Vermont Joins 22 States in Lawsuit Challenging USDA's SNAP Cuts for Refugees

Under the agency’s reading, a refugee who has lived legally in the United States for one year and then obtains a green card—as required by law—would lose SNAP eligibility for four additional years.

Vermont Attorney General Charity Clark filed a federal lawsuit on November 26, 2025, challenging new Trump administration rules that restrict food assistance for certain immigrants. Vermont is one of 22 states arguing that the U.S. Department of Agriculture violated federal law in how it implemented changes to the Supplemental Nutrition Assistance Program, known in Vermont as 3SquaresVT.

The lawsuit, filed in the U.S. District Court for the District of Oregon, targets USDA guidance issued on October 31, 2025, that the states say wrongly strips food benefits from refugees, asylees, and other immigrants who entered the country through humanitarian pathways. The Vermont Attorney General’s Office announced the legal action in coordination with attorneys general from states including New York, California, Massachusetts, and Michigan.

What Is the One Big Beautiful Bill Act?

The dispute stems from the “One Big Beautiful Bill Act,” a sweeping federal law enacted on July 4, 2025, through the budget reconciliation process. The law, officially designated as H.R. 1, made substantial changes to federal spending programs, including new restrictions on which non-citizens can receive SNAP benefits. The law’s text limits SNAP eligibility to U.S. citizens, U.S. nationals, lawful permanent residents (green card holders), Cuban and Haitian entrants, and citizens of nations with Compact of Free Association agreements with the United States.

A key provision of the law requires lawful permanent residents to wait five years after obtaining their green card before becoming eligible for SNAP. The law also introduced what it calls the “State Quality Control Incentive,” which penalizes states financially if their error rates in distributing benefits exceed certain thresholds. According to analysis by Holland & Knight, states with error rates above 6% could become liable for 15% to 20% of benefit costs—expenses the federal government has historically covered entirely.

What the States Are Arguing

The Refugee Eligibility Question

The core of the lawsuit involves how the USDA interprets the law’s effect on refugees and asylees. Under a 1996 federal law, the Personal Responsibility and Work Opportunity Reconciliation Act, refugees and asylees were explicitly exempted from the five-year waiting period for SNAP benefits. That exemption, codified at 8 U.S.C. § 1612, has allowed refugees to receive food assistance immediately upon arrival and to continue receiving it after they adjust to lawful permanent resident status, as they are required to do after one year in the country.

The states argue that this exemption remains in effect because the One Big Beautiful Bill Act did not explicitly repeal it. According to the complaint filed by New York and other states, the USDA’s October guidance omits “former refugees” from the list of individuals exempt from the five-year bar. This omission, the states contend, effectively rewrites federal law through agency guidance rather than congressional action.

The practical effect of the USDA’s interpretation is significant. Under the agency’s reading, a refugee who has lived legally in the United States for one year and then obtains a green card—as required by law—would lose SNAP eligibility for four additional years. The National Immigration Law Center has described this as creating a perverse incentive where gaining permanent legal status results in loss of food assistance.

The Timeline Problem

The lawsuit also challenges the USDA’s implementation timeline as a violation of the Administrative Procedure Act. Federal regulations at 7 CFR § 275.12 provide states with a 120-day grace period after new rules take effect, during which errors in benefit calculations are not counted against them. This grace period exists because implementing complex eligibility changes requires states to update computer systems, retrain caseworkers, and notify affected recipients.

The USDA’s implementation memorandum, issued October 31, 2025, declared that the grace period had already expired as of November 1—meaning states had effectively one day’s notice. The USDA guidance document asserts that because the law was enacted July 4, the 120-day period ran from that date rather than from when the agency issued its detailed instructions.

The states argue this interpretation is “impossible under USDA’s own regulations.” Without guidance on who qualifies under the new rules, state agencies could not program their eligibility systems or train staff. The late issuance of guidance coupled with the retroactive expiration of the grace period, the states contend, guarantees that errors will occur—triggering the law’s new financial penalties.

Financial Stakes for Vermont

Vermont’s 3SquaresVT program distributes approximately $151 million in food benefits annually, according to Seven Days. Under the new penalty structure, if Vermont’s error rate exceeds 6%, the state could become responsible for 15% of benefit costs—potentially more than $22 million annually.

Larger states face proportionally larger exposure. New York, which distributes $7.35 billion in SNAP benefits, could face penalties exceeding $1 billion annually according to the New York Attorney General’s complaint. Massachusetts has estimated potential penalties of $131 million to $394 million annually based on current error rates, according to state government updates.

The states describe being placed in what the Vermont Attorney General’s office calls an “impossible position”: either terminate benefits for recipients who may be legally eligible under federal statute, or continue providing benefits and risk substantial financial penalties if courts ultimately uphold the USDA’s interpretation.

Related Legal Actions

This lawsuit is one of several legal challenges to federal SNAP policy currently proceeding through federal courts. Earlier in November, New York Attorney General Letitia James obtained a temporary restraining order blocking the Trump administration from attempting to claw back SNAP benefits during a federal government shutdown. That order remains in effect while related litigation continues.

The District of Columbia Attorney General has also filed suit to protect SNAP benefits, noting that more than 320 small retailers in the District depend on SNAP revenue. Michigan Attorney General Dana Nessel announced her state’s participation in the coalition lawsuit the same day Vermont filed.

What the Law Says

The legal dispute turns on a principle of statutory interpretation known as the “canon against implied repeal.” Under this doctrine, courts presume that when Congress passes a new law, it does not automatically override previous laws unless it explicitly says so or the two laws directly contradict each other.

The states argue that the One Big Beautiful Bill Act and the 1996 refugee exemption can coexist: the new law defines who qualifies as a lawful permanent resident, while the older law specifies that refugees who become permanent residents remain exempt from the waiting period. Because the new law does not mention or repeal the 1996 exemption, the states contend it remains valid law.

The USDA’s position, as reflected in its guidance, appears to treat the One Big Beautiful Bill Act as a comprehensive restatement of non-citizen eligibility that supersedes previous frameworks. The Church World Service, a refugee resettlement organization, has published analysis noting that if the USDA’s interpretation is upheld, it would represent a significant departure from 30 years of policy treating refugees as exempt from waiting periods for public benefits.

What Happens Next

The coalition of state attorneys general is seeking an injunction to block the USDA guidance from taking effect while the case proceeds. If a court grants preliminary relief, states would be able to continue administering SNAP under the previous rules while the underlying legal questions are resolved.

The case could take months or longer to resolve at the district court level, with appeals likely regardless of the outcome. If the states prevail, the USDA would be required to issue new guidance consistent with the court’s interpretation of the law. If the federal government prevails, states would need to implement the eligibility restrictions as the USDA directs or face the financial penalties established by the One Big Beautiful Bill Act.

A final resolution of the statutory conflict between the 2025 law and the 1996 refugee exemption may ultimately require either a Supreme Court ruling or a technical correction from Congress. Until then, the question of whether refugees who become lawful permanent residents retain their food assistance eligibility remains legally contested.

For Vermont SNAP recipients with questions about their eligibility, the Vermont Department for Children and Families administers the 3SquaresVT program and can provide information about current rules and any changes as they occur.