Republicans aim to close food stamps 'loophole' costing taxpayers billions

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FIRST ON FOX: House Republicans are working to close what they say is a loophole in the federal food assistance program that is costing American taxpayers nearly $7 billion per year.

A new bill, the No Welfare for the Wealthy Act, aims to establish asset and income thresholds for Americans to qualify for programs such as Temporary Assistance for Needy Families (TANF) and the Supplemental Nutrition Assistance Program (SNAP), also known as "food stamps." It would end what is known as broad based categorical eligibility (BBCE) for these programs, which allows Americans whose wealth is higher than the federal boundaries for these programs to still receive food assistance.

"You shouldn't be able to be eligible for food stamps just by taking advantage of a loophole created by a state law," Rep. Ben Cline, R-Va., who is introducing the bill on Thursday, told Fox News Digital.

"I'm sure some people do it unintentionally, but others do it intentionally. And nobody, whether you're intentional or not, no one who doesn't meet the eligibility requirements should be able to receive the benefits."

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Rep. Ben Cline, R-Va., introduced the No Welfare for the Wealthy Act on Thursday.

BBCE is currently active in 41 states plus Washington, D.C. As these states receive federal funding for their food assistance programs through block grants, they can also use that money to disseminate information about those programs through pamphlets and hotline numbers, according to information provided to Fox News Digital.

Because receiving that information qualifies as getting a "benefit," it allows those "beneficiaries" to bypass federal guidelines on assets and be enrolled in the food stamp program, Cline explained.

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The loophole allows five million people to qualify for federal food benefits that otherwise would not be eligible, Cline said. (Fox 2)

"Five million people are on food stamps who shouldn't be because they simply get a brochure about another welfare program. And it costs taxpayers $5, $7 billion… that loophole is not meant to exist," Cline said.

The Trump administration had moved to shut down this system in 2019, but plans were upended due to the emergence of the COVID-19 pandemic. The Biden administration withdrew the proposed rule in 2021.

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The new bill comes just as Congress gears up for expected partisan clashes over the Farm Bill, which comes up every five years and touches on a wide range of topics from federal food assistance to conservation initiatives.

The Trump administration attempted to close the loophole in 2019. (SAUL LOEB/AFP via Getty Images)

Cline’s bill is co-sponsored by House Freedom Caucus Chair Scott Perry, R-Pa.; Republican Study Committee Chair Kevin Hern, R-Okla.; and Reps. Keith Self of Texas and Josh Brecheen of Oklahoma. But the conservative told Fox News Digital that he hopes to get Democrats on board, too.

"We're hopeful that it's a bipartisan initiative," Cline said. "Most of the bills that I introduce are bipartisan… This one should be appealing to both conservatives and progressives who want to see government assistance programs targeted to those who they're meant for."