Welfare Reform:

Few States Are Likely to Use the Simplified Food Stamp Program

RCED-99-43: Published: Jan 29, 1999. Publicly Released: Mar 1, 1999.

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Pursuant to a congressional request, GAO provided information on the impact of welfare reform on the Food Stamp Program, focusing on: (1) the number of states that have adopted or are planning to adopt the Simplified Food Stamp Program; (2) the concerns that may be preventing other states from adopting the simplified program; and (3) the impacts that the adoption of the simplified programs may have on households' eligibility and benefits.

GAO noted that: (1) GAO's July 1998 survey indicated that seven states had implemented a limited, or mini, Simplified Food Stamp Program; (2) of the 45 states that had not implemented the simplified program, 6 were planning to do so; 30 indicated that they did not plan to do so; and the 9 remaining states were uncertain about their plans; (3) one of the six states--Arkansas--was planning to adopt the simplified program, but subsequently implemented a full, or more comprehensive, program that establishes a uniform set of eligibility requirements for both food stamp and Temporary Assistance for Needy Families (TANF) assistance; (4) the states that had not implemented the simplified program cited several concerns that discouraged them: (a) increasing caseworkers' burden by creating a third set of eligibility criteria for a simplified program that are different from those associated with the separately administered TANF and the Food Stamp Program; (b) restricting the options for designing a simplified program by requiring it to be cost neutral; and (c) other Welfare Reform Act requirements that had a higher priority; (5) the simplified program would have little or no impact on either the number of households participating in the Food Stamp Program or on the amount of their benefits, according to the majority of states that have and have not implemented a simplified program; (6) the simplified program has limited impact, according to one state, primarily because a relatively small number of households participate in it compared with the state's total food stamp population; and (7) according to another state, since most TANF households also receive assistance under the regular Food Stamp Program, there is little change in total benefit costs as a result of the state's adoption of the simplified program.

Matters for Congressional Consideration

  1. Status: Closed - Implemented

    Comments: In the Farm Security and Rural Investment Act of 2002, Congress made changes to the Food Stamp Program that gave states new options to better align their TANF and Food Stamp program eligibility requirements. This closer alignment was also the goal of the 1996 Simplified Food Stamp Program, which required that any changes be cost neutral. However, in the 2002 Act, Congress eliminated the requirement that changes to better align programs be cost neutral. As a result, states have more flexibility under the 2002 Act provisions, and more states are adopting the new options than adopted the 1996 simplification provisions.

    Matter: To fulfill the Simplified Food Stamp Program's potential, Congress may wish to consider working with the Department of Agriculture to develop modifications to the legislation that established the program in order to address the implementation concerns discussed in this report. Among other things, Congress could consider providing the states with more flexibility in meeting the simplified program's cost-neutrality requirement by, for example, allowing a longer period of time to measure cost-neutrality, instead of annually as is required by the current legislation.

  2. Status: Closed - Implemented

    Comments: In the Farm Security and Rural Investment Act of 2002, Congress made significant changes to the way financial penalties are applied to states with high error rates. States must have an error rate above a level set by law for 2 years in a row before they are sanctioned. The effect of these changes is to provide states with a grace period of 1 year to make complex program changes and begin correcting for errors before they face financial penalties.

    Matter: Congress could also examine the feasibility of granting the states a grace period in which increased error rates attributed to the implementation of the simplified program are exempted from financial penalties.

 

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