For Democrats especially, any talk about cutting billions from the Supplemental Nutrition Assistance Program is uncomfortable and certain to create internal strife. But negotiators on the farm bill believe they've found a way to make about $8 billion in savings from the program palatable for most Democrats.
The key is eliminating a loophole that enables states to help some low-income residents with nominal subsidies to pay for their heating in the winter in order to trigger much higher food stamp benefits. Some states, such as New York, will make a $1 Low Income Home Energy Assistance Program payment to low-income people in order to automatically qualify them for the maximum federal food stamps Standard Utility Allowance for 12 months.
According to a source tracking the farm bill talks, the Congressional Budget Office has estimated that raising the minimum energy subsidy states would be required to make to $20 would be enough to disincentivize states from utilizing the loophole, potentially saving the government $8 billion over 10 years.
Though most Democrats would prefer the maximum benefits to be paid out — they often point to a Moody's study that estimates that each dollar the federal government spends on food stamps generates $1.70 of economic activity — finding savings by eliminating a loophole is more politically palatable for them than the deeper cuts proposed by the House.
Though these changes to LIHEAP — and the utilities payments affiliation with the food stamps program, are a little convoluted — the Department of Health and Human Services has a good explainer here.