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States are increasing food stamp fraud — on purpose
At least New Mexico is honest. Last year, the state official in charge of food stamps admitted that she has no plans to meaningfully tackle rampant waste, fraud and abuse in the low-income nutrition program. Niki Kozlowski, director of the Income Support Division at New Mexico’s Health Care Authority, is shining a light on a glaring loophole that states are quietly using to avoid one of President Trump’s most important welfare reforms.
The One Big Beautiful Bill Act created a long-overdue change to food stamps. Since the program’s creation, states could tolerate limitless misspending, because while they manage their own food-stamp rolls, the federal government picks up 100 percent of the $100 billion-per-year program. But starting next October, in fiscal 2028, states that misspend a significant portion of food-stamp benefits will pick up as much as 15 percent of the benefit costs, depending on their error rates.
This reform is a powerful incentive for states to start eliminating waste, fraud and abuse. If they do not, they will be on the hook for millions or even billions of dollars.