[House Hearing, 115 Congress]
[From the U.S. Government Publishing Office]












  PROGRAM INTEGRITY FOR THE SUPPLEMENTAL NUTRITION ASSISTANCE PROGRAM

=======================================================================

                             JOINT HEARING

                               BEFORE THE

                      SUBCOMMITTEE ON HEALTHCARE,
                   BENEFITS, AND ADMINISTRATIVE RULES

                                AND THE

               SUBCOMMITTEE ON INTERGOVERNMENTAL AFFAIRS

                                 OF THE

                         COMMITTEE ON OVERSIGHT
                         AND GOVERNMENT REFORM
                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED FIFTEENTH CONGRESS

                             SECOND SESSION

                               __________

                              MAY 9, 2018

                               __________

                           Serial No. 115-83

                               __________

Printed for the use of the Committee on Oversight and Government Reform






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              Committee on Oversight and Government Reform

                  Trey Gowdy, South Carolina, Chairman
John J. Duncan, Jr., Tennessee       Elijah E. Cummings, Maryland, 
Darrell E. Issa, California              Ranking Minority Member
Jim Jordan, Ohio                     Carolyn B. Maloney, New York
Mark Sanford, South Carolina         Eleanor Holmes Norton, District of 
Justin Amash, Michigan                   Columbia
Paul A. Gosar, Arizona               Wm. Lacy Clay, Missouri
Scott DesJarlais, Tennessee          Stephen F. Lynch, Massachusetts
Greg Gianforte, Montana              Jim Cooper, Tennessee
Virginia Foxx, North Carolina        Gerald E. Connolly, Virginia
Thomas Massie, Kentucky              Robin L. Kelly, Illinois
Mark Meadows, North Carolina         Brenda L. Lawrence, Michigan
Ron DeSantis, Florida                Bonnie Watson Coleman, New Jersey
Dennis A. Ross, Florida              Raja Krishnamoorthi, Illinois
Mark Walker, North Carolina          Jamie Raskin, Maryland
Rod Blum, Iowa                       Jimmy Gomez, Maryland
Jody B. Hice, Georgia                Peter Welch, Vermont
Steve Russell, Oklahoma              Matt Cartwright, Pennsylvania
Glenn Grothman, Wisconsin            Mark DeSaulnier, California
Will Hurd, Texas                     Stacey E. Plaskett, Virgin Islands
Gary J. Palmer, Alabama              John P. Sarbanes, Maryland
James Comer, Kentucky
Paul Mitchell, Michigan

                     Sheria Clarke, Staff Director
                  Robert Borden, Deputy Staff Director
                    William McKenna, General Counsel
                        Betsy Ferguson, Counsel
                      Anudeep Buddharaju, Counsel
                         Kiley Bidelman, Clerk
                 David Rapallo, Minority Staff Director
     Subcommittee on Healthcare, Benefits, and Administrative Rules

                       Jim Jordan, Ohio, Chairman
Mark Walker, North Carolina, Vice    Raja Krishnamoorthi, Illinois, 
    Chair                                Ranking Minority Member
Darrell E. Issa, California          Jim Cooper, Tennessee
Mark Sanford, South Carolina         Eleanor Holmes Norton, District of 
Scott DesJarlais, Tennessee              Columbia
Mark Meadows, North Carolina         Robin L. Kelly, Illinois
Glenn Grothman, Wisconsin            Bonnie Watson Coleman, New Jersey
Paul Mitchell, Michigan              Stacey E. Plaskett, Virgin Islands
                                 ------                                

               Subcommittee on Intergovernmental Affairs

                     Gary Palmer, Alabama, Chairman
Glenn Grothman, Wisconsin, Vice      Jamie Raskin, Maryland, Ranking 
    Chair                                Minority Member
John J. Duncan, Jr., Tennessee       Mark DeSaulnier, California
Virginia Foxx, North Carolina        Matt Cartwright, Pennsylvania
Thomas Massie, Kentucky              Wm. Lacy Clay, Missouri
Mark Walker, North Carolina          (Vacancy)
Mark Sanford, South Carolina




















                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on May 9, 2018......................................     1

                               WITNESSES

Mr. Brandon Lipps, Administrator, Food and Nutrition Service, 
  Acting Deputy Under Secretary, Food , Nutrition , and Consumer 
  Services, U.S. Department of Agriculture
    Oral Statement...............................................     7
    Written Statement............................................     9
Ms. Kathy Larin, Director of Education, Workforce, and Income 
  Security, U.S. Government Accountability Office
    Oral Statement...............................................    15
    Written Statement............................................    17
Mr. Sam Adolphsen, Senior Fellow, The Foundation for Government 
  Accountability
    Oral Statement...............................................    48
    Written Statement............................................    50
Ms. Stacy Dean, Vice President for Food Assistance Policy, The 
  Center on Budget and Policy Priorities
    Oral Statement...............................................    68
    Written Statement............................................    70

                                APPENDIX

Letter for the Record from EPIC.org, submitted by Ranking Member 
  Krishnamoorthi.................................................   112
Letter for the Record from the Network Lobby for Catholic Social 
  Justice, submitted by Ranking Member Krishnamoorthi............   115
Questions for the Record, submitted by Members of the Committee..   117

 
  PROGRAM INTEGRITY FOR THE SUPPLEMENTAL NUTRITION ASSISTANCE PROGRAM

                              ----------                              


                         Wednesday, May 9, 2018

                   House of Representatives
         Subcommittee on Healthcare, Benefits, and 
 Administrative Rules, joint with the Subcommittee 
                      on Intergovernmental Affairs,
              Committee on Oversight and Government Reform,
                                                   Washington, D.C.
    The subcommittees met, pursuant to call, at 10:09 a.m., in 
Room 2154, Rayburn House Office Building, Hon. Jim Jordan 
[chairman of the subcommittee] presiding.
    Present: Representatives Jordan, Palmer, DesJarlais, 
Massie, Meadows, Walker, Grothman, Krishnamoorthi, Raskin, 
Kelly, Watson Coleman, and DeSaulnier.
    Also Present: Representative Gianforte.
    Mr. Jordan. The subcommittee will come to order. We will 
start with opening statements.
    I want to welcome our guests. We will introduce you here in 
just a few minutes and give you your opportunity for an opening 
statement and then go to questions. You know how these things 
typically work. You have to listen to the politicians first 
before we get to listen to the experts.
    We are going to start with the gentleman from Alabama with 
an opening statement, and then we will go to the minority side. 
Then I will have some brief remarks, and we will get right to 
you.
    The gentleman from Alabama is recognized.
    Mr. Palmer. Thank you, Mr. Chairman.
    I thank the witnesses for being here today.
    The Supplemental Nutrition Assistance Program, otherwise 
known as SNAP, offers assistance to millions of Americans who 
cannot afford nutritional food for themselves and their 
families. There are over 45 million Americans who rely on this 
program.
    The Food and Nutrition Service administers the program in 
partnership with State agencies, but nearly all the funding 
comes from the Federal taxpayer. In 2017, we spent over $70 
billion on SNAP and other food programs. With a program of that 
size and that price tag, it is essential to apply the highest 
standards of program integrity.
    The committee has worked to expose a pervasive problem of 
improper payments in our Federal programs. This is an issue 
that I have paid particular attention to, given that, last 
year, we had $140 billion in improper payments, which I like to 
remind my colleagues that that is money we had to borrow and 
pay interest on.
    In fact, improper payments are, as I said, rampant 
throughout the Federal Government, not just this program. The 
Office of Management and Budget designates SNAP as among its 
highest risk programs due to the estimated dollar loss through 
improper payments.
    The Food and Nutrition Service provides State agencies with 
bonuses for having low error rates and penalizes those with 
high ones, but that, I think, has not exactly been the right 
incentive for solving this problem of improper payments. In 
2017, State agencies in Virginia, Wisconsin, and Alaska 
admitted to False Claims Act violations for fraudulently 
reporting low error rates to exploit this bonus system. This 
committee is working on a better way to incentivize Federal 
agencies and programs to report on the improper payments and to 
try to solve this problem. Combined, these three States had to 
repay over $16 million in fraudulently earned bonuses, and 
other State agencies are still being investigated.
    One of the most frustrating aspects about the program is 
the lack of data transparency produced from the prior 
administration. In fiscal years 2015 and 2016, data quality was 
so poor in over 40 State agencies that the Food and Nutrition 
Service decided it could not publish its annual national 
payment error rate. That's a major problem. It means, for a 
full 2 years, at a critical time for helping those grappling 
during the recession to put food on the table, the American 
public was left in the dark.
    The Food and Nutrition Service has not published a national 
payment error rate since fiscal year 2014. If you can't see how 
bad a problem is, if you don't understand how bad the problem 
is, you cannot possibly fix it. You can't get to a solution.
    The national payment error rate for 2014 was 3.6 percent, 
which accounts for $2.1 billion in overpayments and $500 
million in underpayments. That is what we have been operating 
on for over 3 years now with lack of data.
    Today, we may hear how infrequent fraud is in the SNAP 
program, but perhaps it is not frequent because it is not 
appropriately measured.
    As reported by the USDA inspector general, the Food and 
Nutrition Service has not established how States should 
compile, track, and report fraud in a uniform manner. The 
Federal Government cannot possibly grasp the scope and 
frequency of fraud in the program until we figure out how to 
report it.
    We also have a problem with the trafficking of SNAP 
benefits that diverts Federal money away from the intended 
purpose of providing nutritional meals to those in need. Food 
and Nutrition oversees retailer trafficking where some store 
owners have been found to illegally redeem over $1.2 million in 
SNAP benefits.
    Just a few weeks ago, investigators concluded a multiyear 
investigation, Operation Halfback, finding hundreds of people 
and businesses trafficked almost $4 million in SNAP benefits, 
some of which went to purchase guns and drugs.
    We have also noticed loopholes in the Food and Nutrition 
Service regulations where retailers who have been permanently 
disqualified from SNAP for trafficking are still in the system. 
If someone owns a second SNAP-certified store, they are still 
eligible to receive SNAP benefits in their non-disqualified 
store.
    So make no mistake, our fellow Americans deserve a helping 
hand in times of hardship, but waste and fraud take this 
assistance straight out of their hands and put it in the hands 
of people who don't need it and who are abusing it.
    I look forward to hearing solutions from our witnesses 
today to bring sustainability and integrity to the program.
    With that, Mr. Chairman, I yield back.
    Mr. Jordan. I thank the chairman.
    I will now turn to the ranking member from Maryland, 
Professor Raskin.
    Mr. Raskin. Mr. Chairman, thank you so much for calling 
this hearing, and I want to thank the witnesses for appearing 
today, too.
    SNAP is, of course, America's most important antihunger 
program. It reduces poverty and food insecurity, and improves 
health and economic outcomes for more than 42 million 
Americans, especially children. People receive an average $1.40 
per meal through the SNAP program. In order to be on it, you 
have to complete a detailed application and provide 
documentation on your income, identity, immigration status, and 
address. Nearly 90 percent of people on SNAP belong to 
households with children under the age of 18, or elderly 
persons over 60, or a family member with disabilities.
    In my home State of Maryland, over 696,000 people benefit 
from SNAP. In my district, it is 15,000 households. SNAP allows 
families to purchase nutritious meals in retailer locations, 
including farmers markets.
    This is a program that, I think, matters to every Member of 
Congress. Americans in every single congressional district 
benefit from SNAP. I looked at all of our districts, Mr. 
Chairman, and there are tens of thousands of our constituents 
who are on the SNAP program.
    The hearing occurs 1 week before the 2018 farm bill is 
slated for consideration on the House floor. That bill would 
impose dramatic new requirements that would effectively stop 
more than 2 million Americans in need from receiving food aid 
under SNAP.
    That comes after the House passed a $1.5 trillion tax cut 
that will give the wealthiest 1 percent of tax filers $84 
billion in 2019 alone. As it turns out, the tax cut recently 
enacted could finance the entire SNAP program for nearly 1.5 
years. In fiscal year 2017, the cost of the entire SNAP program 
was $68 billion.
    So I find it touching that we can give away billions in tax 
dollars to corporate investors who don't actually need it and 
don't have to prove that they are even working to receive their 
tax bonanza while at the same time planning to increase work 
requirements and cut food aid for Americans who are going 
hungry.
    I know that some will try to justify cuts to SNAP with 
allegations of fraud and abuse. Undoubtedly, there are 
corrections that can be made to the 3 percent of payments that 
are wrong, more of them, I understand it, underpayments than 
overpayments. But in fact, SNAP has one of the lowest fraud 
rates in the government at less than 5 percent.
    Over the last several years, the U.S. Department of 
Agriculture has taken aggressive steps to improve SNAP 
oversight and to work with States on rooting out waste. The 
USDA has brought down the rate of trafficking to about 1 
percent of benefits over the last 20 years. While all of us 
agree that waste, fraud, and abuse need to be rooted out, I 
think there are clearly other places in the government we could 
be looking.
    Mr. Chairman, I will just close on that thought. We had a 
hearing that found that there was $125 billion in immediate 
savings that would be available by cutting waste at the 
Pentagon, and I would hope we would be able to focus on that, 
too.
    I yield back.
    Mr. Jordan. I thank the gentleman.
    I now recognize the ranking member from Illinois for his 
statement.
    Mr. Krishnamoorthi. Mr. Chairman, thank you so much for 
holding this hearing. I would like this committee to help 
improve how the government serves the American people. We 
should start by recognizing the enormously important public 
service provided by the Supplemental Nutrition Assistance 
Program otherwise known as SNAP.
    SNAP feeds 42 million Americans who face hunger and food 
insecurity. In my own district, the Eighth Congressional 
District of Illinois, SNAP provides meals to nearly 28,000 
households.
    In fiscal year 2014, 69 percent of SNAP participants were 
families with children. SNAP is vital to America's low-income 
children. No other nutrition or income-support program reaches 
as many at-risk children or contributes as much to helping very 
low-income households who have children.
    SNAP's value far exceeds its costs. This year, for 
households in the program, SNAP will cost just $262.72 per 
household per year. According to the Center on Budget and 
Policy Priorities, SNAP averages just $1.40 per person per 
meal. These meals are crucial to sustaining these indigent 
families.
    I know what I am talking about because I have personal 
experience with SNAP's predecessor, the food stamp program. I 
came to our country with my family from India when I was 3 
months old, so my father could pursue his engineering education 
and our family could embrace all the opportunities that America 
has to offer. But despite my family's best efforts, it wasn't 
easy, and there was struggle. When my family needed help, 
thanks to the incredible generosity and goodwill of the people 
of America and its government, we were allowed to be put on 
food stamps.
    Today, my father is an engineering professor, my brother is 
a doctor, and I am honored to represent the people of Illinois' 
Eighth Congressional District. That is the American dream, the 
promise of a middle-class life with the opportunity for your 
children to have an even better life than you did. That dream 
was possible for my family because of my parents' hard work and 
the opportunities our country makes possible. But it was also 
possible because of food stamps. For families like mine and 
millions of others, SNAP and its predecessors have served as a 
critical social safety net and allowed us to bounce back from 
financial hardship.
    I believe that we must root out any fraud, waste, or abuse 
in SNAP and any other government programs, for that matter. 
According to the United States Department of Agriculture Food 
and Nutrition Service, for fiscal year 2014, 3.66 percent of 
SNAP benefits were issued through improper payments--3.66 
percent. I should say that any amount of fraud, waste, or abuse 
is too much. That is why I believe that the goal of our 
Oversight Committee should be to eliminate even the smallest 
amount of any improper payments, whether it is in SNAP programs 
or any other government expenditures.
    But I strongly disagree with any attempt to exploit common 
ground--that is common ground to root out waste, fraud, and 
abuse--to justify severe cuts to our Nation's premier 
antihunger program that serves millions and millions of women, 
men, children, seniors, and disabled Americans.
    I believe firmly that the best antipoverty job program ever 
created is a j-o-b, a job. But I also believe that it is wrong 
to allow our most vulnerable citizens to go hungry.
    I hope that the witnesses today will shed light on how to 
improve SNAP program integrity without building greater 
barriers to helping Americans who would go hungry.
    Thank you, and I look forward to your testimony.
    Mr. Jordan. I thank the gentleman.
    I want you all to imagine the scenario that I think could 
play out in every one of our districts later this afternoon.
    There is a guy who works second shift at the local plant. 
Remember, when you work second shift, you miss half your kid's 
Little League games, you miss some of their afterschool 
activities. But here's a guy who's working hard for his family. 
He goes out to get in his truck to drive to work. As he's 
getting in his truck, he looks a couple houses down and he sees 
the guy sitting on the front porch drinking coffee, reading the 
paper. And the second-shift worker knows the front-porch sitter 
can work and won't work and is getting his money.
    As he gets in his truck to drive to work, thinking about 
the guy back on the front porch, he has the radio on. It 
happens to be the news hour. The reporter comes on and says the 
Federal Government has a $20 trillion debt. They have some 
crazy program giving money to favorite corporations. One 
company went bankrupt and cost the taxpayers millions of 
dollars.
    He hears all that, remembers the guy back on the front 
porch, and guess what? This guy is ticked off. I would argue 
that he has every right to be mad.
    At the same time that he is driving to work, there is a 
lady driving home from work. She teaches second grade at the 
local school. She, like any good teacher, has busted her tail 
all day long to help her students. She is driving home from 
work, happens to have the radio on, happens to be on the same 
station where she hears the same reporter say the Federal 
Government has a $20 trillion debt. They have some program that 
gives money to some connected corporation. This company went 
bankrupt and cost the taxpayers millions.
    She hears all that as she pulls into her driveway, which 
just happens to be on the same street, and she sees the same 
guy sitting on the front porch drinking his coffee reading the 
paper. She knows he can work and won't work and is getting her 
money. And guess what? She's mad, too.
    I would argue that second-shift workers and second-grade 
teachers are tired of this approach we have to social welfare, 
which says to some people who are able-bodied adults, some of 
them who are even able-bodied adults with no kids, you don't 
have to do something to get taxpayer dollars.
    So I know, over the next hour or so, we are going to spend 
a lot of time talking about the 40 million people who get food 
stamps, and that is appropriate. We need to. In some cases, it 
is a very good program helping people just like the ranking 
member talked about his own family. But I think we also have to 
remember the 260-some other million folks in this country who 
are paying for the program, and it is not too much to ask to 
say, if you are getting a benefit from the government, you 
should have to do something to receive that. After all, it is 
hardworking taxpayers' dollars that we are talking about.
    So I say all that, I hope, to set a little context for the 
next few hours as we talk about this important program and as 
we move into a debate on the farm bill, where we talk about 
reauthorization of the SNAP program.
    With that, I will turn to our witnesses. Let me introduce 
our witnesses, then we will go to them.
    Let me start with Mr. Brandon Lipps, Administrator of the 
Food and Nutrition Service and Acting Deputy Under Secretary of 
the Food, Nutrition, and Consumer Services at the U.S. 
Department of Agriculture.
    Mr. Lipps, we appreciate you being here.
    We have Ms. Kathy Larin, director of education, workforce, 
and income security at the U.S. Government Accountability 
Office.
    We appreciate you being here with us, Ms. Larin.
    And Mr. Sam Adolphsen--Adolphsen? I don't know where to put 
the accent. Say it again?
    Mr. Adolphsen. Adolphsen.
    Mr. Jordan. Adolphsen, all right. I put the accent in the 
right place.
    A senior fellow at the Foundation for Government 
Accountability.
    And Ms. Stacy Dean, vice president for food assistance 
policy at the Center for Budget and Policy Priorities.
    We swear you in here, so if you will all please stand and 
raise your right hand, we will do this.
    [Witnesses sworn.]
    Mr. Jordan. Let the record show that each witness answered 
in the affirmative.
    Unanimous consent that Mr. Gianforte be able to participate 
in all aspects of the hearing.
    We are glad you are here.
    The ranking member is recognized for a motion.
    Mr. Krishnamoorthi. Mr. Chairman, I would like to submit 
two letters for the record, one from EPIC.org, that is 
Electronic Privacy Information Center, and the other from the 
Network Lobby for Catholic Social Justice.
    Mr. Jordan. Without objection, so ordered.
    Mr. Jordan. Now, we will go right down the line here.
    Mr. Lipps, you get your 5 minutes. You know how it works. 
Try to keep it under, if you can. If you go over, don't go much 
over. Then we will move down the list, and then we'll come back 
to questions.
    The gentleman is recognized.

                       WITNESS STATEMENTS

                   STATEMENT OF BRANDON LIPPS

    Mr. Lipps. Good morning, Chairman Jordan, Chairman Palmer, 
and Ranking Member Krishnamoorthi, and members of the 
subcommittee. I appreciate the opportunity to talk to you today 
about the Supplemental Nutrition Assistance Program commonly 
known as SNAP. I am the Acting Deputy Under Secretary for Food, 
Nutrition, and Consumer Services at USDA, and Administrator of 
the Food and Nutrition Service, where I oversee 15 nutrition 
programs, totaling nearly $100 billion per year. The largest of 
these programs is SNAP, with a total of 40.7 million low-income 
individuals being served.
    Today, I want to talk to you about three priorities that 
guide our work at FNS: integrity, self-sufficiency, and 
customer service. These interdependent principles help us to 
ensure that SNAP operates effectively, efficiently, and as 
intended by law.
    FNS works closely with our State partners to administer 
nutrition assistance programs that leverage our Nation's 
agricultural abundance. All those involved in these programs at 
the Federal, State, and local level are accountable for the 
program integrity.
    In programs of this size, even low fraud rates can 
translate into billions of dollars in taxpayer money. 
Therefore, FNS uses advanced data analytics to prevent new and 
emerging threats, as well as to identify and remove retailers 
who take advantage of the program. We also work with States to 
educate and equip them to fight participant fraud.
    To that end, just yesterday, we announced a comprehensive 
SNAP fraud framework geared at helping States with the tools 
they need to combat participant fraud.
    Another fraud reduction measure, which was included in the 
fiscal year 2019 President's budget, is the National Accuracy 
Clearinghouse, which improves States' abilities to check for 
duplicate participation in SNAP across state lines.
    It is also critical that benefits are issued only to those 
who are eligible and in the correct amount. For the first time 
in 3 years, FNS will announce a SNAP improper payment rate for 
fiscal year 2017 in June. It is worth noting that the OIG's 
audit findings suggest that State performance bonuses 
incentivize this bias. The fiscal year 2019 President's budget 
also called for eliminating these performance bonuses.
    Another important piece of our strategy is coordinating and 
enhancing ongoing efforts at the agency. That is why we 
recently announced the hire of a chief integrity officer to 
foster greater collaboration and to leverage lessons learned 
across each of our 15 nutrition programs.
    Another key agency priority is self-sufficiency. Nutrition 
assistance programs should not only be measured by how they 
provide for those in need but also how they support the 
transition to independence for those able to move beyond 
government assistance.
    There are approximately 15 million working-age, able-bodied 
adults on SNAP. Of these, over 9 million are not working. We 
can, and we should, do better.
    FNS recently published an Advance Notice of Proposed 
Rulemaking, which received over 22,000 comments on how to best 
help able-bodied adults without dependents, which we referred 
to ABAWDs, move back to stable employment. As the economy 
continues to improve, there is no better time than now to 
discuss how we can more effectively help those ABAWDs move to 
self-sufficiency.
    I recently visited an employment and training site and had 
a chance to talk to women training for nontraditional jobs. The 
excitement in their voices about the prospect of a new career 
and a new chapter in their lives was truly empowering. E&T 
programs can have a profound effect on low-income Americans, 
lifting them from poverty to prosperity. FNS's SNAP to Skills 
project and our E&T Learning Academy are just two of the ways 
we are working with States and local partners to identify and 
ensure best practices and improve our employment and training 
outcomes.
    Finally, we have the responsibility to provide the best 
customer service to all of our stakeholders. Though the Federal 
Government develops SNAP policy and conducts monitoring and 
oversight, State and local agencies are ultimately responsible 
for delivering program benefits. We must empower them to 
successfully execute this responsibility while also holding 
them accountable.
    I have met with SNAP administrators from across the country 
to hear from them on what is working and what is not. Many have 
indicated they are looking for more flexibility and less 
regulation, so they can better serve their local populations.
    To that end, we recently issued guidance to improve 
customer service by expanding allowable activities for States 
that use non-merit system personnel in their call centers. As 
we move forward, we will continue to identify ways to improve 
integrity, increase self-sufficiency, and deliver high-quality 
service to all our customers.
    As Secretary Perdue says, we can do right and feed 
everyone. I look forward to continuing to work with Congress to 
achieve that goal, and I am happy to answer any questions. 
Thank you.
    [Prepared statement of Mr. Lipps follows:]
   
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    Mr. Jordan. I thank the gentleman.
    Ms. Larin, you are recognized.

                    STATEMENT OF KATHY LARIN

    Ms. Larin. Chairman Jordan, Chairman Palmer, Ranking Member 
Krishnamoorthi, Ranking Member Raskin, and members of the 
subcommittees, I am pleased to be here today to discuss GAO's 
prior and ongoing work on USDA's Supplemental Nutrition 
Assistance Program known as SNAP. Specifically, my testimony 
today will address our work on SNAP employment and training 
programs, improper payment rates, recipient fraud, and retailer 
trafficking.
    First, regarding SNAP E&T, according to our analysis of 
USDA data, about 14 percent of SNAP recipients were subject to 
work requirements in an average month of 2016, but only 0.5 
percent of SNAP's 43.5 million recipients participated in a 
SNAP E&T program that year. SNAP E&T programs are generally 
designed to help SNAP recipients increase their ability to 
obtain regular employment through services such as job search 
and training.
    States have broad flexibility in how they design their E&T 
programs, and we found that they have made various changes to 
these programs in recent years, such as increasing partnerships 
with State and local organizations to deliver services, and 
increasing their focus on able-bodied adults without 
dependents, or ABAWDs. States we talked to noted that, in 
recent years, ABAWDs have become increasingly subject to time 
limits, which prevent those recipients from receiving benefits 
for more than 3 months unless they are working or participating 
in an employment program.
    Regarding improper payments, in 2015, USDA reported that 
3.66 percent of all SNAP benefits paid in fiscal year 2014, 
$2.6 billion, were improper. GAO reviewed USDA's SNAP improper 
payment rates in 2016, and we found that State and Federal 
policy changes likely affected these rates in the last decade.
    Specifically, we found that policies that simplified 
program rules likely lowered improper payment rates while other 
policies may have increased them. USDA did not report on 
improper payments in 2016 or 2017 due to data quality issues 
identified by the department and by the USDA IG. However, USDA 
has been working with States to resolve these issues and is 
expected to release new estimates by June 30 of this year.
    Regarding recipient fraud, in 2014, we reported that States 
faced several challenges in combating recipient fraud. For 
example, we found that USDA guidance on the use of data 
analytics to detect fraud lacked specificity, and we 
recommended that USDA develop additional guidance. We also 
found that tools recommended for monitoring e-commerce or 
social media websites for potential fraud were ineffective. 
USDA's recently released fraud framework may help address some 
of these issues. Additionally, we recommended that USDA 
consider revisiting its financial incentives to better support 
cost-effective antifraud strategies, but the department decided 
not to make changes to address this issue.
    Finally, regarding trafficking, in 2006, we reported that 
SNAP was vulnerable to retailer trafficking.
    For example, we found that USDA did not have a system in 
place to ensure that retailers at highest risk for trafficking 
were quickly targeted for monitoring, and we recommended that 
they provide earlier targeted oversight to these stores. We 
also found that USDA's penalties for retail trafficking may 
have been insufficient to deter traffickers, and we recommended 
that penalties be increased.
    Since we reported on these issues, USDA has established 
risk levels for each retailer and proposed rules to increase 
penalties. However, USDA has not finalized these rules, and as 
of fall 2017, these rules were considered inactive.
    In conclusion, many of our Nation's most vulnerable 
citizens rely on SNAP to obtain an adequate and nutritious 
diet, and USDA has taken some steps to improve the integrity of 
the program, but more could be done.
    GAO continues to examine these issues for the subcommittee 
and looks forward to providing additional information later 
this year.
    This concludes my statement, and I am happy to answer any 
other questions you have.
    [Prepared statement of Ms. Larin follows:]
    
    
    
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    Mr. Jordan. Thank you, Ms. Larin.
    Mr. Adolphsen?

                   STATEMENT OF SAM ADOLPHSEN

    Mr. Adolphsen. Chairman Jordan, Chairman Palmer, Ranking 
Member Krishnamoorthi, members of the committee, thank you for 
the privilege of testifying.
    A couple years ago, I sat in an FBI office in Portland, 
Maine, presenting suspicious food stamp data to FBI special 
agents and investigators from the USDA. In my role as chief 
operating officer at the Maine Department of Health and Human 
Services, a colleague and I had discovered what we believed was 
a massive case of welfare fraud. The Federal officials agreed, 
and, after a lengthy investigation, Ali Daham, the owner of 
Ahram Market in Portland, was found guilty of millions of 
dollars in SNAP and other welfare fraud.
    Daham, who was also fraudulently receiving SNAP benefits 
himself, had been trading cash for food stamps in his corner 
store for years. It is one of the largest fraud cases in Maine 
history.
    The Maine story is not unique. There are cases like this 
around the country, even as some claim welfare fraud isn't a 
problem or that it is a victimless crime.
    It is a big problem, and the victims are very real. Fraud 
steals from the truly needy and traps families in dependency.
    An award-winning fraud director in one Ohio County said he 
believes the real fraud number is as high as 20 percent, one in 
five cases. When States look for food stamp fraud, they find 
it. What is indefensible is that many don't bother to look. Too 
many view Federal food stamp funds as free money instead of as 
a resource to be carefully guarded.
    To stop trafficking fraud where benefits are traded for 
cash or drugs, we should limit the number of users of an EBT 
food stamp card, require people to cooperate with fraud 
investigators, and empower States to shut down retailers that 
steal benefits.
    To stop eligibility fraud, those cases when individuals get 
on food stamps when they are not eligible, let's require real-
time reporting, conduct regular checks, and close loopholes.
    There is much more detail on these solutions in my written 
testimony.
    Change needs to happen. That much is clear. But the best 
way to stop welfare fraud is to get people off welfare and back 
to work.
    And not all food stamp fraud happens at a street corner 
drug deal or in a dingy convenience store. The fraud that harms 
the most people happens with the government stamp of approval.
    Abuse of waivers of work requirements for able-bodied 
adults has disfigured Federal law and waived work for millions. 
So instead of working, able-bodied adults with no kids on food 
stamps don't work. Despite record low unemployment and millions 
of open jobs, three out of four don't work at all.
    A Federal law allows waivers only when unemployment is at 
least 10 percent or there are not enough jobs, but there are 
1,200 counties and cities were work requirements are being 
waived, and just 42 of those have unemployment above 10 
percent.
    Today, there are a record number of open jobs available in 
the country, 6.6 million open jobs. California is that their 
all-time low unemployment, and yet, they have been granted a 
statewide waiver of work requirements for more than 800,000 
able-bodied adults with no kids. One of these California 
counties has 2.2 percent unemployment. These waivers should not 
be allowed any more than swapping an EBT card for drugs is.
    The waivers for work requirements were meant for tough 
economic times. Instead, they continue to be handed out in the 
best economy in decades. That is the definition of fraud. It is 
not right, and it is not how the program should work. It robs 
able-bodied adults of the opportunity and dignity that they 
gain through the power of work.
    This waiver fraud is possible because previous regulations 
and guidance from USDA has allowed it and, in the past, even 
encouraged it. By allowing the use of bad data, old data, and 
gerrymandering, California and 33 other States waive work for 
more than a third of the country.
    It is clear that changes are needed to battle the 
significant problem of trafficking and eligibility fraud, but 
the best way to improve the integrity of food stamps is to stop 
this waiver abuse and move millions of able-bodied adults from 
welfare to work.
    Thank you. I am happy to answer any questions.
    [Prepared statement of Mr. Adolphsen follows:]
    
    
    
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    Mr. Jordan. Thank you, Mr. Adolphsen.
    Ms. Dean, you're up.

                    STATEMENT OF STACY DEAN

    Ms. Dean. Chairman Jordan, Chairman Palmer, Ranking Member 
Krishnamoorthi, members of the subcommittee, thank you for the 
opportunity to testify this morning. I am Stacy Dean, the vice 
president for food assistance policy at the Center on Budget 
and Policy Priorities, a nonpartisan policy institute here in 
D.C.
    I plan to talk about three things this morning: the vital 
role of SNAP, the vital role of program integrity in SNAP, and 
the likely impact of the pending House farm bill on SNAP.
    First, SNAP. SNAP is a highly effective antihunger program. 
Today, it helps about 40 million low-income Americans afford a 
nutritionally adequate diet by giving them benefits through a 
debit card that they can use only to buy food. Benefits average 
a $1.40 per person per meal, and one in eight Americans 
participate in SNAP, which reflects SNAP's important role in 
addressing the extensive need across the country.
    SNAP is an entitlement, so anyone who qualifies can receive 
benefits. That enables SNAP to respond quickly and effectively 
to support low-income families and communities when the economy 
turns down and need rises. So while SNAP enrollment expands 
when the economy weakens, it also shrinks when the economy 
recovers.
    SNAP is also an important work support, helping workers 
both when they are between jobs and supplementing their low 
earnings. That is why looking at the work status of 
participants at a specific point in time substantially 
overstates their joblessness.
    Mr. Lipps noted that, in an average month in 2016, about 9 
million adults participating in SNAP did not have earnings, and 
we agree with that. But about 4.5 million of them worked within 
a year, so they were participating on SNAP when they were 
temporarily unemployed. Of the other 5 million, over a third of 
them couldn't work due to caregiving responsibilities, and most 
have working spouses. Nearly a quarter had a disability or a 
chronic health condition that limited their work, and close to 
a third were going to school or were not working.
    Second, let me turn to program integrity.
    USDA and States take their roles as stewards of SNAP very 
seriously, and they emphasize program integrity throughout 
SNAP's operations, participant eligibility, state accuracy, and 
participants redeeming benefits at SNAP retailers. The 
authorizing committees have mandated some of the most rigorous 
program integrity standards and systems of any Federal program, 
and they do provide rigorous oversight of SNAP's accuracy and 
fraud detection and prevention systems.
    Numerous measures ensure the accurate assessment of 
household eligibility during the eligibility determination 
process, ongoing checks, and reassessment of eligibility. The 
same is true with respect to the proper use of benefits, an 
area of fraud prevention and detection where USDA plays a very 
significant role.
    These measures are designed to detect and prevent honest 
mistakes, careless errors, systemic mistakes, and the less 
frequent problem of intentional fraud.
    CRS did an excellent job summarizing the SNAP program 
integrity and error reduction efforts in a recent report, and a 
few of its observations bear repeating.
    First, errors are not the same as fraud. Many conflate the 
two. Fraud is an intentional activity that breaks Federal or 
State laws, but program stakeholders, particularly recipients 
in States, may also inadvertently err in ways that can then 
affect benefit amounts. Some acts, such as dual enrollment, 
could be error or fraud, and it is important to calibrate the 
response to the cause of the problem.
    Second, SNAP fraud is rare, according to all available data 
and reports. The illegal and inaccurate activities that do 
occur are serious and merit a very serious response. However, 
they do represent a small fraction of SNAP activity overall. We 
strongly favor efforts to improve program integrity, so long as 
they are warranted by evidence, are cost-effective, and would 
not meaningfully impede program access.
    Third, let me turn to the farm bill. Unfortunately, H.R. 2, 
the farm bill that the House will likely consider next week, 
could reduce SNAP's effectiveness. According to CBO, it would 
cut benefits to poor households by more than $17 billion over 
the next 10 years and would cause more than 1 million low-
income households with more than 2 million people, particularly 
low-income working families with children, to lose their 
benefits or have them reduced. It includes sweeping new work 
requirements that would likely prove unworkable and increase 
hunger and poverty. The bill would force States to develop 
large, new bureaucracies but do little to increase employment, 
and leave substantial numbers of low-income people with 
barriers to work, such as very limited skills or chronic health 
conditions, with neither earnings nor food assistance.
    The farm bill could have been a bipartisan effort that 
strengthens SNAP, promoted work, and shored up program 
integrity. Instead, it is largely a package of harmful, 
unworkable, and untested policies that will weaken the program.
    Again, thank you for the opportunity to testify, and I am 
pleased to answer your questions.
    [Prepared statement of Ms. Dean follows:]
    
    
    
    
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    Mr. Jordan. Thank you, Ms. Dean.
    The gentleman from Alabama is recognized for 5 minutes of 
questioning.
    Mr. Palmer. Thank you, Mr. Chairman.
    I was listening to your testimony, Ms. Dean, and I find it 
interesting, some of the things that you quoted there, about 
how this will harm people to go to work.
    I grew up dirt poor. I mean, my father had an eighth-grade 
education. He's blind in one eye. And I was able to get out of 
that situation by working, not by going on a government 
program.
    What I want to point out to you is, work requirements were 
implemented in the State of Kansas, and I just want to read 
some of the results.
    Jason, who was previously unemployed and was on food stamps 
for 4 years, after the work requirements, he got a job, and he 
is earning $45,000 a year.
    Do you have a problem with that? I didn't think you did.
    Amy was previously unemployed. She was on food stamps for 2 
years. She is now earning $27,000 a year.
    Matt was on food stamps for years. He is now earning 
$34,000 a year.
    Sarah was on for 3 years. She is earning $37,000 a year. 
And I could go on.
    The thing that really bothers me about all this is that it 
comes across to me that some folks really do want to see people 
remain dependent on the government, and that, I just can't 
believe it.
    I mean, I am going through the farm bill. I've read the 
provisions in it for the improvements in SNAP and giving people 
the ability to stay on food stamps while they are getting job 
training or getting a job or volunteering, and it is just 
beyond my comprehension that anybody would oppose that for 
able-bodied adults without children.
    I have even heard one of my colleagues say that it would 
violate child labor laws, and I just want to emphasize, this is 
able-bodied adults without children. It doesn't violate any 
child labor laws.
    I will tell you the opposition to it violates the laws of 
common sense. I really believe that.
    Mr. Adolphsen, one of the reasons the current work 
requirements in SNAP have been largely ineffective is the 
widespread use of waivers, as you pointed out. And I think it 
is the GAO report, Ms. Larin, you point out that only about 0.5 
percent actually took advantage of the training. Out of 43 
million people, only about 200,000, is that correct?
    Ms. Larin. Yes, 0.5 percent of SNAP recipients participated 
in the SNAP E&T program. The vast majority of SNAP recipients 
are not able-bodied adults. Many are exempt from work 
requirements. Those include children, the elderly, the 
disabled. But 15 percent were work registrants in 2016.
    Mr. Palmer. That would be about 6 million, right?
    Ms. Larin. Yes, that is correct.
    Mr. Palmer. Fifteen percent of 43 million is a little over 
6 million.
    My point here is that there are, right now, about 6 million 
available jobs. If that 15 percent of able bodies who do no 
work entered into the work force, we could pretty well fill 
those positions and still provide the benefits to the people 
who truly need them, the disabled, the low-income families with 
children.
    One other statistic on this that gets me is that I believe 
about 63 percent of the people who are on food stamps, Mr. 
Adolphsen, correct me if I'm wrong, are under 35 years old. Is 
that correct? No, a little over half, a little over 50 percent 
of people on food stamps, on SNAP benefits, are under 35. Is 
that correct?
    Mr. Adolphsen. That sounds right, Congressman.
    Mr. Palmer. Yes, and I think a little over 40 percent of 
those are men.
    This is the guy that was sitting on the front porch, Mr. 
Chairman, drinking, you said, a cup of coffee. He may have been 
drinking a beer, I don't know. I didn't drive by. That really 
bothers me, again, having grown up the way I did and knowing 
that the only way out of that situation is a good job, a good-
paying job.
    As my colleague from Illinois pointed out, that is the best 
antipoverty program, a good-paying job. It is the best thing to 
do for an individual's health.
    Would you agree with that, Mr. Adolphsen?
    Mr. Adolphsen. Yes, I think we have seen the results in 
States that have brought work requirements back into play. In 
my home State of Maine, just a year after implementing that 
requirement, the incomes of those individuals that left food 
stamps more than doubled in just 1 year.
    You mentioned Kansas. We have seen that work. I think 
people aren't participating in E&T because it's not required. 
It's typically done only as a voluntary thing, and there's no 
penalty if they don't work or if they don't participate.
    Mr. Palmer. Mr. Chairman, my time has expired. I just want 
to close with this, that as a result of the tax cuts and JOBS 
Act, we now have record unemployment. We have higher wages. 
There are over 6 million job openings, and the economy is 
poised to grow at an even greater pace. I cannot think of a 
better time than this right now to help low-income families get 
out of poverty, get off government dependence, and get a job 
and really get themselves onto a brighter future.
    I yield back.
    Mr. Jordan. I thank the gentleman.
    The gentleman from Illinois is recognized, the ranking 
member.
    Mr. Krishnamoorthi. Ms. Dean, I think that Mr. Palmer had 
some points he made, and I think a couple of them were directed 
toward you. Do you want to respond to any of those?
    Ms. Dean. Thank you so much.
    If I have left anyone with the impression that we don't 
believe at the center that work is the single most powerful 
pathway out of poverty, then I did a poor job. Of course, work 
is crucial to family well-being and economic success. That is 
why the center does so much work on key work supports, like the 
earned income tax credit, Medicaid, and SNAP, which is a 
program that supports low-wage working families.
    The problem is that a lot of work does not pay. So in Mr. 
Jordan's example, the custodian at the second-shift plant and 
the teacher's aide in that second-grade teacher's class could 
well be SNAP participants with inconsistent hours, low pay, and 
no benefits. So the program does play a vital role in 
supporting work.
    The concern I have about H.R. 2, and I'll just be brief on 
this, is that before you even get to the question of the work 
requirements and whether the services that would be offered 
would be the quality kinds of things that Mr. Lipps talked 
about earlier, 7 million people would have to file a form every 
month demonstrating that they were working 20 hours a week or 
were exempt.
    And this is where I think we talk about people getting 
caught in a net. A mom with a young kid who was sick has to 
prove that the child was truly sick to the satisfaction of a 
caseworker. We are suggesting that large, massive bureaucracies 
can make mistakes and put benefits at-risk. So we are putting 
benefits to families with children and workers at-risk, and 
that is a deep, deep concern.
    So thank you for the opportunity. I'm sorry. I should let 
you get back to your question.
    Mr. Krishnamoorthi. So kind of explain to us how, as you 
mention, if H.R. 2 were to go into existence or be passed, that 
a million additional people would essentially go hungry without 
the food stamp assistance that they would receive otherwise.
    Ms. Dean. I want to be careful about ``going hungry.'' That 
is an important and powerful term. I think we believe, without 
food assistance, absolutely, hardship will increase, and 
families would be at-risk.
    CBO does say, for example, 400,000 working families with 
nearly a million people would be terminated from food 
assistance under the bill, which would repeal an option that 
States have to extend the program. That is just making their 
lives more precarious.
    You are an example of a child that benefited from ensuring 
steady, stable nutrition during key developmental years.
    Mr. Krishnamoorthi. I think that is one of the fundamental 
issues here, which is that children are in so many of these 
families that receive this SNAP assistance. Through no fault of 
their own, through nothing that they had to do with a mistake 
on paperwork or bureaucratic errors, or anything like that, 
they may go without the essential food assistance that they 
have come to rely upon. Is that fair to say?
    Ms. Dean. That's right. It's an untested scheme, which is 
really unfortunate, because the last farm bill included $200 
million to test very robust demonstration projects to look at 
different interventions around work, so that Congress would 
have a better sense of what works and what doesn't before 
obligating billions of dollars to a new system. In the end, 
it's true, it's poor families who are at-risk under this 
approach.
    Mr. Krishnamoorthi. Tell us, again, how many children will 
go at-risk of losing food assistance because of H.R. 2?
    Ms. Dean. Sorry, I don't have that number at the ready, but 
a significant share of the 2 million are families with kids.
    Mr. Krishnamoorthi. I understand. Ms. Dean, your testimony 
discussed the positive impacts that SNAP has had in reducing 
hunger and poverty in our country, yet, I've also heard people 
say that our investment in antipoverty programs such as SNAP 
has not had any impact on reducing poverty. So can you kind of 
help us understand the discrepancy in these perspectives?
    Ms. Dean. It absolutely has. The official poverty measure 
doesn't include the value of income transfer programs like 
SNAP. So that is why the Census Bureau recommends using an 
alternative measure, the supplemental poverty measure, which 
adds it back in.
    When you add the value of transfer programs, SNAP lifts, 
for the most recent year available, more than 8 million people 
out of poverty, 4 million children. So poverty experts agree, 
it is totally appropriate and preferable to include the value 
of transfer programs. When you do that, you see the powerful 
impact that the safety net has on addressing poverty.
    Mr. Krishnamoorthi. Thank you, Ms. Dean.
    Thank you. I yield back.
    Mr. Jordan. I thank the gentleman.
    The gentleman from Tennessee is recognized, Mr. DesJarlais.
    Mr. DesJarlais. Thank you, Mr. Chairman.
    Mr. Lipps, you mentioned in your testimony that SNAP is 
intended to support the transition of able-bodied adults to 
stable employment. Would you agree that there is a lack of 
available data from USDA in regards to the amount of time 
individuals actually receive the benefits?
    Mr. Lipps. Yes, Mr. DesJarlais. We have some data on that, 
but it is mostly survey data. We don't, at the national level, 
have accurate data held on that.
    Mr. DesJarlais. So would you agree, then, that it would be 
very difficult for us to judge the effectiveness of the program 
in transitioning people off of welfare if we don't even know 
how long they are on the program?
    Mr. Lipps. Yes, sir. I think the more data that we at FNS 
are able to have, the better we can serve recipients.
    Mr. DesJarlais. How do we fix that?
    Mr. Lipps. I think we need to make sure that we can have 
access to that type of data. States need to be measuring when 
people are moving on and off of work.
    Ms. Dean added some follow-up to my statistics on the 
number of people not working. I don't disagree with those, but 
I think part of the problem is that so many of these 
individuals churn on and off work, and the employment and 
training program is about helping people find long-term, stable 
employment, and that is what we should be measuring on these 
people.
    Mr. DesJarlais. States currently receive bonuses for 
meeting the minimum requirements for administering the program. 
Is that correct?
    Mr. Lipps. That's correct. Yes, sir.
    Mr. DesJarlais. Okay. Do you also think that these bonuses 
may incentivize States to potentially falsify their records to 
become eligible for these bonuses? And how much are these 
bonuses?
    Mr. Lipps. The OIG did suggest in their investigation that 
that was a factor in what States did. The bonuses are $24 
million a year.
    Mr. DesJarlais. To all States?
    Mr. Lipps. To States. I believe we give them to eight 
States with the best error rates and a couple additional States 
on improved error rate.
    Mr. DesJarlais. So they are actually sending money to these 
States for doing a good job of signing people up to the 
program.
    Mr. Lipps. For processing them well, yes, sir.
    Mr. DesJarlais. It is often reported by States that their 
error rate is extremely low or even zero. Would you agree that 
it is important to point out that, under current law, the 
threshold for errors is actually $37?
    Mr. Lipps. Yes, sir. That is important to know when 
calculating what the error rate is.
    Mr. DesJarlais. Do you think that should be changed?
    Mr. Lipps. I think it is important that we accurately 
report what the actual errors are and what people judge that to 
be. Yes, sir.
    Mr. DesJarlais. So if the threshold is $37, can you 
speculate how much money may be being overlooked?
    Mr. Lipps. I can't speculate on that exactly, but if you 
consider that the average benefit is $123, I believe $37 is a 
significant percentage of that.
    Mr. DesJarlais. Yes, I would agree.
    Mr. Adolphsen, you mentioned in your testimony something 
known as broad-based categorical eligibility, or BBCE. As I 
pointed out earlier, we have an extreme lack of data when it 
comes to SNAP recipients. Would you agree that broad-based 
categorical eligibility, which waives the asset test, is a 
contributing factor?
    Mr. Adolphsen. Yes, sir. Since we don't collect assets at 
all, we have a limited view of the income and resources 
available to a household.
    Mr. DesJarlais. Can you go into some more detail on 
additional problems associated with the BBCE?
    Mr. Adolphsen. Sir, the broad-based categorical eligibility 
relies on a gimmick where States convey a TANF-funded document, 
usually a brochure, to a recipient, making them eligible. So by 
handing them a TANF-funded document, and some States don't even 
actually give it to them, that confers automatic eligibility on 
them and waves the asset test. It also allows their income 
level to be much higher than traditional eligibility.
    Mr. DesJarlais. Isn't that kind of cheating the system?
    Mr. Adolphsen. I believe it is, and, unfortunately, an 
increasingly large percentage of cases are found eligible 
through that door. I believe it is over 65 percent, at this 
point.
    Mr. DesJarlais. Would you say it is possible that some of 
these programs that are cheating the system are also the States 
where these performance bonuses are going?
    Mr. Adolphsen. That is fair to say. I do know the current 
version of the farm bill eliminates broad-based categorical 
eligibility as well.
    Mr. DesJarlais. Right. I agree. As you point out in your 
testimony, there is quite a bit of confusion when it comes to 
who faces a work requirement for SNAP and who is exempt, which 
often leads to States not appropriately enforcing work 
requirements. Would you agree that, instead of several 
confusing categories, it would be more effective to simply have 
one category of work-capable adults from age 18 to 59 with 
exemptions being for those who were pregnant, mentally or 
physically disabled, or a guardian of a child under age of 6?
    Mr. Adolphsen. Yes, without a doubt, all able-bodied adults 
should have a requirement in place, a work requirement.
    Mr. DesJarlais. I think that is an issue that over 80 
percent of America agrees on, whether you are Democrat, 
independent, or Republican, so I think that is a winning issue.
    And I yield back my time.
    Mr. Jordan. I thank the gentleman.
    We now recognize the gentlelady from New Jersey for her 5 
minutes.
    Ms. Watson Coleman. Thank you, Mr. Chairman.
    I agree with everyone that every able-bodied person in this 
country who has the skills and the opportunity, and is free of 
discrimination, should be working, and that the work that they 
have should pay a living wage so that they don't have to 
supplement it with any kind of government assistance.
    I recognize that SNAP costs a $1.40 a meal, and we are 
sitting here having this long discussion, making assumptions 
about people sitting on their porches, not knowing what the 
hell their problem or issue may be, not even defining what 
able-bodied might be, when we had no discussion on passing an 
incredibly, incredibly generous, outrageous tax bill to the 
wealthiest 1 percent of this country, and we had not a hearing, 
not a committee meeting, not a vetting, not a darn thing, just 
an opportunity to vote yes or no, and I voted no.
    I am offended that we make assumptions about people who we 
may think are able-bodied or should be working when they are 
only receiving minimal help from the government in order to 
ensure that they are nutritiously cared for, even if they have 
children or don't have children.
    The richest country in the world needs to spread some of 
that generosity to those who need it the most. No one--no one--
should be hungry. And no one--no one--should be questioned 
about whether or not they are eligible for a $1.40 a meal. And 
this is very offensive to even have this discussion here right 
now.
    I want to ask, who represents the nonprofit? You, Mr. 
Adolphsen. What does your nonprofit do?
    Mr. Adolphsen. Our nonprofit is a public policy think tank 
that focuses on welfare and health care issues.
    Ms. Watson Coleman. Thank you. So did you all have any 
opinion on the tax bill, the tax initiative that was passed 
most recently? And if so, what was it?
    Mr. Adolphsen. We do not engage in tax policy, but I think 
it is fair to say that, in part because of that tax cut, that 
work now pays like it never has before.
    Ms. Watson Coleman. Do you have an understanding that the 
situation of work availability has a lot to do with the 
communities in which you live, the education which you have 
had, and the color of your skin or your ethnicity?
    We are having this Pollyanna discussion as if there is 
equality in this country. There has never been equality in this 
country. Inequality is at its absolutely highest level right 
now.
    So I am particularly offended to sit here and listen to 
either my colleagues or those who are testifying to suggest 
that there are people who are gaming a system at a $1.40 a meal 
when 1 percent of this country has gamed an entire economy.
    Ms. Dean, I want to thank you for the work that you do and 
for the information that you have shared with us. I know that 
you must agree that there needs to be better monitoring devices 
to ensure that those few who shouldn't receive these benefits 
don't receive these benefits. Do you have anything that you 
would like to contribute along that line?
    Ms. Dean. Thank you for the opportunity. Actually, 2 years 
ago, I testified before a different set of subcommittees, as 
well as the House Agriculture Committee.
    We have suggested that States be given better access to 
some of the kind of data systems that were built for health 
coverage, healthcare.gov, that HHS has a big data system that 
we think would give States quick assess when they are talking 
to someone to verify what they are saying.
    We do support the proposal to create a National Accuracy 
Clearinghouse. We just have serious concerns about the way it 
has been proposed in the farm bill.
    I think also an increase in resources for fraud 
investigators, both at the Federal level and at the State 
level, is a welcome idea. Unfortunately, the farm bill didn't 
do that.
    May I jump in on one point that was raised?
    Ms. Watson Coleman. If you do it really quickly, because I 
have a question for Ms. Larin.
    Ms. Dean. Absolutely. I just want to raise a point about 
the success that has often been touted about Kansas and Maine. 
I do think that often what is reported is what happened after 
the intervention, but there is no actual comparison data 
relative to what we would've seen in the absence of the 
intervention.
    When you compare employment and earnings rates post-
intervention to a year prior, there is virtually no difference. 
I think that is really crucial in an evidence-based 
environment, to not pursue an approach without a robust 
assessment of the facts.
    Ms. Watson Coleman. Thank you so much.
    Ms. Larin, I guess you are best to answer this question. 
You said that there is a certain percentage of these improper 
payments that were made. What percentage was that? And what 
percentage of those were determined to be fraudulent payments, 
as opposed to improper payments?
    Ms. Larin. Improper payments and fraud are two completely 
different things.
    Ms. Watson Coleman. I know that.
    Ms. Larin. Right.
    Ms. Watson Coleman. I'm not sure everyone does, but I know 
that.
    Ms. Larin. Yes. So improper payments occur when a 
beneficiary either gets too much or too little.
    Ms. Watson Coleman. So what percentage? I am asking a 
really specific question here. What is your knowledge of the 
percentage that are improper? And of that improper, what 
percentage is actually fraudulent payments?
    Ms. Larin. We do not know. The only fraud rate that USDA 
measures is retailer trafficking, which does not cover 
recipient fraud, so we have no idea what the recipient fraud 
rate is.
    Ms. Watson Coleman. Thank you.
    My time is up. I yield back. Thank you very much.
    Mr. Jordan. I thank the gentlelady.
    The gentleman from North Carolina is recognized for 5 
minutes.
    Mr. Walker. Thank you, Mr. Chairman.
    Under the Obama administration, SNAP recipients went from 
28 million to 44 million. That is a 64 percent increase. The 
population under that same time increased by 6 percent.
    Ms. Dean, how do you explain that? What would be your 
reasoning for that kind of spike?
    Ms. Dean. I have two reasons.
    First was the extraordinary economic downturn that occurred 
as the Bush administration was ending and the Obama 
administration was beginning. That was the primary driver of 
enrollment.
    But the second is that the share of eligible people was on 
the rise. So the program now serves, I believe, over 80 percent 
of eligible people relative to fewer than 75, so even if the 
economy improves, the program will be serving ----
    Mr. Walker. Okay, what is the point of transition off such 
a program? I mean, do you have a plan or thought about how you 
would transition people back into the work environment?
    Ms. Dean. I think what we have now, which is a growing 
economy and a low unemployment rate, is the best path.
    Mr. Walker. Well, we have I know in our community and many 
others many wages starting at $13 to $15 an hour, and it is a 
problem to find people because of the level of some of these 
government benefits.
    My friends like to make this a humane argument, but what is 
humanitarian about keeping people trapped at this poverty level 
boggles my mind.
    I think we have failed the American people when we begin to 
perpetrate the idea that by adding people more to a program 
somehow creates a success. Our ultimate goal would be, how do 
we transition people off the government entitlement programs 
such as SNAP?
    Obviously, there are kids and there are family situations 
who we want to back up and support, but for many people, the 
able-bodied adults, the people that we are talking, it is a 
God-given, created ability that many people have different 
skills and unique talents. And when we put up roadblocks--to 
me, that is a travesty--to be able to encourage and to motivate 
people back into the work force ----
    Ms. Dean. If I may ----
    Mr. Walker. I am sorry. I don't have time to respond right 
now. If I do at the end of the question, I will come back to 
you.
    Mr. Lipps, what is the total number of SNAP recipients for 
the last fiscal year?
    Mr. Lipps. Forty-two million, two hundred thousand.
    Mr. Walker. And what is the total estimated cost of 
benefits for those recipients?
    Mr. Lipps. Sixty-three billion, seven million.
    Mr. Walker. Okay. For that large of a population, I am sure 
that USDA and/or maybe FNS has ways to prevent improper 
payments. Are there any methods or programs of identifying 
improper payments within USDA FNS?
    Mr. Lipps. Yes, sir. FNS provides a lot of technical 
assistance to States, and they have a lot of training programs. 
Our quality control system is our measure of how well we are 
doing in improper payments.
    Mr. Walker. Can you describe the current process or program 
by which the payments are identified?
    Mr. Lipps. Yes, sir. So the quality control process is the 
issue that we did have a problem with States inserting bias 
into the process in years past. Prior to my arrival and 
continuing now, FNS has done a great job of revising that 
process both at the Federal and State level so that we will be 
able to report an error rate to you this year.
    Mr. Walker. OMB recently tried to address the issue of 
improper payments with a National Accuracy Clearinghouse, the 
NAC, in Alabama, Georgia, Florida, Louisiana, and Mississippi. 
Has this program resulted in any significant reduction in dual 
SNAP participation?
    Mr. Lipps. Yes, sir. It was only tested in a few States, so 
on the size of 40 million recipients. It is difficult to say 
what is significant, but we think that any ability to root out 
fraud in the program is significant, so we did recommend in the 
President's budget that this be expanded nationwide.
    Mr. Walker. Very good. How do you compare this to the 
current PARIS system?
    Mr. Lipps. The National Accuracy Clearinghouse provides a 
lot of opportunity that PARIS does not. PARIS is not a real-
time check on dual participation and has some other issues that 
can be fixed.
    Mr. Walker. Fair enough. Thank you. If adopted, does FNS 
have an estimate for total savings across a 10-year period 
using the NAC, or the National Accuracy Clearinghouse?
    Mr. Lipps. Yes, sir. The estimate in the President's budget 
was roughly $1 billion over the baseline.
    Mr. Walker. And I gave my word to Ms. Dean that I would 
come back if I had an extra question. I want to honor that, but 
let me preface it by saying this. Republicans are trying to be 
presented here as non-compassionate. I spent much of my life 
working the inner cities of Cleveland, New York, Baltimore. 
This is about hope, not judgment. This is about being able to 
help families and people find a way to fulfill their God-given 
gifts and skills and talents, with which we are all uniquely 
created. That is why we are passionate about this.
    How do we help? How do we transition this without 
continuing to create more and more government systems and 
adding millions and millions of people on those roles?
    I want to yield back. I have 30 seconds. I yield that time 
back to you.
    Ms. Dean. I just wanted to say, I think the true measure of 
success is no food insecurity and no poverty. We tout 
enrollment in SNAP as, I guess, a step along the way to that, 
because it is so successful in addressing hunger and food 
insecurity, but the goal is a country without those two 
problems.
    Mr. Walker. But when we see a spike from 28 million to 44 
million, 64 percent, that ought to trouble us, not encourage 
just to say, hey, we are serving, as we have heard today, we 
are serving the American people. For able-bodied adults, there 
is a better way, and we must work to find it.
    Thank you, Mr. Chairman. I yield back.
    Mr. Jordan. I thank the gentleman.
    The professor from Maryland is recognized.
    Mr. Raskin. Mr. Chairman, thank you very kindly.
    First, I just want to say that I agree that all able-bodied 
Americans should be engaged in productive work and not sitting 
around all day tweeting or filing bankruptcy or watching TV. 
And as Chairman Jordan points out, that can get the rest of the 
population very angry, to see people who are not participating 
in a meaningful way in the work force.
    Now, the premise of some of the questions seems to be 
either you are collecting SNAP benefits, or you were working. 
And that puzzled me, because I always thought that working 
people could get SNAP benefits if they were otherwise eligible.
    Ms. Dean, can you clarify that for me?
    Ms. Dean. You are absolutely correct. Unfortunately, too 
many jobs pay too little or offer too few hours, so we have 
millions of people who qualify for SNAP. About, of the working-
age folks on the program, I think 65 percent include a worker 
of the able-bodied definition.
    Mr. Raskin. All right, so I want to be clear about that. 
You are saying nearly two-thirds of the people who receive SNAP 
benefits are able-bodied working people who are, in fact, 
working but not making enough money to support their family in 
a way to avoid food insecurity?
    Ms. Dean. Within that able-bodied age group. The number is 
even higher amongst families with children. Of course, if you 
look whether they were working before or after on SNAP, it is 
even higher. SNAP is there both as a form of unemployment 
insurance and a low-wage supplement.
    So again, when thinking about work interventions, it is 
important to think about who we are targeting, an individual 
who will rapidly reemploy within a month or so on their own 
and, therefore, spending money on expensive training might not 
be the best first solution. Is it someone who actually needs 
more robust intervention, or is there something else going on?
    Mr. Raskin. But I was moved by Chairman Jordan's 
instructive example at the beginning of two people going off to 
work, the third person sitting at home, watching TV, tweeting 
all day, whatever, and those people feeling uncomfortable or 
irritated about it.
    But in fact, because of the work requirement, that person 
is likely to get in trouble, if they are really ripping off the 
system, if everything is working right. It is more likely that 
one of the two going to work could be using SNAP benefits for 
their family. Is that right?
    Ms. Dean. I think I gave the example of other folks in 
their workplace who might be earning lower wages and would 
benefit from the program. Yes, absolutely.
    Mr. Raskin. Okay. But in any event, it is misguided for us 
to think of the collection of SNAP benefits as somehow opposed 
to work when, in fact, as you are saying, a majority of the 
people collecting SNAP benefits are working.
    Ms. Dean. Yes, you are correct.
    Mr. Raskin. Okay. So, Mr. Adolphsen, let me just ask you 
quickly, do you think that Americans have a strong work ethic?
    Mr. Adolphsen. Yes, I think we are the greatest country in 
the world, and we are built on hard work.
    Mr. Raskin. All right, good. Then we agree on that. Thank 
you.
    So I want to come back to what the work requirements are 
currently for people in the law.
    Ms. Dean, could you recite for us what the work 
requirements are for people who are nonetheless still applying 
for SNAP benefits?
    Ms. Dean. Sure. There are two categories.
    The first is the population between 18 through age 59 
without children under age 6 and who are not essentially 
receiving a disability check or are very ill. That group has to 
register for work, and they are the pool of people that States 
can obligate or offer job training to.
    States have a lot of flexibility on who they decide to 
enroll. So when Ms. Larin said only 200,000 were enrolled, that 
is not because the other group was refusing. It is because 
that's the group that States are serving.
    The second group, a subset of that, is between the ages of 
18 to 49. They are subject to a 20-hour-a-week work test. They 
may not participate for more than 3 months out of any 3 years 
unless they are exempt, and that group is not offered a job 
training slot as a condition of work. States can, but the vast 
majority don't. So we call it a time limit, not a work 
requirement.
    Mr. Raskin. Okay.
    Ms. Larin, I wanted to come to you about a question, which 
is, States presently have the flexibility, as I understand, the 
discretion, to impose additional requirements on recipients for 
work. Are there any Federal restrictions on their ability to do 
that? What are some of the restrictions that States have 
imposed beyond the Federal requirements?
    Ms. Larin. I am not familiar with individual States.
    Mr. Raskin. Okay. I can research that separately.
    Ms. Dean, let me come back to you. I know that your think 
tank has worked on tax policy, and I have been able to benefit 
from that. Were there any work requirements imposed on the big 
tax bill that gave hundreds of billions of dollars to wealthy 
investors? Did we require them to prove that they were actually 
working, the way we require under the SNAP program?
    Ms. Dean. I am not an expert on that subject, but I believe 
the answer to that is no.
    Mr. Raskin. They could be collecting the income passively 
through corporate dividends and interest and so on.
    I yield back, Mr. Chairman.
    Mr. Jordan. Yes, but it is their income. I mean, it is sort 
of a fundamental difference. It is not the taxpayer dollars 
getting funneled through government.
    Mr. Adolphsen, let me just run through some basics here.
    What is the food stamp, overall, SNAP program population 
today? What is that number? How many people?
    Mr. Adolphsen. Forty-two million.
    Mr. Jordan. And has that increased or decreased in the last 
decade?
    Mr. Adolphsen. That has increased.
    Mr. Jordan. Increased from what to what? Do you know the 
numbers?
    Mr. Adolphsen. Seventeen million in 2000 from 28 million in 
2008.
    Mr. Jordan. A significant increase, right? How about in 
dollars? What are we spending on it right now?
    Mr. Adolphsen. It has been as high as nearly $80 billion. 
It is at about $70 billion right now.
    Mr. Jordan. And what was it before? Less than half of that?
    Mr. Adolphsen. Less than half of that.
    Mr. Jordan. All right. And then how many of that 42 million 
are in this category we keep talking about, able-bodied adults?
    Mr. Adolphsen. Twenty million.
    Mr. Jordan. Twenty million. And of those 20 million, how 
many are not working and yet are still receiving a benefit of 
that 20 million subset?
    Mr. Adolphsen. Sixty-two percent, so a little more than 10 
million.
    Mr. Jordan. More than 10. So we have 10 million people of 
the 42 million who are able-bodied and not doing anything to 
get the taxpayer benefit.
    Mr. Adolphsen. That is correct.
    Mr. Jordan. And then of that subset, how many are able-
bodied adults with no kids who are not working and still 
getting the benefit?
    Mr. Adolphsen. Sure. About 4 million, 75 percent don't work 
at all, and about 3 million are in areas where that requirement 
----
    Mr. Jordan. Mr. Raskin just said that is not the case. 
There is a work requirement now. But you are telling me there 
are 4 million people able-bodied, no kids, who are doing 
nothing and still getting taxpayer money. How can that be?
    Mr. Adolphsen. Because of the waivers of that requirement.
    Mr. Jordan. Because the States have waived it, right? And 
they are waiving it at a time when the economy is pretty good. 
In spite of the tax cuts that the other side keeps saying are 
bad, the economy is pretty good right now, isn't it?
    Mr. Adolphsen. It's very good, and there are a lot of ----
    Mr. Jordan. What is the unemployment rate right now?
    Mr. Adolphsen. Under 4 percent, I believe.
    Mr. Jordan. Isn't that the lowest it's been in like 18 
years?
    Mr. Adolphsen. Fifteen States have their all-time low.
    Mr. Jordan. All-time low. And yet, we still have 4 million 
people with no kids, able-bodied, who could sit on the front 
porch and drink coffee and read the paper while everyone else 
is going to work, right?
    Mr. Adolphsen. They could do that.
    Mr. Jordan. They could do that. They may not be doing that. 
They could be tweeting, as Mr. Raskin points out. They could be 
watching TV. They could be doing that. But in our example, 
they're sitting on the front porch, reading the paper, and 
drinking coffee.
    Mr. Adolphsen. The average American male spends 21 hours a 
week watching TV or playing videogames. We are asking ----
    Mr. Jordan. Well, I didn't know there was that much sports 
on TV. That's amazing.
    Okay, so, now, all we are saying is that, that group, those 
4 million, should probably have to do something to get taxpayer 
dollars. That's all we're saying, right?
    Mr. Adolphsen. That's correct.
    Mr. Jordan. What's the average length of time someone is on 
food stamps today? How long are they on? Just take the general 
population.
    Mr. Adolphsen. The overall population, about 7 years.
    Mr. Jordan. Seven years. How about that 4 million who are 
able-bodied with no kids who aren't working? How long are they 
typically on?
    Mr. Adolphsen. For about 20 percent of that population, it 
is the same number.
    Mr. Jordan. Seven years. So we have able-bodied people with 
no kids getting something from the taxpayer, not having to do 
anything, and they can do it for 7 years?
    Mr. Adolphsen. If there is no work requirement, and they 
don't go back to work.
    Mr. Jordan. Would you support not only a work requirement, 
would you support a time limit? Like saying, you know what, if 
you are an able-bodied adult, we are going to help you do some 
kind of job training, some kind of work requirement, but if you 
are not willing to engage in that, there is a limited amount of 
time we are going to let you live off the taxpayer, not live 
off the taxpayer, get a benefit from the taxpayer if you are in 
an able-bodied adult not willing to work.
    Mr. Adolphsen. Yes, that type of time limit has been very 
effective in the cash assistance program.
    Mr. Jordan. Mr. Lipps, would you support a time limit?
    Mr. Lipps. Mr. Chairman, we would be happy to have a 
discussion with you about that. The administration doesn't have 
a position on that at the moment.
    Mr. Jordan. Ms. Dean, do you support time limits?
    Ms. Dean. No, and I believe the numbers Mr. Adolphsen 
quoted include senior citizens and children. The average length 
of time for, say, someone who is 65 and ----
    Mr. Jordan. But he also said, I asked him that general 
question, but I also asked him about the 4 million who are able 
to work who are in the category of 18 to 59.
    Ms. Dean. They already face a time limit, 3 months out of 
36, unless they live in a waived area, which covers about a 
third of the country right now.
    Mr. Jordan. Unless they live in a waived area. It's kind of 
a big exception.
    Ms. Dean. A third of the country.
    Mr. Jordan. A huge number of the population.
    So I guess, are you for a time limit for everyone, not just 
----
    Ms. Dean. Absolutely not.
    Mr. Jordan. And do you believe, Ms. Dean, do you believe 
deadlines impact behavior?
    Ms. Dean. With my kids, that's for sure.
    Mr. Jordan. Yes, with everyone. They certainly do with 
Congress. Congress couldn't get anything done if there wasn't a 
deadline on something. So deadlines always impact behavior, but 
somehow we can't have that for people receiving a benefit from 
the taxpayer? There can't be a deadline?
    Ms. Dean. I don't think the jobs that are available today 
are paying or delivering ----
    Mr. Jordan. You have to come to the Fourth District of 
Ohio, because I guarantee you they are. I know what it is like. 
Every single employer I talked to is looking for someone. There 
are help-wanted signs in every single business, and many of 
them pay very well.
    And frankly, what employers are most looking for is someone 
to show up. And if they will show up, they will give them the 
training to get them a job that does pay a lot more than--what 
was the example you used? The custodian worker at the school, a 
lot more than that.
    Ms. Dean. But I think that is an area where perhaps you and 
the program Mr. Lipps mentioned and I have in agreement, which 
is training that is offered to help bridge the skills gap and 
to give employers the employees that they want I think is 
something that would be ----
    Mr. Jordan. Mr. Adolphsen, I have just a few seconds here. 
Is there an asset test for people who get food stamps?
    Mr. Adolphsen. Generally, no.
    Mr. Jordan. Generally, no. So just to sum it up for the 
taxpayer, we have seen a doubling, more than doubling of the 
food stamp population in the last decade, from $30-some billion 
to close to $70 billion in spending. Of that 42 million who 
were in the food stamp program today, 15 million to 20 million 
are able-bodied adults, approximately 10 million able-bodied 
adults who are not working, and 4 million of those have no 
children. And yet, they can stay on the program potentially 7 
years. And we don't even ask them what kind of assets they have 
in place.
    Is that all fair?
    Mr. Adolphsen. That is fair.
    Mr. Jordan. That's why we have to change this program.
    With that, I recognize the gentleman from California.
    We have to go to this side, then we will come back to Mr. 
Grothman.
    The gentleman from California, then we will come back to 
the gentleman from Wisconsin.
    Mr. DeSaulnier. Thank you, Mr. Chairman.
    I do feel the frustration on both sides here. I am old 
enough to look at criminal justice reform and see where we have 
come to some mutual agreements on how we should approach that 
in evidence-based research.
    I was in local government. I was very active in building a 
new juvenile hall for our county in the bay area. When we built 
it, we were told by the judges that it wasn't big enough. I 
went out there recently, it is at 65 percent of capacity. I 
asked the juvenile probation officers, what happened? They said 
because we instituted largely nonpartisan, evidence-based 
research, including helping families who were falling through 
the cracks.
    So, Ms. Dean, it is very frustrating. I don't think any of 
us disagree with the idea that would like people to be able to 
be self-sufficient. But we also know, I have sat in meetings in 
my district, very different from Mr. Jordan's district, in the 
bay area, but I have sat in meetings with UC students who got 
4.2s, got into the University of California, the best public 
university in the world, and they talk about housing problems 
but also food problems.
    So somewhere in here, we can make this system work.
    When I was in the Legislature in California, we were very 
low, and we still are low, in terms of our activity on SNAP. A 
lot of it was because the State and the counties didn't want to 
deal with the bureaucracy.
    So how do we get this discussion turned around like we did 
with criminal justice reform? And we are not there yet, but we 
have come a long way to agreeing with what works, to have 
evidence-based research that is truly impartial, so that we 
give these people the support they need, so we get the results 
we all want.
    Ms. Dean. I think the first thing to do is to wait for the 
results of the 10 pilots that the last farm bill funded. They 
should be coming back, I believe, within the next year or 2. 
Those were done on a very high-quality evaluation basis, in 
terms of random assignment. And they looked at different kinds 
of participants and different kinds of interventions, because 
then-Chairman Lucas and the folks on the Senate side wanted to 
have information before committing billions of dollars.
    But I think there is an extraordinary common interest 
around better job training that gives employers and employees 
what they want. That, I don't believe, is under debate.
    The question is, is a one-size-fits-all, 20-hour rule for 
millions of people in thousands of jurisdictions around the 
country the right approach? And who does it put at-risk?
    So I feel there is a lot of common ground to pursue a 
conversation here.
    Mr. DeSaulnier. I appreciate that.
    Mr. Chairman, I would like to yield the balance of my time 
to Mr. Raskin.
    Mr. Raskin. Thank you very much. I appreciate it.
    Ms. Dean, let me come back to you for a second. Why would 
someone need SNAP benefits if they're working, and they're 
playing by the rules, and they're going to work every day, and 
they're packing their lunch and so on? Why would they still 
need SNAP benefits for their family?
    Ms. Dean. A couple reasons. One might be that they have 
committed to work 35 hours to their employer, but their 
employer, in any given week, only offers them, say, 12 hours 
one week, 27 another.
    Mr. Raskin. What job categories might that account for?
    Ms. Dean. Retailer, home health aide, all kinds of jobs 
where the employer controls the hours, not the employee. They 
can't take a second job, because they have to be available for 
the first one.
    And low pay. The reality is, eight bucks an hour still can 
qualify a family for SNAP.
    Mr. Raskin. How many people lost their jobs after the 2008 
mortgage meltdown crisis, which accounted for a large part of 
the dramatic increase in people on SNAP after President Obama 
took office from--who was that?
    Ms. Dean. President Bush.
    Mr. Raskin. Yes, President Bush.
    Ms. Dean. Mr. Raskin, I'm sorry, you may well know the 
answer. It was millions and millions. I don't have the number.
    Mr. Raskin. My recollection is that 11 million people lost 
their jobs. Something like 12 million people lost their homes. 
There was massive dislocation and poverty in the country. 
Obviously, that was the major cause for people going on SNAP 
benefits.
    And because we have a very strong work ethic, as I think we 
all agree, nobody is proud of that. But we are in a country 
that stands by its own people, and we take care of our own. If 
our people fall on hard times, we take care of them.
    Why do States create waivers to make the program go on 
longer or to create more relaxed requirements?
    Ms. Dean. The Office of the Inspector General at USDA did a 
report on why States seek waivers from the three-month time 
limit.
    The first reason was that many of the States believe that 
this is a very harsh policy, and so they do it because they 
think the underlying policy is unfair, and they seek to waive 
unemployed workers from it.
    The second reason is the rule is incredibly complicated and 
error-prone. And not wanting to contribute to errors, they like 
to relieve as much of the State as they can.
    The third reason, and California is an example of this, is 
they want to run their own employment and training program. 
Again, they don't want the one-size-fits-all mandate of the 20-
hour rule. They offer alternative programs, granted, not across 
the State or for all the individuals, but they have their own 
approach.
    That generally explains through three main reasons.
    Mr. Raskin. I yield back, Mr. Chairman. Thank you.
    Mr. Palmer. [Presiding.] I thank the gentleman.
    The chair now recognizes the gentleman from Wisconsin, Mr. 
Grothman, for 5 minutes.
    Mr. Grothman. Thank you.
    First of all, I will point out, and I have to point this 
out to some members of our Ag Committee, too, I think there are 
many jobs in my district in which they will train you for the 
job. This idea that you need to go through some government 
agency to get job training before you can find a job is just 
preposterous. We have so many job training programs out there 
already, but the idea that we have to expect people to go 
through a formal job training program before they can find 
work, you have to get in the real world.
    But since you guys are experts on these nutrition programs, 
why, wherever I go in Wisconsin or when I ask people in 
Washington, do they sell food stamps for $0.50 on the dollar? 
Could somebody give me an opinion why that's so wherever you 
look?
    Mr. Adolphsen. Congressman, it is pretty easy right now, in 
some States in particular that aren't really looking for that 
type of fraud. For example ----
    Mr. Grothman. Not fraud. Why is it being sold for $0.50 on 
a dollar? I mean, I really can't figure this out, because, 
hypothetically, when you get these food stamps, it's not that 
big amount. But wherever I go, you can buy them for $0.50 on 
the dollar whenever I ask.
    So the question is, why? It shows that there must be 
something so fundamentally wrong with this program that people 
are, in essence, selling a $20 bill for a $10 bill. But that's 
what's going on, right?
    Mr. Adolphsen. We had one store in Maine that was giving 
$0.60 for dollar, and the store down the street that was giving 
$0.50 reported them because they were undercutting their 
competition.
    This is done so that they can turn the benefit into cash.
    Mr. Grothman. I know, but there's something wrong. You 
understand what I'm saying? If I have $20 in my wallet today, I 
don't sell it for $10. It must mean there are so many food 
stamps floating around out there that people don't need, for 
whatever reason--maybe they're cheating on the system, maybe 
they're going to the food bank.
    Could somebody tell me why you can again and again sell 
food stamps for $0.50 on the dollar just about everywhere?
    Mr. Adolphsen. They're using it for things other than food.
    Mr. Grothman. That is apparent, but why wouldn't you sell 
them for $0.90 on the dollar? Why is there this fire sale as 
people try to get rid of food stamps?
    Ms. Dean, do you have an answer for that, why, wherever you 
look, they're selling them for $0.50 on the dollar?
    Ms. Dean. Let's not my experience, Mr. Grothman. Families 
use these benefits for food.
    Mr. Grothman. When you ask people, say in low-income 
housing areas, or when you ask people at the convenience store 
or grocery store, how much they are selling, it's always $0.50 
on a dollar.
    It bothers me that so many people have who have set 
themselves up as experts on this program don't know that that's 
what goes on in this country everywhere.
    Do one of you other guys want to guess? Ms. Larin?
    Ms. Larin. When we were looking at recipient fraud in 2016, 
what we heard is that some people were making very difficult 
tradeoffs between paying their rent and paying for food. And if 
they weren't getting housing assistance, sometimes they would 
sell their food stamps or their SNAP benefits in order to get 
the cash for housing.
    Mr. Grothman. Do you talk to people who get into this 
housing, the landlords and that sort of thing, as to whether 
people are choosing between food and housing?
    Ms. Larin. Yes, and landlords told us that they would take 
food stamps or SNAP benefits for rent. There are some people 
who are making those decisions.
    Mr. Grothman. I would strongly suggest you guys get out and 
talk to more people.
    But I will give you another problem we have out there right 
now. Again and again, when it comes to low-wage jobs, I am 
having employers tell me that people either won't work or are 
cutting themselves off at like 20 hours a week, because they 
are afraid they will lose their benefits. Of course, that just 
doesn't mean SNAP. It means you begin to dig into your low-
income housing. It means you begin to dig into your Medicaid, 
whatever other benefits are out there.
    Do you believe that the SNAP program is one of the reasons 
why so many employees say that I can't take a rate raise, or I 
can't work more than X number of hours a week? Is that one of 
the reasons?
    Ms. Dean. If I may answer, no. The program has several 
earnings disregards that allow people to--basically, earning 
more results in largely monthly income.
    But I will say that H.R. 2 would reimpose a benefit cliff 
and take away one of the key earnings incentives in the program 
that allows people to earn their way up the ladder.
    Mr. Grothman. Could you guys guess as to why it is common 
for employers of people making minimum wage to 15 bucks an hour 
not want to make more money in our society?
    Mr. Adolphsen. I would say the bigger problem, Congressman, 
is people not working at all. That is what we find in the data, 
is that they are not actually going to work, those able-bodied 
adults on the food stamp program.
    Mr. Grothman. Well, I will give you the answer, because my 
time is about up here. The answer is the earned income tax 
credit encourages you to work and make a little money but not a 
lot of money. That is why so many people want to make some 
money but not too much money, because when you make too much 
money, you lose not only your other benefits, but you lose your 
earned income tax credit, too. But there's your answer.
    Mr. Palmer. In closing, I just want to make a couple points 
that we are having this discussion about the value of work, and 
during the worst depression in the history of the country, the 
Roosevelt administration set up a worker program that paid 
people, but they had to work. I think a lot of that was not 
just because they didn't want to spend money. It was the 
dignity of work. Particularly at that time in our Nation's 
history, no one, really, wanted to get a handout. They wanted 
to earn it.
    I think that is a big part of what we are talking about, is 
individual dignity. Even with the Clinton welfare reform bill, 
there were time limits on that.
    But though point is really this, and I think my colleagues 
and I would agree on this, that this country will never truly 
achieve its fullest potential until we are able to unleash the 
enormous talent and intellect and imagination of all of our 
people. That is the thing that concerns me more than anything 
else about where we are in terms of welfare, the millions and 
millions of Americans who have been trapped in that system. And 
the quality of all of our lives have been diminished because of 
that, because we are not able to enjoy the enormous talent that 
is trapped in that system.
    So I thank our witnesses, again, for appearing before us 
today. The hearing record will remain open for 2 weeks for any 
member to submit a written opening statement or questions for 
the record.
    Mr. Palmer. If there is no further business ----
    Mr. Raskin. Mr. Chairman, could I have a closing remark as 
well?
    Mr. Palmer. The gentleman is recognized.
    Mr. Raskin. Thank you very much.
    I just wanted to also try to close on a note of unity. I 
think all of us agree that we want people who are able to work 
to be working in a productive way contributing to our society. 
That means we need good wages and fair wages. I have always 
been a champion for the right of people to organize and to have 
collective bargaining in the workplace, and the minimum wage 
was a great historic triumph.
    I think it's wrong that there are people who are working 
full time who can't support their families without SNAP 
benefits, but I think we have to look at that as a key part of 
the equation of reducing SNAP payments to make sure that 
everybody is making not just a minimum wage but a living wage.
    Finally, I would hope that this whole discussion about the 
farm bill and about SNAP does not take us into an area where we 
are denigrating the work ethic of the American people, who I 
think are the hardest working people on Earth. And we are a 
people that's committed to supporting our families, but we are 
also a people committed to supporting one another through the 
ups and downs of the economy.
    With that, I yield back to you, Mr. Chairman.
    Mr. Palmer. I thank the gentleman.
    My final comment in that regard is that, with the economy 
growing the way it is, with the demand for labor, the things 
that will determine what you make are work experience and skill 
level. And I really believe that we are on a path to help 
people achieve higher skill levels, better education, and, once 
we get them into the work force, to be in a position where they 
can earn a livable wage.
    And I don't want them to just earn a livable wage, and I 
don't think my colleagues want that either. We want them to 
prosper, and the key to that is to be able to work.
    If there is no further business, without objection, the 
subcommittee stands adjourned.
    [Whereupon, at 11:41 a.m., the subcommittees were 
adjourned.]


                                APPENDIX

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               Material Submitted for the Hearing Record


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