“Heat and Eat” Food Stamp Loophole Costs Taxpayers
Matthew Sabas /
Governors in seven states are flouting a reform from last month’s farm bill by continuing to exploit a food stamp loophole that will cost taxpayers billions. At least five others are planning or considering following suit.
The loophole, which is dubbed “heat and eat,” allows food stamp recipients to qualify for higher food stamp benefits if they also receive assistance from the Low Income Heating Assistance Program (LIHEAP), a federally funded block grant to states. Several states and the District of Columbia have made token LIHEAP payments as small as a dime to thousands of households to qualify them for an average of $1,080 per year in extra food stamps.
Congress attempted to tighten the loophole in the most recent farm bill by mandating a minimum LIHEAP payment of over $20 annually before the provision could be triggered. But their reform appears to be failing, as states are dishing out even more LIHEAP money to pull in extra food stamp dollars. Because nearly all food stamp money is federal, “states are not accountable for most of the cost and thus have no problem with spending more on food stamps,” explains Heritage policy analyst Rachel Sheffield. Clever accounting will allow governors to boost food stamp spending by hundreds of millions using entirely federal funds.
New York, for example, will spend $6 million in LIHEAP money to reap $457 million in extra food stamp funds, averaging over $1,500 in additional annual food stamp benefits per household. When included with the other six states, this loophole will cost taxpayers over $1 billion in just one year.
If Congress had closed the loophole entirely, not a single family would have lost eligibility for food stamps or heating.
But closing this loophole is not nearly enough when it comes to food stamp reform. Reforming food stamps from a “one-way handout” into a program that truly helps those in need by encouraging work would restore integrity and accountability to the program.