When Americans think of food stamp recipients, images of desperate lower-income Americans typically come to mind. Taxpayers desperately want to believe that their hard-earned dollars are helping poor people struggling to make ends meet with welfare benefits helping them get the vital nutrients they need to stay alive. Imagine the outrage, then, as taxpayers find out that some of the people on food stamps are in fact millionaires.
Because of a bizarre loophole in how food stamps (formally known as the Supplemental Nutrition Assistance Program or SNAP) are administered by states, millionaires — or even billionaires — can receive food stamps. A loophole allows bureaucrats to simply ignore federally mandated asset requirements. As a result, an estimated 3.1 million to 5 million people currently on food stamps shouldn’t be receiving this welfare benefit. Taxpayers deserve better than having to share their paychecks with well-off Americans who are unlikely to be in want of a meal.
Federal loopholes often have a Kafkaesque quality to them, creating stranger-than-fiction situations that would be hilarious if they weren’t costing taxpayers billions of dollars annually. The puzzling policy was born out of the 1990s welfare reform package, which was designed to streamline efficiency and prevent people from having to reapply for multiple welfare programs. The changes stipulated that anyone receiving assistance from the Temporary Assistance for Needy Families welfare program was also eligible for food stamps.
This made sense at the time when policymakers were laser-focused on reducing the administrative costs of the program and keeping the application process easy. But now, the 1990s are a faint memory, and welfare programs have morphed out of control. In particular, the TANF program has been expanded to the point that that the mere act of receiving a brochure or calling a toll-free number funded by a TANF program now counts as receiving a benefit from TANF. And receiving a TANF benefit makes citizens automatically eligible for food stamps often without any consideration of assets. In 36 states, rules don’t require bureaucrats to ensure that recipients’ assets aren’t too high to receive SNAP benefits.
This gargantuan oversight gap leads to all sorts of ludicrous situations. Leroy Fick received food stamps , even after winning $2 million in the Michigan State Lottery. Fick used his winnings to buy a new home and an Audi convertible, all while continuing to receive SNAP benefits.
Because the food stamp program is paid for by the federal government, but TANF benefits are distributed by the states, there is little or no incentive for states to behave with any accountability. This mismatch has resulted in wacky situations where TANF-funded family planning brochures have been distributed by one state simply to confer SNAP auto-eligibility onto eager recipients.
Fortunately, taxpayers may soon get a respite from this ludicrous loophole. The Trump Administration is finally looking into fixing this SNAP-fu, tweaking the rule so that a person can only cross-qualify if welfare benefits they are receiving under TANF are “substantial and ongoing.” By replacing the “one phone call or one brochure and you’re in” system, this proposed rule change is set to save taxpayers close to $10 billion over the next five years.
Taking advantage of the SNAP loophole is theft, pure and simple, not only from taxpayers but also from genuinely needy Americans. Reform proposals are not only common sense, but the only fair way to ensure that the SNAP program sticks around for the people who truly need it. All advocates for the less-fortunate should celebrate a much-needed change that saves taxpayers billions of dollars and helps the needy get food on the table.
Tim Andrews is the executive director for the Taxpayers Protection Alliance.