Congress weighs cuts to Medicaid, food stamps. In D.C., Gov. Little asks to spare Idaho

BOISE – Idaho spends federal money more efficiently than most states, Gov. Brad Little told reporters Monday. In its administration of the federal food stamps, for example, Idaho has the highest rate of compliance and the lowest rate of fraud, he said.

But as Republicans in Congress look for ways to slash federal spending to make room for President Donald Trump’s promised tax cuts, Little fears Idaho could still get stuck in the crosshairs.

As Congress this week weighs proposed budgets that have floated the idea of limiting federal funding for Medicaid and the Supplemental Nutrition Assistance Program, or SNAP, Little on Tuesday traveled to Washington, D.C., to push for Idaho to be spared.

“Why would you penalize us?” he asked reporters rhetorically Monday. “I don’t think it’s fair – and I’ll make the case – that the states that have been efficient with the federal taxpayer’s dollars get treated the same as the states that are not.”

The Trump administration has argued that these federal programs are full of fraud and waste: A March post on the White House’s website cited a 2024 report from the U.S. Government Accountability Office that found the federal government lost up to about $520 billion every year to fraud. A separate report from the same year found that the government overpaid $175 million during fiscal year 2023, including to people who had died or were no longer eligible for government programs.

But Idaho has been a “model state” in its administration of this federal funding, said Lori Wolff, Little’s budget director. For years, Idaho has ranked among the top three states for its payment accuracy, timeliness and case accuracy and has even sent officials to help other states with higher error rates, she told the Idaho Statesman.

Some states have expanded their benefits programs or added services, but Idaho has maintained “lean” programs, she said. Idaho does not provide Medicaid benefits to noncitizens, and it has invested in technology to streamline its eligibility determination and delivery systems, she said.

“We’re a lean state. We run lean budgets,” Wolff said. “It’s kind of in the culture here in Idaho.”

SNAP programs are fully funded by the federal government but administered by states. State governments and the federal government contribute to fund Medicaid. As of March, there were about 136,000 Idahoans receiving SNAP benefits, according to the Idaho Department of Health and Welfare. There were about 265,000 Idahoans on traditional Medicaid, and another 92,000 on the state’s expansion program for lower-income Idaho residents who earn too much to qualify for standard Medicaid but not enough for private insurance discounts.

Idaho’s budget leans on federal funding

The extent to which states will see federal funding decline for these programs remains an open question. Congressional Republicans on Monday proposed restrictions on food stamps, adding work requirements for some beneficiaries and requiring states to help fund the program.

On Sunday, they released a plan to limit states’ ability to tax hospitals, a move that has helped states secure additional federal Medicaid funding, the New York Times reported. Lawmakers have also weighed limiting the amount the federal government reimburses states for covering low-income patients, the Times reported.

“They’ve talked about a lot of what-ifs or possibilities, and they keep changing their mind on what they’re going to do,” Wolff said. “I think we’re all just watching.”

Outside of these programs, significant portions of Idaho’s government depend heavily on federal funding. Of the state’s $13.8 billion budget, nearly 40% is composed of federal funds, said Joan Varsek, a spokesperson for Little. Fourteen of the state’s 34 departments, offices and divisions are more than 50% federally funded, including the state’s Department of Health and Welfare and Department of Labor.

As of late March, those 34 offices had largely been unaffected by changes at the federal level, Wolff told the Statesman by email.

“Our office is monitoring any proposed reductions in federal funding, and we continue to maintain open lines of communication with the administration,” Wolff said.

Idaho lawmakers cut taxes more than Little wanted

Little in February warned that Idaho needed to be prepared to weather financial changes “of some magnitude” coming from the federal government. At a news conference, he said much of Idaho’s resiliency to federal funding cuts would depend on its maintenance of a state budget surplus in its general fund. In his January State of the State address, he called for a reduction of the fund by about $100 million.

But lawmakers this session largely ignored his warnings, approving about $450 million of new tax cuts, which will come out of the state’s general fund every year.

“If I would have thought we could do $450 (million), I would have proposed $450 (million),” Little told reporters in February.

Little signed off on those larger cuts, but he expressed consternation in accompanying statements.

“Idaho families and businesses need and deserve to keep more of their hard earned money,” Little said in one such release. “As we continue to deliver historic tax relief, we must ensure our budget balances as the Idaho Constitution requires.”