[Senate Hearing 107-732]
[From the U.S. Government Publishing Office]


                                                        S. Hrg. 107-732
 
            THE NUTRITION TITLE OF THE NEW FEDERAL FARM BILL
=======================================================================

                                HEARING

                               before the

                       COMMITTEE ON AGRICULTURE,
                        NUTRITION, AND FORESTRY

                          UNITED STATES SENATE


                      ONE HUNDRED SEVENTH CONGRESS

                             FIRST SESSION


                               __________

                             JULY 19, 2001

                               __________

                       Printed for the use of the
           Committee on Agriculture, Nutrition, and Forestry


  Available via the World Wide Web: http://www.agriculture.senate.gov








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           COMMITTEE ON AGRICULTURE, NUTRITION, AND FORESTRY



                       TOM HARKIN, Iowa, Chairman

PATRICK J. LEAHY, Vermont            RICHARD G. LUGAR, Indiana
KENT CONRAD, North Dakota            JESSE HELMS, North Carolina
THOMAS A. DASCHLE, South Dakota      THAD COCHRAN, Mississippi
MAX BAUCUS, Montana                  MITCH McCONNELL, Kentucky
BLANCHE L. LINCOLN, Arkansas         PAT ROBERTS, Kansas
ZELL MILLER, Georgia                 PETER G. FITZGERALD, Illinois
DEBBIE A. STABENOW, Michigan         CRAIG THOMAS, Wyoming
BEN NELSON, Nebraska                 WAYNE ALLARD, Colorado
MARK DAYTON, Minnesota               TIM HUTCHINSON, Arkansas
PAUL DAVID WELLSTONE, Minnesota      MICHEAL D. CRAPO, Idaho

              Mark Halverson, Staff Director/Chief Counsel

            David L. Johnson, Chief Counsel for the Minority

                      Robert E. Sturm, Chief Clerk

              Keith Luse, Staff Director for the Minority

                                  (ii)







 
                            C O N T E N T S

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                                                                   Page

Hearing(s):

The Nutrition Title of the New Federal Farm Bill.................    01

                              ----------                              

                        Thursday, July 19, 2001
                    STATEMENTS PRESENTED BY SENATORS

Harkin, Hon. Tom, a U.S. Senator from Iowa, Chairman, Committee 
  on Agriculture, Nutrition, and Forestry........................    01
Lugar, Hon. Richard G., a U.S. Senator from Indiana, Ranking 
  Member, Committee on Agriculture, Nutrition, and Forestry......    02
Baucus, Hon. Max, a U.S. Senator from Montana....................    06
Roberts, Hon. Pat, a U.S. Senator from Kansas....................    04
Stabenow, Hon. Debbie A., a U.S. Senator from Michigan...........    07
Wellstone, Hon. Paul. a U.S. Senator from Minnesota..............    07
                              ----------                              

                               WITNESSES
                                Panel I

Bost, Eric M., Under Secretary for Food, Nutrition, and Consumer 
  Services, U.S. Department of Agriculture, Washington, DC.......    09
                              ----------                              
Greenstein, Robert, Executive Director, Center on Budget and 
  Policy 
  Priorities, Washington, DC.....................................    12
Haskins, Dr. Ron, Senior Fellow Brookings Institution, 
  Washington, DC.................................................    16

                                Panel II

Concannon, Kevin W., Commissioner, maine Department of Human 
  Services, Augusta, Maine.......................................    35
Dieppa, Celine, Food Stamp Program Participant, Manchester, 
  Connecticut....................................................    38
Ford, Karen, Executive Director, Food Bank of Iowa, Des Moines, 
  Iowa...........................................................    33
Frank, Dr. Deborah A., Director, Growth and Development Clinic, 
  Boston, Massachusetts..........................................    41
Garza, Dr. Cutberto, Professor, Division of Nutritional Sciences, 
  Cornell 
  University, Ithaca, New York...................................    44
Leavitt, Dean M., Chairman and CEO, U.S. Wireless Data, 
  Incorporated, New York, New York...............................    39

                                APPENDIX

Prepared Statements:
    Harkin, Hon. Tom.............................................    52
    Lugar, Hon. Richard G........................................    54
    Stabenow, Hon. Debbie A......................................    56
    Bost, Eric M.................................................    58
    Concannon, Kevin W...........................................   112
    Dieppa, Celine...............................................   118
    Ford Karen...................................................    98
    Frank, Dr. Deborah A.........................................   123
    Garza, Dr. Cutberto..........................................   131
    Greenstein, Robert...........................................    70
    Haskins, Ron.................................................    87
    Leavitt, Dean M..............................................   120
Document(s) Submitted for the Record:
    American Public Human Services Association...................   140
    State of Wisconsin, Department of Workforce Development......   136

                              ----------                              


      HEARING ON THE NUTRITION TITLE OF THE NEW FEDERAL FARM BILL

                              ----------                              


                        THURSDAY, JULY 19, 2001

                                       U.S. Senate,
         Committee on Agriculture, Nutrition, and Forestry,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 10:10 a.m., in 
room SR-328A, Russell Senate Office Building, Hon. Tom Harkin,
    (Chairman of the Committee), presiding.
    Present or submitting a statement: Senators Harkin, Baucus, 
Stabenow, Wellstone, Lugar, and Roberts.

    STATEMENT OF HON. TOM HARKIN, A U.S. SENATOR FROM IOWA, 
              CHAIRMAN, COMMITTEE ON AGRICULTURE, 
                    NUTRITION, AND FORESTRY

    The Chairman. The Senate Committee on Agriculture, 
Nutrition, and Forestry will come to order.
    Good morning. I want to welcome my colleagues as well as 
our distinguished panelists who have come to testify before the 
Agriculture, Nutrition, and Forestry Committee this morning.
    Our committee has a tradition of working in a bipartisan 
manner to address nutrition and hunger issues, and I 
particularly want to acknowledge the close working relationship 
that I have had over the years with the ranking member, Senator 
Lugar, and of course, with the former chairman and former 
ranking member, Senator Leahy.
    Today we will be focusing on nutrition, food security, and 
health as well as our Nation's nutrition safety net.
    While the Farm bill places an emphasis on farmers in rural 
America, it really is about all Americans. The nutrition title 
is a critical part of this bill and of our jurisdiction. We are 
fortunate in America to have the safest and most abundant food 
supply in the world, but we still have a great deal of work to 
do. While hunger has been reduced in the last 30 years, food 
insecurity rates are still too high. Approximately 10 percent 
of U.S. households, many with children, face the possibility 
that they will not have enough of the amounts and kinds of 
foods they need to stay healthy at some point in a month's 
time.
    Our crucial responsibility is to make sure that our 
Nation's nutrition and food security programs are maintained 
and strengthened.
    It is unacceptable that in the last six years, the percent 
of eligible people who participated in the food stamp program 
dropped from 71 percent to 59 percent. In other words, of those 
who were eligible 6 years ago, 71 percent participated; of 
those eligible now, only 59 percent are participating. At the 
same time, use of food pantries and soup kitchens is on the 
rise. I would like to know why that is happening.
    Contrary to some of the stereotypes about food stamp 
recipients, over half of them are children, nine percent are 
elderly, and nine percent are persons with disabilities. Most 
of the rest are adults who work for a living.
    We need to make sure that our Nation's food pantries and 
soup kitchens are able to help people in need, but not as a 
substitute for the food stamp program.
    We need to continue to support other commodity programs 
such as the Commodity Supplemental Food Program and the 
Nutrition Program for the Elderly. These programs deliver food 
to people who would otherwise go hungry and help to support 
markets for the products of American farmers.
    We also have to keep in mind the strong connection between 
nutrition and health. We know that dietary factors play a large 
role in the risk of heart disease, cancer, stroke, and diabetes 
which account for about two-thirds of the deaths in the U.S. 
each year.
    I am alarmed by the high rates of obesity among children, 
especially, and the resulting rise in the prevalence of adult 
diseases such as diabetes among children.
    Total costs, including medical costs and lost productivity 
attributable to obesity alone, amounted to an estimated $99 
billion in 1995.
    A 1988 report by the U.S. Surgeon General noted that, and I 
quote: ``For the two out of three adult Americans who do not 
smoke and do not drink excessively, one personal choice seems 
to influence long-term health prospects more than any other--
what we eat.'' Simply put, poor nutrition and dietary habits 
are sending far too many Americans to an early grave, or to the 
hospital for medical treatment.
    It is critically important that our Federal nutrition 
programs do all they can to encourage healthier eating habits 
and lifestyles.
    Finally, we should also expand our efforts to fight hunger 
and improve nutrition overseas. Specifically, I hope we will be 
able to incorporate in our bill the McGovern-Dole legislation 
to create an international school nutrition program for 
developing countries. This is a bipartisan and bicameral piece 
of legislation that deserves our strong support and, I hope, 
early action.
    I look forward to hearing from our panelists concerning 
ways in which we can maintain a strong safety net that ensures 
food security and sound nutrition for all Americans.
    [The prepared statement of Senator Harkin can be found in 
the appendix on page 52.]
    With that, I will yield to the distinguished ranking 
member, Senator Lugar.

    STATEMENT OF HON. RICHARD G. LUGAR, A U.S. SENATOR FROM 
             INDIANA, RANKING MEMBER, COMMITTEE ON 
              AGRICULTURE, NUTRITION, AND FORESTRY

    Senator Lugar. Thank you very much, Mr. Chairman.
    This committee has a long tradition of bipartisan support 
for meeting the needs of children and families who face hunger 
and food insecurity, and you have noted that very thoughtfully 
in your opening comments this morning. I look forward to 
continuing our thoughtful and productive partnership as we take 
up the nutrition title of the Farm bill and reauthorization of 
the Food Stamp Program. Today's hearing certainly provides an 
opportunity to gather recommendations for strengthening the 
program, which is the foundation of our Nation's nutritional 
safety net.
    I am a long-time advocate for placing high priority not 
only on an effective Food Stamp Program but on the entire 
package of nutrition assistance programs. During the discussion 
of welfare reform in 1996, I took a firm stand, as you did, to 
preserve a strong nutritional safety net. This meant retaining 
the Food Stamp Program as a national entitlement program and 
making certain that school meals did not become block grants.
    For children, a healthy diet is essential to sound physical 
development and school performance, both prerequisites to 
becoming productive adults. Sufficient food and healthy eating 
habits offer a direct way to reduce the incidence of serious 
diseases such as diabetes and hypertension, as you have noted.
    Despite our commitment to Federal nutrition assistance, 
there is a need to periodically review how well the associated 
programs are meeting their goals and to consider what changes 
might work better.
    For example, I actively supported a provision included in 
the Consolidated Appropriation Act of 2001 to pilot-test some 
administrative changes in the Summer Food Service Program. 
While this program is intended to provide meals to low-income 
children during their summer vacation, a majority of those who 
qualify for free and reduced-price meals during the school year 
are not participating. Indeed, a study in the press today 
indicates less than 20 percent of those children are 
participating.
    It has been a challenge to recruit summer food service 
providers given the burden of the program's cost accounting 
procedures. Our 14-State pilot program, which includes my home 
State of Indiana, is testing the tradeoffs of eliminating some 
of these requirements and streamlining others.
    The upcoming Farm bill provides the occasion for looking 
more closely and systematically at the Food Stamp Program. We 
know that food stamp case loads have declined as a result of an 
improved economy, the welfare reform initiative, and a lower 
participation rate among eligible persons. Even more dramatic 
changes have occurred in the cash welfare program, Temporary 
Assistance for Needy Families, or TANF.
    These changes in cash welfare caseloads have implications 
for the Food Stamp Program. According to USDA statistics, among 
food stamp households with children, the proportion of 
households with earnings jumped substantially between 1994 and 
1999.
    Not only is the profile of food stamp families shifting, 
but the program participation rate is changing as well. Between 
1994 and 1999, the proportion of eligible individuals who 
received benefits went down, as you have noted, from a little 
over 70 percent to less than 60 percent. Two contributing 
factors are routinely identified. One is the complexity of 
program rules while impose a burden on food stamp applicants 
and recipients as well as challenges for eligible workers who 
must apply those rules.
    The second factor is the quality control system used to 
assess program performance. This system focuses solely on 
benefit payment error, which means that States may emphasize 
payment accuracy over recipient service.
    There are, however, some fundamental principles that we 
should apply in evaluating reauthorization proposals. 
Specifically, I will consider how well each recommendation 
maintains the program's role to provide a nutritional safety 
net, increases program simplification and flexibility in a way 
that benefits needy families, and finally, enhances program 
administration and reflects the keen competition for resources 
and the need for prudent use of Federal funds.
    I am especially looking forward to today's witnesses and 
their ideas that will support those principles.
    [The prepared statement of Senator Lugar can be found in 
the appendix on page 54.]
    Thank you, Mr. Chairman, for holding this important 
hearing.
    The Chairman. Thank you very much, Senator Lugar.
    Senator Roberts.

   STATEMENT OF HON. PAT ROBERTS, A U.S. SENATOR FROM KANSAS

    Senator Roberts. Yes, thank you, Mr. Chairman.
    I do not have a prepared statement, but I was jotting down 
some notes from my memory that would certainly buttress and be 
commensurate with your comments and those of the distinguished 
ranking member.
    I can recall so well serving in the House--and it was when 
you were in the House, Mr. Chairman--the support of this 
program in a bipartisan way. That was about the only way we 
could pass the Farm bill as I recall, with the coalition of the 
folks interested in food stamps and nutrition. It goes back to 
the days of former Chairman Bob Pogue and Tom Foley and Kiki de 
la Garza, myself, others. It has been a very strong commitment.
    The witnesses who are here know about that, especially 
Robert Greenstein, who has been in this business for some 
years--he is sort of the ``god-prince'' or the godfather of 
this effort, if that is the right word.
    I would just simply say that we hear a lot about a counter-
cyclical payment or what is needed in the farm program. The 
Food Stamp Program is basically a counter-cyclical program. As 
the economy improves, hopefully, people will no longer find the 
need for food stamps, when people find jobs. On the other hand, 
when it turns down, we get into a serious problem.
    I understand that when we went through this in 1996--and 
that was quite a battle--Senator Lugar referred to those most 
unique times, and I might say that it was my feeling as the new 
chairman of the Agriculture Committee at that particular time 
that we had real problems with the Food Stamp Program from the 
standpoint of fraud and abuse. That is not fair to the 
recipients and is certainly not fair to the taxpayer. Robert 
Viadiero was the new inspector general down at the Department 
of Agriculture. I felt very strongly at that time and still 
feel today that this was a Federal responsibility, and we were 
going to undertake the commitment of welfare reform, but we 
knew that that would be very difficult and would be a long-term 
task. We certainly did not want any family to fall between the 
slats, so to speak, into a situation where they were being 
denied essential services.
    A great many Governors came to town, Mr. Chairman, at that 
particular time, one in particular from Michigan who 
recommended that this be a block grant program and that this 
was a key test. It was a key test. The Governors, it seemed to 
me, were very strong in their testimony, saying they needed the 
block grant and certainly would like to have the Food Stamp 
Program; but in all candor, what they wanted was the money. 
They did not want to run the Food Stamp Program. Can you 
imagine 50 different food stamp programs in 50 different 
States?
    We did not feel that that was appropriate, and against 
considerable very strong political pressure, I can remember 
those days in Bob Dole's office and in the office of--let me 
see, what was his name--it was Newt Gingrich. We had what we 
called ``meaningful dialogue,'' and it was our thought that we 
could certainly preserve and strengthen the Food Stamp Program 
but make the needed reforms.
    Mr. Chairman, we had a situation at that particular point 
in time where, in Philadelphia and New York, the inspector 
general conducted a sting operation and found out that the 
grocery stores were not the grocery stores, that people were 
simply trafficking in food stamps--$3 billion was allegedly 
saved from those efforts as we went through some reform 
measures. That is where the EBT card came in and provided such 
a valuable service. Dean Leavitt will be on the second panel 
and can go into more of what we are experiencing with the EBT 
card. I might add that the late Bill Emerson from Missouri was 
a real leader in that. Pardon me for going on for so long, but 
these are fond memories in regard to what we were able to do.
    In the House agriculture appropriation bill, it seems to me 
that the last time around, there was $5 billion provided over 
10 years relative to the changes that we have made since the 
1996 Act, and as I understand it, in the House agriculture 
appropriation bill for 2002, the estimate is, because of the 
slowdown in the economy--and doubtless Bob and others can make 
the statement if this is not accurate--800,000 people are 
estimated to be coming on in regard to food stamps because of 
the slowdown in the economy. That is about $1.5 billion, $1.8 
billion, somewhere in that neighborhood.
    We really have our work cut out for us to continue to 
monitor this, and I have probably said enough, except to thank 
Bob and thank others who have been active in this as we 
continue to monitor.
    One other thing, Mr. Chairman. I want to thank you for your 
statement in regard to the possibility of an international 
school lunch program, the McGovern-Dole effort. I note in 
talking with Secretary Veneman that she has asked the folks in 
Rome who participate in the World Food Program for information 
to make sure that it is cost-effective and that somehow we 
could fit some degree of commitment if we possibly can in this 
cycle. I am very much for that, for a lot of different reasons, 
and I will not go into that, but I do know that the World Food 
Program is providing that information to Secretary Veneman, 
because the young lady who is doing that is my daughter, Ashley 
Roberts. You can put me down as a strong supporter.
    I thank you.
    The Chairman. Thank you very much, Senator Roberts.
    I will yield to my other Senators. I hope, in the interest 
of time, that we might keep it a little short. We have a 
limited amount of time. I do want to get to the witnesses, but 
I would like to recognize other Senators for, hopefully, short 
opening statements.
    Senator Conrad.
    Senator Conrad. I give my time retroactively to Senator 
Roberts.
    [Laughter.]
    The Chairman. Senator Baucus.
    Senator Roberts. You do not have to laugh that loud, Paul. 
You are turning into me, and I am turning into you. This is 
ridiculous.
    [Laughter.]
    The Chairman. Senator Baucus.

   STATEMENT OF HON. MAX BAUCUS, A U.S. SENATOR FROM MONTANA

    Senator Baucus. Mr. Chairman, I will submit my statement 
and make just one point.
    The Finance Committee is going to reauthorize welfare 
reform and the Agriculture Committee is going to reauthorize 
the Farm bill next year, and food stamps is clearly an integral 
part of that. I would hope that we could figure out a way where 
States like mine can continue a waiver on certain aspects of 
the Food Stamp Program.
    We in Montana have for years received a waiver with respect 
to utility costs, and the current administration is saying that 
that will no longer be available. I say that because our per 
capita income in Montana, or wage per capita income is 50th in 
the Nation. We are first in the Nation in the number of jobs 
necessary per household to make ends meet. We are 27th in the 
Nation in cost of living. We are a mid cost of living State, 
and we are a low-income State.
    It is tough, and all I am saying that if we reauthorize 
this nutrition title that we address that issue.
    I might also just give a ringing endorsement of the various 
school lunch and school breakfast programs. In my State, they 
have worked just wonderfully. If you stop by and see these 
kids, it is just heart-warming. It gives you a sense that, my 
gosh, a lot of the stuff we are doing back here in Washington 
really does make a difference to real people. Just mark me down 
as a big champion, and also, on the international school lunch 
program idea, I would like to help make that work as well.
    Thank you very much.
    The Chairman. Thank you very much, Senator Baucus.
    I will just ask staff to make sure that we pay attention to 
the waiver issue when we develop our bill.
    Senator Baucus. I might say, Mr. Chairman, that I have to 
leave now. We had to recess the Finance Committee because we 
had a bomb scare, and I have just received a note that there is 
no bomb up there.
    The Chairman. What are you guys doing over there?
    [Laughter.]
    Senator Baucus.We are ready to reconvene.
    The Chairman. All right. Good luck.
    The Chairman. Senator Stabenow.

   STATEMENT OF HON. DEBBIE A. STABENOW, A U.S. SENATOR FROM 
                            MICHIGAN

    Senator Michigan. Thank you, Mr. Chairman. It is nice to be 
part of a safe committee; so far, we have not had any bomb 
scares.
    I will submit a full opening statement, Mr. Chairman, for 
the record. Let me just say that I share the feeling of my 
colleagues about the nutrition title. It is critical. I would 
like to note that the average demographics of a person today on 
food stamps is very different from what one might typically 
think of in the past. We are talking about people who are 
working. We need to look very closely as we reauthorize these 
programs and at what is really happening to our families.
    I would also just mention that the commodity programs of 
course are important in two ways--both in terms of nutrition 
for our children and availability of fruits and vegetables and 
other important items for families, and also important for our 
farmers. We in Michigan have benefited from being able to 
include apples and cherries, and we are now looking to include 
asparagus, in the school lunch program.
    Michigan has the largest Commodity Supplemental Food 
Program (CSFP) in the country, and we are very interested in 
working with you, Mr. Chairman, as always, and I am very 
interested in making sure that this title is really 
strengthened and meets the needs of our families.
    The Chairman. Very good. Thank you, Senator Stabenow.
    [The prepared statement of Senator Stabenow can be found in 
the appendix on page 56.]
    The Chairman. Senator Dayton.
    Senator Dayton. Mr. Chairman, I will forego an opening 
statement. Senator Wellstone and I have to go to the Finance 
Committee to testify in behalf of the Trade Adjustment 
Assistance reauthorization, and we will be returning after 
that.
    The Chairman. Thank you.
    Senator Wellstone, do you have a statement?

   STATEMENT OF HON. PAUL D. WELLSTONE, A U.S. SENATOR FROM 
                           MINNESOTA

    Senator Wellstone. Mr. Chairman, I will just take three 
minutes, but I do want to take three minutes, because this is 
one of the reasons I wanted to serve on this committee. This is 
one of the most important things that we are going to be doing.
    We have three panelists here at the beginning, all of whom 
have a lot to say that is important, and I am going to run and 
testify and come back.
    First, this is a safety net program that has worked well in 
terms of dramatically reducing malnutrition and hunger in our 
country going back--my history goes back, although I have never 
played a large role, to all the anti-hunger work, the studies 
that came out in the mid to late sixties, and then, what we 
have done with food stamps.
    We have to take a very close look at eligibility. Let us be 
honest about it. With the welfare bill, we cut the benefits for 
legal immigrants, and when the adults do not get it, the 
children do not get it even though they are eligible. The whole 
issue of eligibility we need to go back and revisit. There are 
many people who could benefit, and there are a lot of children 
who could benefit who do not because of the eligibility 
question.
    We have not at all kept up with inflation, just in terms of 
purchasing power, and the minimum benefits are so minimum as to 
do serious damage to our vision and goal as a country that 
children should not go hungry nor, frankly, should adults.
    Then, finally, we have got to make sure that people who are 
eligible actually receive the benefits. Because of your help, 
Mr. Chairman, and others, in the last ag appropriations markup, 
I had an amendment that asked the Food and Nutrition Service--
and Mr. Bost might want to talk about this--to do a study of 
what in the world is going on when you have over a 30 percent 
decline.
    I just got the report today, and I will be talking more 
about it later, but I want to get it to all members of the 
committee. Mr. Chairman, just listen to one figure here. 
``Slightly less than half the decline, 44 percent, occurred 
because fewer people were eligible to participate.'' It goes 
through some other things. Then, ``The remainder of the 
decline, over half, 56 percent, occurred because fewer eligible 
individuals participate in the program.''
    For a variety of different reasons, Dr. Haskins and I did 
not agree on the welfare bill; but we do agree that when people 
move from welfare to work out there in the counties in this 
country, they ought to know that they and their children are 
eligible for these benefits. We have lost a lot of the 
infrastructure of outreach where people do not know.
    I just want to say to you, above and beyond WIC and school 
breakfast and school lunch, that I am focused on this like a 
laser beam, and I am very pleased to be on this committee. I 
really think that we can do something very important and 
positive. Some of the results out there are harsh. It is crazy 
that one out of every 10 households is, quote, ``food-
insecure,'' and that 35 million Americans, 10 or 15 million of 
whom are children. We can do better.
    Thank you, Mr. Chairman.
    The Chairman. Thank you very much, Senator Wellstone. I 
look forward to working with you on it.
    Senator Wellstone. We will be back.
    The Chairman. I appreciate that very much. Thank you.
    I will just say at the outset again that today's hearing is 
going to be focusing mainly on the nutrition programs, 
specifically the food stamp, and hunger food bank issues.
    Earlier this year, Senator Lugar held a hearing on all the 
child nutrition programs. I am hopeful that we might come back 
again at some other point and just look at the school lunch and 
school breakfast programs. Those programs are not up for 
reauthorization in this Farm bill, but we could discuss them in 
this Farm bill, and I am open to making some changes to the 
child nutrition programs in the Farm bill. In your testimony, 
this morning, please let us know if you have anything to say 
about that. I do intend to have another hearing sometime later 
on--I do not know when--just on that issue of the school lunch 
and school breakfast and other child nutrition programs.
    With that, we welcome our first panel.
    Mr. Eric Bost, Undersecretary for Food, Nutrition, and 
Consumer Services at the U.S. Department of Agriculture, Mr. 
Robert Greenstein, Executive Director of the Center on Budget 
and Policy Priorities; and Dr. Ron Haskins, Senior Fellow at 
the Brookings Institute constitute our first panel, and then we 
have a second panel.
    I will say at the outset that all of your statements will 
be made a part of the record in their entirety, as well as the 
opening statements of Senators sitting here today. I would ask 
if you could summarize your statement for us. I would 
appreciate it. We will try to limit it to seven minutes or so 
on the lights.
    Mr. Bost, welcome, and please proceed.

STATEMENT OF ERIC M. BOST, UNDER SECRETARY FOR FOOD, NUTRITION, 
    AND CONSUMER SERVICES, U.S. DEPARTMENT OF AGRICULTURE, 
                         WASHINGTON, DC

    Mr. Bost. Mr. Chairman and Senator Lugar, and other members 
of the committee, good morning.
    I appreciate the opportunity to join you today to discuss 
the reauthorization of the Food Stamp Program, to build on its 
history of success to meet the demands of the new century.
    I am pleased to represent the administration in the process 
of reauthorizing the Food Stamp Program, the foundation of the 
Nation's nutrition safety net, as part of the Farm bill. I look 
forward to working with this committee as we develop a 
reauthorization approach that preserves those aspects of the 
program that have served this country so well over the past 
decades and makes the changes needed for the program to 
function even more effectively and efficiently into the future. 
The Food Stamp Program touches the lives of millions of people 
who need a helping hand to put food on the table.
    Because food stamps are not targeted or restricted by age, 
disability status, or family structure, recipients are a 
diverse group representing a broad cross-section of the 
Nation's poor. In 2000, over half of all food stamp recipients 
were children, about 9 to 10 percent were elderly, and another 
10 percent were disabled. Many recipients worked, and the 
majority of food stamp households were not receiving Temporary 
Assistance to Needy Families.
    However, most food stamp households had little income and 
few resources available to them. Only 11 percent were above the 
poverty line, while 33 percent had incomes at or below half the 
poverty line. About two-thirds of all households had no 
accountable assets. The program is clearly successful at 
targeting benefits to the neediest Americans.
    The Food Stamp Program responds to economic changes, 
expanding to meet increased need when the economy is in 
recession and contracting when the economy is growing. Because 
benefits automatically flow into communities, States, or 
regions of the country that face rising unemployment or 
poverty, the program tends to soften some of the harshest 
effects of an economic down turn.
    However, over the last decade, food stamp participation 
rose more sharply than expected during the relatively short and 
mild recession in the early nineties, and then fell more 
sharply than expected after 1994, during a sustained period of 
economic growth.
    In April of this year, the program served about 17 million 
people, down from about 28 million at its peak in March 1994. 
In recent months, however, the participation decline has slowed 
and may have ended. Over half of all States are now serving 
more people than they did a year ago. It is important to note 
that as participation has declined, program costs have also 
dropped considerably. Annual costs have declined by over $7 
billion since fiscal year 1995.
    In 2000, 98 percent of households that received food stamps 
were entitled to some benefit. Problems tend to occur far more 
frequently in cases where an eligible household is provided 
with the wrong amount of benefits. Difficulties in determining 
the correct level of benefits stem from a number of factors--
the intricacies of program rules designed to target benefits 
precisely; the complex circumstances of working families; and 
the need to anticipate the circumstances of program 
participants.
    When errors resulting in overpayments do occur, the 
Department works very hard to recoup those funds from those who 
received them.
    Since the program was last reauthorized, we have seen a 
revolution in the way that food stamp benefits are delivered. 
In 1996, only 15 percent of benefits were delivered 
electronically. Today, 80 percent are delivered through EBT. 
Forty-three State agencies now operate EBT systems for the Food 
Stamp Program, and 41 are Statewide.
    A lot of things have changed since welfare reform. In 
important ways, the States have been the leaders in the 
revolution in making these changes--restructuring their welfare 
programs to require work, time-limited assistance, improving 
child support enforcement, and encouraging parental 
responsibility.
    I believe that the Food Stamp Program has contributed to 
the success of welfare reform by supporting the transition from 
welfare to work. Welfare rolls and the proportion of food stamp 
households on welfare have fallen sharply, while the percentage 
of food stamp households with earnings has grown. Today, the 
Food Stamp Program serves more families that work than families 
that receive welfare.
    We have talked about the tremendous decline. However, I 
believe that the complexity of program requirements may be 
deterring participation among people who are eligible for 
benefits, especially working families. There is a growing 
awareness that we need to reform the quality control system, 
which Senator Lugar made reference to, to ensure that it more 
effectively encourages payment accuracy without discouraging 
States from achieving other important objectives.
    My view is that every person eligible to receive food 
stamps should have full and easy access while maintaining 
integrity in our programs. We need to reexamine how the Food 
Stamp Program recognizes and supports its multiple program 
goals.
    Let us talk about reauthorization, and I am just going to 
note some broad proposals.
    We are interested in ensuring that we facilitate working 
families' access to food stamp benefits while minimizing 
burdens for State agencies; and finding ways to reduce burdens 
on applicants and participants and to reduce administrative 
complexity for people who actually implement the program. As 
States explore innovative welfare policies, at the same time, 
we should examine whether program changes, including increased 
administrative flexibility, could help to ensure that all those 
at risk of hunger have access to the benefits they need. We 
also need to improve the program's effectiveness in promoting 
healthy diets.
    Additionally, prudent stewardship of Federal resources is a 
fundamental responsibility and critical to continued public 
confidence in this program. We must be vigilant in the fight 
against error, fraud, and abuse, and ensure that the taxpayer 
investment in this program is used as effectively as possible.
    I am very pleased to join the discussion as we begin today 
to preserve the elements of the Food Stamp Program that have 
contributed to the history of success and to strengthen and 
improve it to meet the challenges for a new century.
    Mr. Chairman, that concludes my remarks. I would be pleased 
to answer any questions that you may have of me.
    The Chairman. Mr. Bost, thank you very much for your 
testimony.
    [The prepared statement of Mr. Bost can be found in the 
appendix on page 58.]
    The Chairman. We move to Robert Greenstein, founder and 
Executive Director of the Center on Budget and Policy 
Priorities, a nonprofit institute that conducts research and 
analysis on public policy issues, with an emphasis on low-and 
moderate-income families.
    I just want to say for the record that I started working 
with Mr. Greenstein when I first came to the Congress back in 
the 1970's, and I know of no one who has dedicated more of his 
life, energy, expertise and knowledge to the subject of 
nutrition and nutrition programs than has Mr. Greenstein. You 
and your agency have provided an invaluable service both to the 
House and the Senate over all these years, and we appreciate 
that and welcome you back to the committee.
    Senator Conrad. Mr. Chairman.
    The Chairman. Yes, Senator Conrad.
    Senator Conrad. Mr. Chairman, might I associate myself with 
your remarks about Mr. Greenstein?
    The Chairman. Absolutely.
    Senator Conrad. He is a national treasure, and we are lucky 
to have him.
    Senator Stabenow. Mr. Chairman, if I might also associate 
myself with your comments and indicate that in a few moments I 
am going to have to leave to preside over the Senate, and I do 
not want any of our guests to assume that that indicates a lack 
of interest. We are just very pleased that you are all here.
    The testimony that I do not have an opportunity to hear in 
person, I certainly will scrutinize the written documents.
    The Chairman. We certainly understand. Thank you very much, 
Senator.
    Mr. Greenstein, please proceed.

           STATEMENT OF ROBERT GREENSTEIN, EXECUTIVE 
 DIRECTOR, CENTER ON BUDGET AND POLICY PRIORITIES, WASHINGTON, 
                               DC

    Mr. Greenstein. Thank you for the invitation to testify, 
and thank you for your kind words. It has been my honor to work 
with all of you over the years. I also wanted to particularly 
note--Senator Roberts was talking about the welfare law--as we 
talk about where we are today, we would be in a very different 
place today if it had not been for the efforts of Senator Lugar 
in 1995 and 1996 on both food stamps and school lunch. He was 
really the champion in that period.
    Senator Lugar. Thank you, sir.
    Mr. Greenstein. As several of you have mentioned, the 
profile of the Food Stamp Program has changed; it has become 
much less a program for welfare families and much more a 
program for working families.
    Ten years ago, the number of food stamp households that 
received welfare and had no earnings was more than double the 
number who worked. Today the number of food stamp households 
who work far exceeds the number who get cash welfare and have 
no earnings.
    As the undersecretary noted, there has been a large decline 
in program participation--more than 10 million people since 
1994, the largest decline in the program's history. The economy 
was clearly a major factor here, but far from the only factor.
    As my first chart up on the board shows, from 1994 to 1999, 
the number of people who were poor declined 16 percent, but the 
number of people receiving food stamps declined 35 percent. 
Part of what happened--several of you mentioned this--was that 
the participation rate changed.
    You noted that the proportion of eligible people who 
participate went down from 71 percent to 59 percent. I would 
also note that the percentage of eligible children who 
participate went down from 86 percent to 69 percent.
    The undersecretary also noted that there had been a 
substantial decline in food stamp costs. From 1994 to 2000, 
food stamp benefit expenditures declined 23 percent after 
adjusting for inflation. There are a number of factors there--
the economy, the decline in the participation rate, and also 
very much the changes in the welfare law.
    The Congressional Budget Office estimated at the time the 
bill was passed that it would reduce expenditures $28 billion 
over 6 years, and the CBO estimates showed that two-thirds of 
the food stamp savings resulted from provisions to reduce food 
stamp benefits for households that remained eligible, often on 
an across-the-board or quasi-across-the-board basis that 
reduced benefits for the working poor and the elderly and the 
disabled along with others.
    Why was that in the welfare law? Because this committee and 
the House Agriculture Committee were assigned austere budget 
reconciliation targets assuming deep reductions in food stamp 
expenditures, and the committees had to comply.
    Those benefit cuts had no relation to the welfare reform 
goals of promoting work and marriage, and as a result of them, 
budget cuts were deeper in the Food Stamp Program than in any 
other major social program in the Federal Government.
    It is interesting if we look at the next chart and turn to 
food stamp expenditures. The top line in the chart is CBO's 
estimate of food stamp costs before the welfare law was passed. 
The middle line is CBO's estimate of what the costs would be as 
a result of the welfare law at the time that it was passed--and 
these numbers we have adjusted downward to reflect the lower 
unemployment than CBO thought at that time. The bottom line 
shows the actual expenditures. See how far it is below the 
middle line. The main difference between the bottom line and 
the middle line is that reduction in food stamp participation 
rates that several of you referred to in your opening 
statements.
    One more background point on what has been happening to 
participation. This is one of the most stunning figures of all. 
Citizen children in legal immigrant families remained eligible 
for food stamps. Their eligibility was not affected by the 
welfare law. In 1994, 1,350,000 of them were in the program; 
four years later, only 350,000 were. There was a decline of one 
million citizen children, a 74 percent decline, apparently 
related to the fact that there was a lot of confusion over the 
larger immigrant changes, and when the parents and the other 
family members became ineligible, apparently, there has been 
widespread misunderstanding and belief that these children are 
ineligible as well.
    What do we do? Clearly, we want to focus on doing better 
with working families. It is still the case that virtually 100 
percent of the families on assistance, on welfare, who are 
eligible for food stamps get it; but among working families, 
only about half of those eligible get it.
    The first thing one needs to do to address that is to 
overhaul--and Senator Lugar mentioned this in his statement--
the quality control system. The way the quality control system 
works today, it penalizes States for serving working families. 
Why? Because error rates are higher among working families than 
welfare families. If the family is on welfare, it gets a 
benefit, a cash welfare payment, it stays the same from month 
to month, the welfare office makes the payment and knows what 
it is. If a family leaves welfare for low-wage work, in many 
cases, the earnings fluctuate. The number of hours change a bit 
from month to month. Many of these jobs do not have paid sick 
leave--if you are off for a day, you get less that month, you 
get more the next month. As a result of the Food Stamp Program 
measuring precise benefit accuracy from month to month, these 
fluctuations result in higher error rates for working families 
in virtually every State than for welfare families.
    That means that a State that does better in moving people 
from welfare to work and has more working families and fewer 
welfare families on food stamps has a higher error rate than a 
State that still has most of its caseload on welfare. That is 
really not the effect we would want.
    Adding to that, the current system imposes or subjects to a 
potential fiscal penalty every State that has an error rate 
above the national average--half the States in any given year. 
That type of system was put in place by Congress back when food 
stamp error rates were up toward 17 percent in the overpayment 
rate. The overpayment rate today is 6.5 percent. We have a 
system that is not realistic for the current situation, and it 
drives States to institute procedures that make it harder for 
working families to qualify and stay on the program, like 
making them take time off from work to come back into the 
office every three months to reapply.
    A second area, also already mentioned--simplification is 
important. I see the lights are coming on. I have a number of 
ideas on the simplification front; I would be happy to discuss 
those----
    The Chairman. If you want to take a couple of extra 
minutes, go ahead. I am willing to bend the time somewhat.
    Mr. Greenstein. The one that I will mention now--and there 
are a lot of more detailed ideas--the one theme that I would 
mention now is that I would urge you to consider simplification 
in part through greater alignment, or allowing States to make 
greater alignment of food stamps and Medicaid. We often think 
of food stamps and welfare. The number of households with 
children receiving both Medicaid and food stamps is now much 
larger than the number that either program has in common with 
welfare.
    Who are the people who get food stamps and Medicaid and not 
welfare? They are working families. You h ave children getting 
food stamps who are eligible for CHIP--I know you have been 
very interested in this, Senator Lugar--or Medicaid, who are 
not enrolled in health care. You have children on Medicaid who 
are not enrolled in food stamps. If we could simplify the 
system--for example, have a single definition that States can 
apply with gross income across both food stamps and Medicaid, 
so that you could do a simpler, joint application for working 
families, maybe without having to go to the welfare office, we 
could both improve nutrition for working families, have more 
incentives to work, and reduce the ranks of the uninsured at 
the same time.
    I also think that some attention should be paid to the one 
provision still remaining from the welfare law in which an 
inflation adjustment that was formerly in place is no longer in 
place. Senator Lugar tried valiantly to maintain that inflation 
adjustment. The House did not agree to it. This was part of the 
``meet the reconciliation target'' issue. We should not have 
the benefits eroding to inflation over time.
    The final item I would like to mention involve gaps in 
coverage in two key areas that emerged in the aftermath of the 
welfare law--legal immigrants and the adults age 18 to 50 who 
are not raising minor children. In both cases, Senator Lugar 
and this committee passed provisions in 1995 that were much 
more moderate than what ended up in the final law.
    In the case of the 18- to 50-year-old adults, I would 
actually suggest that the committee look at the provision that 
this committee passed in 1995 in its welfare law, as 
distinguished from the both harsher and much more complicated 
for States to administer provision that ended up in the final 
law.
    With regard to immigrants--and let me end on this note--Mr. 
Chairman, the Food Stamp Program's restrictions on legal 
immigrants today are much more severe than those in SSI, 
Medicaid, CHIP, TANF, or any other major means-tested program 
the Federal Government runs. The Food Stamp Program is the only 
means-tested program--the only one--that denies eligibility to 
large categories of poor legal immigrants who entered the 
United States before August 21, 1996, the date the welfare law 
was signed. It is out-of-step with every other program in that 
regard.
    With regard to the people who entered the country after 
August 22, 1996, under the welfare law, in Medicaid and TANF, 
States have the option of making legal immigrants who entered 
after August 22, 1996 eligible after they have been in the 
country five years, and most States have taken that option. In 
the CHIP program, Federal law requires States to make children 
eligible--the new entrants eligible--after they have been here 
for five years. In the Food Stamp Program, they still remain 
ineligible at that point. For families with children, food 
stamps is different than the other programs in that regard.
    I would also note that prior to the enactment of these 
provisions, the error rate for immigrant families was about the 
same as for native families. Now the immigrant provisions are 
so complicated in the food stamp law that the latest data show 
that the error rates for immigrant families are much higher for 
native families. They have gone up because of the added 
complexity the law created.
    In summary, this is a wonderful program, and this committee 
has done exemplary work over the years, but there is definitely 
need for improvement.
    Finally, I will just make a statement, Mr. Chairman, and if 
you want to ask, I will be happy to elaborate during your 
question period, but for reasons I will be happy to elaborate 
on, I would actually strongly recommend against doing school 
lunch and school breakfast in the Farm bill. They are up for 
reauthorization in 2003. I suspect that on this committee at 
the end of the day, there is going to be a lot of interest in 
agriculture and commodities, and there is going to be only so 
much money for nutrition. When you look at the reductions in 
expenditures in food stamps, you are going to need virtually 
all of that money there. You can come back in 2003 and make 
improvements in school lunch and school breakfast. If you use 
some of the nutrition money in the Farm bill, whatever amount 
it may be--and I hope it is significant--for lunch and 
breakfast, you will end up shorting these very basic issues 
that are crying out to be addressed in the Food Stamp Program.
    Thank you.
    The Chairman. Did you say that you do not think we should 
address or that we should address the school lunch and school 
breakfast program in this Farm bill?
    Mr. Greenstein. Should not.
    The Chairman. We should not; let it go until 2003?
    Mr. Greenstein. Yes. There are not----
    The Chairman. OK. I will cover that with you later.
    Thanks.
    [The prepared statement of Mr. Greenstein can be found in 
the appedix on page 70.]
    The Chairman. Dr. Haskins, a Senior Fellow in the Economics 
Studies Program at the Brookings Institution, and a co-director 
of the Institution's Welfare Reform and Beyond Initiative.
    Welcome, Dr. Haskins.

STATEMENT OF RON HASKINS, SENIOR FELLOW, BROOKINGS INSTITUTION, 
                         WASHINGTON, DC

    Mr. Haskins. Thank you, Mr. Chairman, Senator Lugar.
    It is a great privilege to be here today. I really 
appreciate being invited to testify in the shadow of Bob 
Greenstein.
    In a former life, I was a staffer in the House--my I.Q. was 
too low to get a job in the Senate, so I took a staff job in 
the House, where I was privileged to work on the welfare reform 
bill--and that is what I would like to focus my testimony on 
today.
    Let me tell you a simple story that has five parts. The 
first part is that in 1996, Congress changed our welfare 
program, our major cash welfare program, AFDC, and required 
States to design programs that would encourage or, where 
necessary, force mothers to work.
    The second part is that, lo and behold, they passed a law 
in Washington, and out there in the countryside, they actually 
did what the law asked them to do. The States devised these 
programs, and mothers left welfare in droves and went to work--
I have submitted some data in my testimony to demonstrate those 
facts--and as a result of that, there have been many, many 
affiliated results, but perhaps the most impressive and the 
most important is a dramatic reduction in child poverty, 
particularly if we use broader Census Bureau measures that take 
into account the Earned Income Tax Credit, EITC.
    The third point is that, as I have just suggested, the 
reason why we have had such success in reducing child poverty 
and increasing family income as well is because of what we can 
call the work support system. That is the main reason I want to 
talk to the committee today.
    That system is composed of the Earned Income Tax Credit, 
food stamps, child care, child support enforcement, and several 
other benefits that go to working families. If you look 
carefully at the legislative history, you will find that since 
1985, all of these programs have been either created in whole 
or have been dramatically expanded. I hate to make an 
accusation like this, but it actually appears that the Congress 
had vision; that Congress wanted to create a situation that 
would both suck people off welfare by giving them the incentive 
and would provide them with a very strong--I hesitate to use 
the word ``safety net,'' because that is usually associated 
with welfare--but would provide additional income because 
Congress knew that so many of these families were going to be 
low-income and did not have the skills and experience to demand 
higher wages, so they were going to have to work at low wages.
    The fourth point is that there is something very nice about 
this system, because it reflects its bipartisan origins. The 
strong work requirements and especially the strong elements of 
the 1996 legislation are clearly conserved in the Republican 
origin. Members of this committee and other committees actually 
fought against some of these provisions and reluctantly, at 
least in two or three of them, President Clinton signed the 
bill. As a result, we have a lot of families who have left 
welfare, and now, for the liberal side of this, we have this 
very strong work support system in which we invest billions of 
dollars--spending has grown like made since 1996--it actually 
started a little before that--so we have a nicely balanced 
system that I believe has strong bipartisan support, and at 
least in a good economy, it works very well, with one 
exception--and this is my fifth point in this story--and that 
is that food stamps and Medicaid are a big problem--a big 
problem.
    Recent research--Bob said that about 50 percent of the 
families leaving welfare who are eligible for food stamps get 
it--recent research suggests the number may be closer to 40 
percent. We have a very large number of children and single 
mothers out there--an exceptionally worthy group, in my 
opinion--and they are not receiving their food stamp benefits.
    I would like the committee to consider this. The typical 
mother is earning around $10,000. If she has two children, she 
gets about another $4,000 in EITC, so she has $14,000. At that 
point, she is eligible for about $2,000 in food stamps, which 
is virtual cash in this case. Imagine a difference to that 
mother and those children of an income of $14,000 as compared 
to $16,000. That is the topic that this committee should 
address. We should all want that family to have that additional 
$2,000, and we know for certain from all kinds of national 
datasets that many of them--probably a majority--are not 
getting the money.
    Now, what is the cause of this? There are many causes. 
There is plenty of blame to go around for people who like to 
blame. Right at the heart of it is the quality control system. 
Bob has already made several references to this, as has 
Secretary Bost. The quality control system really and truly, if 
you think about it, is exactly opposed to the purposes of TANF.
    In the TANF program, if the States do not put people into 
work, they are literally fined by the Federal Government. In 
the Quality Control Program, if the States put people to work, 
they are virtually fined by the Federal Government, because in 
every State, they have higher error rates in the cases of 
people who work.
    Something simply has to be done to the statutes to allow 
the States more flexibility. I would suggest that the committee 
look at four things.
    It is not surprising that this has occurred. It is a new 
world. Things change dramatically. We have many more single 
mothers out there. It is not surprising. Now the committee and 
the committee in the House should respond appropriately by 
getting to the bottom of the problem and solving it.
    First, we have to change the asset limit for vehicles 
especially. It is more important than ever now for mothers to 
have good transportation because so many of them work. That is 
the first thing.
    The second thing is at least consider--I am not enough of a 
food stamp expert to know all the ins and outs--but it makes 
some sense to separate, at least for purposes of quality 
control, working families from the disabled and the elderly, 
because they are so different, and it is possible that a good 
solution could be fashioned around that step.
    The third thing is that I want to strongly endorse Bob 
Greenstein's suggestion of finding a solution that is also 
compatible and works hand-in-hand with Medicaid, because we had 
exactly the same problem in Medicaid. When I was still with the 
Ways and Means Committee, we had a hearing about this and 
invited several States, and they employed very aggressive 
administration action to make sure that people knew they were 
eligible, to make it as easy as possible for them to get the 
benefits--for example, in one State, Florida, you could do the 
entire application and re-application by telephone--those kinds 
of measures were very, very effective. Coordination with 
Medicaid is important.
    The final thing and probably the most important would be to 
lengthen the accounting period for the purpose of the quality 
control. As Bob mentioned, it is simply impossible with low-
income families to trace their income. It could change every 
week, and there is no administrative system known to man or God 
that can follow the wages of an external group from week to 
week; it just cannot be done.
    When the quality control investigators come along and have 
a week to examine a case, they can reveal a lot of these 
things, and that is why the error rates in these cases are so 
high. We should at least give the States a 6-month period in 
which they are held harmless for any changes in income among 
families that work.
    Let me leave you with this thought. I believe there are 
very few, if any, actions that the Congress could take in the 
next 18 months that would have a more immediate and pervasive 
effect on child poverty than solving this food stamp issue and 
making sure that these families get their food stamp benefits.
    Thank you very much, Mr. Chairman.
    [The prepared statement of Mr. Haskins can be found in the 
appendix on page 87.]
    The Chairman. Thank you, Dr. Haskins, and thank you all for 
very excellent statements. As I said, they will be made a part 
of the record in their entirety.
    Dr. Haskins, I would just ask you to compare and contrast 
the role of TANF as opposed to that of the food stamp program, 
and what you conclude about the appropriateness of TANF being a 
block grant and the Food Stamp Program, being a national 
program.
    Mr. Haskins. I may be in agreement with Bob Greenstein that 
I would never say block grants are great, plus I was involved 
when the House wanted a food stamp block grant, and Senator 
Lugar, as Bob pointed out, was very strongly opposed to it, and 
we did not wind up with a block grant.
    There is no question that if you have a block grant, you do 
not have to worry about the administrative details. You give 
the States a bunch of money, and it is their problem. You can 
still have accountability, but you do not have to worry about 
the amount of money going up. That is what we have in TANF. In 
food stamps, when you have an open-ended entitlement, if the 
States are not careful in the administration, if costs the 
Federal Government a lot more money, and fraud goes up; that 
reduces public support. There are lots of problems with fraud 
in any program that does not have good quality control.
    As long as food stamps is an open-ended entitlement, there 
simply has to be some type of quality control. That is why the 
6-month hold-harmless period should at least be tried. If the 
committee is concerned that that could lead to more fraud--and 
it would lead to some more not deliberate fraud, but to more 
overpayments; I am quite certain of that----
    The Chairman. What do you mean by a 6-month hold-harmless 
period? I do not understand.
    Mr. Haskins. Under current law, when the quality control 
investigation takes place, they look at a case in great detail, 
and if a working family got a job and was making $7 an hour, 
and in week one, they worked 35 hours, the next week they 
worked 40, the next week they worked 38, the normal State 
administrative system could not follow those changes. 
Furthermore, the family might quit work for two weeks--we know 
this; very clearly, many families are in and out of the labor 
force. That to be accurate, you have to follow all those 
changes.
    What I am proposing and several others have proposed--and 
the States can give you a lot of information about this--is 
that the statute allow the State to make an accurate collection 
of information and computation when the family goes to work; 
and then, for the next six months, as long as the family 
continues working, you would not have to take into account 
changes in wages. Then, at the end of six months, you would 
have to redetermine and make sure the wage is still correct, 
and hours of work, and so forth. Or, if the committee were 
nervous about that, you could do it for three months. That is 
an essential part of the solution that the States have a period 
during which they are held harmless.
    The Chairman. Mr. Greenstein, your observations?
    Mr. Greenstein. I very much agree with Ron's point on the 
six months. I would note that the Department last November 
issued a regulation that now gives States the option of 
essentially doing what Ron just suggested; however, while some 
State are moving in that direction, the State take-up has been 
less than one otherwise would have expected, because there are 
still on the part of States concerns about the quality control 
issues generally on having a lot more working families on the 
program. My sense is that one needs to couple these kinds of 
improvements with the quality control improvements, and then, 
that more States will be able to take advantage of the option.
    There is another proposal also in a regulation that was 
issued in November, but it has not taken effect yet, that the 
States have suggested that is an excellent idea. I presume Ron 
would like this also. There is this very difficult situation, 
as Ron mentioned, when a family leaves welfare for work. The 
food stamp office knows this family's circumstances are 
changing--the exact income is changing--so often, to protect 
themselves against errors, what the food stamp office may do is 
to end the family's current food stamp certification period at 
that point and say ``You have to come back and reapply.''
    Now, here the family; it is now ineligible for welfare, 
because it is going work. It is told ``We are ending your food 
stamps; you can come back in if you want to reapply.'' It 
assumes that it is no longer eligible for food stamps, either, 
and it does not come back.
    The suggestion--it originated from the States--was to give 
States an option to freeze the food stamp benefit for a 
transitional period when a family works its way off welfare. 
The regulation would allow States to do that for three months, 
but because that regulation needs approval from the management 
side of OMB under a technical paperwork issue, it still has not 
been allowed to take effect, and States are waiting for it.
    Some of us are actually suggesting you consider in 
reauthorization lengthening that transition period; maybe that 
should go to as much as six months.
    The one point where I would mildly disagree with Ron--our 
conclusion is the same; the mechanism would be different--is 
that I do not actually think you need to do more in statute on 
the vehicle issue because of the provision that you enacted in 
October that gives States the option of aligning their vehicle 
rule with their TANF vehicle rule. We are just completing a 
survey of what States are doing, but a large number of States 
are moving to solve that problem--30 already, the 
undersecretary says--so I am not sure that one needs--by the 
way, a final point that I would make is that a block grant is 
the wrong way to go, but here was an example, the legislation 
you passed in October. You did not do a block grant. You said 
here is an area, the vehicle rule, where it makes sense to give 
States the option to align their vehicle rule with the TANF 
rule. The regulation that I am referring to says give States 
the option of freezing the benefit for working families for six 
months. The reg that I hope will be approved at OMB soon says 
give States the option of freezing the benefit for the family 
that works its way off welfare for three months. Rather than a 
block grant, we can find discrete areas where an appropriate 
option, flexibility for a State to simplify matters in a way 
that facilitates service to working families, coupled with 
reform of the quality control system, could help make a lot of 
progress.
    The Chairman. Thank you very much.
    Mr. Bost, do you have any observations?
    Mr. Bost. Yes, just a few. What we are looking at is a 
combination of all of those factors. Up until a month or so 
ago, having had the opportunity of running one of the largest 
food stamp programs in the entire country, we looked at making 
all of those changes, to some extent.
    Let us talk about this certification period. For some 
families, it was three months, for some families, it was six 
months, and for some families, it was essentially nine months. 
For us, the issue was having the flexibility to make some kind 
of determination.
    The other thing that I instituted 2-1/2 years ago that 
probably helped us a great deal was the call center. We 
implemented call centers which would essentially allow families 
to call to note changes, and they did not have to come in if 
they were working.
    The other thing was to extend office hours to evenings and 
Saturdays, so that if they had to appear in person, they could 
do that.
    On this issue of the quality control system, I would agree. 
All of us are absolutely correct in savings that we do need to 
do some things in terms of changing it. The problem or the 
issue or the challenge is--to what? No one has asked to what. 
They say, well, it needs to change; it is too complicated. We 
are working on what to change it to, because we have got to 
maintain integrity in our system.
    I do believe very strongly that we do need to look at 
making some adjustments in terms of what that system is, 
because as so many people have said, a significant number of 
States have indeed been sanctioned.
    On the other side of the coin, there is some incentive or 
there should be some incentive for States to ensure that 
accurate food stamp determination is made for people who come 
into their offices, to ensure that people get every dollar that 
they should receive.
    There has to be that balance in terms of accuracy 
determination, and incentives in programs, but there also has 
to be some sort of quality control there to ensure that we 
address issues directly related to fraud and abuse. They go 
hand-in-hand, as far as I am concerned.
    I have one final point--I want to talk about participation 
rate. When I looked at Texas in the report that was most 
recently released this morning, low participation rates are 
directly related to several factors. One, we have people who 
are working, earning more money, and they are no longer 
eligible. No. 2, some clients--and this is not from research 
but from me actually going out and talking to clients--some 
clients, many clients, have essentially said to me that they 
found the process difficult to understand, so they did not come 
in to apply. A third group of people essentially said that when 
they were no longer receiving TANF, they were not aware that 
they may still be eligible for food stamps.
    It is a combination of all of those factors, but let us not 
forget that first large group. Many people, as a result of 
welfare reform, as a result of a very strong economy, are no 
longer eligible to receive food stamps because they have a job, 
they have income.
    There are those other three or four categories of people 
who are very, very important, but that is one that sometimes we 
overlook.
    The Chairman. I have two other questions, and I will just 
ask one and then wait for my second round.
    Right now, it is my understanding that the average 
expenditure for food by families in America is about 11 percent 
of disposable income. Yet under the Food Stamp Program, we 
expect poor people to spend up to 30 percent of their 
disposable income on food. Then, food stamps are supposed to 
make up the difference between the 30 percent and what is 
needed in order to have a healthy diet.
    What would you think about lowering that 30 percent? Why 
should we ask poor people to spend 30 percent of their 
disposable income on food when the rest of us are spending 11 
percent of our disposable income on food?
    Mr. Greenstein.
    Mr. Greenstein. I am going to surprise you and say no, I 
would not favor lowering that, and here is why. Being 
practical, again, you are going to have a limited amount of 
resources for the nutrition title, and I hope that you improve 
the adequacy of food stamp benefits. Lowering the 30 percent 
figure is very expensive. It is going to consume a lot of the 
limited resources that you would have available, and it would 
target the biggest benefit increases to the highest-income 
households on food stamps.
    Let us suppose you lowered it from 35 percent to 25 
percent. You would be increasing the benefit by five percent of 
income. Well, for somebody at 120 percent of the poverty line, 
you would increase the benefit three times as much as for 
somebody only at 40 percent of the poverty line.
    Let me suggest a better way to deal with that. A better way 
to deal with the issue that you are raising, is to look at the 
standard deduction in the Food Stamp Program. We have a 
standard deduction which was actually created under a proposal 
of Senator Dole back in 1977. The standard deduction is a proxy 
for certain expenses that households have that take away money 
that they otherwise might spend on food, and those expenses 
rise over time, it was adjusted for inflation until the welfare 
law--this was a provision that I referred to earlier where the 
House approach rather than the Senate approach ultimately 
prevailed.
    There is another funny thing about the standard deduction. 
The standard deduction is the same for a single individual as 
for a family with several children, but the family with several 
children has more expenses. There is a bill that has been 
introduced on a bipartisan basis by Senators Specter and 
Kennedy and Leahy and others that proposes to replace the 
current standard deduction with one equal to 10 percent of the 
poverty line. The first 10 percent of the poverty line--if your 
income is only 10 percent of the poverty line, it is not like 
you can spend 30 percent of that small amount on food.
    That would have two effects. Over time, it would improve 
the adequacy of the benefit. It would target it more to the 
people most in need than lowering the 30 percent figure would 
do. It would address the anomaly in the program that exists 
today whereby the standard deduction in the same for a single 
individual as for a family with children.
    I would rather spend the bucks on that than on lowering the 
30 percent figure.
    The Chairman. Very good. Thank you.
    Mr. Haskins. Mr. Chairman, could I just add that especially 
if these extended accounting periods and so forth are put in 
statute, I would be very surprised if the Congressional Budget 
Office did not say that there will be a cost to these. That is 
a crucial thing to support working families, and it is another 
reason to husband your resources and focus them on this big 
problem. I am almost sure it will have a CBO estimate. Nobody 
has gotten an estimate yet to my knowledge, but I am almost 
positive there will be a cost ascribed to it.
    The Chairman. Yes, Mr. Greenstein, go ahead.
    Mr. Greenstein. I was just going to briefly add that this 
committee is going to face a difficult decision. You have an 
allocation from the Budget Committee. We have talked about the 
magnitude--the Undersecretary's figure was that food stamp 
expenditures have come down at $7 billion a year.
    There is a figure in Ron Haskins' testimony where he notes 
that at the time the welfare law was enacted--correct me if I 
am getting your testimony wrong--it is an interesting piece of 
work that Ron did in the last few weeks--at the time the 
welfare bill was enacted, CBO forecast that food stamp 
expenditures from 1997 through 2002 would be $190 billion.
    Mr. Haskins. Yes.
    Mr. Greenstein. When he looked at what the actual 
expenditures have been and CBO projects for the next year or 
two, it is $120 billion. It came down $70 billion more over six 
years than the amount the welfare law already was assumed to 
save.
    Mr. Haskins. That is right.
    Mr. Greenstein. Here is what I am getting to. You are going 
to have a decision, which I know will be difficult for you, 
where the same dollars have to be divided between the 
agricultural side and the nutrition side. The things that we 
are all talking about cost some money. The House is talking 
about $2 billion over 10 years for the food stamp part. We 
cannot begin to do the things that we are talking about for $2 
billion over 10 years. You are going to need to have more than 
that to address these issues.
    Mr. Bost. Mr. Chairman, the point that I was going to make 
in reaction to your suggestion, is the issue that there is not 
one suggestion, but several suggestions, so it is a question 
of, one, how they fit, and two, the fact that all of them are 
going to cost a significant amount of money. Therefore, it is a 
question of the biggest bang for the dollar.
    The Chairman. Senator Lugar.
    Senator Lugar. Thank you very much, Mr. Chairman.
    The testimony that all three of you have presented is just 
very helpful, and likewise the oral testimony on the changes 
that we might make. This last colloquy on cost is important, 
and Mr. Greenstein's earlier comment strategically, that he 
would favor not having the title in the Farm bill and taking 
our chances maybe the year after. That, we will have to take a 
look at simply because I am not sure that in the year following 
the Farm bill or whenever this is to be taken, there are 
additional funds. I am open to instruction as to where you find 
the liberality beyond this given the budget construct that we 
are working under, but can you illuminate that any more? In 
other words, if we were not to put this in the Farm bill--and 
as you have suggested, one reason for not doing so is not to 
run into competition with other claimants in the Farm bill--
where do we get the money later on, or how do we deal with this 
more favorably?
    Mr. Greenstein. Let me clarify. I have created a 
misimpression of what I was saying.
    I am strongly in favor of including the food stamp title in 
the Farm bill--strongly in favor of it. What I was saying was 
in response to Senator Harkin's question that I did not favor 
doing school lunch or school breakfast in the Farm bill. I 
strongly favor doing food stamps in the Farm bill. Lunch and 
breakfast have never been a part of the Farm bill. They are 
also under a different committee of jurisdiction in the House. 
They come up for reauthorization in 2003. There is not an 
immediate crisis in them. In fact, unlike this big decline in 
participation in food stamps, there has really been no decline 
in participation in school lunch, even in free school lunch, 
even in spite of the reduction in poverty and the improvement 
in the economy. Congress seems to have an easier time 
politically finding resources when the time comes for the 
school lunch program given its broad popularity.
    My fear if you did school lunch or school breakfast in the 
Farm bill, is that the first decision the committee makes is 
agriculture versus the nutrition title, and you end with an 
amount for the nutrition title that, whatever the number is, it 
is probably going to be less than I hope it will be. Then, out 
of that limited amount of money, if one does lunch and 
breakfast there, you are taking it out of food stamps, and my 
guess would be that some of whatever you do in lunch in 
particular, a significant amount of that will be middle-income 
children, and as Ron is saying, the principal focus now has to 
be on working poor families with children in the Food Stamp 
Program. That is the No. 1 issue. I do not think you will end 
up, unfortunately, with enough resources to do all that should 
be done there. I would not dilute it further by doing lunch and 
breakfast, but I definitely recommend in favor of doing the 
food stamp title in the Farm bill as it has traditionally been 
done.
    Senator Lugar. How about the WIC Program; which way would 
that fall--in the bill now, or outside of it, or are there 
other things we should identify?
    Mr. Greenstein. WIC is up for reauthorization in 2003. 
Again, there is not any immediate crisis. It should be 
reauthorized in 2003. Also, since WIC is a discretionary rather 
than a mandatory program, this committee does not get charged 
with costs. Those are charged to the Appropriations Committee 
each year in the appropriations cycle.
    Senator Lugar. With regard to the changes that are 
suggested here, probably as we proceed with them--and each of 
the ones that you have made with regard to the accountability 
factors and the various ways in which we can simplify or make 
it more flexibility for States, and each of you have suggested, 
as opposed to maybe having a general Federal standard that 
States be given some discretion in these things--I suppose that 
as we begin our reform efforts, we probably ought to get some 
CBO scoring as we go along so that we all understand that there 
are some costs involved, and there are no surprises at the end 
of the trail.
    Having said that, do you have any idea what kinds of costs 
we are likely to run into? Have any of you costed out any of 
the reform suggestions that you have made this morning?
    Mr. Bost. Senator Lugar, we have just started to line up 
some of the possible changes and recommendations and 
essentially what kind of impact they would have, and I have 
folks in our shop looking at putting numbers behind those. At 
this point, I do not have any firm numbers that I am willing to 
share, because I do not want to be premature in terms of 
putting them out there and then having to defend them down the 
road until I get all of my questions answered. I would say 
generally that it is going to be a significant amount of money 
in terms of the types of changes that all of us have talked 
about. You are looking at increasing access; you are looking at 
making the system easier to negotiate; you want to bring people 
in; you want to provide incentives to States to ensure that 
they do that. The States are essentially going to say that it 
is going to cost them more money for those things to occur.
    I know, having had the opportunity to run a State system, 
there were some other additional initiatives that I felt that I 
could do if I had received more money from the Federal 
Government. From that vantage point, all of these things are 
going to cost us a significant amount of money.
    Mr. Haskins. Could I add one point to that, Senator Lugar?
    Senator Lugar. Yes.
    Mr. Haskins. I know that this will do not good with the 
Congressional Budget Office, and it does not help the bottom 
line, but when thinking about this additional spending, we 
should keep in mind that what we are talking about here is 
getting benefits to children who are eligible under current 
law. I know that that does not make any difference to CBO, but 
it does make a difference when you consider the types of 
proposals that you might support.
    Our goal is not to create new eligibility or to increase 
benefits; it is to get benefits to people who already deserve 
them under current law.
    Mr. Greenstein. Senator, CBO has costed some proposals that 
are in some bills that other Members have introduced, like the 
bill I mentioned that Senators Specter and Kennedy have 
introduced, and Congressmen Walsh and Clayton introduced a 
similar bill in the House. Based on past CBO estimates in-house 
at our center, we have done some rough estimates of what we 
think would be the approximate amount CBO would estimate. I 
will just read you a few of them.
    The standard deduction provision that I mentioned a few 
minutes ago is about $2.7 billion over 10 years. If one gave 
States the option of doing transitional food stamps for 
families working their way off welfare, we think that that is 
about $1.7 billion over 10 years.
    There is a package of pretty interesting simplification 
options that we have been working on and developing based on 
conversations with a number of State people. Those have not 
been costed yet by CBO. We are guessing that they are going to 
end up somewhere in the $200 million to $500 million range over 
10 years and, depending on what you do on legal immigrants, 
that could be a few billion dollars over 10 years.
    CBO does not yet have cost estimates on the quality control 
reforms, and we are not sure exactly how those are going to be 
costed. Hopefully, those will not be too significant.
    These are some initial-type estimates. That is not to say 
that none of these provisions cannot be designed in a way that 
costs less and also does less, but the bottom line is that 
these things cost real bucks.
    Senator Lugar. Well, it strikes me, and I suspect the 
chairman would agree, that we probably ought to line up on a 
sheet of paper the proposals for reform, most of which, it 
seems to me, have extraordinary merit, and see what they are 
going to cost; and then have our draftsmen try to think, in the 
tradition of Dr. Haskins' work in the past, about how you can 
mitigate the cost of any of this and still get most of the 
effects of it, even after the sticker shock has hit from the 
initial list.
    Secretary Bost, it is very important--and I have no idea 
what the policy of the Secretary is here, or yours--but if 
there are strong recommendations that you have--and these are 
certainly exemplified in your testimony today--that the 
administration provide a program fairly quickly, both for the 
things that we ought to do and the costs. I understand you do 
not want to make it prematurely, but we are coming down the 
trail rapidly with regard to farm bill preparation, and unless 
those of us around this table are going to sort of scratch it 
together, parsing the testimony to pick out this and that and 
so forth, you have got a shop of people who are experts to do 
this kind of work. Again and again, with each of the 
administration witnesses, without being difficult about it, I 
am just saying speak nor or forever hold your piece. This is 
the time.
    The Chairman. I agree.
    Senator Lugar. Now, people say, well, we have not had a lot 
of time, and that is true, and there is still the problem of 
getting people confirmed. The chairman has been very helpful, 
and in a bipartisan way, this committee has moved people along 
readily--but still, you have problems, and I understand. In 
your shop, you are there; you are confirmed----
    Mr. Bost. A month ago.
    Senator Lugar [continuing]. You have some helpers----
    Mr. Bost. One month ago. Senator Lugar, to respond to that, 
we are working with all deliberate speed to ensure that I put 
forth those recommendations just as quickly as I possibly can.
    Senator Lugar. That is great.
    Mr. Bost. As I said, I have been here one month; I am 
learning all the hoops that I need to go through; I am learning 
everyone whom I need to talk to. I have had at least four or 
five meetings personally with my staff to make a determination 
on those recommendations that I feel are very important that I 
would like you to consider, along with giving those assignments 
out so that people can attach costs to them. I really do 
believe that I bring a little bit of a unique approach to it, 
having had the opportunity of running the program, too, of 
being on both sides of the fence almost at the same time.
    Senator Lugar. It is an extraordinary approach; and 
supplemented by your two colleagues at the table today, perhaps 
we can fashion something fairly rapidly. I look forward to 
those recommendations, in all seriousness.
    Mr. Bost. Thank you.
    Senator Lugar. Thank you, Mr. Chairman.
    The Chairman. So do I.
    Senator Dayton.
    Senator Dayton. Thank you, Mr. Chairman.
    I am very sorry to have missed the testimony. I am trying 
to catch up here, reading, and I do not really have a set of 
questions because I would like to get on to the next panel.
    I would just note from what I have been able to glean so 
far that I am very alarmed by the testimony that has 
underscored the decline in participation and utilization of 
these important programs.
    I note, Dr. Haskins, that you and perhaps others have made 
some recommendations both in terms of making this program less 
restrictive and, like all Federal programs, unnecessarily 
complicated in terms of eligibility determination as well as 
granting greater flexibility to the States with the working 
participants so it can be worked more in concert with TANF. I 
am looking forward to the next panel to address maybe some 
specific recommendations in this area, because I certainly 
think, Mr. Chairman, that this program has been so important to 
so many Americans that we really ought to look with alarm at 
these declining participation rates and make sure that whatever 
we do in this reauthorization improves access and efficiency.
    Thank you.
    The Chairman. Thank you very much, Senator Dayton.
    Senator Wellstone.
    Senator Wellstone. Thank you, Mr. Chairman.
    I am also sorry that I missed the testimony. Senator Dayton 
and I had to testify at another committee about workers out of 
work and the need to get Trade Adjustment Assistance.
    I have some questions, if it is OK. One thing that I want 
to say at the beginning, which is in just a little bit of 
disagreement with Dr. Haskins--I am in complete agreement on 
the whole issue that those people who are eligible should be 
participating, and I want to come back to the report today from 
Food and Nutrition Service--but again, whether we like it or 
not, we cut some of the food stamp benefits in that welfare 
bill. For example, a typical family of three with a monthly 
income of $957--that is 81 percent of the poverty line, Mr. 
Chairman--is eligible for $154 in food stamp benefits under 
current law. If we had not had the across-the-board reductions 
in the welfare law, they would be receiving $174. That is an 11 
percent increase. To that family, that is really important. 
Some of the minimum benefits are laughable. The lowest is $10 a 
week for one person, or something like that. It is pretty 
embarrassing, frankly. I do not think it is just a question of 
making sure that the people who are eligible get the benefits 
that they are eligible for; we need to look at the benefits.
    I understand Senator Lugar's point about the restraints 
that we are operating under, but there is also the other cost--
and I also want to make the point about eligibility again. One 
of the things that has also been a huge problem--and one of 
you, it was Bob, talked about the issue of the savings in the 
cuts in food stamp benefits--we cut the food stamp benefits for 
legal immigrants. Have you noticed that the politics in this 
country about immigrants is changing? Then, we restored it, for 
children and disabled post-1996. The point is that a lot of the 
children still do not get the benefits because their parent or 
parents are not eligible, so they do not go.
    Let us get real about what we did. We are going to have to 
face this decision. I want to push hard that we restore 
eligibility for benefits for legal immigrants. There are a lot 
of legal immigrants in this country with their children. There 
is more to it than just expanding eligibility.
    Let me now go to my question. The first question is for 
Undersecretary Bost. I appreciate the report. I have been 
asking for this for a while, and I am so pleased that you came 
forward today. The Food and Nutrition Services people do good 
work, and again, it is a matter of--one more time for the 
record--glass half-full, glass half-empty. Undersecretary Bost 
said--and he had every right to--listen, remember that you had 
a certain percentage who were no longer participating because 
they were not eligible because they were working--44 percent. 
We might be more troubled that over half of the people who are 
not participating are still eligible. We have had something 
like a 30 percent decline. There were a lot of reasons, and you 
were very forthright about this, and I appreciate your 
testimony.
    What would you recommend that we do, Secretary Bost, by way 
of--and I know that Dr. Haskins is interested in this as well--
what do you think we need to do to make sure that the people 
who are eligible right now know they are eligible? Where is the 
outreach? Where is the infrastructure?
    Mr. Bost. There are a couple of things we can do at the 
Federal level and also have the opportunity of doing from the 
State level. One, provide information across the board to those 
persons that we think are eligible; two, provide additional 
training of staff for persons who come in to apply, especially 
those who are receiving TANF, and when it appears that they are 
no longer going to be receiving TANF, also make them aware that 
they might still be eligible for food stamps. That is one thing 
we did in Texas that saw a little bit of a reversal in terms of 
the number of people who fell off the welfare rolls but were 
still eligible for food stamps and did not come back in to 
apply.
    The other issue that we have heard consistently from 
clients is the issue about it being difficult for them to 
access services. There are two categories--people who work, 
people who do not work. Those persons who do work essentially 
said, ``It is difficult for me to take off and come in to 
apply.'' The second group of people essentially said, ``I do 
not understand all of the rules. I do not understand all the 
pieces of paper that I need to bring in to ensure that I am 
eligible.''
    We need to address both of those groups of persons, and we 
have all talked about some steps that we can take to do that. 
When you combine all of those initiatives, you will see--and I 
believe that we have seen--a significant turnaround in terms of 
those persons who are indeed eligible and are now 
participating.
    I know that the commissioner from Maine, a good friend and 
colleague of mine, Kevin Concannon, has done an outstanding job 
in terms of ensuring--and I know that he is due to testify, and 
he can talk about some of the things that they have done in 
Maine--to ensure that people who are indeed eligible actually 
come in to the offices to apply.
    All of those are things that can be done.
    One final point--and I am going to speak wearing both hats 
now, since I have only been in this role for 30 days. There are 
some things on the State level that I wanted to do, but I could 
not afford to do them. On the issue of call centers, I got a 
50-50 match. I did two or three. I would have wanted to have 
done more if I had more money to do it.
    On the issue of training, I appropriated money to train all 
of our staff. I could have done more training, because I 
believe that training is very important.
    There is the issue of public service announcements. I could 
go on and on. It is a question of how much money you want to 
put out there to ensure that you address this issue.
    Senator Wellstone. Thank you. The light is yellow, and I 
want to fire two questions to each of the other panelists, and 
then you can answer, so I do not run out of time.
    By the way, my understanding is that right now, it takes an 
average of five hours for someone to apply.
    Mr. Bost. That is not true.
    Senator Wellstone. OK. Good. That is great.
    Mr. Bost. In the office in Texas----
    Senator Wellstone. This is according to the recent 
testimony before the House subcommittee.
    Mr. Bost. Maybe that is an average. We were able to put all 
the information on one application--food stamps, TANF, and 
Medicaid. I am not going to say that it is short, by any means, 
but the average time period that it would take a person to 
apply was about two hours.
    Senator Wellstone. OK.
    Mr. Greenstein, on the issue of fraud--you were talking 
about quality control and how it does not work--are there ways 
that we can revamp the quality control system--maybe you went 
over this--and still protect ourselves against the concerns 
about fraud? If you could speak to that, and then, Dr. Haskins, 
I want to ask you about the whole issue of benefits for legal 
immigrants, because that comes up over and over again--on food 
stamps--if I could.
    Mr. Greenstein. There are a number of things to look at in 
the quality control area, but the single most important is the 
outdated provision in the food stamp law that says no matter 
how well States perform as a group, every State above the 
national average is subject to penalty. In other words, even if 
the States as a group move to very good performance, in any 
given year, roughly half of them are subject to penalty, which 
puts tremendous pressure on the States. We have had State 
directors say to us, ``Look, here is a possible procedure; it 
might lower my error rate a few tenths of a point, but it is 
going to impede participation by working families, and I do not 
want to do it.'' If 10 or 15 other States adopt it, that forces 
me to consider it, because we are all measured against each 
other for this national average.
    The USDA in the mid to late eighties, under the Reagan 
administration, contracted with the National Academy of 
Sciences to do a study of the food stamp quality control system 
and recommend changes. One of their principal recommendations 
was that the system should penalize the States that are the 
outliers, that have the outlying, unusually high error rates--
not everybody who is above the national average.
    Now, there is a provision in the food stamp law that also 
gives the Department the authority to go after and exact 
financial penalties on any State that is negligent in the 
administration of its program.
    Senator Wellstone. Does that mean the people who are 
eligible do not get the benefits--that kind of error?
    Mr. Greenstein. No. We used this some when I was running 
the program in the late seventies. This rarely happened, but 
you have a procedure that Congress has put in to reduce 
overpayments and, for whatever reason, a State just does not 
implement it--something egregious like that.
    Here is my point. We can revamp the quality control system 
so the sanctions apply to the outliers, and you still have the 
authority--if a State is not an outlier but loses a lot of 
money because of gross negligence, the Department still has the 
authority to identify that individual State and do something. 
We should not automatically be subjecting half of the States to 
sanctions in a given year.
    One quick point on another front when you were mentioning 
improving participation. One of Mr. Bost's former colleagues, 
Don Winstead, who runs the programs in Florida, said to me some 
months ago, ``Bob, more of us States are moving to enable 
working families to apply for Medicaid outside the welfare 
office. If food stamps is not enabled to move with them, we are 
going to have families that are not on welfare--they are not 
going to the welfare office for welfare, they are not going to 
the welfare office anymore for Medicaid--if the only thing they 
have to go for is a complicated food stamp process, we could 
lose even more of them.''
    One of the recommendations I made and Ron also talked about 
was enabling food stamps to move in line with Medicaid for 
working families, so you would have a simple process by which 
working families could apply for both together.
    Senator Wellstone. Put child care in there.
    Mr. Greenstein. If you align food stamps and Medicaid 
first, you then may be able to ultimately put child care in 
there as well. That is the right vision.
    The Chairman. Thank you.
    I have one last question I want to ask. The food stamp 
program is a Federal program. Yet it is administered by the 
States. It has come to my attention over the years that in some 
States now, the application for food stamps is two pages long, 
and in some States, it is 30 pages long. If it is a Federal 
program administered by the States, why can't we come up with a 
standard form? What is wrong with having a standard form that 
is two pages long? If some States can get by with two pages, 
why can't all States?
    Mr. Bost.
    Mr. Bost. Well, It is a question of what some States feel 
like they need. In the State of Texas, we were able to combine 
our form to include both TANF, food stamps, and Medicaid on 
four pages, front and back, that included both English and 
Spanish.
    The Chairman. On four pages?
    Mr. Bost. On four pages.
    The Chairman. You included them all?
    Mr. Bost. We included them all. I brought it down from 10 
pages to about four pages. To respond more specifically to your 
question, we are in the process of working with all the States 
to talk about this issue of making the application and the 
application process more user-friendly.
    The issue is that there are some--and Bonnie will correct 
me if I am wrong--but I do believe there are some instances 
where there are State mandates in terms of information that 
they need to collect, so they just added them all on one form, 
and that has essentially extended the form. In addition to 
those Federal requirements, there are also State requirements 
that States have put on one form. Also, there is the State 
infrastructure in terms of being able to collect all the 
information, put it into computers and actually use it. The 
Department is in the process of working with all of our State 
partners now to address this issue of making a form or 
developing a form or providing them with the flexibility to 
ensure that the form is just as customer-friendly as it can be.
    The Chairman. Well, I want to look at that issue as we 
reauthorize the Food Stamp Program. If States want to collect a 
lot of different information, let them do it another way do it 
on a State program form.
    Mr. Greenstein.
    Mr. Greenstein. Federal rules, some of them rooted in the 
law, require States to, for example, track all kinds of minute 
pieces of income that only small numbers of households have--
income for giving blood, all kinds of minute forms of assets. 
You could help the States shorten the forms if, as part of 
reauthorization, we enable some cleaning out of these tiny 
forms of income and assets that few people have--it would not 
be a big cost--but not require the States to have to--and you 
should look at the number of little pieces of assets----
    The Chairman. Right. Why do some States form have, as I 
have been informed, include a couple of pages, and some 
States----
    Mr. Greenstein. Senator, some of the States that have short 
forms then have supplemental worksheets that the workers go 
through that ask all kinds of detailed questions.
    Mr. Bost. That is exactly right. As a part of what we are 
doing now in terms of those recommendations--let me give you a 
really good example of what I am talking about.
    About 18 months ago when I looked at the form, I had them 
line them up in terms of Federal questions that we have to ask, 
State questions that we have to ask, and other things that we 
can change and tinker with. I looked at all of those, put them 
on the board, and we looked at those that we had to have and 
those that we did not think we wanted to have, and we called 
the folks at USDA and said maybe we should not have to have 
them, and maybe we can put them on something else.
    The State questions that we were asking over a period of 
time were piled on top of each other, so I took them all out. 
That is how we were able to bring it down to about four pages, 
by going through that process--and I do believe that many of 
the States are in the process of doing that now.
    The Chairman. I would ask all of you here--you are all 
experts on this--if you have any suggestions on how we might 
proceed on that from here. Most of those questions are not 
legislated. They must be rules--I do not know. If we have 
legislated them, I would like to take a look at it. If they 
have accumulated over the years, as you say, Bob, maybe we can 
weed some of those out.
    Any advice you have for us on how we might do that would be 
appreciated.
    Mr. Bost. Mr. Chairman, during the course of 
reauthorization, in terms of the recommendations that we are 
developing now, those are going to be some of my 
recommendations, to delete some of the stuff that is on there 
now that is of no value to us.
    The Chairman. When are you going to get those 
recommendations to us? I mean, we are moving ahead on this Farm 
bill.
    Mr. Bost. As quickly and as deliberately as I can. I do not 
have a date.
    The Chairman. All right.
    Senator Wellstone. Mr. Chairman.
    The Chairman. Yes.
    Senator Wellstone. In 20 seconds, I had asked Dr. Haskins 
about legal immigrants and what his recommendation was on 
whether we should restore the benefits.
    The Chairman. Oh, yes. Go ahead.
    Mr. Haskins. Senator, I would not change a semicolon in the 
law that was passed in 1996. America offers immigrants the 
greatest deal in the world, literally. They come to the country 
with the most individual freedom, the hottest economy. They are 
required by our laws to have a sponsor if there is a 
possibility that they cannot support themselves. When they 
become citizens, they are eligible for welfare benefits just 
like every other American. In the 1996 law, we made them 
eligible for several programs that had to do with self-
advancement, like Head Start and other education programs. In 
addition to that, we covered many emergency situations.
    This is simply a value distinction. It does not make sense 
to bring people to your country for opportunity and then put 
them on welfare. Taxpayers should not have that obligation; 
their sponsors have that obligation.
    Senator Wellstone. Well, I do not want to get started--can 
I take 20 seconds?
    The Chairman. We have another panel to hear from.
    Senator Wellstone. We will just have a major debate about 
it later.
    [Laughter.]
    Mr. Haskins. Name a time and place, Senator--I will be 
there.
    The Chairman. Thank you very much.
    We will now dismiss the first panel and ask our second 
panel to come to the witness table.
    The Chairman. We welcome Karen Ford, Executive Director of 
the Food Bank of Iowa; Kevin Concannon, Commissioner of the 
Maine Department of Human Services; Celine Dieppa, a Food Stamp 
Program participant; Dean Leavitt, Chairman and CEO of U.S. 
Wireless Data, Inc.; Dr. Deborah Frank Director of the Grow 
Clinic for Children at Boston Medical Center and Dr. Cutberto 
Garza, a professor at Cornell University in Ithaca, New York.
    Mr. Bost, before you leave, I would just like to say that I 
want this panel to hear from Mr. Leavitt.
    Mr. Bost. I will be right back.
    The Chairman. Oh, I did not know if you were leaving.
    Mr. Bost. No. I will be right back.
    The Chairman. OK. Thank you.
    We welcome our second panel, and again, without objection, 
all of your written statements will be made a part of the 
record. I will ask each of you to keep your remarks to 5 to 7 
minutes, and we will use the lights here.
    First, Ms. Karen Ford, Executive Director of the Food Bank 
of Iowa. You have been here before, Ms. Ford, and we welcome 
you back.

STATEMENT OF KAREN FORD, EXECUTIVE DIRECTOR, FOOD BANK OF IOWA, 
                        DES MOINES, IOWA

    Ms. Ford. Good morning, Mr. Chairman, ranking member Lugar, 
and distinguished committee members.
    My name is Karen Ford, and I am the Executive Director of 
the Food Bank of Iowa, which is an affiliate of America's 
Second Harvest.
    The Food Bank of Iowa is housed in a 53,000-square-foot 
warehouse in Des Moines. Just for the record, Mr. Chairman, I 
want to once again invite you and Mr. Halverson to visit at 
your earliest convenience.
    Last year, 4.2 million pounds of grocery product was 
distributed to 240 member agencies and food banks. Nineteen 
percent of the product distributed was TEFAP and bonus 
commodities. The Food Bank has a 42-county service area 
covering 30,000 square miles, populated by one million Iowans 
living in small towns and on farms.
    I am here today to provide suggestions for food stamp 
reauthorization that will be contained in the Farm bill moving 
through Congress this year or next. It is my understanding that 
the House Agriculture Committee is proposing only $2 billion 
out of the over $70 billion in new funding in the Farm bill to 
go to food stamp support. Mr. Chairman, that is not enough and 
is very shortsighted based on what I see in our State of Iowa 
and what food bankers see across the country.
    A recent study was done as a followup by Mathematica about 
the welfare system in Iowa, and it showed that after five 
years, even though people had moved off welfare, they were in 
essence no better off than they were before welfare reform. The 
reason was because they had moved off of cash assistance, but 
they were still in low-paying jobs, and with any kind of 
disturbance in their family situation, it was predicted that 
they would be back in need of assistance.
    As a food banker, I just want to throw this in. I am 
requesting full funding of TEFAP administration, which to me 
means storage, distribution, warehousing. I thought that was 
important when I put this in my statement, but then, on Monday, 
I received a note from the program manager of TEFAP in the 
State of Iowa, informing me that they had run out of money, and 
there would be no reimbursement for the month of September for 
warehouse distribution and storage. This now comes very close 
to home. I am hoping that you will look at that as the cost of 
doing business as opposed to simply an administrative, paper-
shuffling kind of thing.
    In April of last year, Governor Vilsack created and 
appointed me to the Iowa Food Policy Council, a forum to study 
and make recommendations on food security and other food policy 
issues.
    One of our first concerns was the food stamp participation 
level. From 1996 to 2001, participation in Iowa has dropped 
28.9 percent, while demand on food pantries and feeding 
programs has increased. What is going on? America's Second 
Harvest ``The Red Tape Divide'' review helped to give us a few 
clues.
    In Iowa, the application is over 10 pages long, but even 
more disturbing is that it is written at a 12th grade level. I 
was at a meeting with deans from Iowa State University, and 
they were appalled at that; they said that their recommendation 
would be that the application be shorter, user-friendly, and 
written at a 6th grade level.
    I do have some new information. In the fiscal year ending 
June 30, participation in Iowa was up with food stamps 5.1 
percent. Part of that may be because although there is not much 
outreach, there has been a lot of outreach done through the 
food pantries and the soup kitchens and the emergency feeding 
programs, because being overwhelmed, they suddenly--or, maybe 
they have always known the importance of the Food Stamp 
Program--but now they are encouraging people to go.
    The other thing is that last week, The Register reported 
that the Salvation Army had turned away 500 people who had come 
in need of assistance to help fulfill the contract that they 
had made with the energy company because of last winter's high 
bills. That is the kind of disturbance in a family's life that 
would cause this talk about rebounding back into a cash 
assistance program. That is not only Salvation Army; Catholic 
Charities and Saint Vincent de Paul said the same thing. They 
have simply run out of money to be able to help.
    Based on my experiences, having the ability through this 
Policy Council, to look into what goes on and how Iowa's 
program is run, I have the following recommendations.
    First, maintain the Food Stamp Program's benefit 
entitlement structure so that all who may qualify based on need 
can receive necessary nutrition assistance.
    Second, simplify the Food Stamp Program by simplifying the 
eligibility requirements, the application process, change 
reporting and recertification.
    It is apparent in our State that the reason why people are 
not necessarily overly encouraged to use food stamps is because 
of the quality control system, which requires USDA to calculate 
penalties for States that perform below the national average 
and to pay extra administrative funding to States that have 
very low error rates. Too often, a State's error rate is the 
only measure of performance in administering the program that 
receives any attention. It also seems to have the effect--and 
``paralyze'' might be a little too strong--but of just being 
unwilling to make any significant changes because of the error 
rate.
    Then, to make it more complicated, the Department received 
an award from USDA because it had lowered its error rate. It is 
kind of hard to tell them they are doing something wrong when 
they are being told they have done something really right.
    The other thing would be to increase the minimum benefit 
level to $25 as opposed to the $10 currently. Hopefully, that 
would be a bit more of an attraction to the many, many seniors 
who live in Iowa; and also change the Food Stamp Program's name 
and implement EBT. Many stereotypes revolve around the name 
``Food Stamp Program.''
    These recommendations will not come cheap and will not 
happen at all without your help. We need to help ensure that 
funding in this Farm bill is made available to support changes 
that will make it easier for families and our seniors to access 
the Food Stamp Program. The best thing you can do for food 
bankers across the country is to strengthen the Food Stamp 
Program. Nothing else that I can see will alleviate the 
tremendous demand for emergency food more than a strong food 
stamp safety net.
    I agree that the food stamp administrators in Iowa are in a 
difficult position. With strict adherence to the QC system and 
the current financial crisis, food stamp reauthorization offers 
the best opportunity to make needed changes. I can only see 
that as--we have kind of come full circle--that it is time for 
the Federal Government to take the lead. In some States--
obviously, in Texas--they have made broad strokes and gone a 
long way toward having a really excellent program, but that is 
not occurring in every State.
    Thank you.
    The Chairman. Thank you very much, Karen. Thank you for 
being here, and thanks for your testimony.
    [The prepared statement of Ms. Ford can be found in the 
appendix on page 98.]
    The Chairman. Next, we will go to Mr. Kevin Concannon, 
Commissioner of the Maine Department of Human Services.
    Mr. Concannon.

STATEMENT OF KEVIN W. CONCANNON, COMMISSIONER, MAINE DEPARTMENT 
               OF HUMAN SERVICES, AUGUSTA, MAINE

    Mr. Concannon. Thank you very much, Mr. Chairman, members 
of the committee.
    I am Kevin Concannon, Commissioner of the Maine Department 
of Human Services, and I am very pleased to be here today, both 
to speak to and to support the Food Stamp Program.
    In Maine, it is of vital importance to our State. We are 
37th in per capita income, and the ability of thousands of 
Maine households to maintain a nutritional support system is 
heavily reliant on access to benefits provided by the Food 
Stamp Program.
    I am proud of the fact that Maine ranks fourth in the 
Nation in participation rate among households that are eligible 
for the program. According to the USDA, Maine reaches 
approximately 82 percent of eligible households. Over 53,000 
families and 100,000 individuals receive food stamps in Maine 
on a monthly basis. Annually, that represents about $84 million 
to the Maine economy.
    My predominant focus in Maine with regard to the Food Stamp 
Program has been on access. While in TANF, we have experienced 
a 55 percent decline in caseload, our decline in the Food Stamp 
Program has only been about 18 percent from its highest point. 
I might say parenthetically that we have the highest number of 
people on Medicaid and the CHIP program in the history of the 
State; we have had no decline there.
    We believe the largest influence on these numbers has been 
the message we deliver to recipients. When a household in Maine 
applies for public assistance, as part of the application, they 
must attend a mandatory orientation. I attended one myself last 
week. During the presentation, our staff stresses the 
availability of resources to households, including food stamps, 
medical assistance, and other support services when and if they 
leave the TANF program and the cash assistance program.
    We see the Food Stamp Program benefits as important 
transitional benefits for working households, while perhaps a 
longer-term benefit to the elderly and disabled to achieve 
appropriate nutrition. Maine has taken advantage of some 
available options currently available under waivers, but much 
more needs to be done from our perspective.
    Even the options and waivers currently available do not 
come close to addressing some basic faults that have 
accumulated in the Food Stamp Program over its long history. I 
really support the comments from the three panelists who 
appeared initially this morning on simplifying some of the 
complexity, increasing the benefits--for example, a minimum 
benefit is extremely important in our State. If realtors tell 
us that ``location, location, location'' is the predominant 
vector in real estate, then I would say ``complexity, 
complexity, complexity'' is the major area of concern that I 
have and the people who administer our program and the people 
applying for the program are currently faced with. I am very 
encouraged by Undersecretary Bost's comments about his 
experience in Texas and in Arizona, and now as the person 
responsible for the program.
    Along with efforts to enhance access to the program, we 
acknowledge the responsibility to ensure program integrity. 
There has been far too much emphasis on QC or quality 
assurance, and far too little emphasis, if you will, on access 
and on outreach. There needs to be a balance, and in my view, 
having administered the program in Oregon as well as back East 
in Maine, there is too much emphasis on QC and not enough on 
simplifying and making sure that people have access.
    The States through the American Public Human Services 
Association have addressed many concerns to be considered 
during the reauthorization process for the Food Stamp Program. 
We support the recommendations in the APHSA ``Crossroads'' 
document. I have attached for the record a summary from that.
    Briefly, some of the recommendations are, first and 
foremost, to simplify food stamp calculations. Current design 
of the program is too complicated regarding the calculation of 
benefits. This is a problem for recipients as well as for those 
folks who administer the program, the people who work for us at 
the State or county level across the country. Failure of 
recipients to understand these requirements may well discourage 
them from applying.
    The program can and should be simplified, but 
simplification should not undermine the fundamentally important 
goal of targeting. Bob Greenstein spoke to that. For example, 
in our State, we are in the middle of a steep increase in the 
southern part of the State in terms of housing costs, so we 
want to be able to target, but there does need to be 
simplification.
    Second, simplify the processing. Recipients do not 
understand why the various Federal and State programs have 
different requirements. The Chairman referenced that in his 
questions. We administer the Medicaid program. I can fully and 
adequately meet all the Federal Medicaid requirements in a 
single sheet, front and back. I cannot do it in the current 
Food Stamp Program because we have to have workers bring people 
in to subsequently, as was mentioned, go off a worksheet to get 
that additional data that is required federally. It is part of 
that obsession--my word; excuse me--with the QC side of it, and 
there is not really commensurate interest in commitment to the 
access side. Some of those complicated forms and applications 
are, again, protective, if you will, or defensive devices by 
States to try to keep them out of trouble on the QC side. It 
needs to be fundamentally revamped.
    We need to simplify household composition. The current 
household composition rules for the Food Stamp Program are 
outdated. There are examples of that in my testimony.
    We need to simplify the assets. With the advent of welfare 
reform and recent interpretations regarding categorical 
eligibility, some States, Maine being one of them, no longer 
subject families with children to an asset test. I am very 
mindful among the assets about vehicles. Maine has very little 
public transportation, and in the wintertime, it is a very cold 
and wintry place; it is genuine winter, and you need an 
adequate vehicle. The vehicle limitations really need to be 
conformed in our case to the TANF program, but I would exempt 
the first vehicle from any consideration of assets for 
families. You want people to be in a safe vehicle, especially 
in wintertime.
    We very much support transitional benefits. Although they 
are now introduced for you can have them for a 3-month period, 
we think they should be for six months. We have transitional 
benefits in Medicaid, but it is for a much longer period of 
time. We help people with child care for a much longer period 
of time. We are very much focused on supporting families, and 
it is currently too short a time.
    There is absolutely a need to enhance the benefits to the 
elderly and disabled. Maine has the fifth-highest percentage of 
elderly population in the country. This $10 minimum benefit--it 
is such a hassle to get so much for so little--dissuades people 
from coming forward. There ought to be at least a minimum $25 
benefit, in our view, for elderly and disabled people.
    Electronic benefits transfer--this is my 30-second 
catharsis for Maine--we are one of about 12 States that have 
currently not implemented EBT. The troubling thing in Maine is 
that the current issuance cost for food stamps in Maine is 
$800,000 a year. As you heard earlier, we have 82 percent of 
people receiving them. We are very committed to making sure 
people get those stamps. Going to EBT is going to cost us $2 
million a year. I bring it from both parties of my legislature 
and the Governor--they are very unhappy about this cost shift 
to us, which is really what it amounts to to go to EBT, because 
of the rules that have been developed over time. It is going to 
cost us more. We like the prospect of EBT; it has many 
benefits, but it should not cost the State more.
    On performance measures, I know of no other program that 
says, look, we are going to have to rank half of you folks 
below the median and half above--other than introductory 
statistics, it just is not very good social policy, and it 
really should be focused on State by State, helping States to 
improve their performance. This year, we are penalized as a 
State, interestingly enough, because we fall just below the 
median. When I got that, I almost reached for my ``purple 
pill,'' because it bothered me a lot. We have the highest rate 
of participation in our region, as we should have, yet we are 
being penalized on the QC side. It makes no sense whatsoever to 
me. Those performance measures are troubling.
    Finally, Mr. Chairman, I would say that we very much need 
the Food Stamp Program. We are bullish on it. We know that it 
makes a difference in people's lives. We absolutely need the 
complexities reduced, simplification, and some adjustments in 
the benefit.
    Thank you.
    The Chairman. Thank you, Mr. Concannon.
    [The prepared statement of Mr. Concannon can be found in 
the appendix on page 112.]
    The Chairman. Now we turn to Ms. Celine Dieppa, a food 
stamp participant from Manchester, Connecticut.
    Welcome.

  STATEMENT OF CELINE DIEPPA, FOOD STAMP PROGRAM PARTICIPANT, 
                    MANCHESTER, CONNECTICUT

    Ms. Dieppa. Thank you.
    Good morning. Thank you for giving me the opportunity to 
talk with you today. My name is Celine Dieppa, and I live in 
Manchester, Connecticut. I am a working mother of a 4-year-old 
daughter, Malexis.
    I work at Shop Rite of Manchester, a local supermarket. At 
my job, I do a little bit of everything. I work as a cashier at 
a customer service booth and at the lotto desk. I usually work 
30 to 35 hours a week, but sometimes I get the chance to work 
40 hours or more. I am there for six and sometimes seven days a 
week. I earn $7 an hour. I pay for rent and utilities, and 
although I do get help with child care costs, I still have to 
pay $40 each month out of my pocket.
    I have been participating in the Food Stamp Program on and 
off for four years. This program has made a big difference to 
me. I work to provide the beset for my daughter. I usually 
receive about $60 to $70 each month in food stamps, but since 
my income goes up and down, so does the amount of food stamps 
that I get. There are times that I may get just $10 or $20 a 
month. I really appreciate the help that I get from this 
program, yet there are times when it just is not enough. 
Sometimes it can be really hard to afford even the basics, like 
milk for my little girl. There have been times when I have had 
to go to an emergency food pantry to supplement what I could 
buy in the store. The first time I had to do this, I felt 
embarrassed and hurt that I needed to do this even though I was 
working.
    It can be a real challenge and sometimes very frustrating 
for a busy working parent like me to remain on the Food Stamp 
Program each month. I have to submit a monthly report that asks 
for information about all my income in the last four weeks, my 
child care expenses, and the child support i receive. In 
addition to filling out this form, I have to attach documents 
to prove that everything I write on this form is true. I have 
to be very organized, making sure that I keep all my pay stubs 
and letters and copies of checks. I need to make copies of 
everything and get the paperwork in on time. If I lose 
something, or if I am late, I run the risk of getting cutoff 
the program. I do get health coverage for my child through the 
State's HUSKY Program, and I am not asked to report monthly in 
this program.
    This month, I am not getting any food stamps at all because 
I was able to work many more hours than usual last month; but I 
am back to my regular work schedule now, and I hope that when I 
submit my report next month, I will not have trouble getting 
back on this program.
    Having help from the Food Stamp Program means so much to me 
and my child. If you can do something to make it easier for 
working families like mine who are trying to balance work and 
meeting the requirements of social services programs, it would 
be a great help.
    Thank you for listening to me this morning.
    The Chairman. Thank you, Ms. Dieppa, for being here and 
bringing it all back home, as they say, what this is really all 
about. I congratulate you. You really bring it home about 
working families and working mothers, especially single 
parents, who really need help in this program. That is one of 
the way that we are going to have to really look at how we 
change this program, because the families that we are serving 
have changed over the last years, and we have to address that.
    [The prepared statement of Ms. Dieppa can be found in the 
appendix on page 118.]
    The Chairman. Now we move to Mr. Dean Leavitt, Chairman and 
CEO of U.S. Wireless Data.
    Mr. Bost, I wanted you to stay and listen to this, because 
one thing caught my attention which had to do with farmers 
markets and what has happened with the drop-off in 
participation by food stamp programs participants markets. Mr. 
Leavitt is here at my request to testify about that.
    We welcome you to the committee, Mr. Leavitt.

 STATEMENT OF DEAN M. LEAVITT, CHAIRMAN AND CEO, U.S. WIRELESS 
             DATA, INCORPORATED, NEW YORK, NEW YORK

    Mr. Leavitt. Thank you. Good morning, Mr. Chairman, members 
of the committee.
    As the chairman indicated, my name is Dean Leavitt, and I 
am Chairman and CEO of U.S. Wireless Data, a New York City-
based company specializing in the processing of wireless 
payment transactions.
    I thank you for the opportunity to discuss the benefits of 
a new technology my company has developed which provides 
farmers with the ability to wirelessly accept EBT or food stamp 
cards, credit cards, and other forms of plastic payment 
instruments at farmers markets located throughout the United 
States.
    As you are well aware, the Food Stamp Fraud Reduction Act 
of 1993, as proposed by Senator Leahy of Vermont, mandated the 
migration of the food stamp entitlement program from what had 
historically been a paper coupon-based system to one that would 
utilize electronic benefit transfer or EBT technology. As part 
of the implementation of that Act, grocery store owners were 
provided with electronic point-of-sale systems which would 
allow them to accept the newly issued EBT cards to program 
beneficiaries.
    The point-of-sale equipment was provided to the store 
owners at no cost to them. In addition, in most cases, the 
costs associated with the phone line required for the 
authorization of such electronic transactions was also provided 
at no cost to the store owner.
    The cost of the point-of-sale equipment was approximately 
$500. The cost of the phone lines, depending on the 
geographical area, ranged from approximately $50 to $200 for 
the initial installation of the line and from approximately $10 
to $50 per month for basic services.
    Now we have a problem. By all measure, the implementation 
of the Act has been a tremendous success in terms of both the 
reduction in food stamp-related fraud as well as the 
convenience and efficiency the system offers the program 
beneficiaries and store owners.
    However, one of the unintended consequences of the Act is 
that the farmers markets, once a source of well-priced fresh 
fruit and vegetables for food stamp beneficiaries, were by 
virtue of this implementation immediately foreclosed out of EBT 
card acceptance due to the unavailability of electrical outlets 
and telephone lines for electronic point-of-sale systems.
    As such, over the seven or so years since the 
implementation of the Act, there has been a dramatic fall-off 
in the visitation of farmers markets by EBT program 
beneficiaries for the purposes of purchasing fresh fruit and 
vegetables. Instead, program beneficiaries have had little 
choice but to either purchase their produce at commercial 
supermarkets and grocery stores or to cut back on such 
purchases completely.
    Starting in September of last year, U.S. Wireless Data has 
been working closely with the USDA and the State of New York in 
a rollout of a wireless transaction processing solution for 
farmers participating in the farmers market program in the New 
York metropolitan area.
    The initial pilot program, which extended from early 
September to December, included approximately 45 farmers in the 
New York City area. Under the pilot program, farmers were 
provided with wireless devices housing U.S. Wireless Data's 
proprietary software that wirelessly submitted transactional 
data to U.S. Wireless Data's host facility. Those transactions 
were then switched out to the appropriate authorization 
facilities that either would approve or decline the 
transaction. This takes approximately 5 to 7 seconds, the 
entire transaction. If the transaction is approved, the 
terminal prints out a receipt which is then handed to the EBT 
card user for their records. As with the landline-based EBT 
program, the funds are then directly deposited into the 
farmer's account.
    In addition to EBT cards, the point-of-sale terminals were 
also programmed to accept commercial credit cards such as 
MasterCard, VISA, American Express, Discover, Diners, as well 
as debit cards, otherwise known as ATM or 24-hour cards.
    The program ended in December with the end of New York's 
farming season. Incidentally, this device here is the actual 
hand-held device that we are using for that program. It is a 
wireless unit; it is battery-powered; it prints out a receipt 
after the transaction is completed. Also, while this particular 
one is set up for magnetic card stripe reading, it can also be 
enabled for Smart-Cards, which I understand is utilized in many 
States for the WIC program. It is a fairly versatile device, 
and it is working quite well.
    As the pilot program was a success, starting in June of 
this year, U.S. Wireless Data, again in concert with USDA and 
New York State, started an actual commercial rollout of the 
program. As of this date, two farmers are participating in the 
program, which by all counts is running without incident.
    In conclusion, we believe that offering wireless EBT card 
acceptance to farmers participating in the farmers market 
program not only offers EBT beneficiaries the opportunity to 
expand their choices and return back to their favorite venues 
for the purchase of well-priced fresh fruit and vegetables, but 
it also levels the playing field between the larger 
supermarkets and grocery stores who have had the benefit of EBT 
card acceptance for seven years now and those farmers who have 
been unable to realize an important component of their revenue 
stream that they enjoyed prior to the implementation of the 
Act.
    We at U.S. Wireless Data wish to commend Congress and the 
Department of Agriculture for realizing the importance of both 
the EBT and farmers market programs and the need to make such 
programs available to the widest possible audience.
    To that end, Mr. Chairman, my staff and I are eager to work 
with you, your committee, and the USDA in a concerted effort to 
find a way to roll out a nationwide wireless EBT card 
acceptance program. I am confident that we at U.S. Wireless 
Data are well-positioned to continue its role as both the 
provider of the required state-of-the-art technology and the 
implementor of the EBT wireless program to the farmers.
    I thank you again for this opportunity.
    The Chairman. Thank you, Mr. Leavitt, for bringing this to 
our attention and for your testimony. I will have a couple of 
followup questions.
    [The prepared statement of Mr. Leavitt can be found in the 
appendix on page 120.]
    The Chairman. Now we turn to Dr. Deborah Frank, Director of 
the Growth and Development Clinic in Boston, Massachusetts.
    Dr. Frank, welcome to the committee.

    STATEMENT OF DR. DEBORAH A. FRANK, DIRECTOR, GROWTH AND 
           DEVELOPMENT CLINIC, BOSTON, MASSACHUSETTS

    Dr. Frank. Thank you.
    I am honored to come before you representing the pediatric 
researchers of the Children's Sentinel Nutrition Assessment 
Project, which we call CSNAP, and pediatric clinicians like 
myself, who daily treat malnourished American children.
    I specifically want to dedicate my testimony to the 19 
children whom I saw last night in evening clinic, mainly of 
working parents, who are being doctored for malnutrition. It is 
for those children that I speak who are too young to speak for 
themselves.
    With major funding from the Kellogg Foundation over three 
years, CSNAP monitored the impact of current public policies 
and economic conditions on the nutrition and health status of 
low-income children younger than 3--very little children--in 
Baltimore, Boston, Little Rock, Los Angeles, Minneapolis, and 
Washington, DC.
    If you could join us on the wards and in the clinics and 
sit in on our scientific meetings, I do not think it would be 
difficult to reframe the discussion about the costs of 
increasing the availability of food stamps to the costs of not 
increasing the availability of food stamps in the terms of the 
health and work and learning potential of America's people, 
particularly America's children.
    As Ms. Dieppa said, there is not only anecdotal but hard 
medical data that food stamps make a dramatic difference in the 
food security of families with children, and there is even 
clearer and a daily growing body of medical evidence that food 
security is essential for health.
    The stories of the families that we care for daily confront 
us with the stark reality, not found in any medical textbook, 
that if the cost of housing and energy prices increase 
disproportionate to the levels of wages and benefits, many 
working poor and low-income parents have an insurmountable 
balancing act trying to find resources to pay rent, have gas to 
get to work, and still be able to put enough food on the table 
to keep their children healthy and learning.
    As community health providers, we also find ourselves 
spending incredible amounts of time trying to help families 
fill out Food Stamp Program applications, which are longer and 
harder to understand than the one I fill out each year for my 
medical license.
    You have well-documented the national and State-based rates 
of food insecurity, but they do not tell the whole story. For 
example, in Minnesota, the prevalence of food-insecure 
households is 10 percent of the State population, but for young 
children under 3 in poor families coming to medical settings, 
it is 24 percent.
    Hunger threatens the well-being of our next generation 
beginning in the womb. The nutritional status of a woman as she 
enters pregnancy and the amount of weight she gains during 
pregnancy are critical predictors of birth weight, which in 
turn is the most important predictor of a child's survival, and 
for surviving children, whether they will suffer from lasting 
impairments and school failures.
    We also need to think in terms of ``QC''--a new word I 
learned today--of dietary quality as well as dietary quantity. 
For example, it has been shown that food-insecure women have 
diets that are deficient in folate. This is pretty scary, since 
there is a well-established connection between women's diets 
being deficient in folate and their children suffering from 
spina bifida.
    It is not just the quantity of food and whether people gain 
weight, but the quality of food that influences their health.
    After birth, nutrition continues to exert major influences 
on health and development. Any sick child loses weight; 
however, in a privileged home, once the illness is resolved, 
children can eat extra and get themselves back to normal growth 
and health. For a low-income family, particular, for example, 
one that last month had a good income, as Ms. Dieppa was 
describing, and this month has less income, but their food 
stamp benefits are set to last month's income, food supplies 
can be uncertain even for feeding well children. Once a 
nutritional deficit has occurred for a normal childhood 
illness, there is no additional food to restore the child to 
health. The child is left malnourished and more susceptible to 
the next infection, which is more prolonged and severe. It is 
this infection-malnutrition cycle which, in the developing 
world, kills children and in our country leads to preventable 
recurrent illnesses and costly utilization of health care 
resources.
    In fact, we have found that food-insecure children under 3 
are twice as likely to require hospitalization. I would point 
out that two days of hospitalization costs the Federal 
Government much more than a year's worth of food stamps.
    Even with refeeding and medical care, malnutrition can 
inflict concurrent and lasting deficits in cognitive 
development, posing serious implications for the malnourished 
child's future ability to participate in the knowledge economy. 
This happens long before I see a change in body size, because 
the first thing a child who is not getting enough to eat does 
is be less active, less alert, and less interested. By the time 
that strategy has failed is when you actually see a child 
coming in underweight.
    My neighbor, a 5th grade teacher for new Americans, was 
worried about a hungry little girl in her class, and what she 
described to me is classic. She said: ``She is sick a lot, but 
she tries to come to school, and some days, it is just like she 
is not there. Her skin is dull, there is no spark in her eyes; 
she wants so much to please, but some days, she can remember 
and learn, and the next day, she cannot.''
    Well, if you can imagine sitting through one of these 
hearings not having had breakfast or lunch, you can perhaps see 
why that child cannot learn.
    There is a recent article in Pediatrics by Dr. Allemo that 
found that children who were food-insufficient had lower 
arithmetic scores and were more likely to repeat a grade; food-
insufficient teenagers are three times more likely to be 
suspended from school.
    No amount of standardized testing will alleviate the impact 
of hunger on children's ability to learn. To educate children, 
you first must feed them, and you must feed them from 
conception through high school.
    In our study of 8,000 children under 3, we found that those 
whose food stamp benefits were terminated or decreased are not 
only more food-insecure, but food-insecure children are more 
likely to be in poor health, anemic, and require increased 
hospitalizations.
    I have been told that the Kennedy-Specter bill would 
restore food stamps to legal immigrant families, provide 
outreach to let people know they are eligible, and increase the 
minimum monthly benefit, which I agree is crucial. These are 
measures which in medical terms, I would call STAT, which means 
urgent.
    I have also been told that some people think it is a good 
idea to no longer offer shelter cost deductions. In southern 
Maine or in Boston, this would be a disaster, and if the 
pediatric house staff suggested it to me, I would tell them 
that I thought the idea was ``NSG''--not so good.
    Distinguished members of the committee, I am here today to 
urge you to prescribe a miracle drug for America's families. 
This miracle drug decreases premature births, enhances immune 
function, improves school achievement and behavior, and saves 
millions of dollars in hospital stays and visits to emergency 
rooms each year. Yet millions of American children and their 
families are deprived of this drug, and those who get it often 
get it in doses inadequate to protect their health.
    This miracle drug is enough nutritious food. The pharmacy 
that dispenses it is the Food Stamp Program, and you are the 
physicians who prescribe it.
    Thank you.
    The Chairman. Thank you, Dr. Frank, very much.
    [The prepared statement of Dr. Frank can be found in the 
appendix on page 123.]
    The Chairman. We now turn to Dr. Cutberto Garza, a 
professor at Cornell University.
    Dr. Garza, please.

    STATEMENT OF DR. CUTBERTO GARZA, PROFESSOR, DIVISION OF 
   NUTRITIONAL SCIENCES, CORNELL UNIVERSITY, ITHACA, NEW YORK

    Dr. Garza. Thank you, Chairman Harkin, Senator Lugar, for 
the opportunity to speak here today.
    I have had the opportunity over a rather short period of 
time to chair various international and domestic efforts. The 
compelling message that I have received in all of these 
activities is consistent with the message that Dr. Frank just 
gave you, and that is that we expect more from our food supply 
than just the absence of disease. The many diseases that you 
and Senator Lugar alluded to are terribly important in terms of 
prevention, but the public now expects that our food supply 
also achieves a state of well-being that takes us beyond 
disease to optimal productivity, whether it be in the classroom 
or on the job site.
    These aspirations should not surprise us. Public 
expectations related to the food supply have increased steadily 
in the last 100 years, and I expect that they will continue to 
increase further.
    Fortunately, these expectations are not misplaced. Our 
limited but expanding understanding that what we eat can 
promote optimal development and protects us against 
predispositions to diet-related diseases supports the public's 
expectations. These expectations are also supported by our 
increasing abilities to manipulate the composition of our food 
supply.
    Thus, the significant domestic and international interest 
in nutrition, health, food and agriculture, and our expanding 
scientific capabilities place us in an extraordinarily 
privileged position. We should maximize these undisputed 
advantages in these areas by first strengthening USDA's 
programs that sponsor peer-reviewed research, second, improve 
our nutrition survey capabilities, because in fact they help 
design our programs; and third, assure that both domestically 
and internationally, our programs related to food and nutrition 
reflect both the best scientific understanding and are of a 
breadth and scope that match our achievements.
    Thus, we have to be concerned with both how and what in 
food stamps and other programs deliver.
    Unfortunately, however, neither the country's nor the 
world's nutritional health reflects the public interest in diet 
and health or the growing scientific understanding of the role 
of diet in genetic regulation.
    Time permits that I review only two examples of my 
concerns. The first relates to the need for more cohesive 
approaches for preventing childhood obesity, and the second to 
strengthening approaches for tackling childhood malnutrition 
internationally.
    In the interest of trying to save the committee time, I am 
not going to review the statistics in my statement related to 
childhood obesity. The trends, alone are sufficient to alert us 
to the serious short- and longer-term health problems 
exemplified by the growing number of children with Type 2 
diabetes, alluded to by Chairman Harkin and Senator Lugar 
earlier, a condition that also is known as adult-onset diabetes 
because it was exceedingly rare in children.
    Now the American Diabetes Association warns us that Type 2 
diabetes is commonly a disease of childhood onset. Obese 
children are also at risk of heart, skeletal, and other 
abnormalities. Thus, we have to be concerned of problems at 
both ends of the spectrum--the spectrum Dr. Frank so eloquently 
alluded to, and also, in terms of obesity.
    All the reasons for the alarming trends are not clear, 
whether we look domestically or internationally. With little 
doubt, nutritional, social, behavioral, cultural, 
environmental, and other biological factors conspire to produce 
a positive imbalance between energy intake and expenditure in 
ways that are understood incompletely. More worrisome still is 
that unwanted weight gain is extremely difficult to reverse. 
Thus, prevention is key. A comprehensive and systematic 
assessment of the biologic and environmental factors that are 
responsible for these trends and the development of a cohesive 
strategy to prevent childhood obesity are needed to bind the 
numerous public and private efforts striving to cope with the 
status quo and reduce the prevalence of overweight and obesity.
    Thus, we should look very carefully at how we structure 
various food assistance programs aiming to maximize the 
implementation of the dietary guidelines in WIC to support 
international and national recommendations for breast feeding, 
and that we link food stamps with health systems in the way 
suggested by Mr. Greenstein earlier today. I should add that 10 
years ago, I had the privilege of chairing a group at the 
National Academy of Sciences trying to promote this and could 
find little interest within the Federal Government. Thus I was 
heartened by the reception that his suggestion received this 
morning.
    In an analogous manner, the causes of malnutrition are also 
complex. I am going to focus primarily on international issues 
because Dr. Frank dealt so comprehensively with our domestic 
problems.
    A comprehensive strategy also is needed to tackle 
international malnutrition, and it is my view that leadership 
should come from the United States. The number of malnourished 
children in the world remains intolerably high, in part because 
we lack a sufficiently bold vision to minimize it. Elimination 
of malnutrition as a public health problem within a defined 
time period should be a goal for us, domestically and 
internationally.
    We know the recipe for making healthy children, and good 
nutrition is a key ingredient, but not a magic bullet. I am 
concerned that the overdue recognition of micronutrient 
deficiencies internationally is creating the illusion that 
supplying a few micronutrients will solve the problems that we 
face. Although tackling micronutrient deficiencies is an 
obviously important start, it will not be sufficient. 
Fortunately, current knowledge permits us to act more 
comprehensively. The ``food for education'' bill sponsored by 
Senators Harkin, Lugar and others in my view is an example of 
an effort that is responsive to humanitarian needs while 
reaching simultaneously for worthwhile educational and 
biological outcomes.
    As proposals of this type are explored, critiqued, and I 
hope championed more broadly, partnerships should be encouraged 
that link them to programs tackling malnutrition in other 
critical life stages. Thus, a program meeting food needs during 
key developmental periods in school-age children, such as the 
proposed international school feeding program, can strive to 
deal not only with hunger and tackle micronutrient 
deficiencies, but also improve the education of young women, 
enhance learning, and in the longer term, establish self-
sustaining, health-promoting behaviors associated with improved 
educational achievement.
    In summary, we have some remarkable opportunities. The 
success of our agricultural system permits us to look beyond 
survival to diet quality and beyond to well-achieving being at 
every life stage.
    Thank you for the time to share my views with you.
    [The prepared statement of Dr. Garza can be found in the 
appendix on page 131.]
    The Chairman. Thank you very much, Dr. Garza.
    I thank you all for your testimony.
    Dr. Garza, I will start with you. One thing that I am 
consideraing is what we might be able to do on this committee 
in the nutrition portion of our title to address the increasing 
amount of childhood obesity--you left the figure out, but it 
has almost doubled in the last 20 years. I have been told by 
pediatricians and health officials at the NIH and at the 
Centers for Disease Control and Prevention in Atlanta that it 
is approaching a national epidemic, the onset of childhood 
obesity. That is coupled with the lowering of the age of onset 
of Type 2 diabetes, which is closely correlated with weight.
    We are looking at how we can start to address that. Now, 
you said something very interesting in your testimony. You 
said--let me find it----
    Dr. Garza. I suspect you are referring to food insecurity 
being a link----
    The Chairman. Oh, yes--here it is. ``Although incompletely 
understood, food insecurity--that is, the lack of confidence 
that food will be accessible consistently--appears to increase 
the risk of overweight and obesity.''
    I do not understand that sentence.
    Dr. Garza. It may seem paradoxical to some that we can 
speak about hunger and food insecurity in this country and 
still see the alarming rates of obesity that we see, especially 
in low-income populations. However, as these issues have been 
researched, it is becoming increasingly clear that food 
insecurity, paradoxically, predisposes individuals to obesity 
in ways that we do not completely understand. We are not 
certain if the link is with the quality of the diet being 
incompatible with maintaining a healthy weight, or whether the 
link is due to overeating when food is available because of the 
concern that food will not be available in the following weeks. 
It may be a combination of these and other issues that we do 
not understand.
    Additionally, it may have to do with a very serious problem 
faced by many individuals who are food-insecure: many live in 
neighborhoods that are unsafe, and thus physical activity is 
often curtailed. Thus, there is a need for us to look 
comprehensively at what the causes of what is rightly being 
called an epidemic and a very alarming one.
    The solution probably lies not only in improved nutrition 
but in linking what food policy to physical activity, to how we 
plan our neighborhoods, how we adjust----
    The Chairman. How about nutrition education as a bigger 
part of our nutrition programs?
    Dr. Garza. Exactly. Education will be important. The 
environment in which individuals will function will be equally 
important. Paying attention to both should be of extreme 
concern to the committee.
    The Chairman. Let me ask you this. What do you think about 
the prospect of broadening the Food Stamp Program so that food 
stamp recipients could purchase with their food stamps vitamin 
and mineral supplements?
    Dr. Garza. I am not confident about that option. I do think 
that however, implementing the Food Stamp and other nutrition 
related programs that are sponsored by the Federal Government 
in ways that would promote of the U.S. dietary guidelines, may 
be a much more efficacious approach to dealing with the problem 
of obesity.
    The dieting guidelines--provide 10 very clear goals or 
steps that if followed could help get the obesity epidemic 
under control.
    In some instance, yes, micronutrient supplementation of the 
type that you refer to may be of importance, but micronutrient 
deficiencies, at least in this country, are not a major 
problem, at least from a public health perspective.
    The Chairman. It has always seemed incongruous to me that 
you can use food stamps to buy twinkies, but you cannot use 
them to buy vitamins. A lot of low-income people may not have a 
good vitamin and mineral intake, which they might be able to 
get if they could do this.
    Do you have an observation on that, Dr. Garza?
    Dr. Garza. Yes, but the cost of a twinkie per calorie is 
much less than the cost of any fruit or vegetable that I am 
aware of. If you are trying to stretch your food dollar, and 
you are interested in having enough food, the calorie cost of a 
twinkie is much, much less than the cost of a more highly 
nutritious food. That is the strategy people are using. If you 
have to make ends meet, your first goal is to meet your 
calories.
    The Chairman. If people are obese, they do not need more 
calorie needs.
    Dr. Garza. No, but remember that I also said that in fact--
--
    The Chairman. They need protein and some other things 
maybe.
    Dr. Frank, did you have an observation?
    Dr. Frank. Yes. Where I live, one bottle of baby vitamins 
costs $8. People get 80 cents per meal per person maximum on 
food stamp benefits nationally. If the food stamp benefits did 
not change, and they bought that one bottle of vitamins, that 
would mean that child would not get 10 meals.
    I agree with Dr. Garza--and I know this is probably 
politically not doable--but it seems to me that if food stamps 
cannot now be spent on dog food, if they could also not be 
spent on soda and a few other things of low nutrient density 
and high obesity promotion, that would be helpful. I would 
recommend more that vitamins be prescribable and reimbursed on 
all State-funded health programs, but not to take away 10 meals 
to buy that bottle of vitamins, because what you gain on the 
swings, you are going to lose on the roundabout.
    Dr. Garza. I would agree with Dr. Frank.
    The Chairman. Ms. Dieppa, tell me about your situation. You 
use food stamps, and you are working, and I congratulate you 
for that. Do you take vitamin and mineral supplements or 
anything like that?
    Ms. Dieppa. Yes, I do.
    The Chairman. You do. You cannot get them with food stamps, 
can you?
    Ms. Dieppa. No.
    The Chairman. How about your daughter?
    Ms. Dieppa. She takes children's Centrum vitamins once a 
day, and I take the same for adults.
    The Chairman. I see. This is an interesting question, and 
we are going to pursue it even more.
    Do you have any views on this, Mr. Concannon?
    Mr. Concannon. Just reflecting on it, it is one of the 
initiatives--because we have this challenge in our State, too; 
we see it in the population. We have a current public health 
initiative trying to work with school systems, because 
pediatricians speak to us about food habits being influenced by 
the school lunch program, and kids going through the line in 
the school lunch program and not going to the broccoli line but 
to the side of the school lunch program that has French fries 
and a bunch of other things that may contribute to some of 
these problems.
    We have been more focused on that than on the access to 
vitamins per se. We have a lot of issues with the 
pharmaceutical industry, but I will not go there today.
    The Chairman. Well, I have some observations on the school 
lunch program. It seems to me that we have tried to make the 
school lunch program into something that is so acceptable to 
young people that we have basically turned it into a fast food 
operation. They say that that is what kids want to eat--well, 
yes--if you hold out some broccoli and a candybar, give me a 
break, I know which they are going to pick. It seems to me that 
we have a higher obligation in our feeding program. That is 
also why I am so interested in the school breakfast program.
    I do not want to take any more time except to ask Mr. 
Leavitt--on the food stamp program and the farmer's markets, 
you pointed out that when we converted to EBT, the Federal 
Government actually paid for the installation of these systems 
in grocery stores?
    Mr. Leavitt. Yes, sir.
    The Chairman. Both the hardware and the connecting lines?
    Mr. Leavitt. Yes.
    The Chairman. Do you have any idea how much that cost us?
    [No response.]
    The Chairman. Mr. Bost, I am going to ask you if you could 
provide for the committee--I would just like to know, how much 
did it cost us to wire up all the grocery stores in America for 
the EBT cards? I was unaware until you brought this to my 
attention today that we had actually paid for that; I did not 
know that we had paid for the installation of the EBT machines 
in grocery stores.
    Mr. Bost. Mr. Chairman, let us get those numbers, but we 
know that to go to an EBT system, it is shared; it is a 50-50 
cost. The State puts out 50 percent, and the Federal Government 
pays the other 50 percent.
    The Chairman. Oh, I see.
    Mr. Bost.I do not know what the total cost is.
    The Chairman. I see; so it is a State-Federal share.
    Mr. Bost. That is correct.
    The Chairman. I see.
    Mr. Bost.I do not know what the total cost is.
    The Chairman. I do not, either. If you could find some 
records on that, I would sure appreciate it.
    Mr. Bost. Yes, we will.
    The Chairman. As a participant in farmers markets myself--I 
was at one last Saturday--and you are right. They do not have 
the facilities there to run debit cards and EBT cards and so 
on. I am very intrigued by your proposal, Mr. Leavitt. It is 
something that we should take a close look at here.
    Mr. Leavitt. Thank you. Mr. Chairman, if I could also just 
comment on the other discussion that took place a moment ago.
    The Chairman. Yes.
    Mr. Leavitt. If, as, and when there is some movement toward 
the monitoring of what is purchased or what is allowed to be 
purchased and what is not allowed to be purchased, one thing we 
have to make sure we keep an eye on is the ability to monitor. 
With the kinds of technological advancements we are having in 
both the wireless arena as well as the wired arena, those 
monitoring capabilities are also getting more and more enhanced 
so that you can keep records of what each EBT card is being 
used to acquire at the grocery store, the supermarket, or at an 
open air farmers market.
    To look at a goal of ultimately being able to take a look 
at that, we cannot forget about the technological requirements 
that may be needed to see what in fact is being purchased.
    The Chairman. That is a very good point. Thank you very 
much.
    Senator Lugar.
    Senator Lugar. Let me just say that the questions that you 
have raised, Mr. Chairman, are ones that both of us are 
interested in.
    These are age-old problems. First of all, with the 
electronic benefits situation, this came about because we had 
testify before this committee year after year of enormous fraud 
and abuse; and, even worse than that, food stamp coupons being 
used as currency in Cook County, Illinois, for example, where 
people described drug transactions and discounting and soon. 
This is a monumental problem, and obviously, the Federal and 
State governments cooperated to try to bring some integrity to 
the program, because the political opposition to using the Food 
Stamp Program for drug abuse and so on gets to be very 
considerable. It is an unfair fight, and people want that cut 
out.
    We have probably alleviated enormous political hassles and 
perhaps redirected the situation given the benefit of 
electronics.
    The point that you make, Mr. Leavitt, is one that gets to 
current issues. We had a school lunch hearing this year, and 
the chairman pointed out, as did others, that school 
authorities frequently sign contracts with soft drink 
companies, and they want the machines going all day. The school 
lunch authorities are aghast at this because people are 
imbibing this stuff all day--it may be calories, but it is not 
nutritious. We have cross-purposes, with the superintendent 
saying ``We need this money'' for whatever--extracurricular 
activities or whatever--and it is a free country, with local 
control of education, local school board--who are you folks to 
be reviewing how we are administering our schools?
    We are trying to review the school lunch program, but they 
are saying ``After all, we are still running the schools.'' We 
go back and forth on this. Now, a little bit of that is in your 
testimony today, which is very important, and that is that if 
our Federal objective as a people is the best nutrition, and we 
are going to help pay for it, we would like to get our money's 
worth, so we would like people to buy things that are in fact 
healthy.
    The question is always a value judgment--who determines 
what is healthy; what is the freedom of choice for the 
consumer--and those are age-old dilemmas, I suppose, in our 
Republic, but they are very important.
    What you are saying, Mr. Leavitt, is important, and that is 
that unlike other times, given electronic means, we can monitor 
what happens. We can punch in whether it is an apple or a soft 
drink, and one has a ``go'' sign and the other has a ``stop'' 
sign, I suppose--if we want to do this. This is a very 
important question, and our distinguished final witnesses, Dr. 
Frank and Dr. Garza, raised it in very subtle ways, but also 
fairly directly in terms of what is happening.
    The chairman has asked about juvenile obesity. These are 
very sophisticated problems involving environment as well as 
nutrition. There has to be the ability to make choices--who 
determines the healthy food, who monitors whether it is the 
``go'' sign or a ``stop'' sign if we were to move in those 
directions?
    I appreciate your testimony today as very informed, expert 
observers.
    Thank you, Mr. Chairman, for the hearing.
    The Chairman. Thank you, Senator Lugar, for your 
observations.
    This is a complex issue but one that we have to tackle and 
one that we have to move ahead on. There are many facets to it.
    We appreciate all of you being here, and thank you for your 
testimony and for your input.
    The Agriculture Committee will stand adjourned until 9 a.m. 
Tuesday, when we will continue hearings on the Farm bill. On 
Tuesday, we will hear from those involved in animal 
agriculture, our livestock producers.
    Thank you very much.
    [Whereupon, at 12:52 p.m., the committee was adjourned.]
      
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                   DOCUMENTS SUBMITTED FOR THE RECORD

                             July 19, 2001



      
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