Democratic AGs wrong on Department of Agriculture effort to close food stamp loophole

Last month, 24 state attorneys general wrote the U.S. Department of Agriculture criticizing USDA’s proposal to begin closing what might be the biggest and most perverse loophole in the food stamp program. These attorneys general have a unique vantage point at the intersection of law enforcement and public policy—but on this issue, they’re completely wrong.

The loophole, broad-based categorical eligibility, or BBCE, has given benefits to 5 million recipients who are ineligible under federal guidelines, including some millionaires.

It’s worth noting that the attorneys general who write to criticize efforts to eliminate this rule are all Democrats. They also claim to have a common commitment to “serving the public interest and promoting the rule of law.” But everything they outline is contrary to both objectives. USDA’s proposal, on the other hand, serves both.

Despite the complicated name, BBCE is simple—states can automatically qualify individuals who already receive cash welfare benefits into food stamps without checking their assets. The idea behind it is that states already verified eligibility when the person enrolled in another welfare program. But regulations passed during the Clinton administration, and pushed aggressively during the Obama administration, allowed state food stamp agencies to call almost anything a welfare “benefit” under BBCE.

Here’s what that looks like in practice: states claim that brochures or hotlines are “benefits,” and then categorically deem applicants eligible for food stamps without applying the federal asset test—just because applicants receive these “benefits.” Even worse, the loophole allows the income threshold to increase, often up to double the federal poverty level.

In their letter to USDA, the attorneys general casually gloss over the details of how these agency tactics subvert statutory guidelines. They clearly don’t expect the public to learn the ins and outs of the food stamp program, let alone its loopholes. But these details matter. If the public even has any remaining trust in the welfare programs it pays for, an examination of the BBCE loophole would be the final nail in the coffin.

Instead, the letter’s signers use political distortion to maintain the status quo—a system which maximizes welfare enrollment and minimizes program integrity.

They invoke the separation of powers, arguing that the proposed rule is an attempt “to flout the legislative process” because Congress has not closed the loophole itself—in other words, because of Congress’ inaction in correcting the regulatory failure, the executive branch should be unable to fix its own mistake. But that’s not the way our government operates.

But if these attorneys general want to debate distortions of the legislative process, the BBCE loophole is a good place to start. Congress already answered the question of who should be eligible for food stamps—and millionaires are not on the list. The average American agrees with them, with 77 percent of voters supporting asset tests in food stamps.

Knowing that they won’t win a public debate on whether millionaires or those with significant assets should receive taxpayer-funded benefits, as a last resort, the attorneys general regurgitate a tired talking point about risks to the school lunch program that BBCE poses. This transparent scare-tactic, using children who won’t be impacted by the rule, has been so repeatedly debunked that it calls more for consternation than clarification. Nonetheless, we know that more than 99.9 percent of school-aged kids on food stamps nationally would still qualify for the school lunch program.

Not all states exploit BBCE—some, like Louisiana where I served as an assistant attorney general or my current residence of Virginia, take the novel approach of only distributing food stamp benefits to individuals eligible under federal law.

These states know—much like the general public—that keeping the BBCE loophole closed and following federal law preserves welfare resources for the truly needy. The Trump administration’s proposal to close the loophole nationally will do the same. It turns out that following the law has its advantages. These attorneys general should understand that. 

Scott Centorino is a senior fellow at the Foundation for Government Accountability. Previously, he served as an assistant attorney general in Louisiana.

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