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
request reflects the growing demand for WIC during fiscal year 2001 and
continuing into this fiscal year; participation reached 7.53 million in October
2001, 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.
Farmerís Market Nutrition
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
Maintaining the Food Stamp Program
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 December
2001, the Food Stamp Program served 18.7 million people, 1.6 million more than a
year ago. Nearly all States are serving more people than they did a year ago,
and participation has increased in 15 of the 17 months between July 2000 and
December 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 billion level.
Program Integrity Initiatives
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:
Food Stamp Payment Accuracy
Stamp Program is the cornerstone of our Nationís defense against hunger 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 who 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.
As you 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.
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
American taxpayers and could erode support for the program and its participants.
Equally important, rising underpayments reflect a real loss to low-income
families and individuals who need assistance.
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 program outcomes.
I 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.
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.
Food Stamp Trafficking
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.
School Meals Certification
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, significantly more
children were certified for free meals than survey data showed to be eligible.
Although we are not certain of the exact scope of the problem including those
who are eligible but not served, we are seeking a solution to address it.
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. 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.
Child Care Integrity
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.
I will now
touch briefly on the more general programmatic components of our request:
Food Stamp Program
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.
Special Supplemental Nutrition
Program for Women, Infants and Children (WIC)
As 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 Program.
Child Nutrition Programs
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.
The Emergency Food Assistance
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
Commodity Supplemental Food
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.
Food Program Administration (FPA)
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
In 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.