Many states are “gaming” entitlement programs that involve state-federal partnerships to maximize the number of federal dollars flowing to the states while minimizing their own input, senators said this week.
The ploys involve a tendency for entitlement programs to make receiving one entitlement a ticket to receive another: If a person is on food stamps, for example, he’s automatically eligible for a free cellphone. Some states and recipients have learned that by gaining a foothold via a program with lax requirements or low cost, the recipient can open the door to greater federally funded benefits from other programs.
Seventeen states have devised shell implementations of one the Low-Income Home Energy Assistance Program to boost the amount of federally funded food stamp dollars their food stamp, or Supplemental Nutrition Assistance Program, recipients receive.
Being on the low-income program, because it is presumably an indicator of poverty, triggers an increase in the number of dollars a food stamp recipient receives each month. So states have taken to paying token amounts in the program, such as $1 a year, so that recipients’ allotment of food stamp dollars will increase an average of $1,080 annually.
“These 17 states designed their programs to exploit the food stamp program. This is not right,” Sen. Pat Roberts, Kansas Republican, said Tuesday on the Senate floor.
Mr. Roberts and others this week introduced a bill that would save $12 billion by removing that loophole. The bill also addresses another gimmick stemming from “categorical eligibility” language that says receiving services under Temporary Assistance for Needy Families, or welfare, makes one eligible for food stamps.
States have taken to handing those who want food stamps a brochure about welfare, and counting the act of receiving a free piece of paper as a “service” — suddenly making them eligible for food stamps.
“Forty-two states are exploiting an unintended loophole and simply provid[ing] informational brochures and informational 1-800 numbers to maximize the food stamp enrollment and the corresponding increase in federal food benefits. These states are gaming the system to bring otherwise ineligible [food stamp] participants into the program,” Mr. Roberts said.
Eliminating that loophole by clarifying that the welfare relationship refers to those actually receiving welfare would save $11.5 billion, he said.
Federal policy also encourages states to push people onto food stamps by giving out $48 million in cash bonuses, which can be spent on anything, to states with “best program access” and other distinguishments.
“How many more people signed up for [food stamps] compared to the previous year? So if you sign up more people than you signed up last year, well, you get an award,” Mr. Roberts said.
Even as many states sought to cash in on the federally funded programs, a slew of crackdown bills have come from statehouses across the country in recent weeks, including:
Last month, an Oklahoma lawmaker proposed that childless adults may receive food stamps only if they are engaged in 35 hours a week of work-related activity, including education or assisted job searches.
Last week, the Illinois legislature took up a bill to cross-reference its prison inmate database with food stamp recipients and strip them of their food stamps.
Also last week, Illinois also took up a proposal to hire an independent auditor to look at its food stamp and welfare programs, focusing on “fraud and inefficiencies.”