To: Senate Committee on Agriculture, Nutrition, and Forestry
From: National Taxpayers Union
Date: August 4, 2026
Re: NTU’s Views on August 6 Farm Bill Markup
On behalf of National Taxpayers Union (NTU), the nation’s oldest taxpayer advocacy organization, we write to express our views on the Senate Committee on Agriculture, Nutrition, and Forestry’s upcoming markup of the Agricultural Act of 2026 (the Farm Bill). Our primary recommendation is for the Committee to reject any Farm Bill that would increase overall federal spending and add to the federal debt.
The One Big Beautiful Bill Act (OBBBA) made important improvements to the Food Stamp program focused on promoting opportunity and addressing waste, fraud, and abuse.
OBBBA:
- Strengthened and enforced work requirements for able-bodied adults
- Required states with high improper payment rates to contribute modest program funding
- Rebalanced administrative funding with states that run the program
- Ensured that benefits grow each year with inflation, but prohibited presidents from unilaterally modifying the benefit formula as President Biden did
- Cracked down on gimmicks used to game the benefit formula
- Restricted eligibility for illegal aliens
Despite misleading rhetoric, Food Stamp spending after enactment of OBBBA remains much higher than the pre-Biden baseline projections. The CBO projects FY 2026 outlays to be more than $100 billion in FY 2026, a level that is $25 billion, or 34% above CBO’s projection in the February 2021 baseline. Over the FY 2026 to 2036 period, federal Food Stamp outlays are projected to be nearly $1.1 trillion, more than $300 billion, or 38% higher than an extrapolation of the pre-Biden baseline. Once state expenditures from the cost-sharing requirements are taken into account, total Food Stamp outlays are projected to be 49% above the pre-Biden baseline.
The Farm Bill should build on OBBBA, with a focus on addressing waste, fraud, and abuse in federal nutrition programs. The Food Stamp program is rife with improper payments. The U.S. Department of Agriculture (USDA) recently reported a 10.62% Food Stamp payment error for FY 2025, equivalent to about $10.1 billion. The Government Accountability Office (GAO) ranks Food Stamps as having the fourth highest level of improper payments of any program, trailing only Medicare, Medicaid, and the Earned Income Tax Credit (EITC). More than $66 billion in improper payments have been reported by the USDA in the last two decades.
We are particularly concerned about the following sections of the Farm Bill:
Sec. 4101. State Cost Share Delay. This section would modify the OBBBA Food Stamp state cost share for states with high error rates in three ways:
1. Postpones implementation from FY 2028 to FY 2029.
2. Changes the delayed implementation for states exceeding the high-error threshold in both FY2025 and FY2026 until FY 2030.
3. Beginning in FY 2031, raises the state share from 15% to 20% for states with payment error rates of at least 10%.
Food Stamp State Matching Rates Based on Payment Error Rates | |||
Payment Error Rate | Senate Farm Bill | Final OBBBA | House-Passed OBBBA |
Below 6% | None | None | 5% |
6% to 8% | 5% | 5% | 15% |
8% to 10% | 10% | 10% | 20% |
10% or Higher* | 15% in 2029 and 2030* 20% after 2031 | 15%* | 25% |
Normal Implementation | FY 2029 | FY 2028 | FY 2028 |
*Delayed Implementation for States with Error Rates Above 13.33% | States with error rates above 13.33% in FY 2025 and 2026 have the state cost share delayed until FY 2030. | States with error rates above 13.33% in FY 2025 have the cost share delayed to FY 2029; if a state crosses that threshold in FY 2026, the cost share is delayed until 2030. | None |
Ultimately, the modifications to the state cost share requirements could be scored as reducing the deficit over the full budget window, as savings from the 20% rate for high-error states outweighs the delayed implementation. However, this estimate is based on an assumption that the cost share actually takes effect, something special interests have lobbied hard to ever prevent from occurring. The title of Sec. 4101 indicates that the intent of this provision is to delay implementation of the OBBBA policy, not to implement backloaded improvements to the cost-share.
There is no good reason to delay implementation of the state cost share. States have become more dependent on transfers from the federal government in recent decades, a trend that was magnified by the post-COVID-19 spending spree. Based on data from the National Association of State Budget Officers (NASBO), federal funds accounted for 34.1% of the average state’s budget in state fiscal year 2025, compared to 23.9% in SFY 1991.
Meanwhile, the federal government is on an unsustainable fiscal trajectory, creating risks for taxpayers and state governments alike. The state cost share would encourage states to take a more active role in reducing dependency and improving program management. Importantly, the state cost sharing requirement would not reduce or change total benefit spending on Food Stamps. However, the reform would achieve needed savings for the federal government as the states begin to pay their fair share.
Incentive for Higher Payment Error Rates
OBBBA delayed implementation of the state cost share for the states with the worst payment error rates. For states with an error rate of 13.33% or greater, no cost share is required until FY 2029. States whose error rates exceed 13.33% in FY 2026 do not pay a cost share until FY 2030. This provision perversely incentivizes states to tolerate higher Food Stamp payment errors and provides a federally financed reward to the most irresponsible states.
The Senate Farm Bill would modify the delayed implementation. Under the modified proposal, only states that exceed the 13.33% error rate in both FY 2025 and 2026 would have the cost share delayed until FY 2030.
This provision will provide a strong incentive for states that had high error rates above the 13.33% threshold in FY 2025 to intentionally report payment errors above the threshold for FY 2026. These states include Alaska, Washington, DC, New Mexico, Delaware, Georgia, Illinois, and Oregon.
However, this provision would remove the incentive under the OBBBA delay language for states just below the 13.33% threshold in FY 2025 from intentionally reporting higher error rates in FY 2026. New York, Maryland, Florida, Minnesota, Massachusetts, Rhode Island, and Virginia all reported FY 2025 error rates above 12%.
Ultimately, there is no good way to craft a policy that delays the state cost share for states that are refusing to carefully administer the Food Stamp program. The federal government should not provide a benefit to bad actors.
It has been reported that some states are reportedly intentionally gaming the system to avoid paying their fair share:
- New Mexico halted planned implementation of error reduction initiatives in an effort to keep the state’s error rate high.
- A whistleblower in Maryland alleged that officials planned to “leave correctable errors uncorrected” to preserve or increase the error rate.
Eliminating the carve-out for the high-error states could save federal taxpayers about $4 billion; these savings would be realized in FY 2028 and FY 2029.
Sec. 4112. Quality Control Improvements. This section would require a supplementary report on the true Food Stamp error rate. However, the Senate Farm Bill would continue using a flawed error rate that intentionally ignores known improper payments for holding states accountable for waste, fraud, and abuse that occurs due to misadministration.
Food Stamp improper payments are likely significantly higher than the officially reported amounts, due to the “error tolerance threshold,” which was originally created via regulation by the Carter Administration’s USDA. This policy instructs USDA to ignore improper payments up to its limit, which has been adjusted several times. After a temporary increase from $25 to $50 provided by President Barack Obama’s 2009 stimulus expired, the Obama Administration increased it back to $50 by executive action in 2012.
The 2014 Farm Bill initially set the threshold at $37, automatically indexed for inflation each year. The error tolerance threshold was $57 in FY 2025. Therefore, any payment error of $57 or less was excluded from the official FY 2025 payment error-rate calculation.
The Snap Back Inaccurate SNAP Payments Act, introduced by Sen. Joni Ernst (R-IA) and Rep. Randy Feenstra (R-IA), would clarify that all improper payments must be counted as errors in the official data. The current language of Sec. 4112 should be replaced by this commonsense proposal.
Legalized Fraud of Categorical Eligibility
The Senate Farm Bill fails to address the legalized fraud of categorical eligibility.
Millions of Food Stamp recipients do not meet the program’s own statutory income and asset limit rules.
The policy of categorical eligibility allows households to automatically qualify for Food Stamp benefits if they also receive benefits from certain other welfare programs. Broad-based categorical eligibility (BBCE) can even allow qualification based on a nominal benefit, such as an informational pamphlet or access to an 800 number.
Under these regulations, states can bypass federal Food Stamp eligibility rules by waiving the asset test, waiving the net income test, and increasing the gross income limit to 200% of the federal poverty level (from 130% of FPL). Even millionaires can qualify for Food Stamps thanks to the categorical eligibility loophole.
Categorical eligibility should be considered legalized fraud because it spends billions of taxpayer dollars on people who are not supposed to qualify for Food Stamp benefits under the federal eligibility guidelines. Categorical eligibility is also a contributor to the Food Stamp improper payment problem. An analysis by the Foundation for Government Accountability found that “BBCE households make up 82 percent of all payment errors.”
Sec. 3205. Interagency Seasonal And Perishable Fruits And Vegetable Working Group. This section would create an interagency working group to identify threats that imports pose to domestic producers of seasonal and perishable fruits and vegetables.
USDA’s Economic Research Service (ERS) estimates that net cash income for specialty crops, a category that includes seasonal produce and tree nuts, is projected to be $305,300 per farm in 2026, much higher average net cash income of $185,100 per farm for corn, wheat, cotton, soybeans, and other crops. Identifying the impact of trade on specialty crops is a worthwhile goal. However, NTU urges the Committee to clarify that the purpose of this provision is to identify the net impact of trade, including how imports affect the country’s 45,573 supermarkets and the 2.9 million Americans who work there, the country’s 731,000 restaurants and the 12.3 million Americans who work there, and the families who benefit from an affordable year-round supply of fresh fruits and vegetables.
The interagency working group’s activities should also address the impact of imports on prices, given Americans’ concerns about the cost of food. The Consumer Price Index for fruits and vegetables has increased by 126% since 2016. Any analysis of the threat imports pose to producers should be considered along with the benefits they provide by facilitating a year-round supply of affordable fresh fruits and vegetables.
NTU further encourages the Committee to focus on removing barriers to exports, not passing measures that could lead to more trade barriers. Exports equal 20% of U.S. agricultural production. ERS estimates that agricultural exports support over a million U.S. jobs. The goal of U.S. farm and trade policy should be to tear down barriers that discourage agricultural trade, not to facilitate the construction of new tariff walls. This is especially true for sectors that rely on exports including wheat, soybeans, corn, and nuts.
Sec. 4304. Buy American Requirements. This section would require at least 95% of school lunch commodities and products purchased by school food authorities to be domestic.
NTU urges the Committee not to expand Buy American requirements. Schools should not be prevented from purchasing from the most competitive provider, whether they are located in another county, another state, or even another country.
Buy American requirements are costly. A 2020 Peterson Institute study found that Buy American laws cost Americans $94 billion as of 2017. They also encourage other countries to pass their own “don’t buy American” laws that make it harder to export our goods and services.
The Agriculture Committee should not pass a Farm Bill that increases the cost of school lunches. A more effective approach would be to clarify that imports from trade-agreement partners and national security allies will be treated the same as purchases from within the United States.
Sec. 12501. Year-Round E15 And RFS (Renewable Fuel Standard) Reform. This section would permanently authorize nationwide year-round sales of E15 fuel.
This provision is intended to expand consumer fuel choice, a worthy goal. President Trump’s memorandum, Delivering Emergency Price Relief for American Families and Defeating the Cost-of-Living Crisis, stressed the need to eliminate coercive policies that increase the costs of food and fuel, and his Executive Order on Unleashing American Energy references the importance of consumer choice.
NTU’s longstanding position is that the government should end all ethanol-related mandates and subsidies to give drivers the choice to buy fuel with whatever level of ethanol they desire. The proposed Farm Bill fails to do that.
The Senate should reject proposals that pit American energy producers against agricultural producers and exempt refiners against non-exempt refiners, all at the expense of consumer choice.
Potential amendments: NTU continues to support measures that would better target farm subsidies. These include the Assisting Family Farmers through Insurance Reform Measures (AFFIRM) Act, introduced by Sen. Jeanne Shaheen (D-NH), which would means test crop insurance subsidies, and amendments that would direct subsidies to producers who are actively engaged in farming. NTU also supports efforts to strengthen the Farm Bill’s provisions to facilitate the use of secure Electronic Benefits Transfer (EBT) cards to prevent fraud.
NTU appreciates the Committee’s efforts to address the needs of the agriculture sector, beneficiaries of federal support, and taxpayers. Should you have any questions about the recommendations in this memo, please do not hesitate to reach out to Matt Dickerson (mdickerson@ntu.org) or Bryan Riley (briley@ntu.org).