New SNAP Data: 41 States Face Penalties — Will Congress Hold the Line?
New federal data show SNAP made $10.1 billion in improper payments in FY 2025 — a 10.62 percent error rate that has barely budged from 10.93 percent in FY 2024.
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The problem is structural. SNAP is administered by states but funded more than 90 percent by federal taxpayers, giving states little reason to clean up their books. The One Big Beautiful Budget Act attempted to fix this by requiring states to share costs when error rates exceed 6 percent — and based on the new data, 41 states and DC would face penalties. But a loophole known as the Alaska Carveout shields the worst-performing states with a temporary exemption.
OBBBA’s reforms were signed in July 2025, leaving little time to influence FY 2025 behavior. The FY 2026 report will be the first real measure of whether the new incentives are working — if Congress doesn’t gut them first. A growing number of governors and senators are pushing to delay cost-sharing requirements amid Farm Bill negotiations. Cato argues Congress should instead close loopholes and strengthen state accountability tools.
Romina Boccia, Cato’s director of budget and entitlement policy, is available for comment. Please contact Madison: mmiller@cato.org.
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Source: https://www.cato.org/news-releases/new-snap-data-41-states-face-penalties-will-congress-hold-line
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