Posted on Wednesday, July 23, 2025
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by Outside Contributor
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If states rise to the challenge, we can build a safety net that is sustainable and accountable, and truly lifts people up for the next generation and beyond.
If there’s one message worth carrying through America’s 250th celebration, it’s a renewed embrace of federalism and the essential role states play in our system of government. It’s easy to lose sight of the fact that the states created the federal government, not the other way around. Thankfully, that spirit appears in key provisions of the One Big Beautiful Bill (OBBB).
The legislation requires states to take on new administrative and fiscal responsibilities for our nation’s core safety-net programs, Medicaid and the Supplemental Nutrition Assistance Program (SNAP). Implementing these reforms will be a major undertaking, but if states rise to the occasion, the results could uplift generations.
OBBB requires states to cover 75 percent of SNAP administrative costs (up from 50 percent) and, for the first time, pay up to 15 percent of benefit costs depending on their payment-error rate. For Medicaid, states will face more frequent eligibility checks, new limits on provider taxes that help fund most states’ share of the program, and new work or community-engagement requirements for certain adults. For many states, these changes could mean hundreds of millions in new annual obligations, forcing tough budget decisions and demanding real policy innovation.
The sheer scale of these programs explains both why reform is necessary and why policymakers haven’t made meaningful changes in decades. Medicaid is now the single largest line item in many state budgets, making up nearly 30 percent of total state spending when federal dollars are included. Enrollment currently stands at approximately 71 million Americans, more than double the 34.5 million enrolled in 2000.
Over the past decade, improper Medicaid payments have totaled more than $1 trillion, with audits showing that, in some years, more than one in four dollars went to ineligible or misclassified recipients. Similarly, the number of able-bodied adults on food stamps has hit all-time highs, with nearly 4 million adults without dependents enrolled, three-quarters of whom are not working at all.
Much of this surge in enrollment and spending can be traced to policies under the Biden administration. For SNAP, although work requirements exist, states were encouraged during the Covid-19 emergency to exploit loopholes as a way to avoid enforcing these requirements for able-bodied adults.
Even after the pandemic ended, these waivers were not rolled back. In Medicaid, federal rules have prioritized maximizing enrollment over ensuring that only the truly needy receive support. While states were largely barred from removing people from Medicaid during the pandemic, the Biden administration made it harder to remove ineligible individuals once the emergency ended — driving up costs and straining program integrity. Now, states have the hard work of cleaning up this mess.
But with challenge comes opportunity: The truth is the old system was unsustainable. States have either been handcuffed by federal rules that limited their ability to enforce eligibility and crack down on fraud, or have been willing partners in expanding programs while letting taxpayers pick up the tab. Unfortunately, the very people these programs were designed to help are the ones who suffer the most.
OBBB turns the page. It gives states the tools to target assistance to those who truly need it, link benefits to meaningful work, and restore integrity to welfare programs. More importantly, experience shows these reforms work. In the 1990s and 2000s, state-level work requirements for food stamps helped move millions from welfare to work, leading to higher employment rates and rising family incomes. Work requirements are not a punishment; they are a proven path to greater opportunity, better health, and stronger communities.
States have an opportunity to reimagine these safety-net systems so that they help break cycles of poverty. Instead of a fragmented maze of programs and offices, the goal should be a more integrated and holistic approach, where individuals can access support that is coordinated, focused on long-term stability, and directly connected to work, education, and community resources. This would transform Medicaid and SNAP into a launching pad for personal and economic growth. This vision will require state innovation, hard choices about benefits and eligibility, and a willingness to rethink program implementation. But for the first time, states have the directive and flexibility to put the truly needy first and help able-bodied adults return to the workforce.
America’s 250th celebration is the perfect time to renew the spirit of federalism and rediscover what’s possible when power is returned to the people and their states. If states rise to the challenge, we can build an enduring safety net that lifts people up for the next generation and beyond.
Jennifer Butler is a senior policy adviser at State Policy Network’s Center for Practical Federalism.
Reprinted with Permission from The National Review – By Jennifer Butler
The opinions expressed by columnists are their own and do not necessarily represent the views of AMAC or AMAC Action.
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