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One of the biggest safety-net programs in the country is hemorrhaging billions of taxpayer dollars, and as always, few people are talking about it.


Former CBO Director Keith Hall is one of those few. He looks at the Supplemental Nutrition Assistance Program (SNAP) in his latest Mercatus research paper. One core finding of the paper is that improper payments have soared to $10.7 billion annually, even as federal oversight has gotten more expensive and more complex.


You might be wondering, what is an improper payment? Simply put, improper payments are payments made by the government that should not have been made or were made in the incorrect amount. This includes both overpayments and underpayments, whether due to fraud, clerical errors, or a failure to verify eligibility. So it’s as bad as it sounds.

Why is this urgent now?

Because overpayment rates have quietly quadrupled since 2012. In 2023 alone, the national error rate approached 12 percent, and some states like Alaska reported overpayments as high as 57 percent. Meanwhile, recovery efforts are barely making a dent: less than four percent of those overpayments are reclaimed.

What’s going wrong?SNAP fraud and error come in many forms:
- Benefit trafficking: recipients selling SNAP benefits for cash
- Eligibility misreporting: households hiding income or assets
- Retailer fraud: store owners facilitating improper purchases
- Card skimming and EBT scams: worsened by outdated techDespite a 350 percent increase in federal spending on program integrity over the past decade, these problems are getting worse, not better.

If Congress doesn’t act?

We risk undermining trust in a program that millions rely on. SNAP was built to stabilize families during tough times. But bloated budgets and unchecked fraud erode its credibility, and drain resources from people who truly need help.

So what would it take to turn this around?

Hall offers a list of practical, high-ROI reforms:
- Implement real cost-benefit tracking for anti-fraud programs.
- Incentivize states to detect fraud by letting them keep more of what they recover.
- Mandate chip-enabled EBT cards to curb card theft.
- Require all 50 states to use a national system that prevents duplicate enrollment.How would we know it’s working?

Look for these indicators:
- A steady drop in national and state-level overpayment rates.
- Greater transparency in SNAP error reporting.
- Clear ROI data on integrity spending.
- Faster adoption of fraud-prevention tools at the state level.At a time when skepticism of federal programs is high, SNAP is a case study in what happens when oversight loses its grip.
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Hall’s paper is a blueprint for how to restore credibility , not just in this program, but in how we think about public administration itself.

mailto:[email protected]?subject=
Ben Brophy
Director of Marketing

Mercatus Center at George Mason University

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