WASHINGTON – Rep. Randy Neugebauer (R-TX), Chairman of the Financial Services Subcommittee on Financial Institutions and Consumer Credit, delivered the following opening statement—as prepared for delivery—at today’s Subcommittee hearing to examine the regulatory burdens on non-depository financial institutions:
Supplemental Nutrition Assistance Program (SNAP) Improvement Act
The Supplemental Nutrition Assistance Program (SNAP), formerly known as food stamps, was meant to provide support for families in need. But in recent years, relaxed eligibility standards and loopholes have allowed the program to balloon to support 44 million people. One in seven Americans is on food stamps, and the government is spending more than $70 billion a year on this program.
When SNAP benefits are given through loopholes to people who wouldn’t otherwise qualify for the program, it not only drains our resources, but it also hurts those families who truly need assistance. So I introduced legislation that would serve two purposes: first, it reduces waste and excess payments to save taxpayers’ money. Second, it helps refocus the program on families who need help supplementing their grocery budget.
It does that by tightening standards, eliminating loopholes, and reducing redundant programs.
The bill would reduce program spending by an estimated $35 billion over ten years. Key reforms include:
- Restoring Integrity to Categorical Eligibility Rules: $11.5 billion
Currently, families can qualify for SNAP if they’ve received any state assistance—even non-cash assistance like pamphlets and brochures. The Congressional Budget Office estimates that more than half of SNAP participants are qualified this way, which means they are not subject to the same income requirements as other participants. Ensuring that categorical eligibility is only tied to cash-assistance saves $12 billion.
- Closing Loopholes: $12 billion
The Low-Income Home Energy Assistance Program (LIHEAP) loophole allows states can game the system, securing more federal taxpayer dollars by sending token LIHEAP checks—some as low as $5—to increase SNAP benefits. By eliminating this loophole, taxpayers would save $11.5 billion.
- Ending Redundant Programs: $4.3 billion
SNAP includes employment and workforce training programs that duplicate assistance offered through the Department of Labor. By consolidating these programs, program costs can be reduced by $4.3 billion.
- Eliminating State Bonuses: $480 million
Currently, states are given bonuses for signing up more people for SNAP each year. The program should be accessible to those who need it, but taxpayer dollars shouldn’t be spent rewarding states for doing their job. Ending these bonuses saves $480 million.
- Preventing Lottery Winners from Abusing SNAP
Occasionally, through loopholes or oversight, lottery winners have been discovered using nutrition assistance. This legislation would ensure that people cannot defraud the system by preventing anyone with significant gambling or lottery winnings from receiving benefits.