More than 46,000 Nevadans could lose their food stamp benefits under a federal rule change proposed by the Trump administration to tighten eligibility, a move could strip assistance from more than 11 percent of state residents in the program and up to 3.1 million people nationwide.
The proposed rule change announced by the U.S. Department of Agriculture on Monday to close a “loophole” for Supplemental Nutrition Assistance Program (SNAP) eligibility would stop or otherwise delay the ability of tens of thousands of low-income Nevadans from receiving benefits through the program, according to an initial tally by the state’s Division of Welfare and Supportive Services.
Although approval of any federal rule change is a months-to-years long process (starting with a 60-day comment period that began on Wednesday), it has drawn concern from state officials including Democratic Gov. Steve Sisolak, who said in a statement Friday that a reversion of program eligibility could “negatively impact families all across our state.” More than 429,000 Nevadans receive SNAP benefits, a figure that has remained high since the 2008 economic recession and has only gone down in the last two years.
State welfare division administrator Steve Fisher said he is concerned that taking away the ability of states to broadly confer SNAP benefits to low-income Nevadans would have a potentially devastating effect on the ability of poorer residents to access reliable and healthy food.
“If you take that away, you're going to cut into their monthly nutrition,” he said. “So therefore, that is going to impact their food security. One way or another it's going to reduce their food security, no doubt about it.”
The move by the Trump administration to curtail “broad-based categorical eligibility” aims to end a decades-old tool used by more than 40 states to automatically confer SNAP eligibility on nearly all low-income people, amid speculation and one high-profile example involving a Minnesota millionaire that the tool can be abused to allow wealthy individuals (with low incomes) receive benefits.
Historically, federal law allows enrollment in SNAP by meeting actual guidelines on income levels (100 percent of the federal poverty level, or 130 percent for households with elderly or disabled individuals), or to be deemed as “categorically” eligible based on their enrollment in another federal entitlement program, such as Supplemental Security Income or Temporary Assistance for Needy Families (cash payments). The idea is to save time and paperwork for both the government and applicant by removing requirements that individuals go through multiple financial eligibility tests for separate programs that they are likely already eligible for.
But since the passage of the 1996 federal welfare reform law, states (including Nevada) began to expand categorical eligibility for SNAP to broader programs. It’s accomplished through the use of TANF, a federal block grant system that provides cash assistance to low-income families but supports a wide variety of other social service programs that support one of the law’s four goals — which includes reducing out-of-wedlock pregnancies and promoting two-parent households.
Subsequent federal regulations gave states the ability to create limited TANF-funded programs (such as a brochure or 1-800 number) that can be given to and considered a “categorical” match for other programs such as SNAP, but only if the program is limited to people under 200 percent of the federal poverty level.
At least 43 states and jurisdictions use these limited TANF-funded programs to extend SNAP eligibility to nearly everyone a state welfare office comes into contact with; Nevada uses TANF funds to print general applications for welfare services (used to assess Medicaid and other program eligibility) that includes a paragraph on pregnancy prevention information — allowing anyone who fills out the application to be deemed to have received a “TANF benefit” and therefore eligible for SNAP benefits, as long as the applicant’s income is low enough.
The general concept is to ease the “cliff” facing low-income people who would otherwise lose their benefits the second they exceeded the poverty level cut-off; SNAP benefits lessen as income levels increase.
The exemption also allows states including Nevada to suspend asset tests (typically $2,000) that prevent individuals with low incomes but modest savings from receiving SNAP benefits.
But conservative groups and activists have begun to push for a dismantling of the broad-based categorical exemptions over concerns that the application process itself can easily be abused. A Minnesota retiree with assets of more than $1 million, Robert Undersander, applied for and received food stamps, as the system only tests for income and not overall assets. His case has been cited by many who support ending the broad-based categorical exemption, including a South Dakota congressman who suggested “tens of thousands” of individuals with low income but huge amounts of assets could be receiving food stamps.
That line of thinking — and a direct reference to Undersander — was echoed by Agriculture Secretary Sonny Perdue in announcing the new rules, saying restrictions on the use of the broad-based categorical eligibility were necessary to curb “abuse of a critical safety net program.”
“For too long, this loophole has been used to effectively bypass important eligibility guidelines,” he said in a statement announcing the rule. “Too often, states have misused this flexibility without restraint.”
The proposed rules would remove the ability to use brochures or other limited TANF funds to confer eligibility and instead require that for automatic enrollment in SNAP, an individual must receive a “substantial and ongoing” TANF service — defined as something with a monetary value above $50 that lasts for a minimum of 6 months.
That change in rules and stricter uses of TANF funds to confer SNAP eligibility would lower SNAP populations in two ways — removing people with assets over the $2,000 limit and the population of people with incomes between 131 and 200 percent of the federal poverty level. The state estimates roughly 6.9 percent of the current SNAP population would have too high of an income to keep their benefits if the rule was passed, and used a 4.1 percent estimate by the U.S. Department of Agriculture of individuals above the asset limit to reach the 11 percent figure at risk of losing their benefits.
Fisher said he was unaware if there were a rash of wealthy Nevadans or other high-asset, low-income individuals taking advantage of Nevada’s current system to receive SNAP benefits, but that ending the system would likely remove tens of thousands of low-income individuals from receiving benefits through the program.
“Our workers can only do what is put before them,” he said. “They ask the question, they do the interview, they gather the data and the system will tell you whether they're eligible or not. So no, I do not know of any millionaires, if they were (enrolled) then I don't know. I can't answer that question.”
He added that the office was also concerned with potentially duplicative eligibility tests and revising other procedures related to SNAP certification — citing the summary of the federal rule stating, “states will face increased administrative costs associated with the revised procedures.”
Fisher said the office was also concerned with the financial impact — using an estimate of $1.70 in economic impact for every dollar spent through SNAP, he projected that removal of 46,000 people from the program would result in roughly $9 million less in monthly spending at retailers and other stores.
But the issue of food security remains a concern for anti-hunger initiatives. Michael Phillips, a government affairs director with Three Square Food Bank, said that federal programs such as SNAP were the “backbone” of addressing hunger and that while any cuts to the program may result in savings, they would also worsen hunger.
“For the most part, our resources are temporary to most people. We're not a steady source like the federal government can be in many areas,” he said. I understand the rationale as far as throwing in the number out there, but you know, we respectfully disagree that taking resources away from anybody who's struggling, who's hungry is a (good) idea.”
While some state officials have already begun to raise the alarm over the proposed rule change, members of Nevada’s congressional delegation said they were taking a wait-and-see approach given uncertainties and long delays in the federal rule-making process.
Republican Rep. Mark Amodei said he doesn’t believe the rule would greatly change the number of people eligible for the program because it is an administrative rule, which takes time to implement and can be undone by future administrations. He also said that neither party has had success in significantly affecting the number of people enrolled in SNAP.
“Nothing is going to happen,” Amodei said, adding that people tend to envision the worst case scenario.
“With a lot of that stuff, everybody goes immediately to DEFCON 6—which is good, they’re keeping an eye on it,” Amodei said. “But the fact that they’ve gone to DEFCON 6 doesn’t mean ‘guess what, SNAP is in imminent peril and shrinking.’”
He said that, at most, “they’re going to do some housekeeping.”
“If you look at the history with both parties in control the House, nobody's ever cut SNAP in any significant way,” he continued.
He said he also similarly assured the United Way in Nevada this week about a White House plan to use the Chained Consumer Price Index in order to calculate the federal poverty rate, which would result in fewer people falling below the poverty line and could lead to funding cuts to programs that serve low- and moderate-income people.
Democratic Rep. Dina Titus said while it remains uncertain whether the rule will be implemented, she said not to underestimate former South Carolina Republican Rep. Mick Mulvaney, a conservative budget hawk who now serves as White House chief of staff.
“Donald Trump is always throwing stuff out there, and it gets people scared and nervous and uncertain, and I think that is probably the motive of this,” Titus said. “But you never know if something will come from it or not. If Mulvaney’s behind it, they can figure out some way to get around legislation. They have a good record of doing that.”