Maine is one of the few states that has seriously addressed the growth of the Supplemental Nutrition Assistance Program, also known as food stamps, and it should be applauded for doing so.
SNAP has become one of the fastest-growing welfare programs offered by the U.S. government. It is administered by the Department of Agriculture, and the benefits are distributed by individual states. Currently, SNAP is the fourth-largest means-tested program for low-income families and individuals.
In many states, SNAP eligibility is in dire need of reform. Eligibility standards for SNAP have slowly eroded over the past decade.
As recently as 2000, around 47 states had asset tests for the food stamp program. By 2012, 35 states had eliminated their asset tests and five others had weakened their tests. The elimination of these tests has allowed millionaires and lottery winners to become eligible for food stamps, something that should never be allowed to happen.
In 2014, Maine re-established work and volunteer requirements for adult recipients who aren’t disabled and have no children. This shrunk the number of recipients by more than 9,000, saving approximately $21.6 million a year, according to the Maine Department of Health and Human Services. Maine ranked first in the nation in 2014 for its decline in food stamp dependency, according to the USDA’s Federal Nutrition Service.
The state is now considering implementing an asset test for those receiving food stamps. Currently, Maine is one of 36 states that do not require an asset test to receive food stamps, and it would become the first in the Northeast region to do so if asset testing is approved. The new state SNAP rule would impose a $5,000 asset limit on households without children.
SNAP costs nationally have doubled in the past five years, from $33 billion in 2006 to $78 billion in 2011. In this brief period, the number of people receiving SNAP increased from 26 million to 45 million.
When the food stamp program was first implemented nationally in the 1970s, just one in 50 Americans participated. Today, according to the Congressional Budget Office, one in seven Americans receives SNAP benefits, and the total cost of the program has now reached $6 billion per month.
Requiring asset testing could have a dramatic effect on the number of participants in the Supplemental Nutrition Assistance Program in Maine and save thousands of taxpayer dollars.
According to the free-market Foundation for Government Accountability, if every state matched its asset testing for food stamp eligibility to the federal baseline, over 749,000 fewer Americans would be trapped in food stamp dependence – all while saving taxpayers nationally over $1.1 billion each year.
One of the key methods of holding down SNAP costs is restricting eligibility. The current income and asset test for SNAP requires recipients to have a gross income below 130 percent of the poverty level, a net income below 100 percent of poverty and less than $2,000 in assets.
These requirements are much closer to defining people in real need, but many SNAP recipients are accepted under looser standards through “categorical eligibility.”
In states using categorical eligibility for SNAP, recipients are determined not by the income and asset limitations established for SNAP, but by participation in cash welfare assistance programs, which can have more relaxed eligibility standards.
Asset tests are an important tool in managing the cost of welfare programs. They ensure that individuals use their own resources before turning to taxpayers for support, while preventing the program from being abused by those who do not truly need the help.
Many experts agree that $5,000 is a reasonable threshold, as it allows room for saving and re-establishes SNAP as the safety net it was always meant to be. The new rule is necessary to ensure that all food stamp dollars are used only by those families truly in need.
Welfare reform should focus on encouraging able-bodied recipients who are enrolled in these programs to become more self-sufficient and less dependent on government aid. The real focus of these programs must be to provide temporary or supplemental assistance while encouraging work and independence.
States should also have an immediate requirement for recipients to engage in work-related activities to be eligible for food stamps and the Temporary Assistance for Needy Families program.
[Originally published at the Portland Press Herald]
Matthew Glans joined the staff of The Heartland Institute in November 2007 as legislative specialist for insurance and finance.
