The threat of financial penalties has states scrambling to clean up their food stamp programs. For this, the White House deserves applause.
President Donald Trump’s One Big Beautiful Bill Act features a number of worthwhile reforms, including a provision that imposes penalties on states that tolerate fraud in U.S. Department of Agriculture’s Supplemental Nutrition Assistance Program.
According to the agency’s own figures, more than 10 percent of the money devoted to the program is wasted on “improper” payments, the vast majority of which went toward overpayments. The program cost $101.7 billion in fiscal 2025 — the feds pay for it, while the states administer it — meaning more than $10 billion went up in smoke.
The new provisions, passed last year, go into effect next year. States with error rates higher than 6 percent — Nevada was most recently at 6.22 percent — will lose a portion of their federal funding for food stamps, forcing them to pick up the difference. Only nine states made the grade in fiscal 2025.
The error numbers confirm “what has long been true: SNAP is structurally prone to waste, fraud and abuse, and the states running it have too little financial incentive to fix it,” Romina Boccia and Tyler Turmin, budget policy experts at the Cato Institute, wrote recently.
States have until the end of September to lower their error rates. Penalties will be calculated using a sliding scale, with the worst offending states facing the highest penalties. Nevada is likely to face only a minimal penalty, if any.
Unsurprisingly, state bureaucrats in Nevada and elsewhere are warning of deep “cuts” and hardships once the provision becomes law. The head of New Jersey’s Department of Human Services has even called on Congress to repeal the financial penalties, Reason magazine reported, arguing it creates “real uncertainty for states and benefit recipients alike” and won’t do anything to “meaningfully address waste, fraud and abuse.”
Yet the latter is demonstrably false. The law has quickly forced agencies to take a closer look at how they administer such programs. In Nevada, for instance, new computer systems are intended to catch practices associated with fraud or mismanagement, as are more stringent documentation policies. Even in New Jersey, Reason reported, error rates fell by more than half over the past year thanks to reforms implemented in the wake of the federal law.
Ensuring that taxpayer money is used wisely and efficiently should be the goal of every elected official. Yet over the past 12 years, the food stamp error rate went from 3.2 percent to nearly 11 percent, all as eligibility standards were relaxed, particularly during the pandemic. Give the White House credit for implementing a more fiscally responsible course.
