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Iowa House Republicans send new limits on public assistance to governor's desk

iowa capitol dome
John Pemble
IPR file
Iowa GOP lawmakers passed a bill Thursday to tighten eligibility requirements for public assistance.

Republicans in the Iowa Housesent a billto the governor’s desk Thursday evening that would deny food assistance, known as SNAP, to households that have more than $15,000 in assets. That amount doesn’t include a home, one car of any value, and a second car worth up to $10,000.

The bill also requires the state to have a real-time eligibility verification system for all public assistance programs. It would also require Iowans who get health insurance through Medicaid to cooperate with child support recovery.

The nonpartisan Legislative Services Agency estimated the bill would cause 8,000 Iowans to lose Medicaid coverage and 2,800 households to lose food assistance each year “due to discrepancies.”

It passed the House with a vote of 58-41, with five Republicans joining all Democrats in voting no.

Rep. Joel Fry, R-Osceola, said the bill won’t take anything away from people who are eligible for assistance. He said the real-time eligibility checks could help get services to people sooner.

“If you’re eligible for the benefit, you will receive the benefit,” he said. “It protects the program for those who need it most. And I would suggest to you that we are creating a safety net today that is sustainable for the long term.”

Fry managed the bill’s passage and was the only Republican who spoke during the four-hour debate.

Democrats proposed 18 amendments to the bill, and Republicans rejected them all.

Rep. Josh Turek, D-Council Bluffs, said the bill is a disgrace.

“There is zero financial benefit to the state of Iowa,” he said. “It is a terrible economic decision. And even worse, it’s morally reprehensible. The bill takes away food from veterans, the elderly, poor children and disabled individuals.”

Democrats said the legislature should instead be working to provide more food assistance to Iowans as food insecurity has increased in the state.

Rep. Megan Srinivas, D-Des Moines, said buying a home is one of the best ways to escape poverty. But she said saving up for a down payment would cause Iowans to lose food assistance under the asset test.

“So what are we telling people who are on public assistance?” Srinivas asked. “We’re telling them we’re going to trap them in that cycle of poverty, that they will have no chance to save for a home that could be the biggest hope for their children to be able to succeed in the future.”

The LSA estimated the bill will cost the state $1.6 million in the first year of implementation and $5.9 million in the second year, and will cost the federal government much more. The costs are mostly related to hiring 218 new state workers to check additional sources of information related to Iowans’ eligibility for public assistance and to try to get Iowans to comply with child support payments.

There are also costs related to IT upgrades and an assumption that a private company will be hired to run real-time eligibility checks.

Starting in fiscal year 2027, the bill would save the state $8.2 million per year and save the federal government $42 million. Democrats said Iowa is forfeiting federal funding for health and food assistance that will likely be redistributed to other states.

“The money going back to the federal government are also tax dollars of Iowans,” Fry responded. “It’s just another form of taxation.”

SNAP benefits are paid by the federal government, and Medicaid costs are shared by the state and federal government.

Democrats criticized Republicans for adding government bureaucracy to try to root out a very small amount of fraud.

Rep. Beth Wessel-Kroeschell, D-Ames, said data from the Department of Inspections and Appeals showed a 0.07% SNAP fraud rate in the last fiscal year.

“Our laws should be based on reality, on the state of things as they actually exist,” she said.

After Thursday’s debate, House Speaker Pat Grassley, R-New Hartford, said he thinks the state doesn’t have a good enough system to truly determine the fraud and error rates in public assistance programs. He said the bill will help with that.

Grassley also highlighted the bill’s focus on child support recovery.

“That’s extremely important,” Grassley said. “We should have never gotten to a point as a state where you have up to potentially 40,000 cases that need to be opened to make sure that child support recovery is happening. We feel as [House Republicans] that if we have to invest money in a place like that, that’s a good use of our taxpayer dollars.”

Democrats objected to a part of the bill that would write the current maximum income for Iowans to receive SNAP benefits into state law. That is 160% of the federal poverty level, or $48,000 per year for a family of four. They said putting it in state law would make it harder for the state to quickly respond to changing economic conditions, and that eligibility should be expanded now.

Republicans have countered that the state is already exceeding the 130% federal poverty level standard set by the federal government, and that the legislature should get to decide the income threshold for SNAP.

The bill’s passage follows several years of Senate Republicans, and more recently House Republicans, considering dozens of bills to put tighter limits on public assistance programs. Religious leaders and groups that promote food security and health care have been vehemently opposed to such changes, while groups that lobby for tax cuts and spending less on government have supportedthese bills.

GOP lawmakers ultimately rejected previous proposals that would require federal approval, like banning candy and soda purchases through SNAP and enacting Medicaid work requirements.

The bill could be signed into law by Republican Gov. Kim Reynolds in the next few weeks.

Katarina Sostaric is IPR's State Government Reporter