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Policy: Entitlements

Bigger food stamp program means more lost to waste, fraud

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Watchdog,Watchdog Blog,Michal Conger,Agriculture,Federal Budget,Entitlements,Waste and Fraud,Accountability,Follow the Money

At first glance, the most recent Department of Agriculture data on food stamp overpayments for 2012 looks like good news, since, while holding steady at 3.42 percent, the error rate has been at historically low levels for the past three years.

But what the numbers obscure is how much money that seemingly small error rate represents — more than $2 billion in wasted taxpayer money in 2012.

The Supplemental Nutrition Assistance Program, formerly known as food stamps, paid $74.6 billion in 2012 to a record high of 46.6 million beneficiaries, according to USDA data. More than one in seven Americans are on food stamps.

"This [error rate] is a repeating pattern of success. Over the last nine years, the payment accuracy rate has been above 94 percent — originally considered a benchmark of success — and we are consistently improving each year," said USDA Under Secretary for Food, Nutrition and Consumer Services Kevin Concannon in a June statement.

The problem is that even as the error rate has gone down, the number of people on food stamps has soared, meaning the amount of tax dollars lost to waste and fraud has gone up. In 2009, 28 million people were on food stamps, almost 20 million people fewer than were enrolled in 2012.

Policy changes have contributed to the historically low error rate, according to Harvard University and Government Accountability Office studies. The 2009 stimulus bill changed income reporting and eligibility requirements, as well as what qualifies as an improper payment.

Forty-three states, for instance, have dropped the asset test, and fewer rules means fewer errors, according to the GAO. States' efforts to reduce improper payments have also helped, according to a GAO spokeswoman.

Regardless of the reason for the lower numbers, $2 billion is still too much taxpayer money wasted, Megan Whittemore, spokeswoman for House Majority Leader Eric Cantor, R-Va., told the Washington Examiner.

"Given the size of the SNAP program even a nominally 'low' error rate wastes billions of taxpayer dollars annually," the Cantor spokeswoman said.

Cantor has been vocal about the need for tightening eligibility requirements for the program, including employment and job training requirements, which President Obama weakened in 2012.

And the USDA has been aggressively promoting increased enrollment in the program. The department ran hundrreds of radio ads in 2012 encouraging people to enroll. It appears to have worked: Enrollment rose in 2012 in all but 5 states, Washington D.C., Guam and the Virgin Islands.

"As the economy continues to recover, we will see participation decline," a USDA spokesman said. "The best way to do that is to continue putting people back to work so they don't need SNAP anymore or need less of it to put food on the table for their family."

The national average also hides much larger overpayment rates in some states. Rhode Island had the highest error rate, overpaying 6.5 percent of its beneficiaries. In a tiny state with only 172,000 people receiving benefits, the high error rate still meant $18 million in wasted taxpayer funds.

Missouri, with the next-highest overpayment rate, overpaid $94 million to its 948,000 beneficiaries.

Some states overpaid by much more because of the sheer number of people enrolled. New York, with more than 3 million enrollees, overpaid by almost 238 million. California, with more beneficiaries but a lower error rate, overpaid by $212 million.

Nine states were even paid for having low error rates. Florida, one of the seven highest-spending states, received an accuracy bonus of $8 million for its 0.77 percent error rate, which includes both overpayments and underpayments.

Overpayments happen when beneficiaries file incorrect information or their state agency incorrectly calculates their benefits, according to a USDA spokesman.

After a temporary boost to SNAP benefits through President Obama's economic stimulus program in 2009 expires in November, spending will be cut by about $5 billion in 2014.

Even as the administration points to improving job numbers as evidence of economic recovery, Democrats in Congress strongly oppose what they view as the "severe" SNAP spending cuts sought by House Republicans. A proposal by House Republicans would cut the program by $40 billion over 10 years, while a farm bill that passed the Senate in June would cut SNAP by about $4.5 billion over 10 years.

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