you, Mr. Chairman, and members of the Subcommittee for allowing me this
opportunity to present our budget request for fiscal year 2003. As this is my first appearance before the Committee, I would like to
introduce myself briefly.
was confirmed as Under Secretary for Food, Nutrition, and Consumer Services (FNCS)
in June 2001. Prior to that time, I
served for almost four years as Commissioner of the Texas Department of Human
Services, one of the Nationís largest human services agencies, under
then-Governor George W. Bush. As
Commissioner, I was responsible for administering State and Federal programs
that served more than 2 million needy, aged or disabled Texans each month.
I took that position after more than twenty years of experience managing
human services agencies across the country including Arizona, Pennsylvania,
Florida, North Carolina and the District of Columbia.
your permission I would also like to introduce three new members of the FNCS
team. Suzanne Biermann, the Deputy
Under Secretary for Food, Nutrition, and Consumer Services, Dr. Peter Murano,
the Deputy Administrator for Special Nutrition Programs at the Food and
Nutrition Service, and Steven Christensen, the Acting Deputy
Director of the Center for Nutrition Policy and Promotion.
President Bush and Secretary Veneman asked me to join the team at the Department
of Agriculture, I was extremely pleased to have the opportunity to put my
experience to work to effectively manage and improve the Federal nutrition
assistance programs Ė programs that use the abundance of American agriculture
to promote the nutrition and health of our Nation.
I feel especially fortunate to have the opportunity to personally
participate in the reauthorization of the Food Stamp and Child Nutrition
Programs. All of us at FNCS look
forward to working with you and committee staff to do the best job possible
managing the nutrition assistance programs.
Everyone here knows how important these programs are, but I would like to
cite just a few facts that underscore their importance:
We know that a poor diet is a significant factor in
4 of the 10 leading causes of death in the United States -- coronary heart
disease, cancer, hypertension and stroke, and diabetes;
We know that poor nutrition and lack of physical
activity account for 300,000 deaths per year;
We know that the economic cost of poor nutrition
accounts for at least $200 billion per year in medical costs and lost productivity; and
We know that participation in the school feeding
programs leads to improved education outcomes.
nutrition assistance programs have a critical role to play in promoting health
and preventing diet-related health problems by ensuring access to nutritious
food to those who need it, and by promoting better diets and physical activity
through nutrition education and promotion to program participants.
The need to improve diets to fight overweight and obesity extends to the
general public. Our request also supports USDAís Center for Nutrition Policy
and Promotion, which works with the Department of Health and Human Services and
other agencies to promote good nutrition to all Americans.
view the focus of my responsibility as Under Secretary in terms of two broad
objectives: first, to ensure that
all those eligible to participate in Federal nutrition assistance programs have
the opportunity to do so, if they wish; second, and equally important to ensure
the integrity of the programs through solid public stewardship. The Presidentís Budget requests a total of $41.9 billion in budget
authority for Food, Nutrition, and Consumer Services for fiscal year 2003. This supports the operation of Federal nutrition assistance programs, as
well as a number of important initiatives that should advance our program access
and integrity. In the remainder of
my remarks, I would like to highlight a few key components of our request.
Funding for WIC
Presidentís budget includes $4.8 billion for the Special Supplemental
Nutrition Program for Women, Infants and Children, the WIC program. The requested level, an increase of $364 million over fiscal year 2002,
would allow local communities to provide food, nutrition education, and a link
to health care to a monthly average of 7.8 million needy women, infants and children during fiscal year 2003.
The request includes a $150 million contingency fund, which can be used
as needed if food costs or participation exceed current estimates.
request reflects the growing demand for WIC during fiscal year 2001 and
continuing into this fiscal year; participation reached 7.52 million in October
2002, a record high. It also
reflects a firm commitment by this Administration to ensure that resources are
directed carefully to programs that make a real difference in peopleís lives. WIC is just such a program, with an impressive body of research showing
that it is a sound investment of the taxpayerís dollar. As the President said in his January radio address that highlighted his
budget, we must set priorities for the government to meet the most important
needs for the Nation. Our request
for WIC does just that.
Market Nutrition Program
At the same time that we are focusing resources on the most important
priorities, we must also be willing to make the tough choices not to fund
programs that, however worthy, do not most effectively support those priorities.
This, too, is reflected in our request.
Presidentís budget does not provide funding for the Farmerís Market
Nutrition Program in fiscal year 2003. While
all can agree that supporting Americaís farmers and providing low-income
families access to fresh fruits and vegetables is a laudable goal, the FMNP is a
small program that does not operate in all States, is not operated State-wide by
any participating State, and provides limited benefits to only some WIC
participants. While the FMNP is a
worthy program, the Administration is making the difficult choice of
discontinuing the funding in an effort to focus on broad-based, more universally
established programs. This kind of
hard choice is central to the Administrationís responsibilities and we accept
the need and responsibility for making tough choices.
the Food Stamp Program Benefit Reserve
fiscal year 2003 request also sustains the full $2 billion Food Stamp benefit
reserve Congress appropriated in fiscal year 2002. As you know, one of the greatest strengths of the Federal nutrition
safety net is its ability to respond to economic change. The current economic difficulties are no exception.
In November 2001, the Food Stamp Program served 18.5 million people, 1.4
million more than a year ago. Nearly
all States are serving more people than they did a year ago, and participation
has increased in 14 of the 16 months between July 2000 and November 2001. We expect to use most of the $2 billion reserve this year, but we do not believe we will need a
supplemental appropriation. For the
coming fiscal year, we recommend continuation of the benefit reserve at the $2
I mentioned before, I view effective stewardship of Federal funds as a central
responsibility for our mission area, and for me personally.
Iím pleased to report on some successes in this area, but also to note
substantial continued challenges. Our
request includes funding to support increased program integrity activity to
address a number of critically important issues:
Stamp Payment Accuracy
Food Stamp Program is the cornerstone of our Nationís defense against
and a powerful tool to improve nutrition among low-income families and
individuals. But for the program to
be effective in serving this neediest population, it must accurately target
benefits. Those that are eligible
for program benefits should have easy access to them and the amount they receive
should be the amount allowed under law Ė no more, no less.
may know, the accuracy of food stamp payments is at its highest level ever.
In fiscal year 2000, 91.1%
of all food stamp benefits were issued correctly.
Unfortunately, this still means that States overissued about 6.5% more in
benefits than they should have and underissued about 2.4% (people that should
have received more benefit actually received less).
The result of which is that $1.33 billion in erroneous payments were made
-- $970 million in overpayments and $360 million in underpayments.
This occurred under the existing Quality Control system, which we propose
to refine and improve via proposals I helped craft in the Presidentís budget.
On a personal note, I have a good sense of how QC works at the State
level, and, I am proud to point out, that as Commissioner in the State of Texas
I was able to substantially improve the payment accuracy in our Food Stamp
Program and for three years in a row achieved enhanced funding for maintaining
an error rate well below that of the national average.
However, despite Texasí achievement, and the recent progress nationally
on error rates, the costs of errors
are still too high
Every percentage point increase in the error rate represents about $200
million in improper payments.
overpayments, which go to a fraction of the caseload, reflect a real loss to
taxpayers and could erode support for the program and its participants. Equally
rising underpayments reflect a real loss to low-income families and individuals
Presidentís budget proposes a comprehensive and balanced approach to reforming
the current QC system that not only
ensures a high degree of program integrity but also simplifies the program for
States who administer the program and makes it easier for citizens to understand
and comply with program requirements. The
Administrationís proposal would focus sanctions on States with the most
serious and consistently high error rates, and replace current enhanced funding
with $70 million in annual performance bonuses that would balance payment
accuracy with customer service and other measures of
seek your support in reforming the QC system in a way that provides some relief to States
while balancing the need to maintain and improve integrity in our program.
stamp caseloads are rising in response to the current recession, State
administrative resources are stretched then, and with growing pressures to
eliminate State budget deficits, attention to program management and payment
accuracy may suffer if there is not a QC system that holds States accountable.
of food stamp benefits for cash by authorized retailers remains a serious
concern. While the most recent
data, for 1996 through 1998, showed a substantial decrease in trafficking from
previous estimates, the volume of misused benefits Ė estimated at $660 million
annually Ė is still far too high. Our
request supports additional efforts to identify and take action against
traffickers through the analysis of electronic benefit transfer data, and
through increases in FNS retailer compliance staff.
Meals Certification Accuracy
evidence is strong that more students are certified for free or reduced-price
school meals than appear to be eligible. The
trend has worsened significantly in recent years. The most recent data shows
that, in 1999, approximately 27 percent more children were certified for free or
reduced-price meals than survey data showed to be eligible.
While the cost of such errors is unclear, FNS is strongly committed to
improving program integrity without overburdening schools or compromising access
to the programs for eligible children. We
are pilot-testing potential policy changes to improve the certification process.
This issue is complicated because certification data is used to
distribute billions of dollars in education aid, telecommunications funds and
other funding. Unfortunately, this
has created an unintended incentive to increase certifications, which has
resulted in some schools allowing ineligible students to enroll in the program.
We must work with the education and other affected communities in
developing a solution. Our request
supports these efforts, as well as additional oversight of State and local
program operations in this area.
integrity of the Child Care and Adult Care Food Program has been a focus of
concern and action for a number of years. FNS
has intensified management evaluations at the State and local levels, developed
and trained program staff on improved management procedures, and developed
legislative proposals to strengthen program management.
Despite these efforts, additional resources are needed to effect lasting
improvements in child care integrity, and our request supports modest increases
in this area.
integrity is fundamental to the Departmentís stewardship responsibilities;
just as importantly, it is fundamental to the success of the programs
themselves, for funds lost or misused due to poor integrity represent a lost
opportunity for the program to better serve those truly in need.
I know you share my commitment to program integrity, and I look forward
to working with you in this important area.
will now touch briefly on the more general programmatic components of our
Presidentís budget requests $26.2 billion for the Food Stamp Program, enough
to serve an average of 20.6 million people each month.
As noted before, we have proposed to maintain the $2 billion benefit
reserve appropriated last year. Our
request also reflects a number of proposals for legislative changes, designed to
further the goals of the program by simplifying rules, better supporting work,
strengthening the nutrition safety net, and improving accountability.
These proposals have a net cost of $29 million in fiscal year 2003 and
$4.2 billion over ten years.
Supplemental Nutrition Program for Women, Infants and Children (WIC)
I noted previously, the Presidentís budget includes $4.8 billion for WIC in
fiscal year 2003, including a $150 million contingency fund.
It does not include funding for the WIC Farmerís Market Nutrition
budget requests $10.6 billion for the Child Nutrition Programs, which continue
to provide millions of nutritious meals to all children in schools and in child
care settings every day. The
budgeted increases in these programs are due to economic conditions that
increase the need for assistance, rising school enrollment, and increases in
payment rates to cover inflation.
Emergency Food Assistance Program (TEFAP)
budget requests $50 million for Statesí storage and distribution costs and
$100 million for food purchases for this important program.
We project that the current high volume of surplus commodities will
continue to be available to TEFAP in fiscal year 2003.
Such donations triple the amount of commodities that we purchase with
appropriated funds. In addition to
the $100 million available under the food stamp account, we are requesting funds
for $50 million for Statesí storage and distribution costs in fiscal year
2003, the maximum amount authorized.
Supplemental Food Program (CSFP)
budget requests $95.0 million for CSFP, which also benefits from surplus
donations to serve elderly people and women with infants and young children.
The funds requested plus surplus donations and commodities currently in
inventory will be sufficient to continue expansion in States that joined the
program prior to this year. It will
also allow the six States that recently initiated programs to expand their
participation up to their assigned caseload, including North and South Dakota,
Wisconsin, Pennsylvania, Missouri and Washington.
Program Administration (FPA)
are requesting $155.9 million in this account, this includes an increase of
$7 million and 58 staff years in our administrative budget, which
supports the program integrity initiatives I have described, as well as pay cost
adjustments. We are also requesting
that $19 million previously appropriated to other accounts be appropriated in
the FPA account. This repositioning
request reflects the Presidentís initiative to show the full cost of support
services, retirement and other non-direct costs with the program activities
these costs support.
sum, our request sets the right priorities to ensure access to the Federal
nutrition assistance programs for the children and low-income people who need
them, while maintaining and improving their integrity.
Thank you for your attention; I would be happy to answer any questions
you may have.