Food Stamps And Fraud: The SNAP Loophole Nobody Talks About

Since President Trump returned to the Oval Office, he has delivered some of the most momentous reforms in the history of the SNAP (Supplemental Nutrition Assistance Program), also known as the food stamp program.

Rife with fraud and exploitation, the program is costing taxpayers billions of dollars every year and enriching criminals.

Our research, however, has uncovered a new outrage: More than 5,000 liquor stores and smoke shops are now considered “authorized retailers” to accept food stamps — half of which were approved by the Biden-Autopen administration.

Fortunately, President Trump has begun a major crackdown on abuses. As it continues to improve and renovate the food stamp program, it should ensure that only stores that help achieve the program’s mission are approved as retailers.

Nevertheless, most food stamp trafficking happens not at grocery stores, but at convenience stores. In fact, trafficking takes place at more than one out of five convenience stores that accept food stamps. And nearly three out of every four stores that accept food stamps are convenience stores.

The Agriculture Department is supposed to vet and approve stores before allowing them to receive food stamps. But under the Biden administration, the process reportedly took as little as 15 minutes. This is obviously not enough scrutiny for stores receiving our tax dollars.

Thankfully, Trump’s Agriculture Secretary Brooke Rollins approved the first-ever waivers to allow states to defund soda and junk food in their food stamp programs, and states like Nebraska and Colorado have already filed waivers to do so.

To be eligible to receive food stamps, stores are supposed to sell more than a dozen different staple food items, or have food sales as a majority of their revenue. The stores must “effectuate the purpose of the program,” which is to improve nutrition for lower-income Americans. Yet more than 4,000 liquor stores and 1,000 tobacco shops are currently considered USDA-approved vendors — which is suspicious, to put it mildly. The idea that a liquor store sells healthy and nutritious food — or that a tobacco store receives a majority of its revenue from food sales — is doubtful. But even if that were the case, liquor stores and tobacco stores simply do not “effectuate the purpose” of the food stamp program.

The food stamp program was created in 1964, specifically to “provide for improved levels of nutrition among low-income households.” But, over the last six decades, politicians and bureaucrats have often lost sight of its mission and opened it up to enormous levels of waste, fraud, and abuse.

As a result, over the last 25 years, food stamp spending has exploded, growing more than sixfold to more than $100 billion per year. More spending has meant more opportunities for fraud, and it is estimated that last year alone, more than $2 billion in food stamp benefits were trafficked — that is, sold for cash at a discount or used to buy food that was then sold for cash. Food stamp trafficking has grown tenfold over the last 25 years.

President Trump signed historic legislation to make states pay when they misuse tax dollars. These steps alone will save taxpayers billions of dollars — and thankfully, the Trump administration is not resting on its laurels and is continuing its work to improve the program by addressing food stamp trafficking.

Food stamp trafficking exploded under the Biden administration, as Democrats turned a blind eye to rampant fraud. Half of the liquor stores and smoke shops that are authorized food stamp retailers were approved under President Biden. Most of these stores are in California, but states like Michigan and Illinois also have hundreds of liquor stores and smoke shops that are authorized to accept food stamps.

In fact, liquor stores or smoke shops are eligible to accept food stamps in every single state but North Dakota. By 2022, nearly half of all stores receiving food stamps were convenience stores, with more than four times as many convenience stores receiving food stamps — and 15 times as much taxpayer money spent there — as there were two decades earlier.

USDA Secretary Rollins recently issued a new rule that more than doubled the number of required staple food items for stores to qualify to accept food stamps. The new rule also closes loopholes that counted some snack foods as staples. Secretary Rollins is also simplifying the staple food categories, making enforcement easier and ultimately more effective. These rules are just the first step, and there are indications from USDA that a larger crackdown may be coming.

This is excellent news, but USDA should go all the way: Prohibit liquor stores, smoke shops, and other retailers that do not “improve levels of nutrition” from accepting food stamp benefits altogether. Allowing our tax dollars to be used at tobacco shops and liquor stores is not just harmful to hardworking taxpayers, but it also harms the people that food stamps are supposed to help. Secretary Rollins should keep up the good work and make the food stamp program fulfill its original purpose of improving nutrition for those who need it.

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Michael Greibrok is a Senior Research Fellow at the Foundation for Government Accountability (FGA).

Kristi Stahr is a Senior Data Analyst at the FGA.

The views expressed in this piece are those of the authors and do not necessarily represent those of The Daily Wire.