COMMENTARY: Putting safety-net spending back on a pre-pandemic path

Congress passed sweeping changes to two of the nation’s largest safety‑net programs — the Supplemental Nutrition Assistance Program (SNAP), often called food stamps, and Medicaid, which provides health coverage for one in four low‑income Americans. Critics of the adjustments contained in the One Big Beautiful Bill label them harsh and unnecessary, yet the legislation merely aims to bring spending back toward pre‑pandemic levels. During the coronavirus outbreak many federal programs exceeded their historic baselines and settled at a higher‑cost trajectory; several never reverted to their former scale. The current reforms attempt to pull those costs back down, at least in part. Although some lawmakers describe the budget reset as “cuts,” that characterization is inaccurate. The programs will continue to grow and surpass pre‑pandemic levels once inflation and population growth are factored in. In July 2025, when the bill was enacted, the average cost per enrollee stood 54 percent above the figure recorded at the pandemic’s outset five years earlier, or 20 percent higher after adjusting for inflation and population increase. In other words, SNAP benefits expanded so much during the crisis that recipients could not only afford the same groceries as before but could purchase additional items. Eligibility also broadened. July 2025 saw more than 5 million additional SNAP participants compared with February 2020; only 1 million of that rise stemmed from population growth, the remainder resulted from eligibility rules that were loosened to include people who would not have qualified prior to the pandemic. The program had outgrown its original design, making a rollback overdue. The reforms are measured — a scalpel, not a chain saw. For instance, the bill permits the administration to reassess a 2022 regulatory change that boosted payments well beyond inflation. Significant criticism has surrounded that administrative adjustment, which was never mandated by statute. Instead, the Department of Agriculture used its discretionary authority to enlarge benefits past the inflation adjustment Congress had approved. The legislation will allow the USDA to curb this type of expansion moving forward and steer the program back onto a sustainable path. It also extends the existing three‑month limit for receiving SNAP benefits to individuals up to age 64 (instead of 54) and to parents whose children are older than 14 (instead of 18). Additionally, it tightens the test for unemployment exemptions, ends the net subsidy, and shifts more costs and accountability to the states. States with high error rates will bear a larger share of the expense and cover more of their own administrative costs. In 2025, $10 million in payer funds was misspent by state SNAP operations because of errors. The core issue lies in how SNAP and Medicaid are financed — a structure that encourages states to expand programs beyond what they would fund independently. SNAP is fully financed by the federal government but administered by the states, while the federal government covers more than half of Medicaid costs yet grants states discretion over eligibility. Both arrangements incentivize states to broaden coverage because the expense is dispersed across all state taxpayers. The most notable Medicaid change in the bill is the introduction of “community engagement” — meaning work requirements. Like SNAP, going forward individuals must be low‑income and, if able, employed to qualify for Medicaid. Exceptions apply to people with disabilities, the elderly, parents of young children, and pregnant women. Beneficiaries may also satisfy the requirement by attending school or performing community service. Opponents often argue that the “community engagement” rules will disqualify individuals who fail to complete paperwork correctly, citing experiences in two states as proof. States have had several years to prepare for implementation, and most states employ private contractors paid per Medicaid enrollee, giving those firms every incentive to ensure eligible participants finish the necessary documentation. Predictions of widespread paperwork‑related disqualifications are therefore overstated. Programs such as SNAP and Medicaid were created specifically to aid those in greatest need. Nevertheless, both have expanded far beyond their original mandates and would continue to balloon absent legislative action. To serve those truly requiring assistance, the reforms merit a careful examination beyond the headlines about billions being cut. Better‑targeted assistance helps beneficiaries and taxpayers alike. Jeremy Nighohossian is a senior fellow and economist with the Competitive Enterprise Institute. He wrote this for InsideSources.com.