The Biden administration and GOP recently reached a debt deal that made adjustments to work requirements in the Supplemental Nutrition Assistance Program (SNAP), but did not cut its spending. However, cuts are necessary as SNAP expenditures have skyrocketed from $63 billion in 2019 to an estimated $145 billion in 2023. Congress will have another opportunity to reform the program later this year when it is reauthorized as part of the farm bill.
One of SNAP’s ongoing issues is the loss of billions of dollars due to fraud and abuse. Fraudulent activities range from individuals, businesses, and organized gangs stealing benefits. The transition from paper food stamps to electronic benefits transfer (EBT) cards created new opportunities for abuse.
News stories and auditor reports reveal ten types of fraud and abuse in SNAP. These include selling benefits to retailers and individuals, reselling food, card skimming, phishing, falsifying eligibility, multiple applications, retailer-application fraud, state-agency fraud, and government-worker theft.
Card skimming has become an especially severe problem, with EBT numbers and PINs being a prime target for theft due to the lack of chips on the cards. Phishing and other types of EBT data hacks are also on the rise, with thieves posing as government caseworkers to obtain card numbers and PINs from SNAP recipients.
SNAP is difficult to police due to its 250,000 retailers and 42 million recipients, who have varying income levels, job statuses, and other factors that affect eligibility and benefit levels. Haywood Talcove, the head of LexisNexis Risk Solutions, has noted the rise of SNAP abuse, calling it an “alarming attack on the food-stamp program” that could cost $20 billion annually. He argues that the pandemic caused a seismic shift in benefit fraud in government programs, with criminals realizing that government programs are easy to steal from due to the lack of technology.
Because the federal government funds SNAP benefits, state administrators have little incentive to minimize fraud and abuse. A solution could be to remove the feds from food stamps and let the states fund their own food programs. State lawmakers have strong incentives to minimize waste when funding their own programs as they must balance their budgets.
