Food Stamps Don’t Help National Wellbeing

No matter how much the government might give poor families, the official measure of poverty would remain unchanged

Letter to The WSJ. 

"Crystal FitzSimons’s letter “Fewer People on Food Stamps Isn’t Good News” (June 23) claims that SNAP lifts 3.6 million out of poverty. That is impossible because the Census Bureau refuses to count $1.6 trillion in government subsidies, including SNAP, as income. No matter how much the government might give poor families, the official measure of poverty would remain unchanged.

Ms. FitzSimons’s claim uses an experimental poverty measure that counts SNAP as income while omitting $1 trillion in other welfare, arbitrarily subtracts some spending, and capriciously raises the income defining poverty thresholds.

The $100 billion spent on SNAP in 2024 added nothing to national well-being. It merely redistributed it. If left with the original earners, it would either be consumed with the same effects, or it would be saved and invested, creating additional well-being, which it wouldn’t with SNAP.

While decrying the minimal adjustments to SNAP to prevent abuse, Ms. FitzSimons ignores the 60% of food stamp recipients who aren’t poor, even by the overstated Census metric.

John Early

Adjunct scholar, Cato Institute" 

Socialism and the Decline of the Black Family

Children need fathers, but social fragmentation gives an advantage to those who seek centralized power

By Jason Riley. Excerpts:

"socialism’s impact on the traditional family structure is no less concerning. Children from intact families are more likely to finish school and avoid poverty. The absence of fathers is strongly correlated with teen parenthood, drug addiction and involvement with the criminal justice system. The cultural anthropologist Margaret Mead wrote that “every known human society rests firmly on the learned nurturing behavior of men” and that civilization “depends upon social inventions that will make each generation of males want to nurture women and children.”"

"socialists such as Karl Marx and Friedrich Engels dismissed the traditional family as a tool of oppression"

"many of the social and economic problems in low-income black communities stem from the sad fact that some 70% of black children are born to unwed parents and nearly 45% live with a single mother."

"Asians are the highest earners, followed by whites, Hispanics and blacks. Similarly, Asians have the highest marriage rates, followed by whites, Hispanics and blacks. Maybe it’s no coincidence."

"Following emancipation, one of the first things black people did was seek out spouses and children from whom they had been forcibly separated during slavery."

"Between 1890 and 1950, black men and women married earlier and were more likely to be married by 35 than their white peers, Mr. Squires writes. That suggests black attitudes toward marriage and child rearing today are the product of incentives and circumstances that developed long after the end of slavery. “More than 70 percent of black children were born to married parents in 1965—a century after the abolition of slavery,” Mr. Squires writes. “Today, only 30 percent are."

"The black family was more intact after three centuries of chattel slavery than after three generations of the federal government’s ‘war’ on poverty.”" 

Friedman on Immigration: Setting the Record Straight

By Chris Freiman.

"Even people who are otherwise enthusiastic about a free market in labor can get cold feet about immigration once redistribution enters the picture. Some are fond of quoting Milton Friedman, who famously (or infamously) said:

“It’s just obvious you can’t have free immigration and a welfare state.”

On this view, immigration is fine under fully free market institutions, but in the actual world with its abundant government-provided benefits, immigration restrictions are justified to protect taxpayers from the added expense that could arise if immigrants consume these benefits. But this conclusion is too quick, and even Friedman’s position is more nuanced than people on both sides of the immigration debate tend to realize.

An initial point, though: the concern about the fiscal cost of immigration is overstated. For one reason, in the United States, most welfare spending goes to the very young or the very old. Immigrants, by contrast, are disproportionately of working age.

Setting that point aside, Friedman’s own view wasn’t that immigration as such is harmful. He argued that legal immigration is the problem, precisely because it allows immigrants to access government benefits. By contrast, he thought illegal immigration was beneficial. As he put it: “It’s a good thing for the illegal immigrants. It’s a good thing for the United States. It’s a good thing for the citizens of the country. But it’s only good so long as it’s illegal.” Friedman’s reasoning was that illegal immigration enables mutually beneficial market exchange while limiting immigrants’ access to government benefits.

Now, many fiscal conservatives balk at Friedman’s recommendation—namely, if the overconsumption of government resources is the problem with lawful immigration, the solution is to encourage people to break the law. I understand this reaction, but I admit I don’t share it. In my view, whether it’s okay for someone to do something doesn’t depend on whether lawmakers give them written permission. For instance, did you know that it’s against the law to drive on Cape Cod’s National Seashore’s beach if there’s not a tire-pressure gauge in your car? Nevertheless, I have no moral objection if you drive on the beach gaugelessly. Regardless of whether government officials approve, this is just a peaceful activity that doesn’t violate anyone’s rights.

Maybe you disagree with me. Still, as others have suggested, there’s another way to accommodate Friedman’s general idea: admit immigrants as lawful permanent residents but restrict their access to certain government resources. Economists sometimes call this a “keyhole solution”—if the problem is immigrants’ consumption of benefits, then design a policy that narrowly targets that problem rather than restricts their freedom to immigrate entirely.

The main objection to this sort of policy seems to be moral rather than economic. Indeed, Friedman himself was asked about it and he replied that he found the proposal unappealing partly because it’s not “desirable to have two classes of citizens in a society.” That’s a good point. It’s unfair for a government to give some citizens taxpayer-financed benefits but not others. If two people live, work, and pay taxes within a country, government officials should treat them equally, which involves giving them both equal access to government resources.

Notice, though, that a policy of immigration restriction also treats citizens and prospective immigrants differently—it gives citizens, but not immigrants, access to domestic labor markets, private associations, educational opportunities, and more. Consequently, a principle of equal treatment actually seems to imply open borders. Given that Friedman rejects this option, the task becomes that of identifying the second-best solution. (Also, it’s not clear that Friedman can square his objection to keyhole solutions with his endorsement of illegal immigration, which would presumably also create two classes in a society.)

Why think that a policy of open immigration with restricted access to benefits is better than outright exclusion? The reason, in brief, is that admission with conditions treats prospective immigrants better than exclusion. A policy of open immigration with restricted benefits at least gives people the option to move, and it’s hard to see how giving someone a new option could make them worse off.

Here’s an analogy. Suppose John is entering the job market. One employer offers him a job with health insurance and a retirement plan. The next day, he receives another offer—this one comes with no benefits, but a much higher salary. Even if you think he should take the first job, it seems perfectly permissible to offer him the second. John is no worse off for having another option. If he doesn’t want to take it, he can simply decline it. And if he does prefer higher pay without benefits, he’s clearly better off for having the option.

John’s case is analogous to the case of a prospective immigrant who expects to earn significantly more by moving to a country where her access to government benefits is limited. If she prefers having access to a wider range of government-provided benefits in her current country to having higher earnings but fewer benefits in a new country, she can decline to move; in this case, she is no worse off for having the option. But if she prefers higher earnings with fewer benefits, the option makes her better off. Just as it’s permissible—indeed, probably good—to offer John the extra option, so too is it permissible to offer prospective immigrants the extra option.

It’s also worth highlighting another important aspect of restricting immigrants’ access to benefits rather than restricting their movement entirely. Admitting immigrants as lawful permanent residents removes the threat of deportation, among other consequences, that accompanies undocumented entry into a country. Even if you agree with Friedman (as I do) that the keyhole solution of admitting immigrants with reduced access to benefits isn’t totally fair, it’s still more fair than denying prospective immigrants the option of safely moving at all."

The Food Stamp Rolls Decline—Hurray

GOP reforms are paying off as more recipients work or volunteer

WSJ editorial. Excerpts:

"the food-stamp program is now returning to the levels of the bad old days of . . . 2019. Some 42.8 million Americans were enrolled in the program in January 2025, which is more than 12% of the U.S. population. The figure in January 2026 was 38.5 million. The social safety net scholar Angela Rachidi notes the program was “due for a decline” after elevated enrollment during the pandemic."

"those who receive help should hold up their end of the social contract—and work, train or volunteer at least 20 hours a week. That’s the work requirement in the program for able-bodied adults without children."

"those who leave the program because of the expanded work requirement do so for one of two reasons. One: Their earnings increase. That’s good news. Two: They refuse either to work, look for a job, or volunteer at a place like the local library part-time."

"The Agriculture Department ferreted data from 28 states and says it found nearly 186,000 dead recipients. Some 355,000 recipients were enrolled in more than one state." 

American Idle: The Work Ethic Goes Out of Style

One in 3 working-age American men aren’t so much as looking for a job

By Jason Riley. Excerpts:

"1 in 3 men were neither working nor looking for a job in April. Among males 20 and older, the 66% labor-force participation rate is down from 73% in 2006"

"the work rate for men 20 and older fell by more than 13 percentage points between 1965 and 2015."

"the fraction of men without jobs of any sort in the broad twenty-to-sixty-four group went from 10 percent of the total to almost 22 percent"

"the percentage of wholly jobless prime-age men shot from 6 percent to nearly 16 percent"

"It results . . . from an unwillingness to search for work" 

"work rates and LFPRs for white men today are decidedly lower than they were for black men in 1965"

"labor participation rates of married black men twenty-five-to-fifty-four are higher than for never-married white men in the same age group"

"foreign-born males who come to the U.S. in search of work also tend to have higher work rates"

"Neither married men nor immigrants are stealing these jobs"

"The more likely culprit is a social safety net full of generous government benefits that allow men who won’t work to subsist"

"Welfare and disability programs . . . are easily gamed by design" 

Gavin Newsom Wants an AI New Deal

The California Governor is tilting toward an even larger entitlement state

WSJ editorial. Excerpts:

"He suggested imitating Europe’s generous wage replacement programs and job protections. Perhaps he has missed Britain’s debate, notably of late even in the Labour Party, over why a million young men and women have left the workforce while on the government dole."

"If the government makes it hard for businesses to lay off workers, they will be more reluctant to add other jobs and hire young people with less experience. That’s why the youth unemployment rate in France is upward of 20%."

"if workers can make nearly as much unemployed as they do working, many will stay home. That was one lesson from the pandemic when Congress juiced unemployment benefits and transfer payments."

"The top marginal tax rate in California on wage income over $72,725 (including a disability payroll tax) is 10.6%."

"state’s $20-an-hour minimum wage for fast-food workers"

"California is tied with Nevada and Delaware for the nation’s highest unemployment rate (5.3%), followed by Oregon and Washington (5.2%), Illinois (5.1%), Connecticut and Michigan (5%). You don’t need AI to discern what they have in common. With the exception of Nevada, the states are run by Democrats heavily influenced by public unions." 

Why Has Poverty Declined in the U.S.?

By Jeffrey Miron.

"Was President Lyndon Johnson’s “war on poverty” the main driver of declining poverty rates after 1964?

Not according to a new study. The researchers examined a measure of poverty

that accounts for all taxes and government benefits … [and] anchored [the] poverty measure to the official poverty rate in 1963. ... [They also] adjusted income thresholds for inflation and the size of each person’s household.

Using this measure, they found that

poverty fell substantially prior to the War on Poverty, primarily due to increases in market income, without a substantial rise in the dependency of working-age adults and their children on government transfers for most of their income. … These trends were particularly stark for black people, who experienced a steep decline in poverty before the War on Poverty."

Britain’s Lost Generation of Workers

Nearly a million youth aren’t working, in school or job training

WSJ editorial. Excerpts:

"one in eight of its working-age youth currently aren’t employed, in school or in job training."

"Nearly 60% of these youth aren’t even looking for work, and more than half have never held a job."

"Nearly half of Britain’s idle youth now claim to have a work-limiting disability. And more than 42% cite mental health problems as their primary condition"

"The U.K. spent £52 billion in the 2024-2025 fiscal year on overall working-age, health-related benefits, up from £36 billion five years earlier" 

"the cumulative annual cost of a million idle youth at £125 billion, or nearly $168 billion—more than Britain spends on education each year."

"opportunity costs from lost revenue and economic potential."

"Steadily rising payroll taxes for employers—and a minimum wage that has increased by as much as 84% since 2019 for some younger age cohorts—are pricing young, inexperienced workers out of the job market." 

America Loses Its Will to Work

From the War on Poverty to ‘quiet quitting,’ we’ve stopped appreciating the value of honest labor

By Barton Swaim. Excerpts:

"Did the “war” bring victory? On the one hand, today’s poor live vastly more prosperous lives by any material measure than the poor of the 1960s. Talk of citizens living over or under a “poverty line” is meaningless, Mr. Eberstadt shows (Nicholas Eberstadt of the American Enterprise Institute), the de facto line having risen so dramatically upward—a fact that has little to do with government transfer payments and almost everything to do with rapid economic growth in the postwar period."

"Three decades after the War on Poverty began, congressional Republicans passed, and a Democratic president signed, the most sweeping reform yet made to America’s welfare state. The Personal Responsibility and Work Opportunity Reconciliation Act of 1996 conditioned the most important forms of direct welfare payments on employment or the search for employment. Opponents predicted disaster. New York Sen. Daniel Patrick Moynihan, formerly a critic of America’s welfare state, predicted that his colleagues who voted for the bill would “take this disgrace to their graves.” In fact, the reform succeeded. It moved millions off welfare rolls and into the labor market."

"The law mainly reformed Aid to Families With Dependent Children, which it renamed Temporary Assistance for Needy Families. But expansions and liberalizations of other safety-net programs in succeeding years have negated the gains made by the 1996 law."

"We’ve known for years about the slow flight of working-age men from gainful employment. Mr. Eberstadt’s “Men Without Work” (2016) documents in painful detail the moral and psychological costs of men leaving the labor force since the mid-1960s. New and frightening is the phenomenon of “disconnection” among the young, both male and female. About 1 in 7 Americans 18 to 24, according to a recent Rand study, are neither working nor looking for work. Many young people support a “universal basic income”—a government payment to every American, regardless of income or employment status." 

AI Titans Work Hard to Discourage Working

New studies demonstrate what should be obvious: Universal basic income programs kill initiative.

By Jason L. Riley. Excerpts:

"Weavers and bank tellers feared for their livelihoods at the time, but the Industrial Revolution led to significantly more hiring in the textile sector, and banks increased employment after ATMs were introduced."

"In recent years more than 150 basic-income pilot programs in 35 states have been initiated. One of the pilots, backed by Mr. Altman, began in 2020 and provided low-income participants in Texas and Illinois with $1,000 a month, while a control group received $50 a month. After three years of payments, researchers found that both groups worked slightly more—which may have resulted from the pilot’s starting during the pandemic and ending as the economy bounced back. But they also found that people who received $1,000 put in fewer hours on the job than people who received $50, suggesting that the higher payments provided a disincentive to work.

Last month, economist Kevin Corinth and Hannah Mayhew of the American Enterprise Institute released a survey of 122 basic-income pilots that took place between 2017 and 2025 in 33 states and the District of Columbia. They reported mixed results. Employment increased in some programs and decreased in others, and the role of the pandemic was difficult to assess.

The pilot programs varied “in their designs, data collection and study quality,” and only 30 of them provided employment outcomes. Hence, the authors counsel against sweeping policy conclusions based on the results. Most experiments were small, and the evaluations “rely exclusively on survey data and are thus subject to reporting bias and non-response bias.” Yet Mr. Corinth and Ms. Mayhew did find that the larger and more credible studies—such as the one Mr. Altman backed—showed that unearned income has a negative impact on a person’s willingness to work."

"President Lyndon Johnson’s War on Poverty in 1964 launched the modern social safety net"

"The welfare system attempted to replace family breadwinners, but it turned out that those breadwinners were providing more than money. The result of these government interventions was more broken homes, antisocial behavior and blighted neighborhoods." 

Understanding Demonic Policies (concentrated benefits and dispersed costs lead to an expensive welfare state)

By Alex Tabarrok. 

"Matt Yglesias has a good post on the UK’s Triple Lock, which requires that UK pensions rise in line with whichever is highest: wages, inflation, or 2.5 percent. Luis Garicano calls this “the single stupidest policy in the entire Western world” — and I’d be inclined to agree, if only the competition weren’t so fierce.

The triple lock guarantees that pensioner incomes grow at the expense of everything else, and the mechanism bites hardest when the economy is weakest. During the 2009 financial crisis wages fell and inflation declined, for example, yet pensioner incomes rose by 2.5 percent! (Technically this was under a double-lock period; the triple lock came slightly later — as if the lesson from the crisis was that the guarantee hadn’t been generous enough.)

Now, as Yglesias notes, if voters were actually happy with pensioner income growing at the expense of worker income, that would be one thing. But no one seems happy with the result. The same pattern is clear in the United States:

As I wrote in January, there is a pattern in American politics where per capita benefits for elderly people have gotten consistently more generous in the 21st century even as the ratio of retired people to working-age people has risen.

This keeps happening because it’s evidently what the voters want. Making public policy more generous to senior citizens enjoys both broad support among the mass public and it’s something that elites in the two parties find acceptable even if neither side is particularly enthusiastic about it. But what makes it a dark pattern in my view is that voters seem incredibly grumpy about the results.

Nobody’s saying things have been going great in America over the past quarter century.

Instead, the right is obsessed with the idea that mysterious forces of fraud have run off with all the money, while the left has convinced itself that billionaires aren’t paying any taxes.

But it’s not some huge secret why it seems like the government keeps spending and spending without us getting any amazing new public services — it’s transfers to the elderly.

The contradictions of “Elderism” are an example of rational irrationality. Individual voters bears essentially no cost for holding inconsistent political beliefs — wanting generous pensions and robust public services and low taxes is essentially free, since no single vote determines the outcome. The irrationality is individually rational and collectively ruinous. Voters are not necessarily confused about what they want; they simply face no price for wanting incompatible things. Arrow’s impossibility theorem adds another layer: even if each voter held perfectly coherent preferences, there is no reliable procedure for aggregating them into a coherent social choice. The grumpiness Yglesias documents may not reflect hypocrisy so much as the incoherence of demanding that collective choice makes sense — collective choice cannot be rationalized by coherent preferences and thus it’s perfectly possible that democracy can simultaneously “choose” generous pensions and “demand” better services for workers, with no mechanism to register the contradiction until the bill arrives."

Why Blaming Walmart and Amazon for Public Assistance Is Misguided

By Chris Freiman.

"With SNAP funding in the news, we’re seeing a revival of a familiar complaint against big business. The reason millions of Americans need public benefits like SNAP, critics say, is that their employers don’t pay them enough.

As one columnist recently put it, corporations “have taken advantage of Medicaid, food stamps, and other safety net programs for years to get out of paying their workers a living wage by sticking the taxpayers with the expense.” These corporations are to blame for people’s need for public assistance, and they should pay their workers more so that they’ll rely less on safety net programs funded by taxpayers.

But this complaint is morally confused. To see why, let’s start with a simple point: an employer is a buyer of labor. So when critics say that big corporations should raise their employees’ wages to the point where they don’t need public assistance, what they’re really saying is that corporations should pay more for what they buy. But we shouldn’t assume that merely buying something from someone obligates you to pay them so much that they never need public assistance, rather than simply paying them the mutually agreeable price.

Here’s an analogy. Scarlett likes to buy scarves from Wes on eBay. Whenever Wes lists a scarf for auction, Scarlett makes the highest bid. In short, she’s his best customer. But times get tough for Wes. He begins to struggle to pay rent and buy groceries. Scarlett keeps winning the auctions for Wes’s scarves and sending payments his way, but it’s not enough to keep him off SNAP.

Politicians and commentators learn about Wes’s situation and place the blame squarely on one person: Scarlett.

If only she had paid more than the auction price for his scarves, they argue, Wes wouldn’t need SNAP benefits. According to one columnist, “Scarlett is taking advantage of the government’s safety net to get out of paying Wes enough to live on and sticking taxpayers with the expense.”

The moral condemnation of Scarlett would be downright bizarre, and it’s not hard to see why. Remember, Scarlett is Wes’s best customer — she offers more for his scarves than anyone else. If anything, we should have the least complaint against her. She’s already given Wes thousands of dollars while other customers have given him less or nothing at all. Scarlett is doing more than anyone else to benefit Wes, so it’s strange to single her out for blame.

Now turn back to big businesses like Walmart and Amazon. Just as Scarlett is Wes’s best customer, so too is Walmart its employees’ best customer — that is, it made them the best offer for their labor.

We know this because if Walmart hadn’t made them the best offer, those employees would be working somewhere else instead. Workers accept the best offer for their labor just as weavers accept the best offer for their scarves. So, as with Scarlett, we should have the least complaint against Walmart, not the most. Other employers either made Walmart workers worse offers or made them no offer at all. Since Walmart is doing more than anyone else to benefit Walmart workers, it’s strange to single it out for blame.

You might reply that I’m overthinking things. The simple truth is that Walmart should pay its employees more because it can afford to pay them more. But this view assumes you’re obligated to pay more for something simply because you can afford to do so — and that’s a dubious assumption.

Think back to Scarlett. Suppose that she could afford to pay Wes more for his scarf than what turned out to be the winning bid. While it might be generous of her to do so, that seems more like charity than fulfilling an obligation. When someone sells you a scarf, a cup of coffee, a gym membership, or an hour of labor, you don’t thereby incur a duty to pay them whatever it takes to fix their personal finances. You simply owe them the agreed-upon price.

And that agreed-upon price isn’t arbitrary — it reflects supply and demand in the case of labor just as it does for anything else. A scarf sells at a price where someone is willing to buy it and someone else is willing to let it go. Labor is no different: wages settle where workers are willing to offer their time and employers are willing to buy it. If the wage is set too high, people will be less likely to hire workers; if it’s too low, people will be less likely to work.

Even if you insist that rich customers like Scarlett do have a moral obligation to pay Wes more for his scarves, it doesn’t follow that government officials should force her to do so. The mere fact that you should do something — be it paying more for a scarf, driving a good friend to the airport, or visiting your sick sibling in the hospital — doesn’t establish that it’s the government’s job to make you do it. Plus, forcing Wes to raise his prices would likely backfire: if the government required Scarlett and other customers to pay more for his scarves, they’d be less likely to buy them, leaving Wes even worse off than before.

The parallel to employers is clear. Even if you think that buyers of labor should pay more if they can afford to do so, it doesn’t follow that the state should make them. And here again, the proposed policy would probably backfire: by making workers costlier to hire, it would discourage employers from buying their labor at all — leaving them not with higher wages, but with no job. At the bare minimum, we should ensure that any policy intended to benefit workers doesn’t harm the very people it aims to help."

How a $30 Billion Welfare Program Became a ‘Slush Fund’ for States

Republicans and Democrats alike decry the lack of oversight for America’s famous antipoverty experiment. ‘Fraud by design.’

By Cameron McWhirter, Dan Frosch and Scott Calvert of The WSJ. Excerpts:

"Temporary Assistance for Needy Families, or TANF, has long been plagued by poor financial oversight and questionable spending in states led by both Republicans and Democrats.

"Auditors in numerous states . . . . have uncovered problems with TANF"

"TANF funds flow annually through block grants to states, which have wide latitude to spend them and minimal reporting requirements—a structure critics say hampers oversight."

"States now award most of the money to nonprofits, companies and their own state agencies. An average of about 849,000 families got direct cash aid each month in fiscal 2025, federal data shows, down from about 1.9 million in fiscal 2010."

"states inaccurately reporting large expenditures and disbursing millions of dollars to contractors without tracking how the cash was spent."

"states  . . . have directed hundreds of millions of dollars to programs with tenuous—or no—connections to TANF’s goals."

"college scholarships that benefited middle- or upper-income families, antiabortion centers, a volleyball stadium in Mississippi, and an Ohio job-training nonprofit where leaders and employees were later sentenced to prison after prosecutors said they used TANF money for vacations, real estate and salaries for people who didn’t work there."

"the GAO identified 37 states where recent audits found 162 deficiencies in financial oversight, “56 of which were severe.”"

"“opaque accounting practices”"

"States often use TANF money as a “slush fund” to plug budget shortfalls and finance initiatives that don’t help poor people"

"The most prominent scandal involving TANF funds, at least $77 million, took place several years ago in Mississippi."

"officials have often failed to track where the money goes or whether it is spent properly."

"Louisiana . . . state employees didn’t verify or document the hours worked by some TANF enrollees"

"hadn’t accurately documented TANF distributions to contractors."

"In Connecticut, auditors said the state in 2024 didn’t sufficiently review the financial reports of 131 subcontractors who received $53.6 million in TANF funds"

"states don’t have to spend all their TANF money in a single year, and many have built up large surpluses. In times of fiscal pressure, such as the 2007-09 recession, many states used TANF funds for purposes that had little to do with the program’s original goals"

"Several states have also used TANF money for programs available to people well above the poverty threshold.

Between 2011 and 2024, Michigan faced criticism for pumping more than $750 million in TANF funds into two college scholarship programs that aided many students from middle-income and even affluent families" 

Minnesota’s Fraud Problem Isn’t Immigrants

It’s the vast size of the welfare state that corrupts them

WSJ editorial, Excerpts:

"Cash payments. Minnesota offers a “working families” tax credit of up to $3,089 a year, which operates similar to the federal earned income tax credit (maximum of $8,046). Both credits phase out as incomes rise. Minnesotans can also claim a $1,750 refundable tax credit for each child, on top of the $2,200 federal credit. That’s $4,000 per kid.

Low-income Minnesotans can also qualify for a preloaded debit card to pay for incidental expenses. A single unemployed parent with two children can get $1,189 a month in additional cash payments. Minnesotans who work can get more cash, but the work incentive is undermined by the state’s other payments that phase out as paychecks grow."

"With so much money and so many programs, this vast system is an open vault for scammers—especially when politicians are loathe to police fraud because doing so might be called “racist” or “anti-poor.” But it’s also corrupting for beneficiaries who have an incentive to remain on the dole rather than build an independent life."

 

 

Minnesota Isn’t the Only Magnet for Welfare Malfeasance

Mamdani, take note: New York City’s social-service system is rife with abuse and mismanagement

By Kate Farmer of The WSJ. Excerpts:

"The city of New York, however, paid more than $800,000 for 4,902 room-nights to put up asylum-seekers in this hotel [Armoni Inn & Suites], some 30 miles north of downtown Manhattan. Yet no migrants ever stayed"

"New York . . . in 2023 gave mobile healthcare company DocGo a $432 million contract for migrant housing. Because Mayor Eric Adams had directed agencies to use emergency housing procurements, DocGo didn’t have to bid against any competitors. Although it had no prior experience providing housing or homeless services, DocGo received exclusive consideration."

"In the first two months . . . a comptroller audit found, $11 million of its $13.8 million in invoices were unsupported. Expenses included $1.7 million for nearly 10,000 nights of empty hotel rooms,  . . . more than $2 million for unauthorized security staff and caseworkers, and another $2 million in staff hours that were never recorded. . . . by the end of its 12-month term the city had paid the company $182 million."  

"All 51 nonprofits it [Department of Investigation] examined had at least one finding of misconduct. More than 80% had at least three; 30% had five or more. Examples included shelter insiders funneling millions to personal businesses; executive salaries of more than $700,000 a year" 

"“multiple instances” of new contracts being steered to vendors already profiting from existing contracts"

"she [Gov. Kathy Hochul] came under public fire in 2022 for granting a $600 million no-bid contract to a company whose founder was a longtime campaign fundraiser and donor" 

SNAP Has an Eligibility Loophole. Congress Needs to Close It.

By Romina Boccia and Tyler Turman of Cato.

"The Supplemental Nutrition Assistance Program (SNAP), formerly known as Food Stamps, served 41.7 million Americans and cost taxpayers $100 billion in fiscal year 2024.

Congress established firm income and asset limits to target households with the greatest financial need. Yet, states have found a way around these rules.

Through a policy called broad-based categorical eligibility (BBCE), states can bypass federal eligibility standards and draw down more federal dollars. The result: Millions of people are receiving SNAP benefits that Congress never intended.

Congress has so far failed to close this loophole, so United States Department of Agriculture (USDA) Secretary Brooke Rollins is considering taking action. But only legislation can fully restore SNAP’s eligibility standards. Representative Ben Cline’s (R‑VA) No Welfare for the Wealthy Act (H.R. 416) would require all households on SNAP to meet the program’s federal income and asset requirements.

How States Exploit Categorical Eligibility

Federal law provides two pathways to qualify for SNAP:

• Statutory eligibility: gross income at or below 130 percent of the federal poverty level (FPL)—$2,292 for the average two-person household—net income (gross income minus deductions for certain expenses) at or below 100 percent of FPL, and countable assets under $3,000 ($4,500 for elderly or disabled households).
• Categorical eligibility: automatic qualification for households receiving or authorized to receive benefits from other welfare programs, such as Temporary Assistance for Needy Families (TANF).

Congress made categorical eligibility a permanent feature of SNAP to reduce paperwork. But over time, the USDA stretched this authority to broaden SNAP far beyond Congress’s intent. The USDA currently recognizes three types of categorical eligibility:

• Traditional categorical eligibility: Households receiving specifically cash benefits from programs such as TANF are SNAP-eligible. Federal law requires states to implement this form of categorical eligibility. Eligibility requirements for TANF cash assistance are more restrictive than SNAP in many states.
• Narrow categorical eligibility: States can confer categorical eligibility through noncash TANF benefits, but these are primarily limited to services such as childcare or counseling.
• Broad-based categorical eligibility: States can make most, if not all, low-income households categorically eligible for SNAP if they receive or are authorized to receive minimal noncash TANF benefits or services. The USDA’s 2000 regulation allowed states to raise gross income limits up to 200 percent of FPL when determining eligibility for noncash TANF benefits aimed at reducing out-of-wedlock pregnancies or promoting two-parent families. In 2009, the USDA added that even pamphlets and hotline referrals could qualify as noncash TANF benefits. Another memo clarified that states could, in addition to raising gross income limits, also increase or eliminate asset limits for these noncash benefits through BBCE. By 2011, even notices of eligibility could count as a benefit. States that use BBCE are not required to impose net income tests, but households would still be subject to the gross income limit.

As of 2025, 43 states and the District of Columbia have seized the opportunity to grow their SNAP rolls at federal taxpayers’ expense by adopting BBCE. The Foundation for Government Accountability recently estimated that 5.9 million people are on SNAP through BBCE despite not meeting federal eligibility criteria. This costs taxpayers almost $11 billion in annual benefits.

Setting the Rules Straight

Congress nearly took a step toward eliminating BBCE during debate on the One Big Beautiful Bill Act (OBBBA), but Representative Michael Cloud’s (R‑TX) amendment to close the loophole was excluded from the final legislation.

The USDA now appears ready to act through regulation. A preliminary notice indicates that the department would limit categorical eligibility to “ongoing and substantial” benefits from TANF-funded programs “designed to assist households and move them towards self-sufficiency.” This would eliminate states’ ability to use BBCE to trigger SNAP eligibility for those beyond SNAP’s gross income and asset limits with “token TANF” benefits.

This would be an improvement, but it is not enough. Any changes that the USDA makes through regulation can be undone through regulation. Case in point: Trump’s USDA proposed reining in BBCE in 2019, but Biden’s USDA withdrew it in 2021. The No Welfare for the Wealthy Act would align SNAP eligibility with federal law without loopholes and, more importantly, establish durable boundaries that can be reversed only by another act of Congress, unlike agency regulations that can flip-flop with every administration.

Aligning Authority with Accountability

States’ abuse of BBCE has allowed people with six-figure assets, millionaires, and lottery winners to receive SNAP benefits. It should be abolished.

Defenders of BBCE argue that it gives states the necessary flexibility to adjust income and asset limits to reflect their local economic conditions. But SNAP is a program funded almost entirely by the federal government. Asking Uncle Sam for more “flexibility” in spending taxpayers’ money is akin to a teenager asking Dad for the “flexibility” to use his credit card.

The states are free to experiment with eligibility rules for welfare programs as they please—if they’re willing to pay for them. Congress can further empower states by devolving welfare programs and having them take more fiscal responsibility for how they are run. This would align authority with accountability and give states the flexibility to tailor their programs to local needs but with the fiscal incentive to manage them judiciously. Additionally, devolution would eliminate the perverse incentive states have to maximize enrollment through loopholes such as BBCE because the federal government would no longer be footing the bill.

However, some states may be ill-equipped to pay for their share of more than 40 million people’s SNAP benefits. Additionally, starting in FY 2028, many states may be on the hook to pay for part of their SNAP benefits if they have payment error rates above 6 percent due to OBBBA’s matching fund requirements. Since SNAP participants eligible through BBCE have been tied to disproportionately high payment error rates compared to other households, eliminating this policy could help states lower their improper payments and meet OBBBA’s requirements. More importantly, SNAP’s devolution to the states should begin with rightsizing the program by removing those who do not meet its statutory eligibility requirements. Congress should establish firm eligibility standards for SNAP, as Representative Cline’s No Welfare for the Wealthy Act would do."

Fast Facts About SNAP

By Romina Boccia and Tyler Turman of Cato. Excerpt:

"The Supplemental Nutrition Assistance Program (SNAP) served 41.7 million Americans on average each month at a cost of roughly $100 billion in fiscal year 2024. The program suffers from rising costs, lax eligibility enforcement, and significant waste due to misaligned incentives as a result of its near-total reliance on federal funding. SNAP’s inclusion in the Farm Bill—combining rural agricultural interests seeking more subsidies and nutrition assistance advocates seeking expanded benefits—makes enacting meaningful reforms to reduce spending difficult. This fact sheet lays out key details that legislators and the public should know about SNAP’s problems and potential reforms to align authority with responsibility by devolving nutritional assistance to the states.

SNAP spending has grown far faster than population increases, economic conditions, and unemployment rates would predict.

 

Reasons include:

• Benefit increases
  • The 2021 Thrifty Food Plan (TFP) reevaluation violated congressional spending authority and broke a 45-year precedent by allowing TFP to grow faster than inflation, increasing benefits by 21 percent. The Committee for a Responsible Federal Budget estimated that the reevaluation would add $180 billion to the deficit over FY 2022–2031.
• Loosened eligibility standards
  • State SNAP policies, including loosened eligibility and simplified reporting requirements, accounted for nearly half of SNAP’s caseload increase from 2000 to 2016.
  • Federal SNAP guidelines limit eligibility to households with gross monthly incomes at or below 130 percent of the federal poverty level (FPL)—$2,292 for a family of two, the average SNAP household size—and countable assets less than $3,000 ($4,500 for households with elderly or disabled).
  • According to 2025 estimates from the Foundation for Government Accountability (FGA), over 5.9 million people enrolled in SNAP through broad-based categorical eligibility (BBCE) did not meet the program’s eligibility requirements. Thirty-eight states use BBCE to abolish asset limits, and 35 have raised gross income limits above federal rules, with 27 setting the limit at 200 percent of FPL. In 2023, the FGA estimated: Four million had assets above federal limits, and 1.4 million had incomes above federal limits.
• Poorly enforced verification protocols
  • The 1996 welfare reforms required able-bodied adults without dependents (ABAWDs) to participate in a qualifying employment/​training program for at least 80 hours/​month.
  • Per FGA, roughly four million ABAWDs were on SNAP in 2023. Policies, including geographic waivers, allowed most states to shirk work requirements. In 2022, 84 percent of ABAWD SNAP recipients didn’t meet work requirements through employment.
  • The One Big Beautiful Bill Act (OBBBA) expanded work requirements for most ABAWDs from ages 18–54 to 18–64, restricted geographic waivers, removed or tightened most exemptions, and imposed stricter verification requirements.

SNAP’s top-down financing structure contributes to poor health outcomes, encourages widespread waste, and stifles innovation.

• States rely almost entirely on the federal government to fund SNAP. Although states are responsible for half of SNAP’s administrative costs, they pay nothing to provide benefits, which account for over 90 percent of the program’s total costs.
• SNAP’s financing model gives states little financial incentive to reduce improper payments.
• The US Department of Agriculture (USDA) reported in 2015 that 42 of 53 state agencies had weakened their quality control procedures, which artificially lowered reported improper payment rates. Consequently, the USDA suspended reporting of payment error rates for 2015 and 2016.
• Average improper payments have almost tripled from 3.66 percent in FY 2014 to 10.93 percent in FY 2024.
• A 2016 USDA study found that one in five SNAP purchases were for sweetened drinks, desserts, salty snacks, candy, and sugar. SNAP participants have poorer nutrition and higher rates of obesity compared to nonparticipants.
• As of December 2025, the USDA has granted 18 states waivers to restrict the purchase of items such as soda and candy. These changes will be implemented throughout 2026. Federal rules restrict states from setting their own nutritional standards without a waiver.
• By bundling SNAP with agricultural subsidies in the Farm Bill, Congress has created a durable political coalition of nutrition assistance advocates and farm interests, making cost-control reforms difficult. This is a textbook case of logrolling that shields both programs from accountability, transparent debate, and reform.
• OBBBA reduced the federal share of administrative costs from 50 percent to 25 percent (effective FY 2027) and required states with payment error rates above 6 percent to pay a portion of SNAP benefit costs (ranging from 0 percent to 15 percent, effective FY 2028)." 

Further reading:

• “The SNAP Loophole that Lets Millionaires Receive Food Stamps” by Romina Boccia and Tyler Turman
• “How Biden’s Thrifty Food Plan Change Broke SNAP’s Cost Controls” by Romina Boccia and Tyler Turman
• “Food Stamp Shutdown Reveals the Fragility of Federal Welfare” by Romina Boccia and Tyler Turman
• “SNAP: High Costs, Low Nutrition” by Chris Edwards

Download a printable PDF version of this fact sheet here.

 

What’s the Matter With Scotland?

Novelist Allan Massie ponders how the birthplace of Adam Smith and Walter Scott declined into a depressing culture of dependence, passivity and stagnation.

By Barton Swaim. Excerpts:

"Scottish voters in the late 20th century, though culturally conservative, mostly despised Margaret Thatcher and found heavy-handed economic and social policies far more attractive than their English counterparts did. Why? “The Scottish economy at the end of the 19th century was a powerhouse, but it rested on industries that went elsewhere—shipbuilding, heavy machinery, iron and steel and so on.”

These industries largely collapsed after World War I, re-emerged during the next world war, then died again—leaving mass unemployment and a widespread suspicion of capitalism and deregulation. “From the 1960s or 1970s on, the only thought was of the collective” in Scotland. “Only the state could turn things around, only communal action,” Mr. Massie says. “Thatcher was all about individualism. Scotland was—this was the thinking—about the collective, the state.”

The consequence, decades later, was a culture marked by dependency. “A much greater proportion of people in Scotland in the 1970s lived in public housing—schemes they’re called—than elsewhere in . . . the free countries of Europe.” A lot of state intervention was understandable, given the economic realities, Mr. Massie judges, but “it did much to harm the Protestant work ethic that had once been so important in Scotland.”"

"there isn’t a single serious intellectual magazine or book review published in Scotland. An amazing fact, inasmuch as Scotland produced the first important book review: the Edinburgh Review, founded in 1802."

"modern European proponents of welfare-state liberalism likened to a dying class of 19th-century hereditary nobles, confident in their rightness and desperate to rest. The socialist outlook—I use the word in the broadest sense—may inspire struggle in the immediate present, but the practical goal is tranquility, perpetual rest in an equality of outcomes: an attitude not so different from that of a predemocratic, precapitalist European noble hoping to keep his subjects more or less content with little gifts from his largess."

"“Things are not getting better, they’re getting worse.”" 

The Adverse Consequences of High-Tax Welfare States

From Dan Mitchell.

"Honest leftists (the “Okunites“) generally acknowledge that laissez-faire policies deliver more growth, but they nonetheless favor high taxes and redistribution because they argue that social equality matters a lot.

However, according to this chart, there’s a negative relationship between bigger government and social welfare indicators such as health, education, unemployment, and exclusion.

 

Looking specifically at labor markets, you see a negative relationship between bigger government and good results.

This holds true even for workers with only a basic level of education.

 

The two charts come from a new book (available online for free from the London-based Institute of Economic Affairs) by Nina Sanaddaji and Stefan Stefan Fölster.

Here’s how the authors summarize their findings.

A group of low-tax countries has moved to the top in terms of most measures of welfare quality, surpassing high-tax countries such as the Nordics. is is relevant, not least since for a long time the Nordic high-tax models were considered internationally as the best model for welfare delivery. Yet even the Nordic social and economic success was built during periods of low taxes, and stagnated in relative terms after shifting to high taxes. …At the core of this book is a systematic analysis of the available statistical measures that capture the quality of welfare in higher-income countries. …In the overall ranking, Switzerland, Japan and South Korea occupy the top spots. All of these are low-tax coun tries, with a tax burden between 26 and 32 per cent of GDP. By comparison, a high-tax country like Sweden now ranks 12th in terms of overall welfare, …Low taxes are not sufficient on their own to ensure good welfare outcomes.

Given my interests, I especially liked Chapter 7, which investigated the relationship between economic performance and the size of government.

The authors did something I haven’t seen before, which is to measure that relationship by decade.

For what it’s worth, the strongest link was during the 1980s, which may have been caused by both convergence among Asian nations and the pro-growth policies of Thatcher and Reagan.

 

The relationship was still there, albeit not as strong, in the first decade of this century. 

 

At this point, we’re probably looking at a few examples of anti-convergence.

And we’re definitely looking at more evidence that small government is the best way to deliver more prosperity. And to deliver better results for the less fortunate members of society.

That’s the good news. The bad news is that average growth rates for everyone are lower, which is almost surely due to the fact that public policy has moved in the wrong direction this century."

Why Blaming Walmart and Amazon for Public Assistance Is Misguided

By Christopher Freiman.

"With SNAP funding in the news, we’re seeing a revival of a familiar complaint against big business. The reason millions of Americans need public benefits like SNAP, critics say, is that their employers don’t pay them enough.

As one columnist recently put it, corporations “have taken advantage of Medicaid, food stamps, and other safety net programs for years to get out of paying their workers a living wage by sticking the taxpayers with the expense.” These corporations are to blame for people’s need for public assistance, and they should pay their workers more so that they’ll rely less on safety net programs funded by taxpayers. 

But this complaint is morally confused. To see why, let’s start with a simple point: an employer is a buyer of labor. So when critics say that big corporations should raise their employees’ wages to the point where they don’t need public assistance, what they’re really saying is that corporations should pay more for what they buy. But we shouldn’t assume that merely buying something from someone obligates you to pay them so much that they never need public assistance, rather than simply paying them the mutually agreeable price. 

Here’s an analogy. Scarlett likes to buy scarves from Wes on eBay. Whenever Wes lists a scarf for auction, Scarlett makes the highest bid. In short, she’s his best customer. But times get tough for Wes. He begins to struggle to pay rent and buy groceries. Scarlett keeps winning the auctions for Wes’s scarves and sending payments his way, but it’s not enough to keep him off SNAP.

Politicians and commentators learn about Wes’s situation and place the blame squarely on one person: Scarlett.

If only she had paid more than the auction price for his scarves, they argue, Wes wouldn’t need SNAP benefits. According to one columnist, “Scarlett is taking advantage of the government’s safety net to get out of paying Wes enough to live on and sticking taxpayers with the expense.” 

The moral condemnation of Scarlett would be downright bizarre, and it’s not hard to see why. Remember, Scarlett is Wes’s best customer — she offers more for his scarves than anyone else. If anything, we should have the least complaint against her. She’s already given Wes thousands of dollars while other customers have given him less or nothing at all. Scarlett is doing more than anyone else to benefit Wes, so it’s strange to single her out for blame. 

Now turn back to big businesses like Walmart and Amazon. Just as Scarlett is Wes’s best customer, so too is Walmart its employees’ best customer — that is, it made them the best offer for their labor.

We know this because if Walmart hadn’t made them the best offer, those employees would be working somewhere else instead. Workers accept the best offer for their labor just as weavers accept the best offer for their scarves. So, as with Scarlett, we should have the least complaint against Walmart, not the most. Other employers either made Walmart workers worse offers or made them no offer at all. Since Walmart is doing more than anyone else to benefit Walmart workers, it’s strange to single it out for blame. 

You might reply that I’m overthinking things. The simple truth is that Walmart should pay its employees more because it can afford to pay them more. But this view assumes you’re obligated to pay more for something simply because you can afford to do so — and that’s a dubious assumption. 

Think back to Scarlett. Suppose that she could afford to pay Wes more for his scarf than what turned out to be the winning bid. While it might be generous of her to do so, that seems more like charity than fulfilling an obligation. When someone sells you a scarf, a cup of coffee, a gym membership, or an hour of labor, you don’t thereby incur a duty to pay them whatever it takes to fix their personal finances. You simply owe them the agreed-upon price. 

And that agreed-upon price isn’t arbitrary — it reflects supply and demand in the case of labor just as it does for anything else. A scarf sells at a price where someone is willing to buy it and someone else is willing to let it go. Labor is no different: wages settle where workers are willing to offer their time and employers are willing to buy it. If the wage is set too high, people will be less likely to hire workers; if it’s too low, people will be less likely to work.

Even if you insist that rich customers like Scarlett do have a moral obligation to pay Wes more for his scarves, it doesn’t follow that government officials should force her to do so. The mere fact that you should do something — be it paying more for a scarf, driving a good friend to the airport, or visiting your sick sibling in the hospital — doesn’t establish that it’s the government’s job to make you do it. Plus, forcing Wes to raise his prices would likely backfire: if the government required Scarlett and other customers to pay more for his scarves, they’d be less likely to buy them, leaving Wes even worse off than before. 

The parallel to employers is clear. Even if you think that buyers of labor should pay more if they can afford to do so, it doesn’t follow that the state should make them. And here again, the proposed policy would probably backfire: by making workers costlier to hire, it would discourage employers from buying their labor at all — leaving them not with higher wages, but with no job. At the bare minimum, we should ensure that any policy intended to benefit workers doesn’t harm the very people it aims to help."