As several provisions of the reconciliation bill Congress passed last year come into effect, the North Carolina General Assembly may have to appropriate as much as $659 million a year to maintain the state’s participation in the Supplemental Nutrition Assistance Program (SNAP), what used to be called Food Stamps.
That’s a huge increase. Our state currently spends approximately $150 million on SNAP. Unlike some commentators, however, I welcome the new federal rules. Our current arrangement is unsustainable and indefensible.
North Carolina has a poor record on SNAP. We don’t require enough able-bodied recipients to work in exchange for their benefits, a condition past federal laws already authorized. And our program has long been vulnerable to error and fraud. In 2024, more than 10% of North Carolina’s SNAP payments were erroneous or fraudulent. That rate fell a bit last year, but appears to have remained above the federal government’s new 6% target. Unless we fall at or below it by October 2027, North Carolina will incur a heavy penalty.
More generally, the United States simply cannot continue to run budget deficits well in excess of a trillion dollars a year. The persistent gap between federal revenues and expenditures is so large that no amount of nips, tucks, and taxes on rich people can narrow it more than a modest amount. All federal programs must be on the table for reevaluation, reform, and reduction.
That means limiting Social Security and Medicaid benefits for middle- and upper-income households. It means imposing time limits and work requirements on able-bodied recipients of Medicaid, SNAP, public housing, and other public assistance. It means buying smarter, too, on goods and services ranging from fighter planes and warships to highways, buildings, technology, and program administration.
All programs jointly administered by Washington, states, and localities need fundamental restructuring. Some items need to disappear entirely from the federal budget, with state and local policymakers wholly responsible for deciding whether to fund them and by how much.
In other cases — Medicaid, nutrition assistance, and education come to mind — it will likely prove impossible to devolve them entirely. The next-best option, then, will be for Congress to require states to shoulder a higher share of the cost and for any localities involved in administering the funds to be on the hook for payment errors.
Do such changes constitute unfunded mandates? In a sense, yes, although states and localities are usually free to refuse participation and ought to consider doing so in many cases. But let’s be clear: our current model for Medicaid, SNAP, and the rest is already unfunded! Neither Washington alone nor federal, state, and local authorities combined will collect enough revenue this year to finance the welfare state mandated by current law and policy.
Just to be clear, I don’t think Congress went far enough to remove the disincentives to work, marriage, and self-sufficiency embedded in our welfare programs. Some lawmakers reportedly agree and are crafting a follow-up bill for 2026.
To return to the North Carolina case, the General Assembly and the administration of Gov. Josh Stein may still have time to forestall some of the cost increase for SNAP. Madison Ray, senior director of the State Policy Network’s Center for Practical Federalism, recommends that states abandon all expansions of SNAP eligibility effected by agency responses to “guidance” letters from the Biden administration rather than duly enacted federal statutes. And we should take a closer look at how states such as Idaho, Nebraska, Nevada, South Dakota, Vermont, Wisconsin, and Wyoming already manage to keep their erroneous-payment rates below 6%.
Paige Terryberry, a former Locke Foundation policy analyst now doing similar work at the Foundation for Government Accountability, described some best practices in a recent policy report. They include requiring frequent cross-checks of available data, tightening certification periods, and prohibiting waivers of work requirements.
“States should begin implementing program integrity measures to curb error rates,” Terryberry concluded, “and reduce their cost-sharing burden.” North Carolina, she’s talking to you.

Editor’s note: John Hood is a John Locke Foundation board member. His books Mountain Folk, Forest Folk, and Water Folk combine epic fantasy with American history (FolkloreCycle.com).