Incentives matter when it comes to food stamp reforms

President Donald Trump's One Big Beautiful Bill, passed last summer, includes provisions reforming the arrangement between the feds and the states as it pertains to the Supplemental Nutrition Assistance Program. The move seeks to reduce waste and to ensure only those who truly need assistance receive help.

For decades, Washington has fully funded the benefits, while splitting overhead costs with the states. Many states, often blue ones, responded over the years by easing eligibility requirements, particularly during COVID. Why not? They incur none of the payment costs.

“States have also let illegal aliens get food stamps while refusing to clean their rolls of the dead and incarcerated, lottery winners and others who aren't eligible,” Paige Terryberry, a senior research fellow at the Foundation for Government Accountability, wrote in October for The Wall Street Journal. “It didn't help that Washington gave states a two-year reprieve from food-stamp reporting during the pandemic.”

Beginning in October, however, states will take on an additional 25 percent of administration expenses. Eventually, they'll also be responsible for certain payment costs if they don't keep their error rates at a reasonable level. Under the new law, Ms. Terryberry notes, states with error rates of 6 percent to 8 percent will be responsible for 5 percent of the state's benefit costs. The higher the improper payment rate, the bigger the financial hit.

Nevada had an error rate of 5.94 percent for fiscal 2024, one of the better performances in the nation. Alaska, Oregon, New York, Florida and Georgia exceeded 15 percent. These mistakes cost more than $10 billion a year, governing.com reports. How was that acceptable?

Not surprisingly, “state agencies and budget offices have quickly coalesced around a top priority: reducing SNAP payment error rates,” Pew Research Center reported. Nevada officials have ramped up efforts to confirm eligibility, even contracting out with two private firms to reduce error rates.

In other words, the legislation is having the desired effect.

Forcing states to become more cost-conscious also provides motivation for state officials to enforce rather than water down work requirements for the able-bodied, nudging them on a more productive path and away from government dependency. “Work is the single best way to limit, and ultimately eliminate, wasteful spending — to say nothing of giving the economy a big infusion of desperately needed workers,” Ms. Terryberry wrote.

Spending millions on ineligible recipients only diverts resources from those most in need. The nation is on an unsustainable financial path. The SNAP reforms, properly implemented, represent a reasonable middle ground between fiscal responsibility and compassion.

(COMMENT, BELOW)