Food Stamp Program Loses $1 Billion Every Month to Alleged Fraud, Errors: Sen. Ernst

A sign alerting customers about SNAP food stamps benefits at a Brooklyn grocery store in New York on Dec. 5, 2019. Scott Heins/Getty Images

The U.S. food stamp program is losing about $1 billion a month because of alleged fraud and errors, Sen. Joni Ernst (R-Iowa) has said.

The lawmaker made the claim in a Sept. 26 statement that announced new legislation aimed at combating the alleged billions of dollars in monthly losses from the U.S. Department of Agriculture’s (USDA) Supplemental Nutrition Assistance Program (SNAP), which allows low-income families with benefit cards to buy basic food items at approved grocery stores.

Known as the “Snap Back Inaccurate SNAP Payments Act,” the legislation would slash spending by nearly $1 billion a month by ensuring that all errors—regardless of the amount—be counted.

The proposal also would direct state governments to stop handing out benefits to people who aren’t eligible, require states to pay back what they owe, and direct states to recollect SNAP overpayments, ensuring that each household receives only exactly what it is eligible for.

Additionally, the legislation will hold states accountable for payment error rates to incentivize better management of funds and will improve the accuracy of SNAP payment error rates by requiring all errors to be reported.

The number of Americans enrolled in the SNAP program increased to 41.2 million in 2022 from 35.7 million in 2019, according to data released earlier this year by the USDA.

Meanwhile, SNAP costs rose to a record $119.5 billion in 2022 from $60.3 billion in 2019, the year before the COVID-19 pandemic.

Sen. Joni Ernst (R-Iowa) speaks at a Senate Republican news conference in the U.S. Capitol in Washington on March 9, 2022. Anna Moneymaker/Getty Images

States Must ‘Pay the Piper’

However, Ms. Ernst said seven states—Florida, Virginia, Wisconsin, Texas, Louisiana, Alaska, and Mississippi—have “intentionally manipulated” the amount of SNAP payments they were making to residents and ultimately pocketed $60 million.

The Justice Department has since settled those allegations of improper manipulation of the SNAP program with various state agencies and recovered more than $60 million in connection with its investigation.

“Families across the country are going hungry while bureaucrats are jumping the line to gobble up SNAP dollars, either as a meal ticket to beef up state budgets or a self-serve buffet of benefits for themselves or others who do not qualify,” the senator said in the Sept. 26 statement. “I’m snapping back! It’s time for states at fault to pay the piper and eat the costs of their taxpayer waste. Instead of overserving bureaucrats, let’s end the waste and set a place at the table for hungry families.”

The Iowa Republican said that most of the errors from the food stamp program are overpayments or benefits paid to recipients who aren’t actually eligible to receive them.

In June, the USDA reported that states had an overpayment error rate of 9.84 percent.

In 2022, there were about $11.2 billion in overpayments reported; however, the exact number is unknown because the USDA excludes errors totaling $54 or less.

Speaking to The Washington Times, Ms. Ernst said the state of Maryland is one of the worst offenders, paying out benefits to more than 86,000 residents who didn’t qualify for the SNAP program. Despite the error, the state has “no plans” to try to get the money back, citing the COVID-19 pandemic, she said.

People shop for bread at a supermarket in Monterey Park, Calif., on Oct. 19, 2022. Frederic J. Brown/AFP via Getty Images

Benefit Fraud Cases on the Rise

In recent years, an increasing number of fraud cases relating to food stamps or other federal programs, particularly in the form of organized schemes run by those actually running such programs, have also been prosecuted across the United States.

In Delaware, for instance, seven people employed by the Department of Health and Social Services and responsible for issuing Electronic Benefit Transfer cards stole nearly $1 million in federal food benefits. In Florida, two owners of a convenience store allegedly ran a food stamp scam amounting to about $88,000.

Just last week, a Romanian national was sentenced to 24 months in federal prison and ordered to pay $2,980 in restitution after pleading guilty to swiping Los Angeles County food and assistance payments from legitimate beneficiaries.

Fraud and errors relating to food assistance programs aren’t the only problems.

The SNAP abuse is part of about $3 trillion—more than the annual gross domestic product of France—in improper payments made by federal agencies since 2004, according to Adam Andrzejewski, founder and CEO of watchdog organization Open the Books.

Among the “worst offenders” are the departments of Health and Human Services, Treasury, Labor, and Education and the Small Business Administration (SBA), according to Open the Books, although the SBA has insisted that its accuracy rates are “high.”

“This is the definition of a dinner-table issue. Senator Ernst has identified a kind of improper payment that strikes right at the heart of an American’s life—their need to feed themselves and their families nutritious foods,” Mr. Andrzejewski said in a statement. “While we’ve demonstrated that fraud runs rampant across government, stealing right from our plates is an especially pernicious way to make your ill-gotten gains.”