The Trump administration has proposed a new rule that could lift millions of people out of dependency, all by closing a loophole in the food stamp program, one that currently allows millionaires to collect welfare.
In today’s divided political climate, both parties can agree: People with significant financial resources, including millionaires, should not receive food stamps.
But that’s exactly what’s happening today, all because of a little-known loophole that was exploited by both the Clinton and Obama administrations.
Those who receive cash welfare, such as Temporary Assistance for Needy Families, are automatically eligible to receive food stamps without filling out additional forms to prove eligibility. But the Clinton administration supersized this by creating the broad-based categorical eligibility loophole, which opened the floodgates to welfare fraud. The loophole redefined a “benefit” to include noncash and in-kind benefits, including welfare brochures and toll-free numbers. The result was that anyone authorized to receive a brochure, suddenly a “benefit,” was eligible for food stamps, regardless of income or assets. States no longer had to check the eligibility of these enrollees, and the results have been nothing short of disastrous.
More than 5 million people that don’t meet eligibility requirements for assets or income are now enrolled in the food stamp program, including millionaires.
These high net worth families included Rob Undersander and his wife, who live in Minnesota, a state that continues to abuse the broad-based categorical eligibility loophole. After catching wind of this loophole, Undersander, a millionaire, decided to test it, hoping that what he had heard wasn’t true and that the state would stop him. They didn’t. Despite being open on his application about his net worth, Rob Undersander received a fully loaded electronic benefit transfer, or EBT, card one month after applying for food stamps.
In Michigan, more than 10,000 lottery winners, including people who won multimillion-dollar prizes, were enrolled in food stamps. These recipients included Leroy Fick, who used $2 million in Michigan lottery winnings to buy a new home and an Audi convertible, all while collecting taxpayer-funded food stamps. In Maine, nearly 4,000 welfare recipients were lottery winners who had won a combined $22 million, with some individual winnings exceeding $500,000.
These examples aren’t just eye-opening, they’re unacceptable. Loopholes such as broad-based categorical eligibility threaten limited resources for the truly needy who rely on the food stamp program.
That’s why it’s good news President Trump is addressing the issue. The Department of Agriculture’s rule would crack down on this abuse and return categorical eligibility to its original intent, ensuring that only those who actually receive substantial and ongoing benefits from other welfare programs will be eligible for this exemption. This move will help lift millions of Americans out of dependency and restore the food stamp program to its original mission: to serve the truly needy, not millionaires.
Closing expensive loopholes that allow millionaires to collect food stamps should not be a partisan issue. President Trump deserves praise from both sides of the aisle for working to protect taxpayer-funded resources for those who truly need them.
Kristina Rasmussen serves as vice president for federal affairs at the Foundation for Government Accountability.
