SNAP's $96 Billion Question

One of the most tear-jerking stories during America’s longest federal shutdown is the battle over food stamps.

Nearly 42 million benefit each month from this federal program at a cost to taxpayers of about $100 billion annually. Officially called SNAP (Supplemental Nutrition Assistance Program), this long-standing federal initiative helps low-income U.S. households afford food by issuing cash on electronic EBT cards, with eligibility based on income, family size, and allowable deductions.

Given how crucial such cash support can be, a federal judge ordered the Trump administration to resume SNAP benefits without Congressional authorization. An Appeals Court agreed with the district court. For the Left, which just concluded nationwide demonstrations that America does not need a King, it was perfectly acceptable for Trump to act as King.

The Trump administration appealed to the U.S. Supreme Court, arguing that it had no legal authority to act. Justice Ketanji Brown Jackson temporarily agreed with the Trump administration and stayed the lower court rulings. A full ruling is expected shortly.

According to the Center on Budget and Policy Priorities, families qualify for SNAP benefits if they earn below 130 percent of the federal poverty line. For 2026, this amount for a three-person family is $2,888 per month, or about $34,656 per year.

The program is structured in the typical Washington fashion, with the feds paying the states by large-scale transfers of dollars. The individual state treasury offices manage and maintain beneficiary lists and make monthly payments to beneficiaries’ debit cards.

Because states tightly control beneficiary lists, the federal government has no insight into the degree of fraud, waste, and abuse that can be expected in any cash disbursement program. Worse, the federal government has little control over how efficiently the states spend the money, beyond the usual audit authority to review performance after the fact.

According to Keith Hall, a researcher at the Mercatus Center at George Mason University, a May 2025 study found that SNAP has an extremely high payment error rate, including overpayments, underpayments, and fraud. Recovery rates for overpayments are pathetic, averaging about 4%, leaving 96% of erroneous payments unrecovered.

A significant source of fraudulent payments can be traced to illegal immigration. America’s Birthright Citizenship laws allow undocumented immigrants to stay long enough to bear a child in the United States. Armed with a U.S. birth certificate, the undocumented immigrants can obtain a Social Security number for their child.

Undocumented immigrants are not eligible for SNAP benefits, but parents of U.S. citizens can enroll their children in SNAP. In a family of four, with three undocumented migrants and one U.S. citizen, the benefits are cut by 75% to only pay for the U.S. citizen child.

Such a system incentivizes what the government calls Intentional Program Violation (IPV) fraud, specifically, recipient application fraud or eligibility misrepresentation (e.g., falsifying residency or identity to obtain multiple allotments). America does not employ mandatory biometric identification (e.g., fingerprint, facial recognition, or iris scan tied to the EBT card or application) for its SNAP beneficiaries.

Consider four types of IPVs that can arise from a lack of biometric matches.

First, households can create ghost members using fake Social Security Numbers and stolen IDs available on the Dark Web. Or households can file applications for deceased/relocated people.

Second, households can lie about the composition of their families. Adding more family members, such as a non-resident adult or child, means more benefits.

Third, a household can be receiving benefits in one state, move to another state, apply for benefits there, become qualified, and not cancel registration in the first state. State databases don’t talk to each other, and although some information sharing does exist, this kind of IPV can go on for years before detection.

Fourth, the current use of traditional debit cards promotes the use of stolen or sold EBT cards.

Each of these fraudulent ways can be stopped 100% by using biometric identification at all phases of the benefit cycle.

If every listed person must appear in person (or via secure app) for biometric enrollment, fraud can drop significantly. No biometric matches result in instant denial. Dead or absent people can’t undergo fingerprint or iris scanning. Biometric EBT cards (e.g., fingerprint at the point of sale) prevent buyers from using stolen/sold cards. Trafficking shifts to cash-under-the-table, but benefit redemption fraud drops to near zero.

Liberals may counter by saying that these examples of fraud are overblown and don’t occur in practice. However, no one knows the extent of fraud because states haven’t built integrated systems to track and end fraud. It is not the state’s dollars that are being distributed, so states have little incentive to prevent fraud.

India, with the world’s largest population and a massive welfare bureaucracy, provides clues about the promise of using biometric identification to detect fraud and abuse. The country has successfully deployed a complex biometric identification system called Aadhaar.

The 12-digit biometric ID requires citizens to enroll using fingerprints, iris scans, and demographic information. A government agency, UIDAI, stores data centrally, authenticates identity via biometric/PIN match at service points (banks, PDS food subsidy shops), and enables real-time verification to cut fraud and ghost accounts.

In one of its annual reports just before 2020, UIDAI said that Aadhaar biometric systems had identified nearly 2.3–3.6 billion de-duplications across all government welfare schemes over seven years. Separately, the Ministry of Consumer Affairs, Food & Public Distribution, the closest agency to the U.S. Department of Agriculture, reported that 23.9 million bogus ration (PDS) cards were deleted in 2019 alone.

India says that its Aadhaar-linked PDS has cut ghost beneficiaries by ~50 million (30%) after the introduction of mandatory biometrics. India has shown that biometrics can excel at catching and practically eliminating fraud.

To be sure, there have been privacy concerns. Aadhaar’s centralized biometric database risks mass surveillance, data breaches (1.4 billion records were leaked in 2025), and profiling. However, these breaches are not significantly different from the hacks we read about every day.

In 2025, Qantas reported that hackers accessed the Salesforce-hosted customer service platform, exposing names, emails, phone numbers, addresses, dates of birth, genders, frequent flyer numbers, status tiers, and points balances for millions of Australian airline customers. The breach stemmed from unauthorized third-party access and was disclosed in October.

In February, Episource said that a cyberattack allowed unauthorized access to systems, exfiltrating sensitive health data of over 5.4 million individuals, including personal identifiers and medical information. Around the same time, PowerSchool EdTech said attackers stole student records from its education software databases, affecting millions globally.

America should follow India’s lead and implement SNAP EBT cards with biometric authentication, with adequate safeguards to prevent harm to vulnerable users. The money saved from fraud can either be returned to the Treasury, or Congress could pass a law to redirect it to increase beneficiary payments to eligible households.

The world’s most advanced country can do better.

Rajkamal Rao has been a TIPP Insights columnist and member of the Editorial Board for over four years. He also publishes on Substack, with all of his work available for free. Readers may subscribe to get new articles sent straight to their inbox.

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📊 Market Mood — Tuesday, November 11, 2025 (Pre-Market)

🟩 Futures Steady As Shutdown Nears End
U.S. stock futures were little changed after Monday’s rebound, as optimism grew that Congress would pass the bill to end the 41-day federal shutdown — the longest in U.S. history. The Dow inched up 0.1%, S&P 500 -0.2%, Nasdaq -0.3% in futures trade.

🟨 Optimism Builds On Reopening Hopes
Wall Street’s rally continued on expectations that federal operations would soon resume. Analysts said the resolution could unlock a long-delayed year-end rally, though the shutdown likely shaved growth from Q4 GDP.

🟩 UBS Eyes 2026 Earnings Lift
UBS forecast the S&P 500 to reach 7,500 next year, driven by 14% earnings growth—half from tech. The bank expects a “soft patch” near-term as tariffs filter through prices before growth accelerates in 2026.

🟨 CoreWeave Slips On Partner Delay
AI-cloud provider CoreWeave fell pre-market after reporting a delay at a third-party data-center partner, overshadowing otherwise strong results tied to deals with OpenAI and Meta.

🟩 Crude Edges Higher
Oil prices rose modestly as shutdown relief lifted sentiment. Brent traded at $64.27 a barrel and WTI at $60.31, though traders remained cautious about 2026 oversupply.

📅 Key Events Today

🟧 Tuesday, November 11
No major economic releases scheduled.