorically eligible,” states don’t need to check their incomes or assets for eligibility.

President Trump proposed cracking down on the BBCE and work-requirement waiver loopholes in his first administration, but the rules were held up by the courts and never implemented. The budget-reconciliation bill gives Congress the opportunity to finally close the loopholes, end wasteful spending and, most important, refocus benefits on the truly needy.

Matthew Dickerson

Economic Policy Innovation Center"