The Trump administration unveiled a proposed rule last week which could remove up to 27,000 Wisconsin households and 61,000 individuals from food-stamp eligibility, with the U.S. Department of Agriculture (USDA) taking aim at those who qualify for benefits under so-called categorical eligibility rules.
The USDA said the rule would close what it called a categorical eligibility loophole which allows states to make participants receiving minimal Temporary Assistance for Needy Families (TANF) benefits, or welfare, automatically eligible to participate in USDA's Supplemental Nutrition Assistance Program (SNAP), otherwise known as food stamps.
Those benefits are often nominal. The USDA says benefits may be as minimal as simply providing a household with an informational brochure describing social services or access to hotline numbers, and are often given without conducting other eligibility determinations, such as income and asset levels.
In announcing the rule, the USDA cited the example of a Minnesota millionaire who successfully enrolled in the SNAP program simply to highlight the waste of taxpayer money. That millionaire, Rob Undersander, received food stamp benefits for 19 months by using an eligibility loophole which did not check his assets.
A report prepared for the USDA in 2008 found that even then, while a large majority of income-eligible households had low levels of countable assets, more than 5% had more than $50,000 in countable assets. As U.S. Rep. Mark Meadows (R-North Carolina) observed, one in five income-eligible households had more than $100,000 in assets.
U.S. Secretary of Agriculture Sonny Perdue said the new proposal would give the USDA the ability to save billions of dollars, while ensuring that nutrition assistance programs are delivered with consistency and integrity to those most in need.
"For too long, this loophole has been used to effectively bypass important eligibility guidelines," Perdue said. "Too often, states have misused this flexibility without restraint. The American people expect their government to be fair, efficient, and to have integrity - just as they do in their own homes, businesses, and communities. That is why we are changing the rules, preventing abuse of a critical safety net system, so those who need food assistance the most are the only ones who receive it."
How to qualify
Specifically, individuals can qualify for SNAP benefits in one of two ways.
First, they can qualify if they meet income and resource limits specified in federal law, which sets income limits at 130% of the federal poverty level and have no more than $2,250 in the bank.
The value of a home is not counted as an asset, and states may also exclude the value of certain assets, such as the value of a household vehicle.
Second, individuals may qualify for SNAP benefits automatically if they have been determined to be eligible for other public assistance programs, which is the categorical eligibility determination. It is this method of eligibility that the proposed new rule targets.
As of 2019, 40 states, including Wisconsin, provided for categorical eligibility. In some states, those "benefits" are nothing more than receiving brochures or a referral to a job service or human services department from the state.
In Wisconsin, a person with gross income up to 200% of the federal poverty level may qualify for food stamps by receiving a referral to Job Center of Wisconsin employment services or a Department of Workforce Development job search program, according to a 2018 Legislative Fiscal Bureau memo.
Under the proposed rule, to confer automatic eligibility, a household must receive welfare-funded cash or non-cash benefits valued at a minimum of $50 per month for at least six months. In addition, non-cash benefits that could convey automatic eligibility would be restricted to subsidized employment, work supports, or child care.
The USDA says the rule would also improve consistency and equity between states by ensuring uniform eligibility among individuals and families in similar circumstances, no matter where they live.
Right now, the USDA states, expanded categorical eligibility replaces that principle with a patchwork of eligibility rules across the country.
"This proposal helps to ensure that eligibility for SNAP is consistent from state-to-state, and better aligns SNAP with other federal benefit programs," the USDA stated.
By establishing clear standards and requiring that benefits be ongoing and substantial, Perdue said the proposal would ensure that SNAP benefits go toward Americans most in need.
The USDA estimates that 3.1 million SNAP participants in 2020, or about 8% of the total, are expected to be eligible for benefits only because of their state's adoption of expanded categorical eligibility policies.
That percentage could remove about 25,000 households and as many as 61,000 individuals from the food stamp program in Wisconsin, though some officials say the count could be as high as 27,000 households.
Democrats were quick to condemn the proposed rule.
"This proposal is yet another attempt by this administration to circumvent Congress and make harmful changes to nutrition assistance that have been repeatedly rejected on a bipartisan basis," U.S. Sen. Debbie Stabenow (D-Michigan), ranking member of the Senate Committee on Agriculture, Nutrition and Forestry, said. "This rule would take food away from families, prevent children from getting school meals, and make it harder for states to administer food assistance. The administration should stop undermining the intent of Congress and instead focus on implementing the bipartisan Farm Bill that the president signed into law."
Republicans had tried to implement food stamp reforms during the debate on last year's farm bill with an attempt to impose stricter federal work requirements on food-stamp participants, but that provision did not make it into the final agreement.
The farm bill is the vehicle by which the SNAP program and other domestic nutrition assistance programs are reauthorized. Republicans have tried for years to have the nutrition and food assistance programs separated from the farm bill, which also authorizes federal farm subsidies, but have never been successful.
Richard Moore is the author of the forthcoming "Storyfinding: From the Journey to the Story" and can be reached at richardmoorebooks.com.
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