Trump’s signature bill gives Oregon temporary reprieve for food stamp errors

By PENNY ROSENBERG/Oregon Journalism Project

For a good part of the past decade, Oregon’s food stamp program has had one of the highest error rates in the nation by distributing too many — or too few — benefits to lower-income Oregonians.

Starting next year, President Donald Trump’s tax-and-spending bill will require states with a high error rate in the federal Supplemental Nutrition Assistance Program, or SNAP, to shoulder some of program’s costs.

But thanks to a loophole, Oregon, which last year had the seventh-worst error rate in the country, will not be burdened with this penalty for at least one year. Meanwhile, states with slightly lower error rates, like California, will be on the hook immediately for hundreds of millions of dollars.

The spending bill, passed by Congress and signed into law by Trump on July 4, 2025, will start charging states next year in the way they distribute SNAP benefits 5% to 15% of the cost if they have at least a 6% error rate but not if they have a rate higher than 13.32%.

In Oregon, where more than 636,000 people had SNAP benefits as of July, the error rate is 14.1%, which means it will avoid paying an estimated $185 million. 

Why the loophole? The short answer: Alaska.

To get the bill passed, Trump needed the support of Republican Alaska Sen. Lisa Murkowski. And Alaska has consistently had the highest error rate in the SNAP program. In the most recent year, its error rate was more than 20%.

The senior senator tied her support for the bill to whether Republicans agreed to give states with the worst error rates — anything more than 13.32% in the most recent year — a one-year pass.

That provision will benefit Oregon, Alaska and four other states, along with the District of Columbia.

Libertarian think tank the Cato Institute says the “carve-out” has incentivized states to keep their error rates high.

“These loopholes have broader consequences,” a March Cato blog says. The new requirements “also risk penalizing states with transparent quality control processes while rewarding those who game the system by underreporting improper payments.”

Oregon state Rep. Anna Scharf, R-Amity, agrees that states should be on the hook when they have a higher error rate: “State agencies need to do better and quit asking for more people and more money as the only solution to problems,” she said in an email.

Asked why Oregon’s error rate has exceeded the national average for eight straight years, the Oregon Department of Human Services said the blame lies, for the most part, with applicants. The agency did its own analysis of the reasons for the most current error rate, and it concluded two-thirds of errors were the fault of end users, while state employees were responsible for the rest.

DHS spokeswoman Sara Campos told OJP that SNAP applicants erred most when reporting their earned income.

But Oregonians don’t apply for benefits in a vacuum. The process includes a 45-minute interview with a state employee to review the forms and determine whether the applicant qualifies, along with help centers and call lines for follow-ups.

Campos says the agency is developing better training that specifically addresses common errors, pairing it with analytics to identify higher-risk cases for additional review.

Scharf has her doubts. She’s frustrated that state officials opted to build their own diagnostic tool instead of relying on an AI program other states are using. It’s offered by data software giant SAS, and states like Nevada, West Virginia and Florida have signed up, according to published reports.

“We all know how great Oregon’s track record is on IT projects, so I am skeptical,” she says.

If Oregon’s error rate remains above 13.32%, it will get a pass for a second year, again exploiting the odd loophole. But starting Oct. 1, 2029, the state won’t be allowed to evade the penalty. For the feds to continue fully funding SNAP, Oregon must bring its error rate down more than 8 percentage points, a prospect Scharf finds daunting.

“While I agree that more time could help, I wonder if Oregon would even be able to meet that,” she says.

In anticipation of the higher financial stakes, the Oregon Legislature in the 2026 short session approved hiring nearly 400 more employees to work at DHS.

The Oregon Journalism Project is a nonprofit news initiative whose goal is to inform, engage, and empower Oregonians.