[House Hearing, 111 Congress]
[From the U.S. Government Publishing Office]


                                                                      ?
 
   AGRICULTURE, RURAL DEVELOPMENT, FOOD AND DRUG ADMINISTRATION, AND 
                RELATED AGENCIES APPROPRIATIONS FOR 2011

_______________________________________________________________________

                                HEARINGS

                                BEFORE A

                           SUBCOMMITTEE OF THE

                       COMMITTEE ON APPROPRIATIONS

                         HOUSE OF REPRESENTATIVES

                      ONE HUNDRED ELEVENTH CONGRESS
                             SECOND SESSION
                                ________
     SUBCOMMITTEE ON AGRICULTURE, RURAL DEVELOPMENT, FOOD AND DRUG 
                  ADMINISTRATION, AND RELATED AGENCIES
                ROSA L. DeLAURO, Connecticut, Chairwoman
 SAM FARR, California               JACK KINGSTON, Georgia
 ALLEN BOYD, Florida                TOM LATHAM, Iowa
 SANFORD D. BISHOP, Jr., Georgia    JO ANN EMERSON, Missouri
 LINCOLN DAVIS, Tennessee           RODNEY ALEXANDER, Louisiana
 MARCY KAPTUR, Ohio                 
 CHET EDWARDS, Texas                
 MAURICE D. HINCHEY, New York       
                                    

 NOTE: Under Committee Rules, Mr. Obey, as Chairman of the Full 
Committee, and Mr. Lewis, as Ranking Minority Member of the Full 
Committee, are authorized to sit as Members of all Subcommittees.
     Martha Foley, Leslie Barrack, Alexander Gillen, and Matt Smith,
                            Staff Assistants
                                ________
                                 PART 3
                                                                   Page
 Secretary of Agriculture.........................................    1
 Department of Agriculture: Office of Inspector General Oversight.  145
 Child Nutrition Programs.........................................  201
 FY 2011 Budget Hearing for Food and Nutrition Service............  321

                                ________
         Printed for the use of the Committee on Appropriations


 PART 3--AGRICULTURE, RURAL DEVELOPMENT, FOOD AND DRUG ADMINISTRATION,

              AND RELATED AGENCIES APPROPRIATIONS FOR 2011
                                                                      ?
?

   AGRICULTURE, RURAL DEVELOPMENT, FOOD AND DRUG ADMINISTRATION, AND 
                RELATED AGENCIES APPROPRIATIONS FOR 2011

_______________________________________________________________________

                                HEARINGS

                                BEFORE A

                           SUBCOMMITTEE OF THE

                       COMMITTEE ON APPROPRIATIONS

                         HOUSE OF REPRESENTATIVES

                      ONE HUNDRED ELEVENTH CONGRESS
                             SECOND SESSION
                                ________
     SUBCOMMITTEE ON AGRICULTURE, RURAL DEVELOPMENT, FOOD AND DRUG 
                  ADMINISTRATION, AND RELATED AGENCIES
                ROSA L. DeLAURO, Connecticut, Chairwoman
 SAM FARR, California               JACK KINGSTON, Georgia
 ALLEN BOYD, Florida                TOM LATHAM, Iowa
 SANFORD D. BISHOP, Jr., Georgia    JO ANN EMERSON, Missouri
 LINCOLN DAVIS, Tennessee           RODNEY ALEXANDER, Louisiana
 MARCY KAPTUR, Ohio                 
 CHET EDWARDS, Texas                
 MAURICE D. HINCHEY, New York       
                                    

 NOTE: Under Committee Rules, Mr. Obey, as Chairman of the Full 
Committee, and Mr. Lewis, as Ranking Minority Member of the Full 
Committee, are authorized to sit as Members of all Subcommittees.
     Martha Foley, Leslie Barrack, Alexander Gillen, and Matt Smith,
                            Staff Assistants
                                ________
                                 PART 3
                                                                   Page
 Secretary of Agriculture.........................................    1
 Department of Agriculture: Office of Inspector General Oversight.  145
 Child Nutrition Programs.........................................  201
 FY 2011 Budget Hearing for Food and Nutrition Service............  321

                                ________
         Printed for the use of the Committee on Appropriations

                     U.S. GOVERNMENT PRINTING OFFICE
 57-780                     WASHINGTON : 2010

                                  COMMITTEE ON APPROPRIATIONS

                   DAVID R. OBEY, Wisconsin, Chairman
 
 NORMAN D. DICKS, Washington        JERRY LEWIS, California
 ALAN B. MOLLOHAN, West Virginia    C. W. BILL YOUNG, Florida
 MARCY KAPTUR, Ohio                 HAROLD ROGERS, Kentucky
 PETER J. VISCLOSKY, Indiana        FRANK R. WOLF, Virginia
 NITA M. LOWEY, New York            JACK KINGSTON, Georgia
 JOSE E. SERRANO, New York          RODNEY P. FRELINGHUYSEN, New   
 ROSA L. DeLAURO, Connecticut       Jersey
 JAMES P. MORAN, Virginia           TODD TIAHRT, Kansas
 JOHN W. OLVER, Massachusetts       ZACH WAMP, Tennessee
 ED PASTOR, Arizona                 TOM LATHAM, Iowa
 DAVID E. PRICE, North Carolina     ROBERT B. ADERHOLT, Alabama
 CHET EDWARDS, Texas                JO ANN EMERSON, Missouri
 PATRICK J. KENNEDY, Rhode Island   KAY GRANGER, Texas
 MAURICE D. HINCHEY, New York       MICHAEL K. SIMPSON, Idaho
 LUCILLE ROYBAL-ALLARD, California  JOHN ABNEY CULBERSON, Texas
 SAM FARR, California               MARK STEVEN KIRK, Illinois
 JESSE L. JACKSON, Jr., Illinois    ANDER CRENSHAW, Florida
 CAROLYN C. KILPATRICK, Michigan    DENNIS R. REHBERG, Montana
 ALLEN BOYD, Florida                JOHN R. CARTER, Texas
 CHAKA FATTAH, Pennsylvania         RODNEY ALEXANDER, Louisiana
 STEVEN R. ROTHMAN, New Jersey      KEN CALVERT, California
 SANFORD D. BISHOP, Jr., Georgia    JO BONNER, Alabama
 MARION BERRY, Arkansas             STEVEN C. LaTOURETTE, Ohio
 BARBARA LEE, California            TOM COLE, Oklahoma             
 ADAM SCHIFF, California            
 MICHAEL HONDA, California          
 BETTY McCOLLUM, Minnesota          
 STEVE ISRAEL, New York             
 TIM RYAN, Ohio                     
 C.A. ``DUTCH'' RUPPERSBERGER,      
Maryland                            
 BEN CHANDLER, Kentucky             
 DEBBIE WASSERMAN SCHULTZ, Florida  
 CIRO RODRIGUEZ, Texas              
 LINCOLN DAVIS, Tennessee           
 JOHN T. SALAZAR, Colorado          
 PATRICK J. MURPHY, Pennsylvania    
                                    

                 Beverly Pheto, Clerk and Staff Director

                                  (ii)


   AGRICULTURE, RURAL DEVELOPMENT, FOOD AND DRUG ADMINISTRATION, AND 
                RELATED AGENCIES APPROPRIATIONS FOR 2011

                              ----------                              

                                      Wednesday, February 24, 2010.

                        SECRETARY OF AGRICULTURE

                               WITNESSES

HON. TOM VILSACK, SECRETARY, DEPARTMENT OF AGRICULTURE
KATHLEEN MERRIGAN, DEPUTY SECRETARY, DEPARTMENT OF AGRICULTURE
JOSEPH GLAUBER, CHIEF ECONOMIST, DEPARTMENT OF AGRICULTURE
W. SCOTT STEELE, BUDGET OFFICER, DEPARTMENT OF AGRICULTURE

                      Ms. DeLauro Opening Remarks

    Ms. DeLauro. The hearing is called to order. Let me welcome 
everyone here, excuse the sports analogy, on opening day of the 
2011 appropriations process. I want to welcome our friends from 
USDA. I do not know, my staff said that this was good, by 
throwing out the first budgetary pitch. I am not so sure about 
these sports analogies anyway.
    But I do want to welcome Secretary of Agriculture, Tom 
Vilsack, as well as the Deputy Secretary, Kathleen Merrigan, 
our Chief Economist, Joseph Glauber, and Scott Steele, who is 
the USDA's Budget Officer. Thank you for joining us today, and 
I look forward to hearing your insights. Again, I am pleased to 
welcome Ranking Member, Mr. Kingston, all of our colleagues on 
the Committee. In this year as in the years past, I look 
forward to our interaction, our collaboration together with all 
of you, and with you, Mr. Secretary, and with your team in the 
weeks and months ahead as we plow through this process.
    Last year our bill was the second bill to get signed into 
law, something we are all proud of on this committee, and 
hopefully we can work together to make that happen again this 
year. That is the goal.
    Secretary Vilsack, let me begin by commending you on the 
leadership that you have shown in the Department of Agriculture 
over the past year. Your executive experience as a former 
governor has clearly helped to begin that transformation of a 
department that was in dire need of a reform upon your arrival.
    With last year's appropriations, we made important 
investments in meeting the core responsibilities of the Federal 
Government, including improving our food safety system, 
expanding opportunities in rural areas and strengthening our 
child nutrition programs. I hope we can continue these efforts 
in the year ahead to make sure that USDA has the capability and 
the resources that it needs to meet its responsibilities to the 
American people.
    With that in mind, to the 2011 budget. First off, I should 
say that I harbor concerns, particularly still given the still-
fragile state of our economy, about the dangers of a freeze in 
discretionary spending falling disproportionately on our most 
vulnerable Americans right now. Nonetheless, I am heartened to 
see that USDA's budget for the coming year includes strong 
investments in nutrition and supplemental food assistance, 
including $351 million more for WIC and $5 million for the 
Commodity Supplemental Food Program.
    There is no question that we must act. The American people 
desperately need our help right now in this economic downturn, 
now 25 months long. One in eight Americans, one in five 
children, have been receiving food stamp assistance.
    Now, there was a hearing in my district last week which the 
Speaker of the Connecticut General Assembly held. He is doing 
one in every one of the congressional districts. And it is 
about recession and its affect on children. A woman testified 
that her husband lost a job, she was looking for temporary 
employment. She has five children, and she talked about--and 
this is in New Haven, Branford, East Haven, Hamden. It has got 
some pockets of very poor people. New Haven is one of the 
poorest cities in the Nation. But nevertheless, the entire area 
one would regard as not having the poorest income statistics. 
She talked about rationing food to her five children and that 
she has two boys and they are older, and she provides a little 
bit more food to them. And the girls, you know, she manages a 
little bit less, and she says it is an awful thing to have to 
tell your child that they cannot have seconds and that they 
cannot have sleepovers because there is just not enough food in 
the house. That is the reality. That is the reality all over 
the country.
    In America today, almost 14 million children, one in every 
five, live below the federal poverty level. The number is 
expected to rise to as high as 27 percent as a result of the 
recession. If you factor in that the poverty line is actually 
much lower than what families need to really get by, it is 
estimated that 41 percent of American kids live in a low-income 
household right now. And in fact, more than two out of every 
three children in our public school system, 69 percent, 
currently qualify for free or reduced school lunches. It is a 
staggering number, staggering number. So I am heartened to see 
that the Department is up to the challenge and is putting forth 
a good-faith effort to augment these crucial programs in the 
new budget. I look forward to hearing your thoughts on how we 
can best address the needs of families for food assistance and 
for better nutrition in the year to come.
    In addition, I need to learn more about the proposed 
Healthy Food Financing Initiative which, as I understand it, 
will work to combat the problem of food deserts and provide 
healthier food options in underserved communities. I know these 
issues are a high priority for the First Lady, and I look 
forward to working with USDA to make them happen.
    Of course, our responsibility on the Subcommittee is not 
only to make sure that families have access to the food they 
need but also to ensure that the food in our cupboards and on 
our kitchen tables is safe. I am very proud of the fact that 
since assuming the Chair of this Subcommittee, we have 
consistently made stronger investments in our national food 
safety systems year after year. And yet, even with additional 
resources, the crucial job of food safety never gets any 
easier. We have already seen an unprecedented amount of food 
recalls in 2010, particularly with regard to contaminated meat, 
and we are only two months into this new year.
    So with all of this in mind, I am concerned that the 
proposed budget for FSIS this year only provides less than 1 
percent increase over last year's bill, aside from funding pay 
increases. Food safety is a very real matter of national 
security, and I hope that we are using our resources as wisely 
as possible to ensure that American families are protected from 
sickness and harm.
    Also of concern to me is flat funding levels in the budget 
to Public Law 480 Title II program and the McGovern-Dole 
program. Because of higher food prices, a number of 
undernourished people in the world has increased by over 150 
million over the past 2 years and now numbers over a billion. 
While recognizing that we have problems with hunger here at 
home, now does not seem a good time to pull back on our 
commitments to international food aid, not when so many around 
the world are suffering from hunger and malnutrition and so 
many more are looking to us as a symbol of hope.
    In addition, I have questions about several other important 
matters under our purview such as rural development programs, 
agricultural research and conservation efforts. Some important 
issues such as the school lunch safety under the AMS and animal 
identification were not touched on in your prepared testimony. 
I also think that there are other areas such as animal 
identification program where we can find ways to prevent 
wasteful spending and make substantive cuts that will save the 
American people some money. We have put $147 million in this 
program to date with almost nothing to show for it, and I am 
skeptical of the new plans to continue it. But I do not want to 
take up more time from the Subcommittee, and of course, I want 
to give you a chance to offer testimony today. Let me close by 
saying thank you to you, Secretary Vilsack, and to your team 
for joining us. I look forward to asking about these and other 
efforts within the Department. As always, we have big goals 
that we need to accomplish together, and it is the crucial 
details, the budget and the basics that we discuss today; and 
particularly in this time of continued economic uncertainty, we 
have a responsibility, and I know that you understand it to get 
it right.
    Ms. DeLauro. With that, I would like to ask our Ranking 
Member, Mr. Kingston, if he would like to make an opening 
statement. Mr. Kingston, the floor is yours.

                     Mr. Kingston Opening Statement

    Mr. Kingston. Thank you, Madam Chair, and it is great to be 
back with you and I look forward to another productive year. I 
think last year we worked very well, had a lot of good hearings 
and had a lot of participation from the Committee members. I am 
very happy to report to you as I stand here at the altar, and 
not using the sports analogy, but continuing in our great 
marriage that we have that this year there seem to be more 
people sitting on the groom's side of the church. I do not 
know, it could be a trend.
    Ms. DeLauro. Is there maybe a dividing line? I never knew 
that if that is the case, that there is a dividing line.
    Mr. Kingston. This is the center aisle in which we both 
walk down, and any of you want to swap sides, I understand 
that. You could go back and forth several times.
    Ms. DeLauro. Never.
    Mr. Kingston. Mr. Secretary, you had a great first year, 
and I have a lot of respect for you. We have a lot of 
challenges together, and certainly we have some things that we 
are both concerned on. I remember last year you had presented 
this Committee with some ways to cut the budget. I regret that 
we, on a bipartisan basis, did not embrace some of those ideas 
and add to them. I hope that we will be able to move forward on 
those things this year. And so I do appreciate that effort last 
year and hope that we can continue to. I want to point out that 
the freeze, I do not think is enough, and I do not think it is 
a true freeze in light of a 26 percent increase in the last 
year or two. And then if you consider part of the freeze is the 
one-time dairy pact that is no longer in there because it was a 
one-shot deal, then that diminishes it as being called a freeze 
because that should be left out of that discussion.
    And then there are other things which I know both parties 
always, you know, have the veterinarian fee increases and cut 
out congressional prerogatives and things like that. And I 
think that is legitimate to put on the table, but one day we 
really have to figure out, what are we going to do about these 
fees because probably if we went back to George Washington, he 
would say, we are going to start charging fees as a way to cut 
the budget. I do not know. Some time we need to have a serious 
dialogue on that. That might be more the authorizing committee, 
but I think if you take a step back and you look at since 2007, 
a 26 percent increase, a freeze is not enough. We need to 
reduce the spending.
    There are some things that I think we should be looking at. 
I think the BCAP is the agriculture equivalent of cash for 
clunkers. Here is a program that started out, I think something 
like $270 million over 5 years, and we have already gone 
through that. And to some degree, we are paying forest products 
people to do what they were doing for free. I think we can do 
better than what we have done with BCAP.
    In terms of some of the SNAP thing, we are talking about 
doubling the contingency to $5 billion, and you know, I hear a 
lot of the statistics that come from USDA and certainly from 
the Chair in terms of the people who need food stamps, but I 
hear from the Administration how great the economy is doing. 
And I constantly hear, when you watch CNN or MSNBC or FOX or 
whatever, is that the economy has turned around, and yet we are 
talking about not only increasing that contingency fund but 
increasing WIC to $10 billion. So if the economy is doing so 
well, why are we doing these things?
    Also, I know I think the budget has $50 million for climate 
change, and I would think that people would take a second look 
at some of the conclusions of climate change since there is so 
much fraudulent data that is in there. And the U.N. itself I 
think is going to investigate itself on it, which will be very 
odd to witness. But there seems to be more of a dust-up about 
this in Great Britain than there is in America right now. We 
seem to still be in denial that these statistics are not 
significant.
    Recently it came out that the world weather monitors were 
reduced, and they closed the ones down in the colder climates 
which would skew results of this. This is something we all 
should be concerned about. If global warming is true, then it 
is our biggest problem, but it does not seem to be treated with 
the science as much as it is the politics. And so I hope the 
USDA can distinguish itself from some of the herd instinct.
    In terms of food aid, I had the opportunity to meet with a 
lot of your food aid team, and they are really first-class 
people. I have a lot of respect for them and what they are 
doing. I do think, though, that the State Department approach 
on food aid, which skews the USDA approach, has gotten a little 
bit murky. As you know, in 1954, we started out with certain 
objectives of what the world food aid would be from America. 
You know, a lot of it had to do with the Cold War and 
development, taking over what had been colonies and help 
modernizing them and helping them develop. Last week, 
Congressman Goodlatte and I went to a school in Ethiopia on the 
outskirts of Addis Ababa, and it was interesting. We went to 
one school that got food aid and then another school that 
seemed to be at least equally impoverished, if not more, but 
they did not get food aid. And you ask people why this school 
and not that school, and you cannot get clear answers to it.
    My concern in terms of food aid, is it just an 
international welfare policy? Are we teaching people to become 
independent? Are we falling short from that? Because when it 
becomes a permanent program, as compared to a response to a 
disaster, you know, how do we move people to independence on 
it?
    And the other question that I have--and by the way, you did 
go to Africa last year, right?
    Secretary Vilsack. Yes, sir.
    Mr. Kingston. And I was glad to see that you did that 
because I think you did it early in your term. And so I believe 
you and I share a lot of interest in this. One of my concerns 
also is when you go to certain countries, how much of it is 
skimmed off by a bureaucracy or maybe a corrupt government? Is 
it efficient as it should be?
    And you know, I think everybody on the ground is very 
sincere about doing it the right way, but I think the 
objectives just need to be clarified a little bit better for 
everybody that is concerned. What are we doing here and why are 
we doing it? And the odd thing is when you look at food aid or 
PEPFAR or some USAID programs and you compare them to the U.N. 
voting record, and I do not know if you have ever done that, 
but there is no comparison between working with a country who 
seems to be voting with us in the U.N. and a country that is 
not. And sometimes you go to countries that are very pro-U.S. 
and they get less food aid, particularly on the developmental 
side of USDA or some of the developmental ag programs than some 
do.
    So I think there is a lot of interest in this issue, and I 
do not know that we can solve it today. But I wanted to say, I 
did have a chance to meet with your folks, and I think that 
they are really top-notch. But I think administratively we do 
need to clarify the mission a bit more.
    So with that, I look forward to your comments. And sorry to 
take so long but wanted to bring up a lot of points, just like 
you, Madam Chair. That is what keeps this marriage going.
    Ms. DeLauro. What a partnership, my God. Mr. Secretary, if 
you want to proceed with your testimony, you know that the 
entire testimony will be part of the record, and you may 
summarize if you like. Thank you.

                  Secretary Vilsack Opening Statement

    Secretary Vilsack. Thank you, Madam Chair, and 
distinguished members of this Committee. I appreciate the 
opportunity to appear before you to discuss the 
Administration's priorities for the Department of Agriculture 
and to provide you with an overview of the President's 2011 
budget.
    As the Chair indicated, I would like to submit our written 
statement for the record. And as the Chair indicated, we are 
joined today by Deputy Secretary Kathleen Merrigan, Joseph 
Glauber, who is our USDA Chief Economist, and Scott Steele, who 
is our USDA Budget Officer.
    Since I appeared before this Committee a year ago, America 
struggled through the most serious economic recession since the 
Great Depression. Families have been forced to make difficult 
decisions in the face of unprecedented job losses. The 
immediate effects of being unemployed are felt deeply by both 
the unemployed and their families. We have seen more and more 
Americans relying on USDA to put food on the table.
    The challenges facing rural communities have been 
challenges for decades, but they are now growing more acute 
which is why the Obama Administration is committed to new 
approaches to strengthen rural America. Rural Americans earn 
less today and have for some time, less than their urban 
counterparts, and are more likely to live in poverty. More 
rural Americans are over the age of 65 than the general 
population. Fewer have completed fewer years of school, and 
more than half of America's rural counties have lost 
population. But the Administration is committed to 
strengthening these communities.
    This year, President Obama took steps to bring us back from 
the brink of a depression and grow the economy again. We 
recognize that now it is time to get our fiscal house in order.
    USDA's proposed 2011 budget is a reflection of the 
President's commitment for change. USDA's total budget 
authority request pending before this Committee proposes a 
total of $129.6 billion in 2011, up from $119.3 billion in 
2010. This is due largely to increases in mandatory funding for 
nutrition assistance and crop insurance. The discretionary 
appropriation request is $21.5 billion which is comparable to 
the $21.7 billion enacted for 2010. In addition, limits placed 
on select mandatory programs and rescissions of balances and 
other adjustments result in a bottom-line reduction to our 
discretionary budget authority of over a billion dollars.
    This budget uses taxpayer dollars wisely, takes common-
sense steps that many families and small businesses have been 
forced to take with their own budgets. We are investing in 
American agriculture and in the American people. This budget 
will assist rural communities to create prosperity so they are 
self-sustaining, economically thriving, and growing in 
population. We have already taken some important steps in this 
effort.
    With the help of the Recovery Act, we have supported 
farmers and ranchers and helped rural businesses create jobs. 
Investments have already been made in broadband, renewable 
energy, hospitals, wastewater and water systems and other 
critical infrastructure that will serve as a lasting foundation 
to ensure the long-term economic health of families in rural 
America.
    For 2011, the budget includes an almost $26 billion amount 
to build on that down payment and focuses on opportunities 
presented by producing renewable energy, continuing on 
expanding broadband technology, developing local and regional 
food systems, capitalizing on environmental markets and 
generating green jobs through recreation and natural resource 
restoration, conservation and management. The budget also 
focuses and expands our research efforts which I will address 
in detail a bit later.
    In order to utilize the Federal Government's assets more 
effectively, USDA is proposing a Regional Innovation Initiative 
which will create a regional focus and increase collaboration 
with other federal agencies. For 2011, USDA is requesting 
authority to set aside up to 5 percent of the funding from 
approximately 20 existing programs which is approximately $280 
million in loans and grants and to allocate these funds 
competitively among regional projects that leverage the 
combined financial and knowledge resources of a region's 
communities, consistent with a developed strategic vision for 
the region, to become a great place to live, work and raise 
families.
    The budget promotes the production of food, feed, fiber and 
fuel. We intend to expand our efforts to export food and 
agricultural products as we work to strengthen the agricultural 
economy for American farmers and ranchers. They are the most 
productive and most efficient in the world, which contributes 
greatly to the Nation's food security. We have an important 
role at USDA in expanding export opportunities. This budget 
increases USDA's funding for export promotion as part of the 
President's National Export Initiative and provides more 
support than ever for competitive research which can lead to 
significant gains in agricultural productivity.
    We want to ensure, as this Committee does that all of 
America's children have access to safe, nutritious and balanced 
meals. The budget fully funds the expected requirements for the 
Department's three major nutrition assistance programs, WIC, 
the National School Lunch program and SNAP, and proposes $10 
billion over 10 years to strengthen the Child Nutrition and WIC 
programs.
    The budget also includes increased funding for staffing 
needed to strengthen USDA's ability to simplify and improve 
these programs, expand program efforts to improve nutritional 
outcomes, encourage healthy and nutritious diets and expand an 
obesity prevention campaign consistent with the First Lady's 
Let's Move Initiative.
    Currently many communities across America, particularly 
those with high poverty and unemployment rates, have limited 
access to healthy foods which can contribute to a poor diet and 
can lead to higher levels of obesity and other diet-related 
diseases such as diabetes and heart disease. To address this 
problem and to help create jobs and economic opportunity, the 
Departments of Agriculture, Health and Human Services and 
Treasury will implement the Healthy Food Financing Initiative. 
In support of this initiative, the USDA budget includes about 
$50 million in budget authority for loans, grants and technical 
assistance to support local and regional efforts to increase 
access to healthy food, particularly for the development of 
grocery stores and other healthy food retailers in urban and 
rural food deserts and other underserved areas. This effort 
will generate employment opportunities for those seeking work 
and will encourage additional investment in the neighborhoods 
and communities assisted.
    Protecting public health is one of the most important 
missions of USDA, and I am fully committed to taking the steps 
necessary to reduce the incidence of food-borne illness and 
protect the American people from preventable illnesses. Over 
the past year, we have worked to strengthen our food safety 
system, to reduce the presence of deadly pathogens, and we 
continue to make improvements. For 2011, the budget includes $1 
billion for the Food Safety and Inspection Service and allows 
us to fully fund inspection activities and to implement 
recommendations of the President's Food Safety Working Group. 
This and other initiatives are aimed at improving the USDA's 
public health infrastructure. This includes an increase of $27 
million to further implement recommendations of the Food Safety 
Working Group, to strengthen our public information 
infrastructure and allow us to get ahead of the pathogen curve. 
These improvements will decrease the time necessary to identify 
and respond to food-borne illness outbreaks which will also 
better protect consumers.
    This budget will also ensure that private working lands are 
conserved, restored and made more resilient to climate change 
while enhancing our water resources. The budget supports 
cumulative enrollment of more than 304.6 million acres in the 
Farm Bill conservation programs, an increase in enrollment of 
about 10 percent over 2009. And it supports efforts to 
strategically target high-priority watersheds where the 
benefits of conservation are greatest.
    Underlying the achievement of all the Department's goals is 
a strong research program. Research fuels the transformational 
change that rural America needs to excel. I would like to point 
out that the 2011 budget proposes the largest funding level 
ever for competitive research grants funding with $429 million 
in the Agriculture and Food Research Initiative, an increase of 
$166 million over 2010. In addition, the budget maintains 
formula funding for research and extension at 1862, 1890 and 
1994 land grant institutions, schools of forestry and schools 
of veterinary medicine at the 2010 level.
    The budget also includes a number of management initiatives 
that will improve service delivery, ensure equal access to USDA 
programs and transform USDA into a model organization.
    I would like to take this opportunity to thank the 
Committee for funding the Farm Service Agency's IT 
modernization effort which will result in more reliable 
customer-focused service to producers. For 2011, the budget 
requests additional funding for continued implementation of our 
modernization effort to address vulnerabilities in our aging IT 
system.
    USDA is also proposing to expand the Office of Advocacy and 
Outreach which was established by the 2008 Farm Bill to improve 
service delivery to historically underserved groups, and we 
will work to improve the productivity and viability of small, 
beginning and socially disadvantaged farmers.
    In support of my commitment to improve USDA's handling of 
civil rights matters, the budget includes funding to ensure 
that USDA has the staffing and resources necessary to address 
its history of civil rights complaints and to seek resolution 
to claims of discrimination and the Department's employment 
practices in program delivery.
    Madam Chair, there is no doubt these are tough times which 
call for shared sacrifice. The American people have tightened 
their belts, and we believe we have done so as well. We have 
made some tough decisions. This budget reflects our values and 
the common-sense solutions to the problems we face. It makes 
critical investments in the American people and American 
agriculture to set us on a path to prosperity as we move 
forward into the 21st century.
    This concludes my statement. I would be happy to answer 
questions.
    [The information follows:]

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                NATIONAL SCHOOL LUNCH PROGRAM SUPPLIERS

    Ms. DeLauro. Thank you very much, Mr. Secretary. Let me 
begin by referencing the USA Today articles that looked at 
suppliers to the school lunch program. A number of suppliers 
have repeatedly failed to meet program requirements. For 
example, meat packers have failed to meet program requirements 
26 times since 2006. Even more disturbing is the fact that USDA 
has documented many of the violations but taken virtually no 
action to permanently bar suppliers from participating in the 
program. USDA's approach in the past has been to identify non-
conformances and eventually permit the suppliers to continue to 
provide food to our schools. You are proposing finally to get 
tough with these bad actors, and I commend you for that. What 
is your assessment of the USDA's previous practices? What 
specific problems existed that required the new initiative? 
What new steps will you take to permanently bar suppliers with 
multiple violations from participating in the program? How is 
this different from the process that was previously in place? 
What kinds of violations could cause a supplier to be 
permanently barred from the program?
    Secretary Vilsack. Madam Chair, we have recognized that 
five different USDA agencies are engaged and involved in some 
form or fashion in providing safe food for our school children, 
AMS, the Agricultural Marketing Service, the Agricultural 
Research Service, the Food Safety and Inspection Service, the 
Farm Service Agency, and the Food and Nutrition Service. One of 
the things that we needed to do initially was to make sure that 
our testing procedures were what they needed to be, and so we 
had asked for not only a review internally with FSIS of AMS's 
testing procedures but also working with the National Academy 
of Sciences, we are asking for an independent review of testing 
procedures, specifically as they relate to the purchase of 
ground beef.

                  FOOD VENDOR ELIGIBILITY REQUIREMENTS

    In addition, we also believe that there needs to be new 
standards and requirements in terms of food safety for the 
purchasing, particularly for beef suppliers. And so we have 
called for FSIS to review AMS's food safety purchasing 
requirements and to beef those up. We have also provided 
technical assistance through ARS and FSIS to provide technical 
assistance. We are not stopping there. We recognize that we 
need to do a better job of information sharing between these 
various agencies. There needs to be better information on in-
plant enforcement actions, positive pathogen test results, 
contract suspensions, recall notifications, and additional 
information to better serve.
    We also recognize that there is a need for tightening 
vendor eligibility processes, which means that FSIS and AMS 
must review and evaluate meat, poultry and processed egg 
vendors as part of the eligibility process. FNS has to review 
and evaluate the methods they currently utilize to approach 
state agencies and school districts when they communicate a 
problem. We realize there may be a lack of aggressive 
communication or response by state agencies to potential 
problems.
    FNS is also going to establish a center of excellence 
devoted to research on food safety issues. We have a similar 
center of excellence on food handling. We need one on food 
safety.

                 STRENGTHENING FOOD SAFETY REQUIREMENTS

    We are also going to take a look at strengthening current 
requirements through FSA that is also involved in purchasing 
commodities, utilizing our HACCP program. So there is a wide 
variety of efforts here in addition to the steps that we are 
taking generally in terms of food safety.
    Ms. DeLauro. I have a couple of follow-up questions. I am 
going to make an assumption that none of this was in place 
prior to your putting it in place. So I will dispense with the 
request for what the prior practices were. You mentioned the 
new initiatives which then are, and I am going to again presume 
that there was none in existence prior to your initiating 
these. But I have a couple questions that have to do with what 
would it take for a supplier to be permanently barred from this 
program? And I want to know the timeframe for fully 
implementing the changes. What will our evaluation process be? 
And with what you are talking about, specific performance 
standards and the timeframe for being able to meet them. I want 
to start with the suppliers. Beef Packers failed to meet the 
program requirements 26 times. This is not exactly three 
strikes and you are out.

                 VIOLATIONS OF FOOD SAFETY REQUIREMENTS

    Secretary Vilsack. I think it is important to distinguish 
between technical violations and very serious violations that 
compromise food safety. And clearly if there are repeat 
violations of a significant food safety standards and issues, 
there ought to be action aggressively taken in order to ensure 
that that supplier either improves their service or is not 
allowed to continue their service.
    There are times when what is noted is something is checked 
in the wrong box or things of that nature, and that becomes in 
a sense a technical violation. So I would distinguish between 
those two, and I am sure you would as well.
    In terms of timeframes, we want to make sure----
    Ms. DeLauro. So let me just say, we are not going to see 
what happened with Beef Packers again and we are not going to 
see what has happened with salami being on the market for over 
a year? We keep expanding the recall on that, but we have known 
it is out there. We are not going to see that again?
    Secretary Vilsack. Well, I would certainly hope that we 
would do a better job than we have done, Madam Chair.
    Ms. DeLauro. And that we would end their contract if they 
continue to repeat?
    Secretary Vilsack. I am not satisfied that if we continue 
to see repeated violations that compromise the safety of our 
children, I think it is fairly important to take steps to 
basically say, not just to that company but to the industry, 
this is not going to be tolerated. We understand and appreciate 
this is a serious issue, and we are going to treat it very 
seriously. That is why we have the Food Safety Working Group, 
that is why we have taken very quick action when this all came 
to light.
    Ms. DeLauro. Timeframes? Just one question. I know my time 
is up. Timeframe for implementation?
    Secretary Vilsack. Well, I would simply say that I think it 
is important for us to evaluate this properly, and we expect 
and anticipate responses some time this spring and this summer 
from the National Academy of Sciences Review. That obviously 
will help us in some way, shape or form determine what steps 
need to be taken. My hope would be that we are actively engaged 
in improvements in this calendar year.
    Ms. DeLauro. Will we have the benefit of that NAS report?
    Secretary Vilsack. I am sure. All you have to do is ask, 
and if you just ask, you will get it.
    Ms. DeLauro. Thank you. Sorry.

                           THE BUDGET DEFICIT

    Mr. Kingston. Thank you. Mr. Secretary, I wanted to just 
make a few comments. When we were in the majority, it was very 
difficult to pass a budget. I remember one year I think we 
passed it 214 to 212, and so any move to decrease spending or 
to increase spending could have just upset the whole balance, 
and yet, despite that tough balancing act, one reason we lost 
the majority, we Republicans, was because of overspending. But 
this year alone, $1.4 trillion deficit is going to be higher 
than all the cumulative deficits we had under the 8 years of 
George Bush. I believe outside this room that decision is going 
to be made. I think the Budget Committee is going to have a 
very tough time passing the budget, and if it is not a serious 
reduction in spending, I think the American people will 
probably make a correction on it themselves. But I remain 
concerned with a 26 percent budget increase since 2007, and the 
fact that we are freezing it but not until 2011, I do not think 
the American people are going to be satisfied with that. I do 
feel like that is going to be decided outside this Committee, 
but I wanted to mention that again.

                 THE FIRST LADY'S LET'S MOVE INITIATIVE

    I also wanted to ask you a couple of miscellaneous 
questions, and I will just go quickly. The First Lady's obesity 
commission, is she having an outside group on that? Is she 
naming people to a commission or a panel? Is there a mechanism 
like that. I missed the press announcement because of the snow 
and appreciated the chance to go.
    Secretary Vilsack. There is a concerted effort to make sure 
that this is a partnership with the private sector and the non-
profit sector and the education community and the academic 
community, the food industry. It is a wide range effort. It 
includes the task force for which there will be members. It 
also includes a private foundation that the First Lady has set 
up. Contributions have been submitted by a number of folks who 
are very interested in this particular area. As you know, this 
is an issue that has now reached epidemic proportions. One-
third of our children are either at risk of being obese or in 
fact obese. There are serious consequences in terms of 
educational quality. We have a number of retired generals and 
admirals who are very concerned about the capacity of the 
United States to be able to meet its military concerns since 75 
percent of the adults ages 19 to 24 are not physically fit to 
be in the military. So there is a wide range of concern about 
this issue.
    Mr. Kingston. Well, I think you will find a lot of 
bipartisan interest and support from this Committee. So if we 
have the opportunity to suggest anybody to the panel or to 
participate in it, we would certainly like to do that.
    Secretary Vilsack. You obviously have the capacity to do 
that with your own office, sir, but if you want to submit names 
to us, we would be happy to make sure that the First Lady's 
staff is aware of your interest.

                     CHINESE FOOD SAFETY PROCESSES

    Mr. Kingston. Okay. And we are very glad that she is doing 
this. Also, you and I and a number of others and the Chair, we 
all had a lot of discussions about Chinese chicken, but I 
understand now there is some information glitches in terms of 
getting the underwriting that you need for safety inspection. 
Do you feel like that is going to break loose? Is this sort of 
just normal dealing with Chinese government sometimes or is 
this a serious setback?
    Secretary Vilsack. Immediately after Congress took action, 
we began the process of educating the Chinese on precisely what 
the law requires from us, and what the law requires from us is 
no more, no less than what it ought to require which is to 
ensure that there is, in fact, sufficient procedures and 
processes in place in China to assure safety. That process had 
begun in 2004, 2005 timeframe, 2007 timeframe, and the Chinese 
were concerned that what we were essentially doing was starting 
all the way back from square one. What we have tried to 
convince them is that this law is not going back to square one, 
it is simply confirming what the state of their law is, then 
making sure that an on-ground review of their regulations and 
actions are consistent with that law, and that ultimately we 
get to take a look at specific plants that need to be 
certified.
    There is a request pending from us to the Chinese for 
specific information that would allow us to take the first 
couple of steps in that process. There we are trying to assure 
them that this is not going back to square one, but this is a 
continuation of the process that began and we are just simply 
wanting to confirm information and have any additional changes 
or modifications that may have occurred.
    Mr. Kingston. Well, good. Certainly, I think this Committee 
wants you to put safety first, and we would also want to 
support your efforts to move forward on this.

                         ARRA BROADBAND PROGRAM

    You know, broadband program, the stimulus part of it, not 
the $417 million loan program but the money that was dropped on 
it, I continue to be a critic of that inasmuch as it is deficit 
spending and often is putting broadband in places there is not 
a problem because the private sector was doing it. Recently the 
President was in Georgia, for example, announcing some 
eligibility for the broadband stimulus money, and it was in 
some of the highest real estate areas of the state. I just 
continue to be a skeptic on that program because, again, all 
the money is deficit spending.
    Secretary Vilsack. Congressman, if I could respond in the 
remaining time I have, this is a very important step that you 
have taken and the Congress has taken and the Administration 
has taken in creating a new framework for the rural economy.
    The reality is that we will never be able to attract and 
expand small business opportunities in rural communities unless 
they have access to 21st century technology. I can assure you 
that we are very sensitive at USDA. Now, obviously, there are 
two departments involved----
    Mr. Kingston. And if I could interrupt you, let the record 
show, I called my seat-mate's house one night and said last 
year, if this is going to happen, it should all be done through 
the USDA and we should not create a new department. So I am a 
100 percent believer that you guys do it more efficiently.
    Secretary Vilsack. I do not want to get into the middle of 
that, but I do want to distinguish. But as it relates to our 
responsibility, the USDA portion, we are very sensitive to the 
need to place it in rural areas, into rural remote areas, into 
areas that do not currently have that service or in areas where 
with an investment, the service can be substantially improved. 
And the reason for this is that this is an important pillar to 
really creating a much different framework for a rural economy. 
What we have been doing in the past, with all due respect to 
everything that has been done in the past, you cannot say it 
has been working when you have got higher poverty rates, higher 
unemployment rates, per capita income that is substantially 
lower than urban and suburban areas, a graying of the 
population and young people basically leaving counties so that 
over 50 percent of our rural counties are losing population. We 
have got to try something different in my view. And broadband 
is an important, critical component to trying something 
different.
    I realize it is a deficit issue, but I also believe that if 
it is invested properly, it can help turn the trends in rural 
America around which will ultimately lead to higher revenues to 
maybe offset the deficit.
    Mr. Kingston. Thank you.
    Ms. DeLauro. Just a comment there. We both support the 
effort for broadband to be done through USDA. I would also add 
that I think the grant component of that program, which was 
part of what the recovery program was about, was a very good 
addition in terms of trying to move into underserved areas. Mr. 
Farr.

                   CHILD NUTRITION PROGRAMS DELIVERY

    Mr. Farr. Thank you, Madam Chairman. Thank you very much, 
Mr. Secretary, for being here today and for your leadership in 
the Department of Agriculture. I am the only westerner on this 
Committee representing an awful lot of western agriculture and 
certainly the only Californian in the number one ag state. So I 
could sit here all day and discuss everything with you, but one 
of my key interests is in the Child Nutrition Program, and I 
really appreciate your leadership in it.
    Just an editorial comment. I have been dealing with this 
program for a long time, and the problem is the jurisdiction 
for writing the legislation is not with this Committee, it is 
with the Education Committee. You are the agency that 
administers it, and there is usually not much contact between 
the Education Committee in Congress and the U.S. Department of 
Agriculture. And I have seen those programs develop over the 
years, and we have gotten so many different programs in the 
child nutrition arena and in the WIC program that I really 
think the Department ought to look at coming back to Congress 
and suggesting that we really divide it into two programs, one 
a community-feeding program which would be WIC and all the 
other food programs that we have in the community, and the 
other is the school feeding programs, all the different 
programs that are in schools, because one of the difficulties 
is the amount of bureaucracy that has been developed as each of 
these programs has evolved over the years. And I really do 
think we can find some savings in administrative costs by just 
being smarter about how we deliver all these programs at two 
levels, at the community level and school program.

                 FRESH FRUITS AND VEGETABLES IN SCHOOLS

    Having said that, as you know, I have introduced a 
Children's Fruit and Vegetable Act, H.R. 4333. We have 
bipartisan cosponsors, and I am glad to hear that Mr. Kingston 
is really excited about it because maybe he will cosponsor the 
bill now. One of the policy provisions in that bill would be to 
promote salad bars in schools as evidence-based strategy to 
increase children's fruit and vegetable consumption. It is 
right in line with the areas that you are moving in, and I 
would like to ask you to make the commitment to get those 
fruits and vegetables in every school in America. As you know, 
in a lot of the urban schools, and I think probably Jesse 
Jackson talked a lot about the fact that in big cities, they 
are now using processing centers to do the school packaging of 
school lunches, and in that processing has added a lot of salt, 
sugars and other things that end up not being necessarily the 
best dietary nutritional goods for children. And we really need 
to try to get back into that old school-based ability to have 
fresh fruits and vegetables in every school.
    And I would like your response to that. I know you and the 
First Lady have worked hard on this. We hope our bill will move 
this year and be a part of the whole reauthorization act.

               REAUTHORIZATION OF THE CHILD NUTRITION ACT

    Secretary Vilsack. Congressman, I will be happy to get you 
a copy of a speech I delivered yesterday to the National Press 
Club that sort of outlined the framework for the Child 
Nutrition Program reauthorization effort.
    [The information follows:]

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    Let me just simply say, we are absolutely committed to 
improving the nutritional value of these meals. The Institute 
of Medicine study that we commissioned essentially was a wake-
up call suggesting indeed there was too much sugar, too much 
sodium, too much fat, not enough fruits, vegetables, whole 
grains and low-fat dairy. We are committed to making that 
happen. The reality is that oftentimes those steps do require 
some additional resources which is why we are asking for the 
additional resources.
    I would also say that we are in the process of focusing 
some of our research and development efforts on obesity and 
particularly on how we can improve the quality of choices that 
youngsters can make, as well as making sure that we connect as 
best we can with the Deputy Secretary's leadership, as best we 
can to promote the local provision of those fruits and 
vegetables. Opportunities for local producers to be able to 
create markets with schools can be amplified and assisted 
through USDA and through rural development.
    So there is a major commitment on our part. Let me also say 
that it is not just about more money. It is, as you have 
indicated, about trying to figure out how to spend the money 
that we are currently spending more effectively. We would 
suggest that one way to do that is to end paperwork in some of 
these school districts where it is fairly clear the vast, vast 
majority of students are in fact free and reduced-lunch kids 
and that we look for direct certification opportunities so that 
if a parent is qualifying for one set of programs they do not 
have to fill out multiple applications to qualify for something 
else.

                          ORGANIC AGRICULTURE

    Mr. Farr. Terrific. You are on it. I like that. Let me ask 
you. I represent the most organic agriculture in the United 
States, and probably my district is the most productive in 
organic agriculture, and I notice that you are reducing the 
organic research funding in this budget. And I wanted you to 
explain why. I mean, organic is about 3.5 percent of all food 
products, and with the funding cuts, the research comparison is 
you are down to about 1.3 percent.
    Secretary Vilsack. If you will permit me, I am going to ask 
the Deputy Secretary to amplify on my answer. I am just simply 
going to say that I think it is important to take a look at the 
overall budget as it relates to organic. I think what you will 
find is there is significant support in a number of areas to 
advance organic. We are also working on a tightening of 
regulations which should help preserve that market and that 
brand.
    Ms. Merrigan. Thank you, Mr. Secretary.
    Mr. Farr. You will need to put your button on.
    Ms. Merrigan. We have a number of research agendas within 
the overall REE mission area that are very compatible with 
organic research. A great new emphasis on classical breeding, 
work on perennial grains, a very substantial increase in the 
SARE program. So it is a matter of double-counting in a large 
way. A lot of the SARE programs, for example, is actually 
organic research. We estimate that in this budget there is $78 
million of specific organic research, but there is additional 
programs that also offer up organic benefits.
    Mr. Farr. So the bottom line for organic is you are not 
cutting it? Is that what you are trying to tell me?
    Ms. Merrigan. The bottom line is, it is well-timed that not 
only the REE mission area embrace organic and research needs 
but that we attend to organic agendas throughout the agencies 
and the Department because it is a big tent, USDA, and we see 
the organic industry as thriving, important, and we just had a 
national NASS survey that came out, the first ever, on the 
organic industry. And it showed that this is an area of great 
interest across the country. All 50 states have organic 
production.
    Mr. Farr. Thank you.
    Ms. DeLauro. We will have a hearing next week on March 3. I 
think that is Wednesday. We will deal with nutrition and 
obviously child nutrition and how we proceed in that direction. 
I think the Administration and the agency knows about that, but 
it will be next Wednesday.
    Mr. Latham.
    Mr. Latham. Thank you, Madam Chairman, and to use your 
sports analogy, you are on your game today, Rosa. Anyway, 
welcome, Mr. Secretary, everybody on the panel.

                             CROP INSURANCE

    As you know, Mr. Secretary, crop insurance industry is 
very, very important for a state like Iowa. It is more 
important even than the industry for the farmers themselves to 
be able to manage their risk. In the budget, it looks like over 
five years you are planning on cutting about $7 billion out of 
about $20 billion. I do not know where we are in negotiations, 
but I would like to hear about that but also, I will just ask 
you directly. Is there any discussion at USDA about taking over 
risk management away from the private sector, like the direct 
student loan program has been taken over?
    Secretary Vilsack. I think our preference, Congressman, is 
to work with the industry, recognizing the important role that 
the industry plays in this part of our safety net. But I think 
we also want to make sure that as we work with the industry, we 
do it in a fair way to all, to the farmers and producers, 
obviously, to the agents who are impacted, to the insurance 
industry, but also to the taxpayers.
    I mean, I have got a chart here that I think in a very 
graphic way projects what is happening in crop insurance. You 
are seeing dramatic increases in the amount of profits, both on 
the agent and the insurance company side, even though we are 
selling about 200,000 fewer policies than we sold in the year 
2000. We have to rebalance this, which is what the negotiations 
are about. They are ongoing. We have made a recent second 
proposal to the industry in an effort to try to respond and 
listen to the concerns that they have raised, and we have made 
several adjustments. But I think at the end of the day, I think 
there needs to be a rebalancing here without compromising the 
capacity for producers to have this risk management tool and 
also using some of the resources to basically allow crop 
insurance to be sold on a fair basis to some producers that 
right now, under the current system, are not treated fairly.
    [The information follows:]

    [GRAPHIC] [TIFF OMITTED] T7780A.040
    
    Mr. Latham. They also assume the risk also. I mean, that is 
the thing, where you are putting the taxpayer on the hook for 
the potential losses out there.
    Secretary Vilsack. In 2 out of 15 years there have been 
small losses, 13 years out of 15 there have been pretty 
significant gains, Congressman. And we did not do this, if I 
might add, we did not do this without looking at this. And the 
Milliman's study indicated that what we are proposing is 
somewhere in the neighborhood of 12 percent return on the 
investment for the industry as opposed to a 16 percent return. 
We think that is fair.

                        CLIMATE CHANGE RESEARCH

    Mr. Latham. Okay. In research funding, you are increasing 
funding by over $50 million for climate change research, some 
of which will be used to ``provide vital information needed for 
an agricultural and forestry cap and trade system.'' You know, 
this has not obviously passed Congress. The hopes of getting 
that done probably are not very bright at this point. I just 
wonder about those research dollars being spent somewhere else, 
and as you are well-aware, the FAPRI report that came out of 
Missouri, their conclusion, producers use many energy inputs in 
the production of agricultural commodities. The direct impact 
of a policy change that increases energy costs will be to 
reduce farmers' bottom lines, and we are talking probably 20, 
25 percent utility costs on top of all the fuel costs and 
everything else. I just wonder how you react, you know, to 
this.

          IMPACT OF INDIRECT LAND USE ON THE BIOFUELS INDUSTRY

    Also, the question of whether the USDA agrees on the 
indirect land use, the EPA. They are coming down on that. It is 
a huge impact obviously on the biofuels industry.
    Secretary Vilsack. Well, let me see if I can respond to 
those comments. First of all, as it relates to the indirect 
land use, we worked in an effort to try to make sure that the 
RFS2 standard that came out from EPA recognized the important 
role that corn-based ethanol can play in helping biofuels 
future. And we were pleased that in fact there was an 
indication that corn-based ethanol, soy diesel, would in fact 
be able to meet the thresholds established by the RFS2. So I 
think that is an important point to make.
    Secondly, as it relates to the research efforts, I think it 
is fair to say that we have ongoing needs to take a look at how 
crop production will be impacted by more extreme weather 
conditions, whether it is drought-resistance or drought 
intolerance or whether it is flooding situations, are there 
mechanisms and are there processes by which we can ensure 
productivity of seed in those extreme weather conditions.
    And so I think it is important for us at USDA to focus on 
this. We also recognize that with these extreme weather 
conditions there could very well be an increase in severity of 
pests and disease. And so part of this research is taking a 
look at how we would be able to adapt to more serious pest and 
disease circumstances because of extreme weather conditions. So 
I think this is a valid reason for us to focus resources, and I 
think it is very consistent with USDA's responsibilities. There 
are other----
    Mr. Latham. But that is not what this is for.
    Secretary Vilsack. No, that is what it----
    Mr. Latham. Well, it says information needed for cap and 
trade. That is what you say.
    Secretary Vilsack. Essentially what I am telling you is it 
is going to be----
    Mr. Latham. That is what it says.
    Secretary Vilsack. Well, Congressman, if I can tell you 
what we are going to direct--what the research is actually 
going to be focused on, it is going to be working with 
adaptation to extreme weather conditions. You can call it 
climate change, you can call it cap and trade, you can call it 
whatever you want. The bottom line is it is about making sure 
that we continue to be the most productive and efficient 
farming country in the world. That is our intent, and so this 
research is designed to help that and focus also on water 
issues.
    We are very concerned, and I know you are, about the 
limitation of water resources in many parts of this country, 
and that is a result of extreme weather conditions. And we have 
to be much better at our science in terms of knowing precisely 
how to preserve and conserve water. That is one of the whole 
reasons why we are also focused on a whole new approach in our 
Forest Service to landscape all lands approach and focusing on 
using our management of our forests in a much more effective 
way relative to water.
    So all of these give rise to research opportunities.
    Mr. Latham. Thank you, Madam Chairman.
    Ms. DeLauro. Mr. Davis.
    Mr. Davis. Madam Chairman, thank you very much and 
certainly for the testimony of Mr. Vilsack, the Secretary.

                        THE SCHOOL LUNCH PROGRAM

    I have had an opportunity in my long life to do many 
things. My first job out of college with an ag degree was to 
work with the Soil Conservation Service as a soil scientist. So 
some folks say I am one of the scientists over here in 
Congress. However, that work was somewhat different than some 
of the real scientists that are here.
    Then I worked with an agency called Farmers Home 
Administration which was then a rural lending agency of USDA 
until the mid-1970s.
    I live in a district that almost 70 percent of the people 
live outside of an incorporated area. When you approach those 
communities, it will say Pall Mall, unincorporated. In essence, 
the folks who live in the congressional district that I 
represent understand rural America probably as much as anyone 
and probably more so than most congressional districts because 
many congressional districts have a portion of an urban area or 
a city which comprises a large part of their congressional 
district.
    So I know when we talk about school lunch programs, how 
tough it is for small rural communities and small rural 
counties to be able to provide the basic needs of their 
students who attend there.
    And so I know as we look at the hot lunch programs we call 
those back home, being sure that there are nutritious foods 
being served to our children is extremely important. So I hope 
that we look, and I heard two or three of the members talking, 
I hope we look very seriously at putting some pretty strict 
requirements on nutritious food, not soda pop and not Twinkies 
and not what we call pogey bait being served in some of the 
dispensers. That is an area where I think that this Department 
can do unbelievable good for America's rural families, 
especially those that have children attending school.

                        RURAL HOUSING ASSISTANCE

    Now, the next thing I want to say is that I also, having 
worked with Farmers Home, is rural housing. I have been 
somewhat saddened when I realized that my neighbors on my 
street that live near me oftentimes are relegated--and I am not 
opposed to modular housing. I think there is a great need being 
served by that. But a used modular housing is not necessarily 
something that would be--we would call those sometimes 
substandard, and there are many folks in rural areas where I 
represent all across the district, and the 10,000 square miles 
that I represent are relegated to the point where they cannot 
find a loan to where they can actually be able to obtain 
housing. We need to take a serious look at reinstating direct 
interest assistance, interest credit housing, direct loans, not 
making subsidies to guaranteed loans. I do not disagree that 
that needs to continue, but we need to look more at 
transferring more and more dollars. And my understanding is 
that our Chairman of the Financial Services is moving toward 
maybe even authorizing some dollars, and my hope is that that 
is the case, that we would appropriate those that we can have 
help from our Department of Agriculture.

                 HORTICULTURE AND THE NURSERY INDUSTRY

    I met with a group of folks who provide a tremendous amount 
of employment in the congressional district that I represent, 
and the central part of it, the area of horticulture. Huge 
investments, and oftentimes not on an annual basis do they 
receive income. Sometimes it is three or four or five years 
before they can actually be able to have income. And so they 
have to kind of hold on with their debt servicing. They are 
having a hard time. I want to visit with you and send you some 
suggestions that the group that I met with about a week-and-a-
half ago about how maybe USDA can take a serious look at 
refinancing some debt for those folks until we get through this 
period of time where housing moves back because basically, when 
you talk about horticulture or the nursery industry, as the 
housing industry goes, so goes the nursery industry. And we 
could almost destroy the farmers who are producing hundreds of 
jobs and thousands of jobs in many cases in those small rural 
areas.

                       BROADBAND IN RURAL SCHOOLS

    The next thing I want to say is that I have heard talk 
about broadband. It is my understanding the latter part of last 
year the rules have pretty much promulgated that now our 
telephone co-ops and others can start applying for grants and/
or loans to expand broadband into areas. And I am excited that 
the American Economic Recovery and Reinvestment Act, it is not 
a stimulus package. I want to clarify that. It is not a 
stimulus package. It was not a stimulus legislation. It is the 
American Economic Recovery and Reinvestment Act. Almost $300 
billion were tax cuts to working people and tax cuts for small 
business folks so they could invest in their business and 
discount that from their income. So when I hear stimulus, it is 
not a stimulus. It was not a stimulus legislation. It is an 
investment in America. It is an Economic Recovery and 
Reinvestment Act that folks will be able to survive. In my 
district, when folks get an unemployment check after their 13 
weeks or 26 weeks, it came from that American Economic Recovery 
and Reinvestment Act. And when they get \2/3\ of their 
insurance being paid for and they still cannot find a job, it 
came from that Economic Recovery and Reinvestment Act, not 
stimulus. It may stimulate their checking account a little bit 
and keep them from losing their house.
    So I want to talk now about broadband. I envision in rural 
America where I live that the small rural schools who may not 
be able to hire an extra teacher to challenge the young minds 
of the best and brightest that some day will make this Nation 
even greater. We have done wonders with education since the 
1970s reaching down to what we would call the underserved, the 
special ed needs. The special ed needs are also there for the 
best and brightest. And I envision broadband being in every 
school system in rural America and the best and brightest 
teachers in this country, educating that youngster. There may 
be thousands of them at a time in that hour period they have 
set.

                      INVESTMENT IN RURAL AMERICA

    So it is my hope that as we move into the future we realize 
that we are making a huge investment and reinvestment for the 
first time since back in the '80s, basically, in building 
America. When you look up through about 1980, we built our 
interstate systems, we fought four wars, we built every lake 
and every dam that we have in this country. We even built the 
Panama Canal and gave it back to them in 1979, and since then 
we have not invested in anything in this country. All we have 
done is invested in debt. We have grown from about a trillion 
dollars in 1981 to almost $11 trillion today. So I understand 
about debt, but it did not just happen yesterday or it did not 
just start last January. It has been moving on top of us for a 
long time.
    And so as we invest in rural America, USDA has been the one 
that has been the champion and the one that has provided an 
opportunity, unbelievable opportunities, to those of us who 
live in rural America and those of us who serve.
    I could ramble pretty much for the next 2 or 3 hours, but I 
think I will stop doing that. But I want to ask you a question. 
We all know that there are and will continue to be scarce 
resources in this country, perhaps for years to come. How do 
you think or could you make recommendations of how you would 
feel the USDA could more wisely invest in rural America from 
where you sit as Secretary of Agriculture?
    Secretary Vilsack. Congressman, I appreciate that question, 
and I will try to respond as quickly given the time constraints 
that you all are facing. I do think it is important for us to 
recognize that in the past, our economic development efforts in 
rural America have been focused on individual businesses and 
individual communities and not recognizing that those 
businesses and those communities are part of an economic 
region. Smaller communities oftentimes have capacity issues, 
both in terms of human resources and knowledge, as well as 
financial resources. I think we would probably do a better job 
of investing our economic development resources if we were in a 
position to allow those communities to come together, to band 
together with a common strategic vision and to leverage their 
financial and human resources toward a vision that focuses on 
making that region of the country a great place to live, work 
and raise a family.

                     REGIONAL INNOVATION INITIATIVE

    What we have proposed in this budget is giving us the 
authority to prove that case. By establishing pilot projects in 
regions across the country, taking a portion of the monies in 
the various 20 programs that we have identified that could 
potentially be invested in those regions and allowing us to 
work with those regions to more wisely leverage those resources 
for private investment and also to allow the USDA to do a 
better job of working with companion agencies, like the 
Department of Transportation, Department of Energy and others, 
to be able to leverage our resources with other government 
resources to really bring prosperity into these communities. If 
you look at all the academic studies about rural development, 
what they are going to tell you is that it is time we approach 
this from a regional basis, not a community-by-community, 
company-by-company basis, and that we will get more bang for 
our buck if we do it that way.
    Now, we recognize that is a new concept, and we could not 
possibly come to this Committee and suggest that all of the 
money be appropriated in that way. We are not suggesting that. 
What we are suggesting is give us a chance to prove this case 
to you, and I will guarantee you that we will prove that it is 
a very successful way of approaching rural development.
    Mr. Davis. Thank you very much for being here. I think we 
are very lucky to have you as Secretary.
    Ms. DeLauro. Mr. Bishop.
    Mr. Bishop. Thank you very much, Madam Chairman.

                      CIVIL RIGHTS ADMINISTRATION

    Welcome, Mr. Secretary. Let me take this opportunity first 
off to thank you and commend you for going forth on your 
commitment to equal opportunity at the Department. I think even 
prior to your confirmation, we had conversations where you 
committed to that and you have gone forth with the civil rights 
enforcement. You have offered tremendous leadership in the 
settlement of the Pigford II cases, and of course you are 
moving forward on the thousands of administrative claims that 
are now pending that carried over from the last Administration, 
the last two Administrations. So I want to commend you for that 
and thank you. Hopefully, the funding mechanism for the 
administrative claims will be contained in either the jobs bill 
or the supplemental, I am not sure which, and maybe the Pigford 
in the supplemental which I understand is going to be proposed.
    I also want to thank you for moving forward with the 
appointments of our State Committee. I think we have got four 
of the five appointments complete, and that is good because 
that has been holding up a lot of action there in the state.

                  FARM SAFETY NET PAYMENT LIMITATIONS

    I do have concerns, however, with the Administration's 
proposed budget, particularly some reductions in the areas like 
the direct payments which the Administration has really taken 
forth an effort and said that it wants to preserve the safety 
net for our farmers. However, with southeastern agriculture 
which is a little bit unique and different from agriculture in 
other parts of the country because it is so diverse, the 
payment limitations issue has a much more adverse impact on 
southeastern farmers who do multiple crops than on some other 
parts of the country. So I have some real problems with that, 
and of course, as we work through the budget, we will try to 
deal with that. The elimination of the cotton storage and 
handling credits again are part of the safety net, and the 
reform/reduction in the market access program, all of these are 
parts of the safety net that have assured that American farmers 
were able to compete in the global marketplace with their 
competitors from other countries that have this kind of help 
doing that. So I would like to discuss it at some point, and 
maybe you can allude to that.

                       BROADBAND IN RURAL AMERICA

    The other concern I have relates to broadband. Mr. Kingston 
touched on it. In Georgia, we have had only one grant under the 
Recovery Act, and that was in North Georgia. I have had 
multiple applicants in our area, and I have met with all of 
them who serve rural areas, and none of them has been approved. 
It does not appear that they have the prospects of doing it, 
particularly with the formula that we understand is going to 
be--one of the considerations is the ratio of grant-to-loan in 
the application. We have rural, poor areas, and they really 
need to be able to compete, and they do not have the resources, 
which is why we insisted that USDA, RUS, be the people to do 
that. And we had a big fight over that in the stimulus. So we 
really would like to have you to visit that.

              USDA'S ROLE IN DOL'S H2A PROGRAM REGULATIONS

    And the final thing I wanted to mention is the H2A program. 
We have got some real concerns there with the regulations that 
are about to be implemented and the impact that it will have on 
our produce growers, fruit and produce growers and would like 
to know if USDA is actively involved with the Department of 
Labor in trying to promulgate those regulations in a way that 
will not adversely impact those producers.
    Secretary Vilsack. Congressman, I will try to respond to 
all your points. Let me sort of go in reverse. The H2A issue, 
we acted in an advisory capacity to the Department of Labor.

               DEPARTMENTAL ADMINISTRATION REORGANIZATION

    Mr. Bishop. Excuse me, and you can submit this other one 
for the record. The reorganization that you had talked about 
earlier with the Under Secretary of Administration, you can 
submit that for the record or we can talk about that later. I 
just wanted to add that on the record.
    Secretary Vilsack. And we will provide you written comment 
on that. The H2A, we provide at advisory capacity. Obviously 
that is a Department of Labor ultimate call, but we have 
provided advisory direction and will continue to do that.
    [The information follows:]

    As part of the reorganization of the staff offices and 
administrative services of the Department, numerous functions have been 
consolidated under the Assistant Secretary for Administration in an 
effort to improve the effectiveness and efficiency of the Department. 
Due to these increased responsibilities, we are considering legislative 
language to create an Under Secretary for Management. An Under 
Secretary for Management would be able to work more effectively with 
the other members of my Subcabinet to improve operations of and the 
services delivered by the Department.

                  BROADBAND IN RURAL AND REMOTE AREAS

    On the broadband issue, let me just simply say, we are 
still in the process of not only reviewing applications but 
also making announcements about applications that have been 
approved. I think until we have completed that process, I would 
hope that you would give us an opportunity to prove to you that 
we are cognizant of the need to get these resources in rural 
and remote areas, as those that exist in your community. There 
may be technical issues with the applications. I would suggest 
that if you can get permission from those who have applied to 
give you the opportunity to visit with the RUS folks--there are 
privacy issues--but if you have that permission, I would 
certainly encourage you to do that so that you know precisely 
what the status of those applications will be.

                         MARKET ACCESS PROGRAM

    On the Market Access Program, I think it is also important 
to point out that we are substantially increasing other 
resources in the export systems area. We are working very 
closely with our collaborators and cooperator programs within 
other countries. That has been flatlined for an extended period 
of time, and it is the entity that provides assistance to 
commodity groups to encourage promotion of the American brand. 
It is not focused on----
    Mr. Bishop. Name brands.
    Secretary Vilsack [continuing]. Things of that, you know, 
the same thing the MAP program is focused on. It is focused on 
a longer term, providing technical assistance, providing the 
research, breaking down the sanitary and phytosanitary barriers 
to trade that we see popping up from time to time. We are also 
proposing additional technical assistance, to be specifically 
focused on specialty crops. Ultimately, at the end of the line, 
there are additional resources in export promotion than there 
was last year.

                       COTTON AND PEANUT STORAGE

    On the issue of the cotton storage, simply cottons and 
peanuts, basically the only two commodities that have that. We 
think that there is some market distortion that occurs as a 
result of that. Cotton prices are going up, and so we are not 
certain that there is a need for that.
    Mr. Bishop. Well, we just did a Farm Bill.
    Secretary Vilsack. The only thing I would say is we are in 
a slightly different circumstance than we were when the 2008 
Farm Bill was passed, and if I may, because of the recession 
and because of the impact that that has had on the decisions 
that you all have had to make, we are faced with some serious 
issues relative to the debt and deficit which we have to 
address.

                          DIRECT FARM PAYMENTS

    And then let me just simply say about direct payments 
because I think this is important, if I can answer your 
question for one minute. It is important first and foremost to 
understand that this is a significantly different proposal than 
the one that we proposed last year which was ill-thought-out 
and not particularly appropriate. This is really focused on a 
very small percentage of farmers. We calculate that of the 1.4 
million farmers who currently qualify for direct payments and 
things of that nature, only about 30,000 across the country are 
going to be impacted. Around 5 percent of producers in Georgia 
will be impacted. Ninety-five percent of producers will not be 
impacted.
    And I think it is also important to recognize that when we 
talk about a safety net, we have to talk about the whole 
package, and the whole package includes the research money that 
we put in, the export promotion money that we put in, the 
efforts in commodity purchases. And if you look at the totality 
of support, I think you will find that we do indeed have a 
strong safety net in this country and one that is fairly 
compliant with trade responsibilities. And if you look at the 
overall picture, I think what you are seeing is a very small 
percentage of farmers who, under our thresholds, are doing 
fairly well with the $500,000 in adjusted gross farm income and 
up to $250,000 of adjusted gross non-farm income. Somebody 
could make in theory about $600,000 to $700,000 and still get a 
check from the government. You know, if we are going to be 
serious about deficits, we have to look someplace and this was 
one place to look.
    Ms. DeLauro. Mr. Kingston.

                    BIOMASS CROP ASSISTANCE PROGRAM

    Mr. Kingston. Thank you, Madam Chairman. Mr. Secretary, 
just sort of continuing with that, as you know, in the 
southeast one of the reasons why farmers bump up into that 
higher income category is because in order to get the economies 
of scale, the son and the daughters and the uncles are really 
more directly just mom, dad's and the children's farms get 
combined. And that is why the income goes up. It is not always 
an accurate picture. And we will have this discussion with you 
I know as this goes on. But one of the things I wanted to point 
out is that BCAP does not have an income limitation, and there 
are a lot of people that are making far more money than farmers 
do who participate in BCAP. So that might be something you want 
to look at. As I expressed earlier, as I had my doubt about 
BCAP anyhow and facing the deficits that we have.

                         MARKET ACCESS PROGRAM

    The other thing I wanted to mention, MAP had been called 
corporate welfare in the past, and I wonder how you would 
respond to that. And then a third point I want to make, and Mr. 
Farr would be interested in this, but last year one of our 
witnesses was actually a farmer from Georgia. He was an organic 
farmer who was telling me he could not sell any of his produce 
locally, particularly to the School Lunch Program. And I was 
wondering if we offered in this Committee some report language 
to encourage USDA to break down some of those barriers in the 
school lunch program so the local farmers could sell produce to 
the schools. Is that report language necessary? Because I know 
you are doing some things on it.
    And then number four, this is my last thing, I think that 
we have developmental agriculture money for Zimbabwe. But we do 
not have it for Botswana because Botswana has an income-per-
capita issue, but they are a very pro-American ally in the 
area, particularly as compared to Zimbabwe where we have 
sanctions. And I wonder if we should not take a second look at 
that. Not 100 percent sure because, again, tight budget 
limitations. But here you do have one country that is, you 
know, trying to do the right things and move in a very good 
positive direction in a region of the world that, you know, we 
need good allies, and yet, they are not getting development out 
of agriculture money as I understand it.
    Secretary Vilsack. Congressman, I wonder if I can ask 
permission to get you a written response on that question 
because as it relates to those specific countries because I am 
not as well-versed on those specific countries. But I would say 
that there is an effort within USDA to cooperate with USAID and 
the State Department on our feeding initiative, our 
international feeding initiative.
    [The information follows:]

    The U.S. Government targets its assistance to meet the needs of the 
recipient countries. In Botswana's case, it is a great development 
story. In 40 years, Botswana has moved from one of the world's poorest 
countries to a middle-income country. Its economy is growing as fast as 
the economies in East Asia. With this growth, Botswana is not facing 
food security issues that other countries confront, but Botswana does 
have a high incidence of HIV/AIDS. The U.S. Government has been 
providing assistance through the U.S. President's Emergency Plan for 
AIDS Relief. During 2004-2008, Botswana received more than $300 million 
to support HIV/AIDS prevention, treatment, and care programs.
    By contrast, Zimbabwe is facing multiple humanitarian problems, 
including severe food insecurity. One of the key targets for U.S. 
assistance has been to provide food aid and other funding to improve 
that country's food security.

                    INTERNATIONAL FEEDING INITIATIVE

    Mr. Kingston. Could I interrupt one second? One of the 
things I was wondering is USDA actually runs the program but we 
fund it, correct? We, USDA, funds it?
    Secretary Vilsack. We fund it. USAID basically manages the 
part of the program, the one part that we are not requesting 
additional resources we would have some impact on. We also have 
companion case programs which we have a little bit more of a 
say on.
    But I would say that we came into office with the 
understanding that we needed to take a look at simply doing 
more than providing food assistance, that what we really needed 
to do was to provide greater technical assistance and greater 
assistance in these countries so that they could become more 
self-sufficient, and as they become more self-sufficient, they 
build an economy. And as they build an economy, they become 
better trading partners with us over time. Perhaps the best 
example of this is what we are trying to do in Afghanistan and 
Pakistan with USDA officials there working with the Afghan 
ministry to try to substantially increase productivity and 
rebuild an agri-business economy.
    So that is sort of the overarching theme, and I think you 
know, you cannot just look at the food programs in isolation. 
You have to look at what we are also trying to do on this 
development and capacity side.

                         SCHOOL-TO-FARM ISSUES

    As it relates to school-to-farm, the Deputy Secretary is 
very engaged in this. We have today tactical teams, SWOT teams 
we call them, as part of our Know Your Farmer, Know Your Food 
effort, going into school districts and going into local 
communities and making the link between local production and 
local consumption, trying to figure out what the barriers are. 
And then hopefully, what we hope to be able to do, is use rural 
development resources to build the supply chains that do not 
exist in some of those communities that would allow you to get 
enough critical mass to meet the need of a school on an ongoing 
basis and also to provide technical advice as to how crops 
might be grown during more difficult weather conditions.
    And we are not just focusing on rural communities in this 
area, we are also looking at how we can help urban centers meet 
their nutritional needs.

                    BIOMASS CROP ASSISTANCE PROGRAM

    I appreciate the concerns that you have raised about BCAP. 
We have tried to address some of those concerns with a 
termination of the Notice of Funds Availability that was 
outstanding that caused a lot of angst and concern. We have put 
a proposed rule that we are in the process of receiving 
comments on. Those comments will be due, I think, by April, and 
then we will try to fashion those into a final rule that makes 
sense. Some of the things we have asked people to comment on, 
should there be a differentiation or a tiered approach in terms 
of how much reimbursement we provide per ton for certain 
products, should there be a lack of support for doing what you 
are already doing. Should you have to prove that you are 
actually doing more in terms of producing more energy from 
renewable sources if you are already doing that. Are there 
processes that BCAP simply does not qualify for, and we are 
asking people to comment on those. That may have somewhat of a 
limitation. I know it does not address your issue as it relates 
to income levels, but it is an indication that we are sensitive 
to your concerns.
    Mr. Kingston. Yeah, I appreciate that. And Madam Chair, if 
I can have just 30 more seconds, I wanted to say I think the 
income limitation thing should be consistent if that is what 
the--if we are looking at ways to reduce the budget.
    I saw that you were asking for 64 slots in Afghanistan. 
That is a very interesting program. I am very glad you are 
doing that. I think we should be doing that in Iraq as well, 
but we will talk about that later.
    Secretary Vilsack. Well, we do have people in Iraq as well 
doing somewhat similar circumstances but not quite as 
comprehensive as in Afghanistan because frankly, the need is 
different in Iraq. It is a bit more sophisticated in terms of 
agriculture than it is in Afghanistan.
    Mr. Kingston. I am glad you are doing that. And then just 
one last comment. One of the inadvertent beneficiaries of BCAP 
is the American taxpayers are subsidizing European fuel, and in 
this economy, I think that that is something that we really do 
not want to do.

                       INTERNATIONAL AGRICULTURE

    Ms. DeLauro. Mr. Secretary, first of all, let me associate 
myself with a comment on the increase in the folks going to 
Afghanistan. I have several questions about that which I will 
hold for later in terms of getting some idea of how we evaluate 
their work and success of that work.
    What I would like to do is to suggest and we will think 
about how we try to put together a program since most of the 
farmers in this world are women, how in fact we are trying to 
assist women farmers around the world and to try to build that 
kind of infrastructure and capacity so that it will increase 
their production levels, and I continue to believe what we need 
to do is deal with emergencies. But beyond the emergency, how 
do we build capacity.

               REAUTHORIZATION OF THE CHILD NUTRITION ACT

    With that, let me move to the nutrition reauthorization. 
You released your priorities at the Press Club yesterday, an 
excellent commentary, and it includes improving nutrition 
standards, increasing access to meal programs, increasing 
education about healthy eating, establishing standards from 
competitive food sold in schools, serving more healthy foods, 
increasing physical activity, training people who prepare 
school meals, providing schools with better equipment, and 
enhancing food safety. I support all of these initiatives, and 
I think you know that and have for a number of years. I am not 
sure how much we can make an impact on these issues with $1 
billion each year. It is $10 billion as I understand it, over 
10 years. Can you break down the $1 billion dollars to the 
different priorities? Such as how much do you recommend 
increasing the reimbursement rate for the school lunch program? 
How much would that cost, what is the cost of expanding the at-
risk supper program to all States, and are you planning to 
submit additional information to the Congress, outlining the 
specifics of the proposal. The specific proposal is behind 
these priorities.
    Secretary Vilsack. Madam Chair, first of all, let me say 
that we see this as not just a $1 billion. We see this as $1 
billion plus. The plus comes from some of the efficiencies that 
we think a direct certification, paperless application process 
can create within individual school districts that allow school 
districts to have resources that are freed up that are 
currently allocated to administration, freed up toward these 
other priorities. And we are fairly confident that there will 
be indeed significant savings from what we are proposing under 
direct certification and reduction of paperwork.
    As it relates to whether or not I can tell you today 
precisely how many dollars are applied to various items, let me 
simply say that on the reimbursement side, what we are looking 
at is inciting the right kind of behavior. So to a certain 
extent it is dependent upon school districts accepting the 
challenge that we put forward to them, which is that we expect 
more fruits and vegetables, healthier foods in these diets, and 
we are willing to provide you resources if you can prove to us 
that you are ready, willing and able to accept that challenge. 
This is not necessarily a blanket increase which could 
potentially fund just the status quo. We are not interested in 
doing that. We are interested in really focusing on improving 
the system. So it somewhat depends how many school districts 
step up to that challenge and how quickly they can step up to 
the challenge. We would be more than happy to provide as much 
detailed information as Congress wants, but we also recognize 
that your responsibilities are such that you are going to want 
quite a bit of say in all this, and we want to work with you.
    Ms. DeLauro. I would be interested--I have further 
questions, I must get them to you.
    I would be interested in the view of the concomitant 
savings and where you think we are going to make those savings 
and what savings do you think we are going to achieve doing 
this? This is like the healthcare bill. Where are the savings 
going to be, you know, achieved so that we can then look at how 
we fund these. Again, I support these initiatives. My concern 
is whether or not we are going to be able to carry them out 
because I think they are valid. But the savings side of this 
will be very important as we take a look at what criteria we 
are going to place on schools, et cetera, and school districts 
in terms of dealing with these issues.

                       NATIONAL EXPORT INITIATIVE

    Let me move next to--in your budget you propose an increase 
of $54 million for the National Export Initiative, doubling 
exports in 5 years. The President I guess has a goal of 
doubling exports in the next 5 years.
    Secretary Vilsack. Right.
    Ms. DeLauro. You have not said you are going to do that.
    Secretary Vilsack. Given the fact that we have a 
significant surplus in agriculture today, what we hope to be 
able to do is to break down barriers in five countries that 
currently are making it difficult for us to trade and 
increasing our trade surplus by several billion dollars.

                            TRADE WITH CUBA

    Ms. DeLauro. It would be interesting to know which 
countries make it difficult for us to trade. But further, I 
would like to say that I would like that list, $54 million is 
going to FAS. Quite honestly, there is one market very close to 
our shores which no one mentions, and you do not mention in 
your testimony and that is Cuba. We currently allow 
agricultural exports to Cuba through a number of restrictions 
that are in place because of the embargo. Exporters are denied 
access to private commercial financing or credit. All 
transactions must be conducted in cash in advance or with 
financing from other countries. We put no restrictions on any 
other country except Cuba in that regard.
    Even with the restrictions, the United States has been the 
leading supplier of food and agricultural products to Cuba. A 
2008 report by FAS stated the United States has been Cuba's 
largest supplier of food and agricultural products since 2002. 
FAS also concluded that Cuba has consistently ranked among the 
top 10 export markets for U.S. soybean oil, dried peas, 
lentils, dried beans, rice, powdered milk and poultry meat. A 
2007 report by the U.S. International Trade Commission 
concluded that the U.S. share of Cuba's agricultural fish and 
forest imports would rise from \1/3\ to between \1/2\ and \2/3\ 
if all trade restrictions with Cuba were lifted. Given the 
clear impact it would have on exports and on farmers, do you 
support the lifting of the embargo as part of your export 
initiative?
    Secretary Vilsack. Madam Chair, your question is a very 
timely one and important one.
    Ms. DeLauro. Mr. Peterson----
    Secretary Vilsack. Just submitted a bill which I read 
earlier this morning. And it emphasizes the complexity of the 
discussions about trade because oftentimes it is not just 
simply about a trading relationship, it is about a more complex 
relationship which I think is certainly true in Cuba. We are 
obviously interested in working with the Congress, working with 
other administration departments to increase trade in Cuba and 
increase trade around the world. But we want to do it 
consistent with our values and consistent with what other 
priorities we may have in other areas of the government, 
whether it is a national security priority or whether it is a 
foreign policy priority. So I think it is important and 
necessary for us to have consistency here. And we were happy to 
work with the current conditions. We were pleased that the 
Treasury Department made it a little bit easier for folks who 
wanted to export to Cuba by not requiring cash before the 
shipment left but doing it similar to the way other exporters 
are currently treated in terms of providing cash at least at 
the time before title is transferred. That made sense. We are 
happy to work with folks. But trade is extraordinarily 
complicated, and sometimes what seems to be a relatively simple 
thing, just because there are other issues involved, becomes 
quite a complex thing.
    [The information follows:]

    Below is the URL address to the USTR 2009 National Trade 
Estimate Report on Foreign Trade Barriers.
http://www.ustr.gov/about-us/press-office/reports-and-
publications/2009/2009-national-trade-estimate-report-foreign-
trad

    Ms. DeLauro. I understand the other issues involved, and I 
understand the complexity of trade when one would like to know 
those countries that we are having difficulty trading with 
today and why we are having difficulty with that. And the other 
piece of this is if the end goal is consistency, I would just 
say to you that our trade policy with regard to Cuba is about 
the least consistent for trade and national security or 
diplomacy or anything that we have embarked on in a very long 
time. If we wanted to deal with consistency, it would just seem 
to me that there would be a real necessity for review of our 
entire trading policy and I will leave it at that, Mr. 
Secretary. Ms. Emerson.
    Ms. Emerson. Thank you. Sorry I am late, but I am ranking 
on another committee, and we were having the IRS Commissioner 
and I did not want to stand him up today.

                         ANIMAL IDENTIFICATION

    But anyway, thank you, and I would like to associate my 
first comments with the Chairperson's. But I want to talk to 
you a little bit about animal traceability, Mr. Secretary, and 
I really do have to congratulate you and the Department for 
getting out into the field and really listening to the 
producers. I think that has been very, very helpful, and I also 
appreciate the fact that the Department has recognized, and if 
I might quote, a vast majority of participants were highly 
critical of the NAIS program and certainly the $100 million 
plus that we have spent on the program, not to really have 
anything, is problematic. But that did not start with you, so 
we will leave it at that.
    But I think in just listening to comments of producers 
since last week when, or was it the week before, that you all 
announced changes in the program, I am concerned to some extent 
that you responded more to the public relations problem, 
perhaps not really addressing the underlying discontent of 
producers.
    My producers are just so concerned about mandatory 
traceability system, whatever the name of it is, and they are 
concerned about the reporting requirements. They are concerned 
about the recordkeeping. They are concerned about civil and 
criminal liabilities and there are concerns probably more than 
anything to what they perceive is an underlying threat to their 
privacy. And changing the name from NAIS and requiring the 
states to enforce rules written in Washington, D.C., is not 
going to change their concerns. So I hope that you will 
recognize that and work directly to address them.

                      ANIMAL DISEASE TRACEABILITY

    In the meantime, as a representative from a state that is 
very hostile to NAIS in any form whatsoever, we have many, 
many, many, cow-calf operations. I think we are third in the 
country, but we have very few feedlots. So there are a lot of 
interstate sales. And because of that, could not this, number 
one, be considered a mandatory requirement for our producers or 
operators in Missouri? And secondly, what would be USDA's 
reaction or response to a state which refuses? And I mean, 
seriously refuses by statute to implement a traceability system 
at all.
    Secretary Vilsack. Well, I think first and foremost, it is 
important to understand why we need this, which is if there is 
a disease outbreak. The ability to determine where it is and to 
confine it is certainly not just beneficial to that producer 
but it is beneficial to the entire market. And every producer 
in your State of Missouri could potentially be negatively 
impacted if we do not have a system in place that would allow 
us to focus on disease traceability that allows us to get to 
the heart of the matter, which is how do we identify and react 
and respond to a disease outbreak. What we were interested in 
is having a system that works far better than the one we had. 
When only 35 percent of producers are participating on the 
cattle side, it is fairly clear that this is not a system that 
is going to be particularly helpful in that ultimate goal, 
which is to be able to identify a disease outbreak and be able 
to contain it.
    And I think as people recognize that what we are proposing 
is first and foremost, a limitation on what livestock are 
impacted as you mentioned, that is part of the reaction to the 
concerns that were expressed, that if I am just producing 
something for my neighbor or myself, I should not have to do 
this. We understood that.

                    CREATING A NEW ANIMAL ID SYSTEM

    We also understand that we want to work with the states to 
create a system the states are satisfied with and happy with. 
We want to engage them in responding to a number of the 
questions. So for example, we do not foresee that the Federal 
Government will be the data collector. We do not see that that 
is necessarily something that is our role. We think the data 
could be maintained in the respective states. We do not think 
we should be the arbitrator of what technology works because 
different states have different requirements or different 
states feel different technologies would be more appropriate or 
less appropriate. Our view is that there are probably some very 
significant low-cost technologies that would work just fine to 
allow us to do what we need to do with this system. We think 
that there needs to be a conversation on liability, but we 
recognize that the states are going to have some input on that, 
and we did not want to prejudge what that input would be. So 
what we committed to was a comment that we are going to take 
that old system and put it aside, we are going to put a new 
system in place, but we are going to have partnerships with 
states. My hope would be, and I am not trying to avoid your 
question, but my hope would be that we would not have a state, 
after all is said and done and after this is all fleshed out, 
that would say we are just simply not going to do this, because 
they would recognize that it is in their best interest to be 
able to have some capacity to identify at least what state a 
disease outbreak may have occurred in that would allow us to 
contain it, allow us to respond to it and allow us to make sure 
that it does not harm the market any further than it might. And 
that is really what this is about. In some livestock operations 
this is not an issue. In pork and poultry, I think there is a 
greater acceptance, but in the cattle industry there was not 
and we need to figure out how to do a better job.
    Ms. Emerson. I mean, I hear what you are saying but I do 
hope that you all will be prepared to figure out what is going 
to happen should a state really decide not to do this. I mean, 
just to be realistic, I think it is quite possible that it 
could happen.
    Secretary Vilsack. Well, you are from the Show Me State, 
and I appreciate that.
    Ms. Emerson. Thank you.
    Ms. DeLauro. Mr. Farr.

                  CALIFORNIA'S PLANT PESTS ERADICATION

    Mr. Farr. Thank you, Madam Chair. Mr. Secretary, I am sure 
your--complimenting you on your choice of Chief of Staff, Karen 
Ross--would be very interested in my question here because I 
understand that the European grape vine moth, a serious pest 
for grapes, has been found for the first time in the United 
States in Napa Valley in California, and I just wondered what 
the Department's plans were to deal with this new threat to 
California table, raisin and wine grape industry and what 
funding resources might be committed to help with the efforts 
at the state and local levels to eradicate this?
    Secretary Vilsack. Congressman, I am prepared to talk about 
citrus greening and emerald ash borer and a variety of other--
--
    Mr. Farr. Light brown apple moth.
    Secretary Vilsack. Light brown apple moth. I can talk about 
that. And we have resources dedicated. I will have to ask 
permission to get back to you on that specific set of issues. 
But I think your question underscores an important role that 
USDA has, an important role research has in terms of 
identifying these problems and trying to figure out strategies 
that will work before they become very significant, and the 
ones that we have mentioned have become very significant and we 
are putting significant resources behind trying to eradicate or 
contain----
    Mr. Farr. I appreciate what you are doing with light brown 
apple moth. Ground zero is my district, and we have a breeding 
lab set up there now. Hopefully your plan, which I think is 
much better than the state plan, will be implemented.
    [The information follows:]

    APHIS has been working with the California Department of Food and 
Agriculture to develop a delimiting survey for areas where the pest has 
already been detected as well as a State-wide detection survey. Once 
the surveys are complete, APHIS and California cooperators will 
determine what additional actions are needed. APHIS is still exploring 
funding options to conduct the surveys.

                    CALIFORNIA'S CUT FLOWER INDUSTRY

    Let me ask you another. I represent most of the cut flower 
growers. I got all these issues in my district. Twenty percent 
of the flowers sold in the United States are still grown in 
California and about 110,000 jobs. What we have been trying to 
do is to set up a logistics center to bring all the flowers 
locally to one transportation hub and allow--because the 
Colombians which we have indirectly helped with the--I mean, I 
was a Peace Corps volunteer in Latin America and in Colombia, 
and I certainly want to help Colombia have an alternative to 
the drugs, but I think we made it awfully easy for them not 
having any tariffs and so on to sort of take over our flower 
industry in this country and trying to put it back together by 
creating this shipping center. And I really appreciate Deputy 
Secretary Merrigan because I know she has been working with the 
industry to find resources at the agency to fund this center, 
and it censors the center to be run by the State Charter 
Commission, the California Cut Flower Commission, and would 
make sales of their flowers more competitive across the 
country. And they are asking for a one-time $15 million grant 
to make this transition for the industry feasible. Are we 
capable of doing that? Can you update us on what might be the 
progress of this request for the California cut flower 
industry?
    Secretary Vilsack. With your permission, I will have the 
Deputy Secretary, since she has been working on this, respond 
to that.
    Mr. Farr. Okay.
    Ms. Merrigan. Mr. Vilsack and I are deeply interested in 
the flower industry.
    Mr. Farr. Did the light go on?
    Ms. Merrigan. There we go. I was just joking. I said Mr. 
Vilsack and I are deeply interested in the flower industry, so 
of course we are working on this. I have recently had an 
opportunity to talk to leadership in the cut flower industry. 
There is very little domestic industry left as your comment 
underscores. It is a struggling industry----
    Mr. Farr. Twenty percent of the market.
    Ms. Merrigan [continuing]. With a variety of problems.
    Mr. Farr. It is not bad. It was 100 percent.
    Ms. Merrigan. Yeah, so I think there are multiple 
challenges, and we have just begun the conversation and we 
really do look forward to finding a pathway for that industry 
to survive and hopefully build in the coming years. In terms of 
the particulars on this grant, we have not come to any 
resolution, but the conversations have begun, sir.
    Mr. Farr. So how long does that usually take before you 
decide whether to assist with grant monies? Is that a long 
time?
    Secretary Vilsack. Congressman, part of the challenge is to 
make sure that we find the right program in terms of the 
requirements and restrictions that Congress may have placed on 
the distribution of resources. And that may have a lot to do 
with location, may have a lot to do with which program would 
work and whether or not we can figure out a way in which either 
our resources or perhaps other resources could be made 
available. I would say that we do take this area very 
seriously. In fact, ironically, my next event after this is to 
talk to the Garden Club of America that is meeting here in the 
Capitol several hundred strong from around the country. So we 
understand and appreciate the importance and significance of 
this and of this industry to your district and to the country, 
and obviously as we look at rural development, as we look at 
new employment opportunities we ought to be looking for ways in 
which we can provide resources to have a business that would 
make sense who is going to employ people. We ought to figure 
out a way to help. Now, what that is and how much it is, 
obviously we still have to work on it.
    Mr. Farr. It is a really interesting comment, the largest 
rose grower in the United States is in my district, put out of 
business by the Colombians. He is now the world's largest 
orchid grower growing Colombian orchids, and nobody can put him 
out of business because he is the only person in the 
geographical region that can send to the Asian market and the 
U.S. market. So you know, you just get smarter in the United 
States. We can beat people at this trade game.
    Ms. DeLauro. Mr. Latham.
    Mr. Latham. Thank you, Madam Chairman, and Mr. Farr. I will 
match you soybean for soybean, okay?
    Mr. Farr. You can have them all.
    Mr. Latham. Now come on. More corn than you have.
    Mr. Farr. We do not have any subsidies.
    Secretary Vilsack. Congressman, do you want me to come to 
your aid here? I would be happy to.

                   ARTHROPOD-BORNE ANIMAL DISEASE LAB

    Mr. Latham. Please, Mr. Secretary. One thing of interest in 
my district certainly, that the Arthropod-Borne Animal Disease 
Lab from Laramie is moving. The ARS wanted it to go to Ames, 
and it is going to Kansas, apparently. Do you have any update 
where we are on that move or what the situation is? Is there 
cooperation going to happen with the Animal Health Center there 
at Ames with this facility or any kind of update?
    Secretary Vilsack. There is currently an evaluation taking 
place of the Kansas location. A consultant has been hired to 
take----
    Mr. Latham. You would agree it should be in Ames?
    Secretary Vilsack. I would be happy to visit with Senator 
Roberts, and the three of us can work together on this.
    [The information follows:]

    The relocation of the ARS Arthropod Borne Animal Disease Research 
Laboratory (ABADRL) from Laramie, Wyoming to Manhattan, Kansas has 
already begun. Sixteen permanent employees have accepted relocation 
packages. Two employees have already been relocated; another two 
employees will relocate to Manhattan by the end of March 2010, and the 
remainder of the employees will relocated by June 2010. Construction 
contracts have been awarded for a new insectary in Manhattan and for 
moving the tissue culture laboratory from Laramie to Manhattan. Both 
tasks are scheduled to be completed by May 31, 2010. Laboratory and 
office space have been identified for the ABADRL employees in the ARS 
Center for Grain and Animal Health Research Laboratory in Manhattan. 
Laboratory renovations to accommodate ABADRL in Manhattan are in the 
planning stages and the contract is expected to be awarded by March 19, 
2010 with a May 31, 2010 completion date. Several offices on the 
University of Wyoming campus have been vacated and returned to the 
University of Wyoming and the first two laboratories will be vacated by 
the end of March 2010 and returned to the University. Cooperative 
research has been planned between ABADRL scientists and Kansas State 
University (KSU) scientists, collaborative grants co-written and plans 
for the use of KSU research laboratory space by the ABADRL scientists.
    The ABADRL and the National Animal Disease Center (NADC), Ames, 
Iowa work on different animal diseases, and therefore, the expected 
interactions between the two laboratories will be limited. The ABADRL 
program conducts research on animal diseases that are vectored by 
insects (Rift Valley Fever, Bluetongue, and Vesicular Stomatitis) while 
NADC conducts research on many non-vectored, domestic animal diseases. 
NADC lacks an entomology program that is needed to work with the insect 
vectored diseases. Both programs, however, are broadly coordinated by 
the same ARS national program leaders, and there will be commonly 
shared disciplinary expertise and ongoing technical consultation among 
the two groups.

    Mr. Latham. Okay.
    Secretary Vilsack. I do know that there has been a 
consultant hired to take a look at the challenges and safety 
requirements that this facility would require. I will tell you 
that if there is not an intent between folks to have close 
cooperation, there should be. There should be an ongoing 
conversation and far better communications than perhaps there 
have been in the past.
    Ms. DeLauro. There are three votes coming up.

                      BIOFUELS/BIOENERGY INDUSTRY

    Mr. Latham. Going back to the biofuels industry, I think we 
are sending some mixed messages. There was a Spanish company a 
couple years ago that from the Department of Energy got a $70 
million grant to build an ethanol plant in the United States 
and there are other foreign companies that have invested in my 
district, one particular plant of about $100 million, and they 
do not qualify for or are not able to participate in the 
Bioenergy Program. And I know there are rules being written 
right now at OMB. I do not know if you have any comment on 
that, but I think, you know, want investment in the United 
States. We want to create jobs here. We want to improve our 
economy. The biofuels industry is obviously very important for 
us. Could you add any comment on that? We are sending really 
mixed messages here.
    Secretary Vilsack. I think that is one of the reasons why 
the President asked a number of Cabinet secretaries and 
administrators to put together a biofuels task force report 
that lays out a much more cohesive and strategic vision for 
this industry. And we have done that. What we have found from 
our review is that there were overlapping and inconsistencies 
in terms of decision-making, who was going to do what. We now 
have laid out an understanding that this is an industry that we 
think has regional potential. In other words, this is not just 
simply going to be located in one part of the country. We 
really want it to be located in all parts of the country 
because we have a fairly high threshold we have set for 
ourselves, 36 billion gallons. We think that there are multiple 
ways to produce biofuels and that there is room for everyone's 
way, so to speak, to create job opportunities in this industry 
and create an industry that allows us to have greater energy 
independence. We also think it is important to distinguish 
between what USDA ought to be doing and what the Department of 
Energy ought to be doing.

                     BIOFUELS/BIOENERGY INVESTMENTS

    What we found was that we had conflicting research 
challenges. We were both focused on feedstocks, and the 
Department of Energy probably has greater competency and 
efficiencies and conversion technology, and we have probably 
better focus on feed stock development, so we ought to be just 
focused on that, our core competency, and they ought to be 
focused on their core competency. We ought to be focused on 
things that can be implemented within the next 10 years. They 
ought to be focusing on things that have probably got a horizon 
far beyond 10 years. And so we have a division of 
responsibility. And we also felt the necessity of setting up 
timelines working back from the 36 billion gallon goal so that 
we could measure whether or not we were making success or not. 
So we are in the process of putting that task force together.
    I would also say that it is important for people to 
recognize that it is not just the Energy Title of the 2008 Farm 
Bill that provides resources for these facilities. There is 
also the possibility of using some of our traditional rural 
development programs, this regional development concept I 
talked earlier.
    Mr. Latham. My point though is that if it is a foreign 
investment, they are not eligible for that. Now, they would be, 
if the CCC funds are being used, where there is no restriction, 
but they are tying this into rural development where we are 
discriminated against investment in the United States just 
because this comes from a foreign source, and it is huge.
    Secretary Vilsack. Well, there is huge potential, and 
again, I think we can be creative and innovative to find other 
alternatives or other ways so that we basically create enough 
resources so the capital needs of this which is very, as you 
know, highly intensive, are met.
    Ms. DeLauro. Thank you. We have three votes. I am going to 
try to get Mr. Davis in to move quickly and Ms. Emerson before 
we go to vote, and then we will come back. Mr. Davis?
    Mr. Davis. Thank you, Madam Chairman. And I will be kind of 
brief. That is difficult for folks to do at this table.
    Ms. DeLauro. Question first, Mr. Davis.

                     GRASS-FED BEEF FROM TENNESSEE

    Mr. Davis. Question first? Okay. There are two issues, 
grass-fed beef in my district, whether or not it can be 
processed in Tennessee and shipped outside the state. Today it 
currently cannot be. The new Farm Bill that we just passed 
would authorize some ways maybe where that could possibly 
happen. I look forward to working with you maybe to help 
expedite that process. The reason being, there are no 
substitutes, very little, for any type of beef, but there are 
for commodity products that is being used to feed ours.

                   FOOD SAFETY PROCESSING EQUIVALENCY

    The second question that I wanted to ask about, comments 
have been made about re-importing poultry or importing 
processed food products into this country. I have become more 
and more aware as I go to the grocery store and look every time 
that I buy an item, the country of origin that that food 
originated. Are you comfortable that as we see poultry either 
processed in another country, grown in another country, are you 
comfortable that we have the same standard of inspecting that 
food as we do here in the United States? There are at least 
three poultry processing facilities in the area that I 
represent. They go through very rigid inspection by USDA on-
site inspectors. I am concerned that as we see corporate 
America whose good name was built by the American producer, the 
American worker, the American consumer being willing to put 
their label on anything that comes into this country for a 
price. And my fear is that the patriotism of corporate America 
is not the same as our fighting men and women on the 
battlefields. Do you have a comfort zone that in countries that 
may be 1,000, 2,000, 3,000 years old that the food that is 
being shipped here is as safe as what we are producing and 
processing here in the United States?
    Secretary Vilsack. Congressman, I am comfortable that the 
mandate from this Congress and from every Congress has been 
quite clear to the food safety folks that there needs to be 
equivalency in terms of processing. And if there is not 
equivalency, there should not be processed product coming into 
this country. Especially in light of recent concerns, we are I 
think more acutely aware of the need to make sure that we are 
doing a better job every day on equivalency in food safety.

                       COUNTRY OF ORIGIN LABELING

    As it relates to labeling, you know, I appreciate the fact 
that you are like a lot of American consumers. I think 
consumers are interested in knowing where their food comes from 
and appreciate the capacity to know that. And that is one of 
the reasons why we are focused on making sure that we are 
implementing the COOL program as I think it was intended by 
Congress.
    Ms. DeLauro. Mrs. Emerson.

                RURAL ELECTRIC LOAN PROGRAM BUDGET CUTS

    Mrs. Emerson. Thank you. Mr. Secretary, the RUS Electric 
Loan program has, as you well know, helped rural electric 
cooperatives deliver portable electricity to homes across the 
country, and for the rural electric co-ops that depend on RUS 
programs, the average household income in their service 
territories is on average about 14 percent below the national 
income level, and I can attest to that having a district that 
is more covered by rural electric co-ops than by the investor 
in utilities. And so this program has been tremendous, and it 
has really kept costs down for working Americans during this 
tough economic time. Obviously you can know where I am going 
with this. I am not happy with the budget cuts of $2.5 billion 
for the program, and I think what is equally troubling is that 
it prevents RUS lending for peaking natural gas plants as well 
as environmental upgrades to existing power plants. And I think 
that those cuts kind of contradict the President's goals of 
investing in cleaner energy.
    So can you answer this question for me? How does reducing 
the electric loan program either advance the Administration's 
energy goals or save taxpayers money, particularly when the 
program has a negative subsidy rate and brings funds into the 
Treasury?
    Secretary Vilsack. Well, there are other opportunities that 
we have within RUS to provide assistance and help to the 
industry, and I think part of what we need to be doing is to 
determine whether or not we can look at those other 
alternatives. For example, I know the industry has approached 
us on a number of occasions to take a look at the fact that 
when a loan is made some time ago, that there has been 
appreciation in the value of the assets of a particular Rural 
Electric Co-op. And because of our lien position, they are 
prevented from utilizing that increased value in equity. It is 
conceivable that we might be able to work with the industry to 
figure out ways in which we can protect our loan position but 
perhaps be a bit more flexible than we have been relative to 
that increased value, which will give them the capacity to 
expand. I think the President has been quite clear in his 
intent to promote renewable energy sources, and we wanted to be 
consistent with his intent and what we have essentially 
indicated to the rest of the world we are going to do, which is 
to focus on renewable resources. And we think that there are 
ways in which we can balance the need for supporting 
traditional approaches and also jumpstarting non-traditional 
renewable energy technologies.
    Mrs. Emerson. And I understand that and I appreciate it, 
and you know, coming from an ag district, I greatly embrace 
that idea. But I do think that we should have our options and 
have the technology in place to actually replace one with the 
other before we pull the rug out on an existing system.
    Secretary Vilsack. Well, you know, I have actually been in 
a facility in Missouri that is basically creating energy from 
agricultural waste. And so I think the technologies are there. 
I think we need to ramp them up, and I think that is what we 
are trying to do.
    Mrs. Emerson. Well, I am not in disagreement with that, but 
I still think we have to do both until we are comfortable with 
getting the cost down for the new piece, and I do not think you 
would disagree with that.
    Secretary Vilsack. I do not disagree. It is just a question 
of whether we can be more flexible and innovative so we can do 
both.
    Ms. DeLauro. Mr. Secretary, we are going to just recess and 
get back here. I know Mr. Kingston is coming back, I am coming 
back, and we will do that as soon as we can. There are three 
votes. The last two votes are 5 minutes. So we should be back 
shortly. Thanks.
    [Recess.]

                       NATIONAL ANIMAL ID PROGRAM

    Ms. DeLauro. I talked to Mr. Kingston's staff, and we can 
proceed. He will be here shortly so let me move through some 
questions, Mr. Secretary. The National Animal Identification 
Program, and I listened to your exchange with Mrs. Emerson. As 
you know, the Congress appropriated $147 million for the 
program. We still do not have a workable system but it has been 
clear to me for a while that the program is not working, and we 
need to make significant changes. You recently proposed a major 
change in the program. Quite frankly, in light of that I was 
surprised that there was no mention of animal ID in the written 
testimony.
    The new framework which you announced envisions a 
traceability program that would be owned, led, and administered 
by the states, as I understand it. I have several questions 
about the framework and how this will be implemented. What is 
the effective date of the requirement that all animals moving 
in interstate commerce be identified?
    Secretary Vilsack. Madam Chair, we are scheduling a meeting 
to begin the process with the states in March, next month, and 
I will probably be in a much better position to tell you how 
prepared and over what time period it will take states to be 
prepared to do that following that meeting and would ask 
permission to get back to you with specifics after that 
meeting. I think it is important to emphasize that we have put 
together a very skeleton proposal here because we think our 
partners need to be engaged in helping craft it. One of the 
problems in the past was the perception that this was a top 
down, dictated kind of situation which did not garner a lot of 
support from the grass roots, and if this is going to work we 
have to have support in the grass roots.

                   ANIMAL IDENTIFICATION ENFORCEMENT

    Ms. DeLauro. How and by whom will this requirement be 
enforced?
    Secretary Vilsack. We are going to work with--USDA has a 
responsibility obviously to work with our partners, and our 
expectation is that we are going to come to an agreement with 
the state ag commissioners and secretaries on precisely how 
this is going to operate, and that there will be an 
understanding of who has got responsibilities. I will say that 
we envision that the states will have access to the information 
because there are serious confidentiality issues that have been 
raised and privacy issues. We perceive that the states will 
apply this only to interstate.
    Ms. DeLauro. But if you are going across state lines, who 
has the jurisdiction to enforce all this?
    Secretary Vilsack. Well, that is essentially what is going 
to be worked out. What I suspect will happen is in a number of 
regions of the country, there is going to be a regional 
approach. It is not just necessarily going to be state-by-state 
but there are going to be groups of states that will probably 
agree based on the nature of the livestock that they have that 
a system in each state will be somewhat consistent.
    Ms. DeLauro. What are the penalties for violations? These 
are going to be worked out? Let me just ask this. Is 48-hour 
trace back still the target?
    Secretary Vilsack. I do not think it is necessarily tied to 
a 48-hour number. I think it is important for us to figure out. 
There has been a 72-hour discussion, there has been a 24-hour 
discussion. I think what we are trying to figure out is what is 
actually doable and what is appropriate under particular 
livestock circumstances. We have a pretty good program with 
sheep, a pretty good program with poultry, a pretty good 
program with pork. I do not think this is necessarily going to 
change much of that. I think the cattle is where we are going 
to be focusing a lot of our time and attention and resources.
    Ms. DeLauro. So are you telling me that in terms of if you 
got a cow that crosses a state line without any identification, 
that is the kind of thing you are going to be talking about in 
March. With an ID what happens? We do not have any idea about 
that at the moment?
    Secretary Vilsack. That is correct. And what technology 
will be used to identify that cow. We want a cooperative 
partnership here, which we did not have under the current 
system. We spent $130 million, $140 million, and I cannot tell 
you today that we have a system that works. I can tell you that 
there are components of it that will probably be applied so 
that the entire amount of money was not wasted, but today I 
want to preserve the right of the states to allow us to jointly 
form a program that will work. That is what we heard from the 
15 different listening sessions that we had throughout the 
country.

                COST OF THE ANIMAL IDENTIFICATION SYSTEM

    Ms. DeLauro. What costs do you expect the Federal 
Government to carry?
    Secretary Vilsack. Well, I think the cost of technology, 
once we determine what the appropriate technologies are, I 
would assume that the government, the Federal government, we 
have indicated to states that we want to, and we should, pick 
up the cost of the technology, and we believe there is some low 
cost technology strategies that would be effective to provide 
us to trace back to the states, and then the states can 
determine whether or not they want any more detailed trace back 
within their jurisdiction.
    Ms. DeLauro. I am going to make a couple comments to you, 
Mr. Secretary. It is $147 million that we have spent on this 
program. There is a request now, I guess, for 14.3, which is 
about 9 beyond what we did last year, 14.2, 14.3. I must be 
honest with you, I do not understand how we are going to have a 
system based on more than 50 state tribal system, state system, 
et cetera, how it is going to work. I do not believe it is 
going to work. I have a list here of international cattle ID 
and traceability programs, mandatory programs, Argentina, 
Australia, Canada, EU, Japan, South Korea, Uruguay, all these 
people started, Argentina, 2007, Australia, 2002, Japan, 2003, 
South Korea, 2004, Uruguay, 2006. United States of America 
cannot figure this out.
    And I am going to be very clear with you on this as I have 
in the past. I want to wait to see what this system is all 
about before we take $14.3 million and add it to this process. 
I have an article here, and I am sure you have seen the article 
where U.S. weighs how to track diseased livestock. Let me make 
something of a conclusion here. It cannot work, it cannot work. 
We will not have it. I fought long and hard on this issue. I 
have given every opportunity, provided--this committee has 
provided resources through this. If we cannot do it, well, then 
we will not do it. We will not spend good money after bad. And 
then we will take our chances on the international market. I do 
not have a dog in the hunt in Connecticut, and essentially that 
is what these folks are saying, their product will be suspect. 
Ultimately, that is not going to be my decision.
    Secretary Vilsack. Madam Chair, we think this system can 
work, and I am not going to accept responsibility for what has 
taken place prior to my being in this office. We went out and 
we listened very carefully to the people who are impacted by 
this decision. Thirty-five percent, 36 percent of cattle 
producers were participating in the program. That in any 
measure is not a successful program. The Congress decided it 
had lost confidence in the program, and we felt it was 
appropriate and necessary to figure out a different way. I will 
tell you that our goal is to have a system, have a system in 
which the states and the Federal government cooperate, in which 
there is greater acceptance by the cattle industry, and that we 
utilize the most efficient and effective cost mechanisms for 
allowing us to have the traceability we need to be able to 
contain animal disease and to be able to assure our trading 
partners of what I am confident, which is that we have a safe 
and quality product, and we are going to work hard to make that 
happen.
    Ms. DeLauro. I believe you will work hard. I am going to 
work very hard to make sure that I understand what it is and 
until we have truly information that says this is moving 
forward--my Committee can vote in any way they want. I know I 
will not be for another $14.3 million. I just will not do it. 
That is a waste of money. We are talking about cutting costs. 
Let's figure out how to do it. All these other countries have 
figured out how to do it. We ought to be able to do it. Let me 
move to women farmers, and I applaud the work that you all have 
done with the Pigford case and African American farmers.

           PARITY FOR DISCRIMINATION AGAINST MINORITY FARMERS

    It is my understanding that last week on behalf of USDA the 
Department of Justice attorneys met with lawyers for the 
Hispanic, Native American, and women farmers, who are looking 
to settle thousands of pending claims that are again related to 
historical discriminatory practices. They are very similar, if 
not identical, to those in the Pigford case, as I understand 
it. The DOJ indicated on February 18 that it had wrapped up the 
second Pigford settlement, which will total about $2.2 billion 
and DOJ expressed an interest in settling with the other three 
groups at parity. As you know, I have introduced legislation 
that is designed to compensate women farmers for the 
discrimination they suffered at the hands of various USDA 
offices.
    The statistics for women are egregious. And I want to ask 
you, do you think it makes sense to compensate all of the 
discriminated groups, Hispanics, Native Americans, in addition 
to women and African Americans and to include all that in the 
same bill so that we can make sure that there is in fact 
parity?
    Secretary Vilsack. Madam Chair, as you know, the settlement 
with the Pigford II plaintiffs has a fairly tight time line, a 
March 31 time line, and we certainly hope that Congress would 
work with us to make sure that that time line is met. I think 
there are some differences with reference to the other cases. 
And let me be clear, it is our goal and our intent to get this 
chapter, these series of chapters, closed in USDA history, but 
because of the fact that several of these cases have not been 
certified in the same way the Pigford case was, and in light of 
the fact that there is sort of a precedent for how we approach 
Pigford, which is not necessarily what anyone has agreed to in 
the other cases, it is going to be necessary for there to be 
discussion and deliberation between the plaintiffs' lawyers and 
the Department of Justice on amounts and/or a process, and that 
is not as mature as it was in Pigford.
    So I am a little concerned about basically saying that it 
is, you know, one piece of legislation because I am not sure 
that that can get done. I would like to think it could get 
done.
    Ms. DeLauro. What I would like to ask is if you will help 
us to get that done because then we can move forward and be 
done with what is an ignominious chapter in our history, and I 
understand what you are saying, but if we can work 
cooperatively to get this done.
    Secretary Vilsack. Well, I think that you either need an 
amount or a process. What you did with Pigford is you put an 
amount on the table in the first Pigford, which led ultimately 
to a resolution. But, frankly----
    Ms. DeLauro. We have a process in terms of the legislation 
and amount.
    Secretary Vilsack. Right. And we have not had that in the 
other cases, and we either need an amount or a process or an 
agreement between the parties as to an amount of a process, and 
we are happy to work with whoever is willing to get to either 
an amount or a process or both.
    Ms. DeLauro. Thank you. Mr. Kingston.
    Mr. Kingston. Yes. Is that for women and Hispanics?
    Secretary Vilsack. It is for all----
    Ms. DeLauro. It is women, Hispanics, and Native Americans, 
and their claims have not been recognized. They have not been 
allocated for class action so that is why we are working with 
the Justice Department.
    Secretary Vilsack. Some of them have and some of them have 
not. But let me just say a very clear statement. This is a lot 
harder than it ought to be.
    Ms. DeLauro. Agreed. Agreed.
    Secretary Vilsack. It is a lot harder than it ought to be.

                      SOUTH KOREAN TRADE AGREEMENT

    Mr. Kingston. Mr. Secretary, when do you think the 
Administration is going to move on the South Korean trade 
agreement? The President mentioned it, I believe, in the State 
of the Union address, and you had talked about the need to 
expand our exports, and that is, of course, a very valuable 
ally in the Pacific rim.
    Secretary Vilsack. Congressman, I think the intent of the 
President, as he expressed in the State of the Union address, 
is to move as aggressively as possible on both Korea, Panama 
and Columbia, as well as on the trans-Pacific efforts. We need 
to be focused on bilateral and multi-lateral trade 
opportunities, and we frankly need to be--within USDA we need 
to be very focused on breaking down barriers. The Chairwoman 
asked for examples of countries. We are in the process of 
dealing with Russia on poultry and pork and it has been a 
process where we need to really break down those barriers and 
basically respond to questions that are raised, either sanitary 
or applied to sanitary issues. It needs to be an aggressive 
effort on all fronts.
    Mr. Kingston. If you had to put a time line on it though, 
do you think they would move forward on it say within 6 months 
or 12 months?
    Secretary Vilsack. I do not want to speak for the President 
or Ron Kirk, the U.S. Trade Representative. From our 
perspective, we recognize the sooner it is done the better 
because obviously agriculture benefits with these trade 
agreements, and certainly the Colombia and Panama trade 
agreement in particular, we can pretty much quantify the 
benefits. Korea is a little bit more problematic because it 
depends on the commodity that you are dealing with. We may have 
some issues relative to rice, for example, that may make that a 
little bit more complex.

                     SNAP ELIGIBILITY REQUIREMENTS

    Mr. Kingston. On SNAP, you want to continue to waive the 
able bodied person requirement for eligibility, and, you know, 
that was a hard fought part of welfare reform. Welfare reform 
in general was very difficult to get passed. Lots of naysayers, 
lots of the sky is falling kind of mentality but during that 
period of time 14 million people were on welfare, and it went 
down to 5 million people, a reflection also of a good economy, 
but it was a successful program. And what I see over and over 
again in the ag bill is that we just chip away at it bit by bit 
to the degree that it is always well intended but then it 
always gets abused. And I am concerned about the message that 
we are sending on that, so just your comment.
    Secretary Vilsack. We think a limited extension is 
appropriate given the fact that we are still dealing with a 
fairly high unemployment level, and many of those who are 
unemployed are able bodied individuals who are looking for 
work. I would also say that we distinguish this, at least in my 
mind I distinguish it, from some of the other assistance 
programs in that this is a direct economic stimulus. I think a 
lot of times of people do not recognize or appreciate the 
stimulus impact and the effect that these provisions in this 
program has. We have been able to pretty well document that for 
every dollar that you invest in this program there is a $1.84 
of economic activity.
    It just stands to reason if people are in a position to 
purchase appropriate numbers of groceries those groceries have 
to be stocked, they have to be trucked, they have to be 
processed, they have to be produced. Someone is retaining a job 
or getting a job because of that. And so we see this a little 
bit differently. We recognize we are not asking for a permanent 
change in the rule. We are simply asking for an extension of it 
so long as we are dealing with a weak employment circumstance 
and situation. We believe it is going to get better. We think 
it will get better. We hope to see improvements during the 
course of this year but it is still fairly obvious we've got a 
10 percent unemployment rate, and we need to respond to that.
    Mr. Kingston. At what unemployment rate would you consider 
the time to drop that waiver?
    Secretary Vilsack. I do not have a specific answer to that 
question today.
    Mr. Kingston. I am just wondering if we should address what 
you are talking about through a trigger and just say, okay, 
when the unemployment gets down to whatever.
    Secretary Vilsack. We would be happy to visit with you 
about that.
    [The information follows:]

    The time limit on SNAP participation was enacted when the 
unemployment rate was under 6 percent. I understand that it was enacted 
largely to achieve budget savings and I am not convinced it is a 
welfare reform measure. With the reauthorization of this program coming 
up in 2 years, we need to review the appropriateness of a time limit 
and the full range of options for enhancing the self-sufficiency of 
SNAP participants.
    Under current law, States can assign able-bodied recipients to 
employment and training activities. I think this makes the most sense: 
Improving the employability of people so that they'll be better 
positioned to find jobs as our economy improves.

                          SCHOOL LUNCH PROGRAM

    Mr. Kingston. Also, on the School Lunch Program and many of 
these other type programs, I am a philosophical believer that 
people should pay something, whether it is a child paying a 
nickel or 15 cents or a quarter or whatever, I think culturally 
we need to get into the mindset that there is no such thing as 
a free lunch. And with the national debt that we are looking 
at, with Medicare going broke, Medicaid having problems, it 
would appear to me that it would be in our national interest to 
instill a culture that you need to do something, and obviously 
collecting a nickel for a school lunch is not cost efficient 
but that is not--on a micro-school, school level it would not 
really be the objective. The objective would be nationally to 
try to get into people's mindset that things are not free.

                        CREATING SCHOOL GARDENS

    Secretary Vilsack. Representative, with due respect, I have 
a little trouble with that concept as it relates to children. I 
think there are ways in which we can instill in youngsters an 
understanding of nothing is free. For example, we are 
encouraging schools to focus on gardening and creating school 
gardens and having the youngsters tend those gardens and then 
using the produce from those gardens in the School Lunch 
Program. This is an educational opportunity. It is a physical 
activity opportunity. It is consistent with the First Lady's 
Let's Move Initiative. We see that as perhaps a more effective 
way of sending the message about----
    Mr. Kingston. Well, that would fall in line with my 
philosophy as well. How many schools have that program? What 
percentage is that, a very small percentage or is that actually 
something that is trying to be done on a serious basis?
    Secretary Vilsack. I would not be able to tell you with 
accuracy how many schools or what percentage but I can tell you 
anecdotally, from my travels around the country, that there are 
a number of schools that have embraced this notion and are 
learning about, Know Your Farmer, Know Your Food efforts to try 
to help the People's Garden Initiative. I can tell you that we 
started our own little garden at USDA that spawned 125 
locations across the country. We have seen a substantial 
increase in gardening generally as a result of the First Lady's 
garden. I think I saw one statistic, 30,000 more gardens. We 
have seen the seed companies doing a much more robust business 
because of the expansion of gardens, so I think this is 
something that is a fairly significant movement that is taking 
place in the country, sort of a return, if you will, to the way 
we used to be.
    [The information follows:]

    The Department does not collect information on the number of 
schools that have school gardens. However, we join you in supporting 
school garden efforts through USDA grant programs, and through our new 
Know Your Farmer Know Your Food initiative. Farm-to-school encompasses 
many types of programs and school experiences such as planting and 
tending school gardens, educating children about nutrition, and of 
course, purchasing fresh, locally-grown farm products.

                          SCHOOL LUNCH PROGRAM

    And the second thing I would say about the School Lunch 
Program and School Breakfast Program is remember the genesis of 
it. The genesis of it was in 1946 when there was deep concern 
about whether we would have enough able-bodied people to do 
what needed to be done to defend this country. Now you've got 
retired generals and admirals basically expressing the same 
legitimate concern. Seventy-five percent of our kids today are 
not physically fit for military service. That is an issue that 
I think all of us ought to be concerned about, not to mention--
not to bring up a sore spot, not to mention health care issues. 
If we think we've got problems today, a generation of----
    Mr. Kingston. I am not debating that aspect. I would say 
culturally, for example, somebody like you who has had a very 
successful legal career, been a governor and doing a great job 
as secretary, did you have an allowance when you were a child?
    Secretary Vilsack. I did, but my wife did not. We talked 
about that yesterday. And she has a better job of maintaining--
--
    Mr. Kingston. Did you have household chores, for example?
    Secretary Vilsack. I had to pick up the papers around my 
house.
    Mr. Kingston. The reason why I ask that, I often ask people 
that question, did you have work to do around the house, 
chores, and most people over the age of 30 would say yes and 
then the next question is did you get something out of it? And 
100 percent say, you know, actually I did. It was helpful. And 
when you say you do not want to have a child pay for something, 
I am not sure what age would be appropriate, but I do know that 
you can start a child on the right path at a very young age and 
instill a work ethic that is important.
    Secretary Vilsack. I would not want to discourage----
    Mr. Kingston. I know I am rubbing fingernails on a 
blackboard at this point.

                    NUTRITION PROGRAMS PARTICIPATION

    Secretary Vilsack. I would not want to discourage 
participation in the program. That is another concern. And it 
is already difficult enough to get parents engaged in this, 
which is why we have--we have seen a disturbing trend, the SNAP 
program increasing significantly, not necessarily seeing the 
same level of increase in our School Lunch and School Breakfast 
Programs. Part of it may be that the application system is 
complicated. It does not get home. It does not get filled out 
right. We are actually looking for ways, at least as it relates 
to this program, where we are ensured that every youngster who 
needs help is getting the help.
    Mr. Kingston. Well, I would also say, and I know I am way 
out of time and this is a good philosophical discussion for us, 
food stamps is at an all time high, WIC is at an all time high, 
10 million people. So I would say you actually have a pretty 
good participation program and that those numbers need to go 
up, but I am still concerned that the lessons that so many of 
us had as children in terms of work, I think we lost an 
opportunity there.

                   CHARGING CHILDREN FOR SCHOOL LUNCH

    Secretary Vilsack. I think we can do it without necessarily 
charging a nickel for lunch.
    Mr. Kingston. As long as there is a correlation and a 
culture then I think that is important.
    Ms. DeLauro. I will just make one comment to my dear 
friend, Mr. Kingston. This institution voted for $256 billion 
in relief for state taxes to people who make $3.5 million or $7 
million a year. These folks are not struggling to put food on 
the table. They are eating high on the hog. The folks who are 
engaged in the food stamp program today can barely put food on 
their table. Mr. Farr.
    Mr. Farr. Well, I also have to make a comment. I would be 
glad to invite you to the other side of my district called the 
other America which is the America living in a culture of 
poverty where those values that you may think ought to be in 
every family just do not exist in that culture. It is very 
difficult to instill those values when you are struggling just 
to cope because you may not be able to read and write, because 
you may not be able to have the skills of the job, because you 
did not grow up in a community or a house where you had loving 
parents that could support you and give you things to have 
chores with. I can guarantee you that kids who live in poverty 
have a lot of chores but they are not the same chores that you 
and I would have growing up. We do need to take care of that 
other America, and I am proud that we do.

     SUDDEN OAK DEATH SYNDROME AND CONSISTENT PLANT PESTS PROTOCOLS

    Anyway, I want to switch now to plant pests. USDA regulates 
when there is a declared pest, plant pest, you regulate it. You 
also have in law that no state can have inconsistent 
regulations. Yet for a plant disease in California, for 
example, the sudden oak death syndrome, we have states that 
have imposed additional standards which has had an effect of 
excluding plants grown in California and Oregon from entering 
that state. And I wondered how you might be able to get 
involved in making sure that we have a consistent national 
standard that will work to essentially not allow as we have in 
these other states to sort of ratchet up interstate regulation 
wars so that we can move our product from California and Oregon 
and other states to states that are not allowing states with 
sudden oak death syndrome to transport their plants.
    Secretary Vilsack. Congressman, I am not sure I am going to 
give you a good answer to that question other than I think we 
are very interested in making sure that we are spending 
resources to provide states with the resources and the 
capacities and the university systems with the capacities, A, 
to prevent and/or to eradicate pests and to do it in a way that 
allows folks to have some confidence that we respect the impact 
it has on markets. So, for example, we are continuing to 
support the National Clean Plant Network that we are trying to 
set up, which is an effort to try to make sure that there is 
seed that is protected and available. We last year or just 
recently announced over 200 projects that could potentially be 
funded. We are working with universities, with state 
departments of agriculture in way of providing some 
consistency.
    And there are a number of surveys, a number of issues that 
are involved. This is a very complex set of issues. There is no 
question about it. And we are committed to trying to do what we 
can within our regulatory and marketing programs as well as our 
research programs.
    [The information follows:]

    APHIS is responsible for establishing Federal regulations on plant 
health issues including what treatments or other requirements are 
necessary to prevent the spread of plant pests. In this case, APHIS has 
been working to keep dialogue open between the two States and with 
other concerned States in the South on the issue and worked to explain 
the risk assessment data and other scientific rationale behind the 
Federal regulations.

    Mr. Farr. Well, you know, we are a big huge nursery state, 
and so is Oregon, and I think it is South Carolina that will 
not allow those plants in, and it is felt that that is your 
responsibility to make sure that states do not ratchet up 
additional standards which are not related to the pests that 
you are helping these states regulate, California and Oregon.
    Secretary Vilsack. There is a fine line obviously that we 
draw and that we have to respect the capacity of states to make 
decision for themselves. At the same time, we have to make sure 
that whatever decisions are being made do not unnecessarily, in 
an inappropriate way, negatively impact market opportunities.
    Mr. Farr. Yeah, I think that is all we are asking is if you 
have protocol for a treatment and the states have those 
treatments in place then sort of that fairness doctrine of 
other states should not say, well, then we alone are going to 
exclude products in that state.
    Secretary Vilsack. Well, this gets to the challenge of 
science and whether or not folks believe our protocols are 
strong enough and, if not, do we need to pay attention to that. 
If they are strong enough, we need to be able to make a 
convincing case to state ag commissioners and secretaries that 
they----
    Mr. Farr. Well, that is what we are asking.
    Secretary Vilsack. There are ongoing conversations with 
State Ag secretaries and commissioners on a monthly basis on a 
wide variety of issues. The Deputy is involved in a conference 
call every month where these issues are discussed.

                   SCHOOL LUNCH PROGRAM REIMBURSEMENT

    Mr. Farr. All right. Well, then we will follow up with the 
Deputy. You know, this school lunch program that we are talking 
about and whether there ought to be reimbursement, the one 
thing that I notice in schools is that we do not means test 
that kid when they get up on the morning and get on a school 
bus. They do not say does your family have a high income, so if 
it does you pay to get on this bus. If you are low income, you 
get on the bus free. When that child goes to school and walks 
into the library, they do not say, well, you have to pay to 
check out a book because your family is from a high income and 
you get the book free because you are low income. We do not 
means test for getting on a school bus. We do not means test 
for getting a library book.
    But then the child stands in line to be hungry, we means 
test them, and it is just having the discriminatory lines in 
schools is just awful and we have got to just change that. 
People tell me that if kids who are hungry do not want to admit 
that they are poor because they do not want to have to stand in 
the line with the poor kids. What a way to separate children at 
an early age and start putting this discriminatory factor on it 
just so that we can have free and reduced meals versus paid for 
meals.
    And it seems to me we know enough information to block 
grant these monies. The same census tracks, the same schools 
get the money every year, and why we have to go out and qualify 
every parent for every program in a very paper heavy process. I 
really appreciate your idea of using technology and electronics 
that if the parents qualify for the SNAP program, or for the 
WIC program, then the children automatically qualify for the 
School Lunch Program.
    Ms. DeLauro. Mr. Kingston.

               FOOD SAFETY RESEARCH AT CLEMSON UNIVERSITY

    Mr. Kingston. Thank you. Mr. Secretary, you may not be 
aware of this, and I do not know if the Chair knows it or not, 
but Clemson University is actually studying a package for any 
ag product but particularly meat and poultry that changes 
colors when the food product is no longer fresh. And that is 
something that--I do not know if they get USDA funding on it 
but it is to me a pretty exciting thing, emerging technology, 
and the passion that I know Rosa has for food safety and you 
share as well, but I wanted to mention that to you because that 
might be something somebody wants to look at and encourage. It 
is not on the market yet but they feel pretty strongly that it 
is marketable and that it is going to happen.

              EPA REGULATIONS ON GREENHOUSE GAS EMISSIONS

    Mr. Secretary, the farmers in my area are very concerned 
about EPA regulations on global warming, and it is very common 
that I hear from them on this. Have you studied what the EPA 
regulation will do to farmers, what is the down side of that to 
them?
    Secretary Vilsack. Well, I do not know that the regulations 
have--it depends on what regulation you are referring to.
    Mr. Kingston. Greenhouse gas emissions.
    Secretary Vilsack. I think it is difficult to assess in the 
absence of specific proposals coming from the EPA. I would say 
this. I think the EPA is cognizant of the importance of 
agriculture and the importance of making sure that steps that 
are taken are not unnecessarily negative to the ability of 
agriculture to continue to produce the food and fiber and fuel 
and feed that we depend on. In talking with Administrator 
Jackson, I know that there is a sensitivity. I was appreciative 
of the fact that she allowed EPA folks to go out and visit a 
farm in Iowa and an ethanol production facility in Iowa, which 
made a difference in terms of the RFS2 and the biofuels 
opportunity, so I think there is an openness for learning and 
openness for discussion.
    Candidly, I think there needs to be more of that 
conversation between the EPA and the farm community so that 
each knows what each is trying to do because I think there is 
potential for more agreement than disagreement. I have heard 
the same concerns you have heard, which is why I have 
encouraged that line of communication to be more open. I would 
also say that one of the reasons why I was supportive of 
efforts at setting up an offset program and system 
legislatively was to make sure that there were corresponding 
benefits. As we look at trying to deal with issues involving 
climate change, there should be corresponding benefits in my 
view from the studies that I have seen from the University of 
Tennessee, a corn grower study recently that major commodity 
groups could in fact potentially be positively impacted by the 
offset program, so it is a matter of how it is structured and 
how it is set up.

                  GREENHOUSE GAS EMISSIONS REGULATIONS

    It could be an economic opportunity for farmers if it is 
structured properly. I would also say that we are cognizant of 
emerging markets in water and habitat conservation and that is 
one of the reasons why we are setting up the Ecosystem Market 
Program that you established in the last Farm Bill. We 
recognize the need for verification and validation in those 
markets. So I think there is opportunity here. It is just a 
matter of structuring it properly.
    Mr. Kingston. Do you feel that USDA is sufficiently at the 
table with EPA in terms of discussions informally or formally?
    Secretary Vilsack. I would offer as an exhibit the RFS2.
    Mr. Kingston. Madam Chair, let me hold right now.

                CHINESE POULTRY IMPORTS AND FOOD SAFETY

    Ms. DeLauro. Secretary, we received earlier this week the 
first status report on Chinese chicken and what is required in 
the 2010 appropriations bill. I just want to make a couple 
comments because we are going to explore this issue again later 
in the year with a hearing on trade and trade and food safety. 
But for my colleagues, I think it is important to note that it 
seems to me anyway that USDA is aggressively encouraging the 
Chinese to seek equivalency determination for the slaughter 
operations, and if that is granted then they could send their 
own domestically raised poultry to the United States. So this 
is not sending U.S. or Canadian products to China, processing 
it, and sending it back here. This is bringing Chinese grown 
poultry products to the United States.
    So to my colleagues on both sides of the aisle here, I 
think we need to think about how this impacts poultry producers 
in their districts and their states and just nationally. It 
appears as if from the letters that I have looked at that China 
has so far refused, flatly refused, to provide information on 
their new food safety law to FSIS as they are required to do. 
Why? Because, this is my view, the equivalency process has 
become about trade and not food safety, and they are going to 
rely on market power to get equivalency without showing that 
their food is safe.

                       ILLEGAL IMPORTS FROM CHINA

    So again, as I said, this is an issue that we will explore 
later with a trade and food safety hearing. It is also 
important, I think, for my colleagues to know that products 
from countries without equivalencies are coming into the U.S. 
There have been six recalls, at least half of them involving 
China. I have pictures of the products here. These are products 
that are coming into the country illegally. And these are 
people with, as I say, without equivalency, half of which are 
coming from China. Back to the report. There are a number of 
actions that have been or will be shortly taken by USDA. There 
are a number of letters, five or more, with the Chinese 
government, meetings in China, meetings in Washington.
    It looks like in essence here we are seeking to give 
equivalency to China rather than China looking for equivalency 
to be able to get it. So I make that statement, and I am sure 
that you have disagreements with it. I have heard the answer in 
the past, but I am frankly troubled by what I see coming out of 
this. But I have a couple more questions. I will make that 
statement. But if you would like to say something in that 
regard, Mr. Secretary, please feel free to do so.
    Secretary Vilsack. Madam Chair, we understand our 
responsibility under the appropriations language that was 
approved, and we are making every concerted effort to make sure 
that we are following the letter and the intent of that 
direction. I think the intent is to ask the Chinese to 
establish and provide sufficient proof of their activities 
consistent with our law, and then once that is done we go to 
the next step, which is not necessarily approval. The next step 
is in-country visits to assure that there is in fact 
consistency and action with what the language--what the 
verbiage is in their rules and regulations. That would follow 
specific plants, inspection of specific plants. So there is 
quite a bit yet to be done. I do not know that I would 
characterize our actions in quite the same way you 
characterized them with respect.
    In addition, we are going to continue to look for ways in 
which we can beef up point of entry re-inspection efforts by 
FSIS and provide information from other countries that are 
complying with the Chinese so that they are aware of the fact 
that this is not asking them to do more or less than what we 
ask anyone else to do.

                LACK OF CHINESE FOOD SAFETY COOPERATION

    Ms. DeLauro. In your letter to me, and I will make this my 
last comment, and you are preparing a response. I understand 
that. But the letter from China which China states that it does 
not need to provide any additional information on its food 
safety.
    Secretary Vilsack. Well, that goes to the discussion we 
have been having with them on whether or not this constitutes 
going back in time or whether this is just an updating of 
things from the last time we corresponded. And, you know, we 
are continuing to have conversations with them. We are not 
going to go to the next step until this step has been 
satisfied. Of that you can be assured.

                       FOOD SAFETY INFRASTRUCTURE

    Ms. DeLauro. That is assurance. If I can, I want to talk 
about food safety in general. I have concerns. I would be less 
than honest with you about where we are on food safety. I look 
at FSIS recalls this year for E. coli and Salmonella, the 
amount of product recalled for E. coli contamination is more 
than four times that in all of 2009 and more than half of that 
in 2008. Salmonella, single recall this year is more than half 
that and six recalls in 2009. There were no recalls for 
Salmonella in 2008. Projected out to the end of the year, you 
can extrapolate that recalls for both pathogens would total 
nearly 55 million pounds.
    We seem to make progress and then we kind of fall back. I 
mentioned Huntington Meat before but we have now a criminal 
investigation because quoting USDA, and I quote, ``The 
investigation has uncovered evidence to show that the food 
safety records of the establishment cannot be relied upon to 
document compliance with the requirements.'' I strongly support 
HACCP. I do. But I think that we have gone too far in removing 
FSIS inspectors from the active role they had prior to HACCP, 
and we have not had oversight as to whether the company's HACCP 
plans are effective. This is a little bit like almost apples 
and oranges here, but it is like saying you can put a plan 
together.
    We are going to do that with animal identification, but 
then it is up to you as to what you do. It is almost as HACCP, 
you put the plan together and then it is up to you. We do not 
know if the plan is effective or not or we do not have 
jurisdiction about whether the plan is effective or not. So 
again for me it is too much reliance on industry self-policing 
and I think Huntington is the result. Do you believe we need to 
modernize HACCP?

                         FSIS HACCP REGULATIONS

    Secretary Vilsack. Yes. And I think we are proposing 
additional resources to make a significant step in that regard 
by expanding regulatory sampling and other needed efforts 
within HACCP. There is an additional $10 million in the budget 
requesting that. I think there are a number of the 
infrastructure of food safety that need to be enhanced.
    Ms. DeLauro. And I know with the Food Safety Working Group, 
one of the key recommendations was to focus on the need to give 
FDA and FSIS improved statutory authorities including the 
ability to access basic food safety records at facilities, the 
ability to establish performance standards to measure the 
implementation of proper food safety procedures, and mandatory 
recall authority. We are familiar with the legislation as it 
relates to FDA and it passed the House obviously, not yet in 
the Senate. But the bill in the House exempted FSIS from its 
provisions. What are we going to do with regard to the 
authorities for FSIS?
    Secretary Vilsack. One of the things that we are attempting 
to do is to provide a strategy that focuses on prevention, 
focuses on enhanced surveillance and risk assessment and 
focuses on recovery and recall. In all three areas, we are 
trying to take steps to improve our safety record. So, for 
example, we are proposing in this budget additional 
strengthening of our public health infrastructure that would 
allow us to identify trends and utilize data more effectively 
to figure out if we have got emerging problems. We are 
proposing additional acceleration of pathogen identification. 
We are proposing additional resources for research in the food 
safety area to allow us to get ahead of the pathogen curve as I 
said earlier.
    We are proposing a strengthening of our communication 
system so that the various agencies of government will 
communicate more effectively when there is a problem and we can 
respond more quickly when there is a problem. We are focusing 
on all 50 recommendations to the Food Safety Working Group that 
refer specifically to FSIS in an effort to try to implement 
those.

                      STATUTORY AUTHORITY FOR FSIS

    Ms. DeLauro. Well, I understand that and I applaud that. 
This was a recommendation of the Working Group. FSIS has been 
exempted. This is about statutory authority. And I for one do 
not understand why FSIS is exempted from this particularly, as 
I see, it comes out of the recommendation of a group that is 
moving this initiative forward. I would hope, and I hope that 
you are thinking about and talking about statutory authority 
for FSIS. And let me ask you this. Are you? It is kind of yes 
or no. Are we going to move to that with regard to FSIS?
    Secretary Vilsack. Madam Chair, I think before you move 
there you have to know precisely what that move entails, and I 
think you have to make sure that the regulatory structure is in 
place to be able to understand and appreciate the risks that 
are associated with that. I mean if you take a look----
    Ms. DeLauro. Mandatory recall, Mr. Secretary.
    Secretary Vilsack. Madam Chair, I would be happy to have a 
conversation with you about case law and about regulatory 
administrative procedures that could potentially open up 
significant challenges for us to do the job that you want us to 
do. That is what we are concerned about, and so we are focusing 
on strengthening significantly our capacities.
    Ms. DeLauro. I am going to take it that this recommendation 
of the Food Safety Working Group is not going to be 
implemented.
    Secretary Vilsack. I would not necessarily conclude that, 
Madam Chair. I would not necessarily conclude that.
    Ms. DeLauro. Mr. Farr.

       DISCRIMINATION SETTLEMENTS FOR WOMEN AND HISPANIC FARMERS

    Mr. Farr. Thank you, Madam Chair. I do not know if I had a 
chance to thank you for your incredible public service not only 
as a governor but coming to the Administration here in 
Washington. You have a lot of fans out in my district. Some 
even wanted to leave their jobs to work in the presidential 
campaign. There is a lot of respect for your work. It is 
delightful to have you here. One of the things that I wanted to 
just follow up on because you ended with a statement on the 
Pigford settlements in relation to the minority settlements for 
women and Hispanics. Do you agree that there has been some 
discrimination and that there is a class in these categories 
that should reach some settlement and should the settlement be 
as it was for black farmers, and how could that be resolved in 
a less arduous procedure?
    Secretary Vilsack. The opportunity to settle Pigford was 
the result of two things. One, you had in place by virtue of a 
previous settlement a process by which Pigford claimants could 
expeditiously have their claims adjudicated because you had a 
class action certification by the court and you had two tracks 
that they could go down. Because there were late filers who did 
not understand the system, that process again was reopened by 
Congress with a specific dollar amount, $100 million in the 
Farm Bill, which gave rise to the fact that that was not going 
to be adequate to deal with those numbers of late filer cases.
    So in place you had specific dollar amounts and you had a 
specific process, and you had class certification. That is not 
necessarily the case in some of these other cases. It is clear 
that there are people who feel that they have been 
discriminated against, and it is clear that we are dealing with 
not a few cases, a handful of cases, but potentially thousands 
of cases. So in Garcia, the Garcia case has not yet been 
certified. It has not been certified as a class action. There 
was a process and went through the court system, and I do not 
know all of the ramifications for why it was not certified, but 
I know it went as far as it can go. So, therefore, you do not 
have one single group of lawyers representing. You do not have 
a defined group of people that you are aware of precisely how 
many claimants there might be as you had a good sense in 
Pigford, and there is no dollar amount on the table.
    The same thing is somewhat true in Love and Keepseagle a 
little bit, which is a Native American case, is a little bit 
different because there is a little bit more definite--it is 
more defined, whatever that word is. So my counsel to those who 
are interested in getting this resolved is either establish a 
dollar amount or establish a process or both, which is what you 
had in Pigford because if you have a dollar amount then that--
--
    Mr. Farr. Does Congress need to do that?
    Secretary Vilsack. You have done it in the past. And if 
there is a dollar amount then the process will be created to--
--
    Mr. Farr. For settlement.
    Secretary Vilsack. Yeah, to reach that amount. If there is 
a process, the process then allows you to define the number of 
cases that are valid which in turn leads you to an amount so 
that you are in a position where you know you are not paying 
more or less than you ought to under the circumstances, and you 
get a process that is far more expeditious than the process 
that we have been undertaking for the last 15 or 20 years.

          LEGISLATION TO COMPENSATE WOMEN AND HISPANIC FARMERS

    Mr. Farr. So you are endorsing the Chairwoman's process?
    Secretary Vilsack. I am endorsing the Chairwoman's effort 
to try to get at a dollar amount or a process. Now I do not 
know whether the dollar amount is the right amount or not, and, 
frankly, I do not know anybody that really knows that because 
you do not know how many claims there are. But if you put a 
dollar amount on the table, you will find out whether that was 
too much or not enough, but without a dollar amount and without 
a process then what you have to have are plaintiff's lawyers in 
a room trying to settle a case and the problem with that, in 
some cases, is they may not represent all the people who have 
claims because you have no defined universe of claims. They are 
just whoever thinks they have been discriminated. That could be 
60,000 people. It could be 600,000 people. Give us a dollar 
amount or give us a process or both and we can get these 
matters resolved. Absent that, it just becomes having to try 
individual cases, and in Garcia's case you are talking about 
tens of thousands of cases.
    Ms. DeLauro. Mr. Farr, if I could just jump in here on 
this. The piece of legislation, Mr. Farr, that we have put 
together does both establish a process, a special master making 
the determination, and it does in fact have a dollar amount. 
The dollar amount is $4.6 billion, which is in the legislation. 
Both process and dollar amount are in the legislation.
    Secretary Vilsack. And I recognize that, Madam Chair. 
Again, I do not know that the $4.6 billion is the right number 
or the wrong number. I just know that you got to have a number 
or a process or both, which your legislation does.
    Ms. DeLauro. And trying to deal with full parity. We 
believe we can move, and obviously we need to deal with the 
Hispanic farmers and the Native American farmers, but on the 
women farmers, Congresswoman Eshoo and I have introduced this 
legislation which has a process and dollar amount.

                        CATFISH INSPECTIONS RULE

    Mr. Kingston. Mr. Secretary, our friends on the authorizing 
committee in the Farm Bill of '08 included catfish under USDA 
inspection guidelines, and I am not sure it was a great idea. 
As you know, it was really probably a trade move to keep 
Thailand or Vietnamese catfish from coming into America in full 
force. And there was some glitch in terms of what was a catfish 
and what was not a catfish. I remember there were two different 
kinds. I do not remember the type and the pronunciation even if 
I had it in front of me but what I do know is that USDA had 
till November '09 to promulgate the rules on it, and that has 
not happened even though there has been $15 million the budget 
each year to come up with those rules.
    Are you guys dragging on purpose on this or what is the 
delay? And I am not sure it might be a good thing to drag on 
because I know there is some real question about it.
    Secretary Vilsack. There has been no intent and no 
purposeful delay on the part of USDA. This is a complicated set 
of issues. There are actually 39 different varieties of catfish 
and it depends on what definition you use and what scientific 
definition or biological definition. It is a complicated set of 
issues.
    Mr. Kingston. Why do not you just tell me what the top ten 
are?
    Secretary Vilsack. I would be happy to provide that in 
writing. We have submitted a suggested set of rules and a 
structure to OMB and it is in the process of being reviewed by 
OMB, which we obviously do not have complete control over, but 
we have submitted what we believe is the appropriate way to 
proceed given what we think Congress' intent was from the 
language of the bill, as well as the colloquy which you 
yourself were engaged in, which I have read.
    Mr. Kingston. And I agree with you. It is a lot more 
complicated than our authorizing friends realized, and somebody 
said this is a great example of be careful what you wish for. 
Thank you.

                   FLORIDA RURAL DEVELOPMENT DIRECTOR

    Ms. DeLauro. I just have a final couple of questions. One 
is for Mr. Boyd, Mr. Secretary. He could not stay. And that is 
the State of Florida is still without a rural development 
director, and just wondering when the Administration plans to 
fill the position.
    Secretary Vilsack. We want to fill these positions as 
quickly as we possibly can. The process that we are utilizing 
is a fairly extensive and intensive process that unfortunately 
has caused us not to be able to do this as quickly as some 
would like, but our goal is to get these positions filled as 
quickly as possible. And we will reach out to Congressman Boyd 
with more specific information.
    Ms. DeLauro. That would be great because he mentioned also 
that the FSA administrator, that position was just very 
recently filled so they are feeling some stress there so that 
would be helpful.
    Secretary Vilsack. I understand.

  REGIONAL INNOVATION INITIATIVE AND HEALTHY FOOD FINANCING INITIATIVE

    Ms. DeLauro. I will tell him you will be in touch. Thank 
you. A question on the two initiatives that you are proposing, 
the Regional Innovation Initiative and the Healthy Food 
Financing Initiative. As I understand it, the Regional 
Innovation Initiative is to set aside 5 percent of funding for 
programs in Rural Development, the Agricultural Marketing 
Service, the Natural Resources Conservation Service and the 
Forest Service. The Healthy Food Financing Initiative is 10 
percent of funding from some of the same rural development and 
agricultural marketing programs. This means that many programs 
will have up to 15 percent set aside for programs such as 
community facilities, business, and agricultural marketing 
programs.
    In many instances, these programs are over-subscribed by 
communities in need and no real increases were proposed for 
most of the programs to help offset the set asides. So my 
concerns on the initiatives, and I appreciate what you are 
trying to do, is what measures are you going to put in place to 
determine the effectiveness of these programs, how will you 
evaluate the success of them? Why are setting aside funding for 
these Initiatives more important than the loans and grants made 
every day through these critical programs? Who is going to make 
a decision on who is eligible and what will be funded?
    Secretary Vilsack. This is a competitive process, so we 
will work through Rural Development to determine which regions 
are in a position with leadership and a strategic vision to be 
able to take full advantage of this. The purpose of this, 
frankly, again with all due respect to the efforts that have 
been underway for many, many decades to try to help these rural 
areas, candidly, Madam Chair, when you have a higher 
unemployment rate and you have a higher poverty rate and you 
have a per capita income that is in one study I saw $11,000 per 
capita less than urban and suburban areas, and you've got an 
aging population and you have fewer college educated folks, and 
fewer high school folks, educated folks in rural America, and 
you've got fewer young people in rural America, I would suggest 
that we need to take a look at trying to do something a little 
differently than we have done.
    And one way we can do that is by suggesting that it is not 
just about an individual community on its own trying to figure 
out this Rubik's Cube of trying to figure out economic 
opportunity. It is really about bringing communities together 
and creating enough critical mass that you actually create 
centers of economic activity and then surround those centers of 
economic activity with communities that can support the quality 
of life that people are looking for. And part of it is an 
analysis of what you do best in a community and in a region, 
and what with broadband, with energy title of the Farm Bill, 
with ecosystem markets, with our natural resources, tourism, 
hunting and fishing, and Know Your Farmer, Know Your Food, and 
local production and local consumption how we might be able to 
generate more economic activity than you had in the past.

             GENERATING ECONOMIC ACTIVITY IN RURAL AMERICA

    Now in order to do this, you need people that get this, and 
once you have those folks, you can show the rest of the country 
how you could be more effective with the resources that you 
have. Again, I am not necessarily being critical of the choices 
that were made in the past, but if you look at where resources 
have been invested, you are talking about relatively in many 
cases minimum wage. You are just slightly above minimum wage 
opportunities. When you invest tens of millions of dollars in 
convenience stores, for example, you are not necessarily 
creating a healthy place for someone to buy food nor are you 
creating an opportunity for real advancement or economic 
opportunity.
    You are saying, in essence, rural America is a great place 
to drive through, and if you build a hotel it is a great place 
to spend the night, but you may not want to locate there. And I 
would like to be able to reverse that. I would like to be able 
to show people that there is a real future in rural America. 
And so recognizing that there are limited resources, we are 
asking for permission to take a portion of those resources and 
basically show how this would work. On the Healthy Food 
Financing Initiative, here is the reality. If you do not have a 
grocery store in these rural communities and these urban 
centers, if you do not have access to a grocery store, you do 
not have access to fruits and vegetables and nutritious food. 
It is just that simple.
    And as we study this, we find that just about anybody can 
operate a grocery store at 95 percent success, but what you 
need to do is get to 100 percent success. We need to be able to 
have the flexibility and utilization of these tools to be able 
to figure out in each individual area where there is a food 
desert, why do you have a food desert. Is it lack of workers? 
Is it the cost of commercial real estate? Is it the security 
issues? Is it supply chain? We need to analyze that and then we 
need to be able to have the flexibility within our programs to 
be able to target resources to meet that need long enough for 
them to be able to get a critical mass of customers to support 
their operation the right way.
    Ms. DeLauro. I understand that with regard to the food 
initiative. One of my concerns is it is 5 percent then plus the 
10 percent. That is about $50 million. I am anxious to take a 
hard look at what happened in Pennsylvania because Pennsylvania 
has been working in this effort to see what it costs. I, quite 
frankly, am not sure, you know, if 35 or 50 can get you to 
where you want to go because I understand what you are saying 
about the food desert. I understand about the convenience 
stores where people pay more. But we are looking at serious 
sums of money when you are looking at developers going in and 
putting in a place. And that is under Treasury, I understand 
that, your grants and loans, et cetera. But I am going to take 
a very hard look at--actually I talked to my colleague, Allyson 
Schwartz, you know, and want to find out how Pennsylvania has 
worked, what was the mix of state, local, federal, et cetera 
that would make the program work. Working model, you know, hey, 
those are the kinds of efforts we need to try to be engaged in.
    I look at some of the programs where there are some 
serious--you are going to have to answer questions in terms of 
specifics, not just from me but from folks who are going to 
look at 14 percent on community facilities direct loans, 14 
percent on guaranteed loans, other areas. These are----
    Secretary Vilsack. What you want to be able to do is target 
those resources that actually result in leveraging resources 
and creating more economic activity.
    Ms. DeLauro. Sure. I want public-private partnerships for 
infrastructure. I am trying to get the Administration to buy 
this concept and so forth and put it under Treasury so we can 
borrow on the capital market, and we can build roads and 
bridges, get it regional, out of the way, et cetera. They are 
telling me that it would add to the deficit. So I understand 
the concept and I am for it, but I also want to see that we are 
looking at the dollar amounts that are going to be required to 
get us where we want to try to go is what I am saying.

                    ECONOMIC RURAL DEVELOPMENT PLANS

    Mr. Farr. I represent the coast and what the federal 
government did was a coastal zone management plan, and it 
required every community by states submitting these plans by 
local jurisdictions. We have never done that for rural America, 
rural economic by regions, because I agree with the Secretary. 
You cannot do this on a piecemeal. You got to really have a 
plan that includes it all. I am very keen on it because I think 
that the growth industry--I am Chair of the Tourism Caucus in 
Congress. I think the growth industry in tourism is rural 
tourism and it is ag tourism. I mean wine tasting is one of 
those. It has perfected it. But it does not have to be limited 
just to wine.
    And because you sell the rural culture when you get people 
out into the rural areas, but you have to make it convenient 
when you bring in that outside dollar. At the same time we are 
selling the rural character when we do farmers markets, and 
Marcy Kaptur on this Committee had been very active in getting 
those farmers markets in urbanized, inner city areas where 
there is no culture of shopping for fresh foods and vegetables. 
So I do believe you are right, but I think the Administration 
ought to really require these economic rural development plans 
for rural America and then base all of our agencies giving and 
grants based on a plan that is going to carry out all these 
things.
    Secretary Vilsack. I have been a small town mayor, 
Representative Farr. I have been a governor of a rural state. I 
have spent the last 25 years of my life trying to figure this 
out, and I am convinced that if we continue the current system 
of just focusing on individual communities making individual 
product applications, you are going to continue to have the 
same results you've got, and I think rural America deserves 
better.
    Ms. DeLauro. I believe they do, and I think we ought to 
deal with resources that get us to where we want to go. And I 
know this Committee is prepared to do that and we want to work 
with you on that and take a look at what, in fact, you think it 
is going to cost. And if that is the case, you have to think 
out of the box, and that is why I talk about infrastructure in 
the way that I do. That is the only way you get to growing the 
economy rather than just doing something for the moment, and 
that is what creates jobs, et cetera, for us for the future.
    I am going to submit for the record questions on the Texas 
food stamp program and the Indiana program, on the Iowa 
refinery assistance program, and Farm Service Agency IT, which 
has been an issue of great importance to all of us on this 
Committee over the years in looking at what additional kinds of 
funds would be needed for that and what the changes are in that 
process and where we are going. And with that, let me say thank 
you to you, Mr. Secretary. I know you only have 20 minutes 
between this and another hearing so our apologies for the 
delay. But I thank you very, very much for your candor and to 
the rest of the team. This hearing is concluded.

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                                          Thursday, April 22, 2010.

    DEPARTMENT OF AGRICULTURE, OFFICE OF INSPECTOR GENERAL OVERSIGHT

                                WITNESS

PHYLLIS K. FONG, INSPECTOR GENERAL, U.S. DEPARTMENT OF AGRICULTURE

                      Ms. DeLauro Opening Remarks

    Ms. DeLauro. The hearing is called to order. Good morning.
    First let me welcome our speaker today, Phyllis Fong, the 
Inspector General of the U.S. Department of Agriculture. As you 
all know, Ms. Fong is the senior official responsible for 
audits, evaluations, investigations, and law enforcement 
efforts relating to the USDA's programs and operations, and 
really the go-to official for dealing with questions of waste 
and fraud at the Agency.
    As such, today counts among more of the more important 
hearings held by this subcommittee. And I want to say ``thank 
you'' to you, Ms. Fong, for being with us today, and providing 
the testimony. And I am going to leave it to when you begin 
your testimony to introduce your fellow panelists.
    Overall, it seems like OIG is doing a very good job of 
monitoring the expansive program areas at the USDA.
    Since the start of Fiscal Year 2009, the USDA IG has issued 
nearly 80 audit reports on topics including the ARRA Oversight, 
the Economic Recovery Program Oversight, Food Safety, Organic 
Products, Animal Fighting, Public Safety, and the integrity of 
numerous payment and loan programs.
    We here on the Subcommittee rely heavily on these IG 
reports in an effort to evaluate the successes and the 
shortcomings of USDA programs.
    Some of your findings over the past year have been eye-
opening, to say the least. According to your reports, USDA is 
falling short in how it carries out a range of programs, 
including producer eligibility for financial support, the 
organic program, and perhaps most troubling, one of USDA's most 
solemn responsibilities, that's food safety.
    On this latter front, IG reports have questioned the 
integrity of our food safety enforcement, and even the very 
system we use to evaluate the success of food recall.
    In addition, some longstanding problems, such as residues 
of pesticides, heavy metals, and antibiotics in our meat 
continue to plague our public health and safety.
    And OIG has found that there is an across-the-board need to 
improve program administration, and a particular problem of 
coordination involving multi-agency initiatives.
    So I hope that today we can walk through some of your 
findings, talk about ways to ensure the OIG's valuable 
recommendations are integrated into USDA operations. 
Implementation of your recommendations is as important as the 
studies themselves. And the Department must work hard to ensure 
that any systemic problems afflicting the Department are 
addressed.
    At a time of fiscal constraint, when we are working 
overtime to ensure that every penny in this coming budget is 
well spent, the last thing we want is to have you take the time 
and the effort to produce these reports, and then to have your 
recommendations and findings collect dust on a shelf somewhere, 
while faulty programs continue.
    With that in mind, I wanted to mention the staffing 
situation at OIG. The Fiscal Year 2011 budget before us 
proposes an appropriation of $90.3 million for OIG, a 1.8 
percent increase, or $1.6 million increase over last year's 
level.
    While the number of full-time equivalents at OIG will 
remain steady at the estimated 2010 level of 600.
    After conducting some research, I discovered that over the 
past 30 years since OIG was established, the number of FTEs in 
the office has gone from 970 in 1980 to 550 in 2009, a 
reduction of 43 percent. That's a lot of manpower to lose. And 
I want to make sure, Ms. Fong, that you feel that OIG still has 
the staff and the resources in place to meet its critical 
obligations at the Agency.
    I say this, because, as you know, USDA's programs are not 
only very wide-ranging, but often extremely complex. And the 
OIG's office is fundamental to the Department's proper 
functioning.
    With that in mind, Ms. Fong, I appreciate your dedication 
to the long-term strength and integrity of the agencies that 
you review. As with previous years, I am sure that my 
colleagues and I will express great frustration at times today 
about problems at the Department.
    However, there is a recognition here that you are not the 
problem, and that you are testifying today simply to highlight 
the problem areas that exist.
    So we thank you for your great work. And now let me yield 
to my colleague from Louisiana. Rodney.

                     Mr. Alexander Opening Remarks

    Mr. Alexander. Thank you, Madam Chairman. Ms. Fong, as 
always, welcome. We're glad for you to be here today.
    This subcommittee greatly recognizes the important role 
that you and your staff provide us, and giving us information 
that we need and proper oversight in the investigations that 
you are conducting.
    One of the most important roles, of course, that you play 
is reviewing the existing laws and regulations, and making 
recommendations to Congress as to how we can have a more 
effective USDA.
    They're extremely important functions that you carry out, 
and we are anxiously waiting to hear your testimony today, and 
would like to ask some questions about what some of your 
requirements are, what some of the auditing work is that you're 
doing.
    So we look forward to hearing your testimony. Thank you.
    Ms. DeLauro. Thank you, Mr. Alexander. Ms. Fong, we would 
be delighted to hear your testimony, and understand that the 
full testimony will be part of the record. And you are welcome 
to summarize in any way you might want to.
    Thank you.
    Ms. Fong. Thank you.

                       Ms. Fong Opening Statement

    Good morning, Chairman DeLauro, Mr. Alexander, Mr. Hinchey. 
It's a pleasure for all of us to be here again to testify 
before you and to give you an oversight of what we are doing at 
OIG.
    And before I start, I'd like to introduce my colleagues 
here this morning.
    Starting on this side of the table, we have Jack Lebo, who 
is the Deputy Assistant IG for Management, and is our expert on 
budget questions and resource; Karen Ellis, who is the 
Assistant IG for Investigations, manages our Criminal 
Investigation Program; Gil Harden, our new Assistant IG for 
Audit, manages that program for us, the heart of what we do in 
many ways; and Bob Young, whom I think many of you know was 
formerly the Assistant IG for Audit, is now in a new capacity 
with us, in charge of our Recovery Act Oversight, which is a 
very big part of our portfolio these days.
    With that, as the Chairwoman recognized, we have submitted 
a full written statement. So I just want to offer a few 
comments on the areas that we have been really focused on in 
the last year to 18 months.
    Basically, the two areas that I would like to highlight for 
you today are the work that we are doing to oversee Recovery 
Act funds within USDA; and the work that we are doing in Food 
Safety, as you recognize, a very important priority for us.
    In the Recovery Act arena, as you all know, USDA received a 
tremendous amount of money in a number of programs to address 
the economic situation in the country. And as part of the 
oversight of those funds, the Subcommittee saw fit to give OIG 
about $22 million to provide oversight.
    And so we have engaged in a plan to look at every dollar in 
recovery funds that is coming into USDA. We have a plan to look 
at every program that is receiving recovery money, in order to 
make sure that the potential for fraud, waste, and abuse is 
minimized, and that those funds are being delivered 
effectively.
    I want to highlight for you that we have, as part of that 
oversight program, developed a new way to provide 
recommendations to the Department. Instead of waiting until the 
end of, say, a lengthy audit process to come up with a 
comprehensive list of issues, what we are doing now is going 
in, looking at internal control issues, looking at eligibility 
issues. And at the point where we find significant issues that 
we want to raise to management's attention, we do that in a 
real-time way, so that the Department can take action quickly 
and ensure that the money goes in the right direction.
    And I think we have been quite successful in issuing those. 
We issued about 30 of those what we call ``fast reports'' last 
year, and got very good response from the Department's program 
managers. They recognized the issues, and in many cases took 
action to straighten out or strengthen their internal controls.
    In a number of areas, of course, we still have concerns, 
and so we are continuing to do audit work to ensure that those 
programs are running effectively.
    The next area that of course we want to just spend a few 
minutes on is the area of food safety. And as you recognize, we 
have issued several very significant reports this past year.
    We looked at inspections at a beef processing facility in 
California, and what that meant for the inspection process that 
FSIS engages in.
    We looked at beef recall procedures. We looked at harmful 
residues in beef. And we did a comprehensive look at the 
organic program.
    And we will be very happy to talk about those audits in 
detail in response to your questions.
    And of course, in addition to doing work in these two areas 
of very important priority to all of us, we are doing, as we 
always do, the full panoply of work across the broad array of 
USDA programs, including nutrition programs, farm programs, 
rural development, and USDA's financial management and IT 
security activities.
    These are areas that we continue to devote a substantial 
amount of time to, because of their significance.
    In closing, I'd like to thank the Committee for the support 
that you all have shown to us, both in terms of encouraging us 
in our oversight, and in terms of providing resources to us. 
You have done more above and beyond the call of duty, in many 
ways, in terms of giving us oversight resources for the 
disaster programs that came out a few years ago, for the 
Recovery Act, and of course in our annual appropriations. And 
we do truly thank you for that support.
    I'd be happy to talk to you about our request.
    And with that short summary, we stand ready to address your 
questions.
    [The information follows:]

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                     FOOD SAFETY INSPECTION SERVICE

    Ms. DeLauro. Thank you very much. And I appreciate the 
summary. I don't know when we're going to have votes this 
morning, but I know they will come, because it's going to be an 
early departure, so we want to make sure we have the 
opportunity for a great conversation.
    Let me just start with regard to food safety and with FSIS. 
In the report you issued last September, you reviewed the 
oversight FSIS conducted on the recall of products by the meat 
company involved in a massive recall in 2008, the Hallmark 
Westland Company. Can you discuss your findings on this issue? 
It appears that FSIS made needless mistakes, reflecting a basic 
failure of management at the Agency.
    Ms. Fong. Yes. We did, as you know, an extensive audit of 
the Hallmark facility. We were called in to look at the pre-
slaughter activities at that plant, because there were very 
significant concerns about inhumane handling of the cattle. And 
we were concerned about whether those events were isolated, or 
systemic.
    And we went in there, we looked at it, and we found that 
there were some issues with respect to the Hallmark staff and 
whether or not they bypassed required inspection steps. And we 
found that, in fact, there were some deliberate actions on the 
part of Hallmark staff.
    Ms. DeLauro. There were some deliberate actions, did you 
say?
    Ms. Fong. That was one of our findings.
    Ms. DeLauro. Okay.
    Ms. Fong. I will also say we do have an ongoing criminal 
investigation into that, so we can't really talk much about the 
specifics on that.
    Ms. DeLauro. Mm-hmm. Mm-hmm.
    Ms. Fong. We also found that with respect to FSIS, that 
their in-plant staff, the people who are on site, did not fully 
carry out their responsibilities with respect to inspection 
procedures. They took some short cuts.
    There were some issues about whether or not there is 
sufficient supervisory oversight, span of control. Their use of 
information systems was perhaps not as good as it could have 
been to pinpoint problems that had been occurring over a 
history of time. The formal training program for the inspectors 
could use improvement.
    And we found basically that the sampling process for 
residues was also not followed, which then led to our 
subsequent residue audit.
    Ms. DeLauro. Mm-hmm.
    Ms. Fong. And as a result of that, Hallmark of course 
engaged in a significant recall. And we then followed up with 
an audit on that recall process, because we wanted to see if 
that was being handled appropriately, given some of the recall 
issues we had seen in prior years.
    And in effect, we found that while FSIS had actually taken 
steps to implement some of our prior recommendations, in that 
they had put into place a statistically-based sampling process, 
that the way it was put into effect in the Hallmark recall was 
not effectively done.
    And so we pointed out that, you know, they had issued 
recall notices to a large number of customers of Hallmark, and 
it turned out about 40 percent of them truly had not purchased 
the product. There was no way for them to substitute entities 
to be sampled. And so there were some real lessons to be 
learned from that process, which we summarized in our audit 
report.
    Ms. DeLauro. Let me just interrupt you for a second, 
because your report is pretty thorough on what you found.
    Some of the things that you just said, aren't those pretty 
much basic to, you know, proceeding? I mean, dealing with 
statistics, dealing with--you know--in a way that allows you to 
carry forth its mission of recall?
    I mean, are we looking at some very basic steps in this 
process, that are either overlooked, or there are shortcuts 
taken? Or what?
    Ms. Fong. Well, to talk about it in terms of the Hallmark 
situation, where the in-plant staff didn't follow the 
procedures that FSIS had set out, that should not occur.
    You know, if the Agency sets out in writing guidance for 
its staff: ``This is how you're going to do inspections; this 
is how you're going to sample; this is how you're going to . . 
.''--then the staff should be carrying out those procedures.
    Ms. DeLauro. I understand that. But I think you said that 
they sent the material out to places where they were not part--
they didn't receive any of the product, or in fact, they may 
have been out of business, as I read your report--and there was 
no way to make any kind of substitution from this master list, 
if you will.
    How would you characterize that procedure?
    Ms. Fong. Clearly, I believe that was the first recall that 
was handled under their statistical sampling process. It was a 
new process for FSIS.
    Yes, I think that experience very clearly indicated that 
that was a gap in the process that needed to be thought 
through. There needed to be steps; FSIS needs to have steps 
where if they're going to do a recall and they go down the 
master list, and they send out the notices, and there are a 
number of entities who haven't purchased the beef, there needs 
to be a way to substitute for the statistical sample, or it 
won't be valid.
    And I think that recall very clearly demonstrated that that 
was a step in the process that needs to be fixed. Yes.
    Ms. DeLauro. That sounds pretty basic to me, that if you 
can't find the places that are, you know, where the risk is, 
that once again flies in the face of risk-based inspection 
procedures.
    And you know, you can count to ten and then take eleven, 
and count--that's maybe a nice way to do it, but you know, it's 
a shot in the dark. And it just seems to me, after all the 
discussions we've had about this, this effort in recall, that 
we would be a little bit more sophisticated in our methodology 
of being able to identify the places, where we have to be.
    And so my time is expired. I would just say this too. You 
concluded that only 59 percent of the verifications were 
relevant to assessing Hallmark's recall; 41 percent of the 
companies FSIS contacted about Hallmark's recall, 83 of 203, 
were not useful for determining the recall's effectiveness.
    FSIS conducted effectiveness checks at 65 companies that 
did not purchase the recalled product, 12 that were not in the 
business of buying and selling meat, and five that were out of 
business.
    The result, which I think is critical in terms of the 
result, you concluded was: FSIS' conclusion that Hallmark's 
recall was successful is not statistically supportable.
    I think the record needs to show that: This process, this 
procedure in which they move at this--and if it's Hallmark or 
if it's somewhere else, it is not statistically supportable.
    And with that, Mr. Kingston, do you want to go? Or I will 
go to Mr. Alexander, who made the opening statement?
    Mr. Kingston. Let me go to Mr. Alexander.
    Ms. DeLauro. Okay.
    Mr. Kingston. And let me thank him also for opening this 
up.
    Ms. DeLauro. Okay. Great.
    Mr. Kingston. I was actually chairing another meeting, so I 
apologize for being late, Ms. Fong. It's always good to see you 
and your team.
    Ms. DeLauro. Mr. Alexander.

                         RISK MANAGEMENT AGENCY

    Mr. Alexander. Thank you, ma'am.
    A couple of questions. The risk management. We find that in 
your audit you did, you found as many as 22 errors. Or there 
were several errors, and you made 22 recommendations to correct 
some of those errors.
    But yet we found out that Risk Management has said ``No'' 
to over half of those recommendations that have been made. What 
do you do next?
    Ms. Fong. Okay. I understand your question to be talking 
about the Risk Management Agency and crop insurance, and the 
audit that we issued about a quality control system for AIPs. I 
just wanted to make sure that I'm talking about the same audit.
    Yes, that is an area where we have been involved for a 
number of years, as you know. We have issued several reports. 
We continue to be--frustrated may be a strong word, but it is 
clearly an entrenched issue that we keep coming back to.
    You know, we've tried to raise awareness through many of 
our reports, our management challenges, our semi-annual 
reports, our testimonies. We've testified several times in the 
last few years on these issues and these reports.
    I will say that we issued a number of recommendations, as 
you point out. Many times the agencies will reach agreement 
with us on our recommendations. We call it management decision. 
It means that they recognize the value of our recommendations, 
they agree to them, and they agree to take action.
    I will say that on that particular audit and on that 
particular issue, we have not had an easy time reaching 
decision, management agreement with RMA. There seems to be a 
conceptual or philosophical difference between our offices as 
to the best way forward.
    We continue to follow up on it. We will continue to do 
audits and issue recommendations.
    At this point, as you probably know, we do not have the 
authority to actually take the action ourselves. We are not 
authorized to run a program. And so we cannot say to RMA, ``You 
will do this.''
    What we have done is, of course, brought it to your 
attention, and to the attention of the Agriculture Committees 
on both sides. And we do talk with the leadership at the 
Department about our concerns on this.
    Mr. Kingston. Will the gentleman yield?
    Mr. Alexander. Sure.
    Mr. Kingston. Why don't you elevate that to the Secretary 
then?
    Ms. Fong. The Secretary actually has indicated a tremendous 
amount of interest in these issues. We have briefed the front 
office, the Deputy Secretary, the Secretary, on those reports. 
I believe that he has indicated to us that he is very concerned 
about this issue.
    And I think as we look at the development of the Crop 
Insurance Program and the renegotiation of the standard 
reinsurance agreement that's going on right now, we see that 
the Administration is proposing some measures to tighten up 
oversight of the program and to address the amount of 
compensation that the AIPs are getting.
    So I think that there is some movement forward on these 
issues.
    Ms. DeLauro. If the gentleman would further yield? Because 
I want to join my colleagues in this effort. And you have 
plenty of time if you have additional questions, Mr. Alexander.
    But because this is on my mind as well as Mr. Kingston's 
and Mr. Alexander's, as I looked at the Agency response, and 14 
of the 22 recommendations, RMA did not agree--now, you go 
through your whole audit report, laying out where the 
difficulties lie, what the problems are, where we're not in 
compliance, and then we have what they disagree with.
    They did not agree with our recommendation to develop a 
comprehensive, systematic, well-defined, integrated strategy 
for its compliance-related efforts; or our recommendations to 
conduct and document an overall risk assessment of program 
operations to identify major program vulnerabilities and focus 
and coordinate and prioritize resources on high-risk areas.
    This is, again, basic to whether or not this Program is 
functioning, and at what cost is it functioning, when you look 
at liability, going from $35 billion to $91 billion in four 
years?
    Now the Secretary--you know, there needs to be some real 
strength behind doing something about this. And that does go to 
the Secretary's level, and as well as to the authorizing 
committees, to deal with this issue as well.
    It may have been justified to go from 35 to 91; but we 
haven't got a clue as to why it went in that direction. And in 
agency that says some very basic issues, they don't concur. And 
therefore, will anything happen, Ms. Fong? Realistically, 
honestly. Will it change?
    Mr. Alexander. And quite honestly, during the last year and 
all the debate about financial meltdown--not making light of 
your response--but we've heard repeatedly from people in 
positions of leadership, like you're in, say ``We don't have 
the responsibility to do that.''
    Who does? That's what we, you know, we're very concerned 
about it. And----
    Ms. Fong. I think----
    Mr. Alexander. Go ahead.
    Ms. Fong. I didn't mean to interrupt you.
    Mr. Alexander. I'm sorry.
    Ms. Fong. I think we all share a sense of that we've been 
in this for the long haul. We've done a lot of work, all of us. 
We all have our roles to play in this process.
    I will say that where we think, in situations where there 
is an entrenched issue, the only way that progress is made, in 
my perspective, is when all of us who have a stake in it get 
into alignment on it, and we all recognize that we have a 
challenge, and we all work within our spheres of influence to 
move the ball forward.
    And crop insurance has been a very sensitive issue. I think 
there have been numerous attempts to look at it legislatively 
as well as from a management perspective. There have been 
numerous proposals in the last few years to amend the program. 
And I think there are some proposals on the table right now.
    Clearly, the industry has its own views on it, which may 
differ from the views of oversight people like GAO and the IG 
may differ from the views of the Administration, which seems to 
be very much wanting to address this issue.
    And so I think all of us are going to have to work at it to 
the best that we can.
    We will continue to do our part, which is to continue to go 
in there, document the issues that we see, the abuses, the 
management failures. We will continue to raise these issues in 
every forum that we can.
    And I will continue to talk to the Agency administrators 
and the Secretary. And if there's anything else that you see 
that I can do, I'm sure that you will ask me to do that.
    Mr. Alexander. Thank you.
    Ms. DeLauro. Thank you, Mr. Alexander.
    Mr. Hinchey.
    Mr. Hinchey. Thank you very much, Madam Chairman.
    Inspector General Fong, thank you very much. Thanks for 
what you've been talking about, and thanks for the answers you 
have given to the questions. And thanks for the job you do. 
It's very, very important.

                       NATIONAL ORGANICS PROGRAM

    One of the things that you mentioned was the organic foods, 
which is something that strikes me as very important, because a 
lot of people are attracted to it, because they think it's 
something very special and something very secure and safe.
    The organic farming movement in this country has just blown 
up, as I understand it, over the past ten years. It's just 
grown and grown and grown.
    So it's not always clear what constitutes an organic 
product, what really makes it up and how secure it is. A lot of 
people are talking about it. Every place you go to buy food, 
you see that sign up, you know, or the advertisement on various 
kinds of products.
    So I'm wondering just a couple of questions about this. Can 
you explain to us how the Department defines and certifies an 
organic product? And explain how the Department delegates 
authority to enforce standards to what seems to be private 
contractors. And what does it mean to be ``a certifying 
agent,'' working on behalf of the U.S. Department of 
Agriculture?
    And then just finally on this issue, in your opinion, does 
the Department effectively regulate, does it effectively 
regulate the organic food industry?
    Ms. Fong. Okay, well----
    Ms. DeLauro. Just for one second. I would just say this to 
Mr. Hinchey. I think everyone should have at his desk--we did a 
chart here on the findings from the National Organic Program. 
So if you have a----
    Mr. Hinchey. Very good. Thank you.
    Ms. DeLauro. Thank you.
    Ms. Fong. That's very helpful to me, too. Thank you.
    Yes, as you point out, the organic industry is clearly 
something that is at the forefront these days for health and 
safety reasons, as well as environmental reasons. And I'm going 
to invite my colleague, Gil, to address some of your questions.
    But I do want to say, up front, that we are, of course, 
very concerned. It's a new program for the USDA. There's new 
legislation on it. And we are very concerned with the 
effectiveness, because of how effectively the program is run, 
because so many people do rely on that certification that 
something is organic. And in fact, we want to make sure that 
that certification is good.
    So Gil, if you would like to address that?
    Mr. Harden. The heart of the matters that we reported on 
really reflect on the processes and where there were weaknesses 
and how they decide whether the certifying agents are good.
    I don't know that I can articulate right off the top of my 
head the exact process, but there is a process they have in 
place----
    Mr. Hinchey. Mm-hmm----
    Mr. Harden. That we did find weaknesses with.
    And the other part of your question that we still have to 
do work on, which we plan to do later this year, is part of 
what makes something organic is whether it's approved to be on 
what's referred to as--that's called the National List of 
Prohibited Substances--so it's the stuff that you can't use.
    And so we plan to do work later this year, which wasn't 
part of our current audit as to how the processes they use to 
move products on and off that list, that would allow farming 
operations or certifying agents to allow things to be used.
    Mr. Hinchey. Okay.
    Well, thanks very much. I think this is an important issue, 
and I appreciate your attention to it. And I appreciate this 
organic program here that we have.

                         DAIRY SUPPORT PROGRAMS

    In the brief time that I have, I wanted to ask you another 
brief question. It's about dairy farming. And I don't know if 
you're very focused on this. But it was something that was 
addressed in the comments that were being made.
    The situation here, well, we know that, you know, the dairy 
products, when you buy them in the stores, the price isn't 
going down. The price is going up, if anything. But the price 
of the products for dairy farmers has gone down.
    In fact, in New York the state dairy prices, the price per 
100-weight of milk in New York has dropped to $16.70 from more 
than $21 a year ago, which is more than a 20 percent decline.
    I signed a letter with a number of other people to 
Secretary Vilsack, and we signed it three weeks ago, urging him 
to take some of the same steps that he took last year, as well 
as provide assistance to the dairy products price support 
program.
    And the purpose of that, of course is to keep these farmers 
there, so that, you know, the variety of farming will continue, 
and the stabilization will continue.
    So to help stabilize market prices specifically for cheddar 
cheese and non-fat dried milk, those kinds of things are being 
paid attention to.
    So the question I have is: Has your office, do you in any 
way focus attention on this? Have you audited or reviewed the 
DLAP or the DPPSP program recently? Has anybody taken a look at 
that?
    Do you think they're effective in what they do? And will 
you commit to overseeing the Department's response to the 
current pricing crisis?
    Ms. Fong. I can tell you that during my tenure at OIG, I 
don't believe we have ever looked at that program. And if any 
of my colleagues recalls it, please speak up.
    I'm aware of the crisis of which you speak, and that there 
are some very significant issues going on right now.
    My sense is that that is a program that's run by AMS. Is 
that?
    Mr. Hinchey. Hmm, yes.
    Ms. Fong. And we actually have not looked at many of the 
industry kinds of programs. We'll probably get into the soybean 
issue later this year. But that would be the first, I think.
    But we would be very happy to talk with your staff----
    Mr. Hinchey. Okay----
    Ms. Fong. To get a little bit more information about your 
interest, and to see if there is anything there that we could 
initiate.
    Mr. Hinchey. Okay. And maybe you could follow up with a 
contact to Secretary Vilsack.
    Ms. Fong. Okay.
    Mr. Hinchey. Thanks very much.
    Ms. Fong. I'll mention to him that you raised that today.
    Ms. DeLauro. Mr. Kingston.
    Mr. Kingston. Thank you, Madam Chair.

                    FOOD NUTRITION SERVICE PROGRAMS

    Ms. Fong, there is a fairly high error rate in the SNAP and 
School Lunch Programs. Correct?
    Ms. Fong. Right.
    Mr. Kingston. How high do you think that is? Any estimate?
    Ms. Fong. Oh, you know, I don't have the precise number. I 
do know that it is on the high list for improper payments that 
is published government-wide. And because of that, FNS is 
required this year to analyze those rates, and to come up with 
an action plan to bring the improper payment rates down. And we 
will be involved in that process later this summer.
    Mr. Kingston. Okay. Then, why did they get a clean opinion?
    Ms. Fong. On the financial statement audits?
    Mr. Kingston. Yes.
    Ms. Fong. Right. Let me turn to one of my audit colleagues 
here, who might have a good insight into that.
    Mr. Harden. They do have a plan to address those improper 
payments, as part of their financial statements. But that 
doesn't exactly affect how it's presented on the financial 
statements themselves.
    It's a different type of program error.
    Mr. Kingston. Can you walk me through that? And the reason 
why I say that is--and my colleague, Mr. Farr, off the record 
made--you know, I really and truly feel that your job is to 
measure all programs blindly, without prejudice, whether 
they're, you know, a constituency group or not, that's 
involved, that's sensitive, that's great, or whatever.
    You know, four inches ought to be four inches. And if it 
wasn't, can you imagine the impact, you know, on industry? And 
I can tell where we've got the best example of this is Moody's 
and Standard & Poor's probably contributed to the financial 
meltdown, which led to TARP and all the panic on Wall Street, 
maybe just as much as anything else. And somehow they escaped 
scrutiny.
    You know, we should be bashing Moody's and Standard & 
Poor's, you know, a great bipartisan fashion in the wake of 
looking at what went wrong on TARP.
    And it would appear to me that we look to you for purity--
just pure objectivity rather than, you know, ``Okay, well this 
one is somebody likes this one, so we got to let him escape.''
    Mr. Harden. There's a difference----
    Mr. Kingston. And I also want to say this. I feel the same 
on any overpayments for farm programs. They should just all be 
measured with the same ruler, so to speak.
    Mr. Harden. Let me see if I can clarify for you what we're 
doing on the financial statements versus the actual improper 
payments themselves.
    When we're looking at the financial statements, we're 
looking at whether FNS allocated that money or obligated that 
money to the right places.
    Mr. Kingston. Mm-hmm.
    Mr. Harden. So they obligate, for instance, SNAP or School 
Lunch, through state agencies, so it's spent by states and 
overseen by state agencies throughout the country.
    When you're expressing an opinion on the financial 
statements, yes, FNS gave it to the right people.
    When you're talking about the improper payments, or where 
SNAP payments went to the wrong people, that's where you've got 
to get into the eligibility and what went on on the ground. 
That doesn't affect----
    Ms. DeLauro. Retailers----
    Mr. Harden. Retailers, or, you know, or the individuals. 
And how the state oversaw the money that USDA gave them, to 
make sure it went to the right people.
    So that's the distinction, and we look at audits of whether 
there's recipients or retailers spending the money wrong. And 
you can go after and try and get that money back. But that 
doesn't mean that when our FNS made the original obligation to 
state A, B, or C, that that was a wrong thing.
    Mr. Kingston. Okay. So the clean opinion rating would be 
simply did they allocate money to the right agencies?
    Mr. Harden. And their financial statements.
    Mr. Kingston. Financial statement oriented. Okay.
    Now the second part of it involving states overage or 
misuse of the program, or you know, whatever: Who grades that? 
If that's the water's edge--are you saying you don't go past 
the financial statement part?
    Mr. Harden. For the financial statement audit, we don't go 
past the financial statement. In other audits that we do, in 
looking at the various programs, we will look at the oversight 
throughout the program, where, take school lunch for an 
example. We haven't done in a while; but the way we would 
approach that is to look at how FNS oversaw the money that it 
gave to a state; how then that state has obligations as to how 
it gives it to a school district.
    As the school district, you know, make sure that the right 
kids are coded for the right type of lunch.
    Mr. Kingston. The financial statement you do annually by 
statute. When is the other audit done? What triggers that?
    Mr. Harden. Those are ones that come up in terms of 
priorities, in terms of how we do our annual planning. So I 
mean, those come up--like RMA, and we talk about the compliance 
activities that we saw as something as being a high priority to 
do.
    School lunch things haven't been of that level recently, 
but we----
    Mr. Kingston. How much was the overage in RMA, do you 
think?
    Mr. Harden. That number I don't have right off the top of 
my head.
    Mr. Kingston. Well, why don't you just guess?
    Mr. Harden. That I would have to get back to you on. I 
don't have that.
    Mr. Kingston. Well, would you say it was ten millions? Or 
hundreds of millions?
    Mr. Harden. We've----
    Mr. Kingston. You've got to know. And let me you tell you 
why. And I don't want you to get back to me on this. And I'm 
not picking on you.
    But you made a judgment decision to go further on them than 
on this other one; so certainly you have that information. 
There would not be any reason to get back to me. Correct?
    Ms. Fong? I mean, somebody in your Department made a 
decision that RMA was a higher priority. And I just want to 
know, how was that decision made? That's not an unusual 
question. I don't know why you couldn't answer it.
    And I'm not trying to pick on you, this is not personal. 
But certainly you have that information.
    Ms. Fong. I'm not sure that I understand what your 
question----
    Mr. Kingston. All right, here's the question.
    Ms. Fong. Okay.
    Mr. Kingston. You said that you do the financial statement 
audit on an annual basis just standard. And then you do--and 
I'm not sure what word we're looking for--but the program audit 
based on priorities.
    So I'm just saying, how did you figure out which one was a 
priority and which one wasn't?
    And I don't have any idea myself. One may be billions of 
dollars, and one might be hundreds of millions. But I am 
assuming you know, because you made the decision that one was a 
priority.
    Mr. Young. If I could, one of the reasons that the Food and 
Nutrition audits haven't been a higher priority is because when 
we do those reviews, we're making the same recommendations. The 
FNS officials agree with us. They simply say it's very hard to 
get their arms around those problems.
    We do the reviews, we come up with the same type things. 
They've tried various things over the years to reduce, you 
know, ineligible lunches, these types of things. Their success 
rate has not been good.
    So as far as trying to do the audits again, show them the 
same things, we have given priority to other new areas that we 
haven't looked at.
    Mr. Kingston. But you don't have an idea how big one 
problem is versus another? I mean, I understand what you're 
saying. From a pragmatic standpoint is ``Okay, we've been here, 
we've done what we can do on it. This other one might be a 
little bit more solvable, so we need to put our time in 
there.''
    Correct?
    Mr. Young. Correct. As far as the risk, the amount of 
money, there was--FNS has tried to come up with a figure as far 
as what the improper payments are. They've had a very difficult 
time.
    They did that sample roughly two years ago, that projected 
school lunch. And I don't have that figure here.
    Mr. Kingston. Well, I think it's $850 million.
    Mr. Young. Yes.
    Mr. Kingston. Because we brought it up to Secretary 
Vilsack----
    Ms. DeLauro. It's gone from $850 million to $241 million 
over the years. That is what is stated in your reports here, 
that over the years they have seriously made progress with 
this, because they have stayed on it, they focused on it. The 
error rate is 5 percent.
    There probably is no other program in which we have spent 
as much time looking at who is eligible, who isn't eligible, 
what retailers are skimming the process.
    And they're listed here as to who's been caught, what kind 
of jail sentences they had.
    Quite frankly, there hasn't been this level of scrutiny 
with a whole variety of federal programs that we have. 
Including--including ones that we mentioned here today and 
others that have not yet been mentioned.
    I mean, you've got data and facts. It's not 811. That was 
several years ago. It's been changed. You ought to know that, 
because Mr. Kingston asks a valid question. And we ought to be 
able to get valid answers to these questions.
    Mr. Kingston. In reclaiming my long-expired time----
    [Laughter.]
    Mr. Kingston. That's what we're really looking at, is just 
how to quantify it? You know, because when I say clean opinion, 
I'm thinking--you know, I understand now.
    But I'm just trying to figure out, well, you know, where 
are good, where are we bad? Where do we, as a committee, need 
to be focusing? And where do the authorizers need to be 
focusing?
    And so that's why that information is important.
    And again, getting back to that kind of the blind judgment 
of, you know, four inches is four inches, that's what we want 
is the objectivity and the purity, which--if there's one 
government agency that has a high opinion, it's the IG's 
office.
    I mean, I think everybody can agree on that. So that's why, 
you know, we just want the cold, hard data. And then, you know, 
we can look at it accordingly.
    And I thank the Chair for your indulgence.
    Ms. DeLauro. No. These things have to be gotten right, 
because there are implications on whatever program it is. We've 
got some good programs. They need to be strengthened. We need 
to look at them, and how, in fact, they can help to make a 
difference, whatever the constituency is.
    But let's get the right numbers, and let's have the 
accurate set of facts in order for us to be able to move 
forward.
    Otherwise, we move in ways that are detrimental, again, to 
whatever constituency comes under this jurisdiction.
    Mr. Bishop.

                           PEANUT PRICE DATA

    Mr. Bishop. Thank you very much. I will shift the subject 
for a few moments. In your testimony, Dr. Fong, you mentioned 
that an audit conducted by your staff last year suggested that 
the accuracy of financial assistance to peanut producers, which 
is primarily based on peanut price data supplied by the 
industry, is not deemed by your audit to be reliable market 
data. I have several questions I would like to ask regarding 
that.
    You referenced that peanut shell is voluntarily provided 
price information. My first question is, do you have any 
evidence that the information that they have been providing to 
the National Agricultural Statistics Service is inaccurate or 
fraudulent? And if not, why would we be assured that a new 
regulation or law would make any significant change to the 
price data that is available today?
    The second question is, under our current trade agreements, 
our price data is determined by a formula that is established 
by the ITC, the International Trade Commission. For the 2002 
and the 2008 Farm Bill language, both encouraged USDA to 
consider the world market price when determining peanut prices. 
The peanut industry is living under two sets of pricing 
formulas. Why can't USDA use a formula that is similar to the 
ITC as opposed to NASS? We changed the program from a supply 
management program to a market oriented program. And Congress 
wanted to see more peanut exports, yet USDA doesn't take world 
market peanut prices into consideration when it establishes the 
formula.
    And the third question, why do you argue for mandatory 
price transparency but refuse to discuss the formula or the 
black box for determining the USDA posted price each week? Our 
producers don't believe that the formula has sufficient weight 
from the world market based prices for peanuts, but don't have 
any way of verifying what weight is given to it. And so, we 
would like there to be a little bit more transparency and would 
like for you to explain to us why you are not recommending 
that.
    Ms. Fong. Let me make a few comments on those and then I 
will ask my colleagues if they would like to also comment. On 
the peanut data issue, your first question was whether we had 
found that there was inaccurate or fraudulent data at some 
point in the process. And the reason we got into this audit was 
because a year or two ago there was a situation where I believe 
there was some concern about whether or not there was 
inaccurate data. And we looked into it--our inspection group at 
that time looked into it and found that there had been 
inadvertently reported inaccurate data which resulted in the 
department and the reporting entities having to go back and 
recreate, reconstruct, and fix that problem.
    So we at that point said, how did this happen? How can we 
work so that it doesn't happen again, which is why we did the 
audit. And as you mention, we concluded that because the data 
is based on voluntary compliance and it is not verified by 
NASS, that we can't be assured that the data is accurate and we 
feel very strongly that because of the potential implications 
in terms of cost--you know, if you have a penny differential 
here or there over the course of a year, it could have a 33 
million dollar effect--that it was essential that good reliable 
data be collected, and that is why we made that recommendation.
    Now, we did not look, as far as I know, at the ITC trade 
agreement process and the use of the ITC formula. I think that 
is a really interesting thought. We haven't had a chance to 
assess that, and I think that is something that we should take 
a look at to see if that would be a good alternative. I am sure 
NASS is thinking about that already, and we would be happy to 
talk with your staff further to see if there is anything 
further that we can do. But that had not been on our radar in 
terms of our recommendations.
    Mr. Bishop. We have had through my office and through the 
peanut industry have had a significant amount of correspondence 
with the department over the years about the peanut price 
setting process. And this black box which has a magical formula 
in there that nobody knows but the people inside of USDA, also 
there is no predictability, there is no sunshine if you will, 
that will allow people in the industry to have any idea what 
you are basing that on except a general conclusion of your 
statements--I say not you, but the department--general 
conclusion of your statements. And we have been trying to get 
some identifiable criteria that could be looked at objectively 
by everybody as opposed to just having to wonder what the genie 
was going to come up with. So the sooner you could address 
that, I think the happier all of us would be. And of course 
the--I think it would assist you and well, assist the 
department in assuring accurate payments and reliable price 
data.
    Ms. DeLauro. Thank you. Mr. Alexander.

                  CONSERVATION STEWARDSHIP PROGRAM----

    Mr. Alexander. Thank you, ma'am. Touching on something Mr. 
Kingston was talking about, the survey can be clean and still 
smell badly. Now let's talk about the conservation program, the 
conservation security program, whatever. One might find it hard 
to believe that a Member of Congress that represents district 
that is heavily dependent on farming would be somewhat critical 
of the program. It just seemed to me like it is a way for the 
Federal Government to pay men and women to not to farm on land 
that might not be suitable to farm on to begin with.
    Now the conservation program, it scheduled a billion dollar 
budget for 2011. And we are told that half of the contracts 
that you have surveyed were deemed to be going to people that 
didn't qualify for those contracts. Now, we don't know how many 
you surveyed. Did you survey all of them? Or if one is told 
that half that you surveyed were going to illegitimate people 
then we have to assume that all the surveys, if you surveyed 
all of them, then half of them would be abused. That is a lot 
of money. What are we doing to recover that?
    Ms. Fong. Well, to just address your initial comments about 
the survey and what the 50 percent means, when we do these 
reviews and surveys it is not possible for us to look at every 
single recipient, so we structure a statistical sampling which 
means that if we look at a certain number and we get a result, 
we can be confident that it would be projected to the full 
portfolio that statistics will hold. So that is what we did for 
the CSP program. We looked at 75 contracts; we used a 
statistician to pull the right number and the right range. And 
of that 75, 38 it turns out went to unqualified recipients, 
which is a fairly high percentage, very high percentage. And I 
will say to you that I do know that the Secretary is very 
concerned about that statistic and is working to implement some 
corrective actions within that program.
    Now, your next question about what can be done to get the 
money back I think is a very interesting question, a very good 
question. If generally speaking, if somebody is ineligible to 
participate in a program and they provide inaccurate or false 
information, they should not be allowed to retain that benefit. 
And there are, different, perhaps ways that the department 
could consider going after that in terms of possibly civil 
false claims, actions, or actions on the contract itself. And I 
would think that NRCS should be talking to the General 
Counsel's Office to see if there are appropriate ways to go 
after that. Certainly, if there is any indication of criminal 
wrongdoing, we would anticipate that those cases would be 
referred to us to look into.
    Mr. Alexander. I don't see how one could even question 
criminal doings when we are told that--and I think 38 is a lot 
more than half of 75--but, we have people we know of that are 
in jail today for abusing Medicaid and Medicare. How many are 
in jail today for abusing this system? I mean if we are told 
that there is a billion dollar budget, over half of that is 
going to the people that don't deserve it. And if we are 
somewhat non supportive of the entire program to begin with, 
then that really makes you sick. And what I would like to ask 
is, if you can identify some names of people or businesses that 
have been charged with criminal activity--and I certainly think 
this is stealing. If outside people are charged, do we ever 
consider filing charges against people on the inside? I mean 
checks have to be written, and if they are going to people that 
don't deserve those checks, then do we ever question those 
writing the checks?
    Ms. Fong. One of my colleagues has advised me that we did 
in this situation, where we did the audit and found the number 
of people that provided false information, we contacted the 
prosecutors in a number of areas and asked them to consider a 
prosecution but we were--it was declined, the prosecutors 
declined. And that could be for any number of reasons. It could 
have been the dollar thresholds weren't high enough, it could 
have been any--it could have been a priority setting process. 
And so what that tells us is that in those cases, criminal 
investigation is not an open avenue but there may be some other 
avenues that the department----
    Mr. Alexander. When you say prosecutors, I'm sorry, are we 
talking local district attorneys or--?
    Ms. Fong. It would have been the federal Department of 
Justice. But you know, to get to your other question, whenever 
we do audit and investigative work and it appears that there 
may be inappropriate conduct by department employees, we do 
follow up on that. We do have a number of employee integrity 
cases going on at any time, and we are not hesitant to pursue 
wrongdoing either within the department or outside the 
department where we see that there may be evidence of that.
    Mr. Alexander. The point being Madam Chairman, if you would 
indulge me, I have heard stories of people in Louisiana that 
bought property paying for that property with conservation 
money, no intentions ever to farm on that. And that just goes 
against the grain for me. I don't like that. Thank you.
    Ms. DeLauro. I just would one quick question and very 
briefly because I am somewhat out of line with just following 
up here. But my colleague is absolutely right. Who has the 
authority to get this money back? Who?
    Mr. Alexander. We need to file charges against some 
prosecutor for----
    Ms. DeLauro. Who is it within the federal jurisdiction 
here? We have information about improper payments, 38 out of 
75, we must have identified whoever it was that got these funds 
improperly. Who then moves to getting the money back? Where 
does it go? You won't cover it, you don't have the authority to 
get the money. Who has the authority?
    Ms. Fong. In the first instance it would be the program 
manager who once we tell them you have some ineligible 
participants and this is the reason why we say that, they then 
can take that information and they should be talking with the 
General Counsel's Office to determine what avenues are 
available----
    Ms. DeLauro. So the department USDA then goes to the 
General Counsel's Office?
    Ms. Fong. The program officials at NRCS should be talking 
with the General Counsel to see----
    Ms. DeLauro. The White House general counsel?
    Ms. Fong. No, no. USDA----
    Ms. DeLauro. USDA's general counsel.
    Ms. Fong. To see what legitimate options are available to 
pursue this.
    Mr. Kingston. Can I jump in on this? I don't get it. I mean 
is the government just too big that we can't fill in the 
potholes anymore in the roads, and this is just one of these 
potholes that we just shrug and say it should be done down the 
hall, not us?
    Ms. DeLauro. Close to doing business. I mean I don't 
understand.
    Mr. Farr. Well, we make the law.
    Mr. Kingston. Well, the law is made though.
    Mr. Young. That same question. I raised that question with 
the administrator as far as going back and collecting money. 
One of the problems that they are having and the agency is 
trying to take action, the problem they have is that program 
was extremely complex. I am not saying I agree with this, I am 
just saying what we were told. That the program was one of the 
more complex programs----
    Ms. DeLauro. Yeah, but you figured it out as if there was 
an improper payment. You figured out the complexity of it, you 
got to the answer. Their job now is to make a justification.
    Mr. Young. Well, the problem is, what they are saying is to 
go back and collect it as far as going the legal route because 
of the complexities of the program, it makes it very difficult 
to do that. Now that is the reason that we were given for not 
moving out. So that is----
    Ms. DeLauro. We have some fundamental issues here to really 
try to deal with here. Mr. Farr--oh, I am sorry, was it Ms. 
Kaptur? I am sorry.

                      USDA LOCAL FOOD PROCUREMENT

    Ms. Kaptur. Thank you, Madam Chair. Welcome. Thank you for 
the work that you do. I am very interested in the Inspector 
General's Office and its ability to provide insight on how USDA 
programs are actually operating. My particular focus this 
morning is really a question once I explain what I am 
interested in, and whether you can provide any insight into 
this.
    I am very interested in how USDA programs overall benefit 
local farmers. And I am wondering how a measure could be 
developed by county looking at dollar inflows into those 
counties from USDA, and to what extent those dollar inflows 
help local agricultural, a local community agriculture. Let me 
give you an example. In the Supplemental Nutrition Assistance 
Program, if one could measure all the dollars coming into given 
counties, and the counties I am more interested in are the 10 
poorest urban areas in the country, I would like to know--as a 
start I am interested in those; I represent one of those--how 
those programs benefit local farming. So for example, if the 
local school system is buying beef or vegetables, who actually 
redeems those SNAP coupons? What are the mechanisms that exist 
in those places? Which companies benefit? Which local farmers 
benefit? Do you have the ability to develop a mechanism to do 
that?
    If I take another USDA program, the Seniors Farmers' Market 
Coupon Program, I know that one works for local agriculture 
because I have seen it work. So local people benefit from local 
producers. The WIC Program I am not sure about. I don't really 
know--I know the WIC Farmers' Market Coupon Program functions 
at some level in my area, but I don't know how much. I go to 
the store in the winter time in my region, which is a 
greenhouse capital for our whole part of the country, and I see 
peppers on the shelf that are local supermarkets from foreign 
countries. But I don't see anything from our local producers 
who can produce under glass all year. And I am saying, what is 
going on here?
    So I know you seek wrongdoers and you have a heavy focus 
there and we need you there, but I am wondering if you could 
provide us any insight into measuring the impact of USDA 
programs across a variety of categories, and its connect to 
local community agriculture. Do you think about that? Do you 
have a way of doing that or providing us with information? Then 
I can make a decision, oh legally up here what can I do and the 
law to help local agriculture first?
    Rather than providing more money for foreign inspections, 
which I am all for when I look at the amount of fruits and 
vegetables coming in here from other countries, and you know so 
much of this isn't really tested. Our farmers, we know where 
the peppers come from; we can track it right back to where it 
has grown. So I am very interested in how effective USDA is in 
connecting to local agriculture. Could you comment on that, 
please?
    Ms. Fong. Let me offer some comments and then I will ask my 
colleagues if they would like to comment also. That is a really 
interesting question, and you are right that we haven't really 
focused on that. And I will say that in terms of teasing it 
apart, what we would need to be able to do is to have some good 
information systems, data systems, that can track recipients of 
each of the programs and dollar level, so that we really know 
where the money is flowing, so that we could then extract that 
money, that information and do the kind of analysis you are 
talking about.
    I will tell you, I don't know if USDA agencies have that 
capacity currently. I just don't know. In terms of an analogy, 
when we look at the recovery money--as you might know, the 
Recovery Act set up a board to develop a website called 
recovery.gov, which is intended and it is a break through 
website that is supposed to be able to track every dollar 
recovery money across the government from every program down 
through the federal departments through the state and local 
agencies to the recipients and sub recipients down to the local 
person on your neighborhood block who actually gets the 
contract, the grant, or whatever it is.
    And that has taken quite a bit of time to actually design 
and get it up, but it is a ground breaking website, and it has 
actually been successful. So for example, if I get on that 
website and I plug in my zip code, I can see you know, within a 
three block radius who in my neighborhood got money from which 
department for which program, and how much it was. The reason I 
mention this is because I think that is going to be the wave of 
the future for government agencies and information technology. 
Now that we know that technology can be used to do that, even 
though it is an expensive and time-consuming process, my guess 
is that we will start seeing these kinds of websites develop 
across federal agencies.
    And at some point, you know, I would hope that USDA would 
have that capacity as well so that we would be able to track 
every dollar appropriated and every program down to the 
recipient at the grassroots level, and be able to do that kind 
of analysis. And that would of course be in the public's 
interest as well so they can see where their money is going and 
who is getting it and for what purposes. But in terms of where 
we are today, I am not sure that we are there yet.
    Ms. Kaptur. With your power at USDA, I would really 
challenge you to consider some pilot counties, and to think 
about your programs and their impact on local agriculture. And 
though I don't have the authority to represent the city of 
Detroit, I go there frequently and it is a place of great need. 
I see this giant farmer's market downtown and I see lots of 
local possibilities there; that is a town with no supermarkets 
in the city. And it is very important for us to understand 
where the dollars flow now, and we can do urban agriculture in 
Detroit; it's being done in some instances already. I have met 
the Vietnamese woman selling snow peas and so forth.
    We need to use USDA's power to help local people and local 
farms in those regions succeed. So I would--Ma'am I don't know 
if it is within my purview, but to ask if they could construct 
some type of prototype analysis for--take the top 10 poorest, 
however you want to measure it, top five--and come back to us 
with how USDA's programs actually link to local agriculture and 
support the development of local agriculture.
    Ms. DeLauro. Why don't we talk about that and what kind of 
request we want to try to make. Mr. Farr.

                       SCHOOL NUTRITION PROGRAMS

    Mr. Farr. Thank you, Madam Chair. I really appreciate this 
report. I think it is succinct and--I appreciate your stating 
it in goals, and one of them is management improvement. The 
question I have really relates to your authority to essentially 
do perhaps reinstatement or restatement of the law. I am very 
concerned and Jack Kingston brought it up about--although we 
have different view points on it--on auditing children in the 
nutrition program. I just kidded him that some people have more 
interest in auditing Sesame Street than Wall Street.
    But the concern I have is that we need to really make food 
nutrition in our schools a high priority in our healthcare 
bill, the wellness aspect certainly a goal of the First Lady 
and the President. Yet if you look at the program, and to do 
that you are going to need more money, and we are at a zero sum 
game, and what I find is that the administration of the 
nutrition program is so costly. We spend more money on auditing 
and administration than we do on food, because we don't want to 
feed the kid who may have too much money in--his family may 
have too much money--give them a free meal. You know, we are 
talking about cents; dollars and cents, not billions of 
dollars. If the wrong person gets fed I think the reduced meal 
cost is 40 cents and for a full meal it is about $2.50.
    So the question really goes, and does your--looking at this 
law because you are responsible for auditing and seeing whether 
it is being carried out--you also make recommendations as to 
how the law can be streamlined and you know, for nutrition 
programs we have one for every meal. We have administration for 
each. Breakfast is a different administration than a snack, is 
a different administration than a lunch, is a different 
administration than an after school program, different 
administration than the WIC Program, different administration 
from other poverty programs, and yet it all may affect the same 
child.
    I mean there is incredible bureaucracy here that needs to 
be tackled, and that has not been done by any Administration. 
And it seems to me that the people who can understand that are 
the people who have to get down and do the sort of auditing. 
There must be some times where you say this is--we have just 
created kind of a dumb-dumb process here. And in that do you 
feed back to Congress? Is there like, hey we ought to really--
we ought to look at this different. We ought to find a better 
way of measuring cost effectiveness.
    Ms. Fong. I think you raise a really interesting point 
about the many food programs that exist in the government. It 
is not something I think we ourselves have focused on in terms 
of the duplicate, potentially duplicative administrative costs 
for each of the programs. But I think we just heard that GAO 
issued a report last week on many--I think they mentioned that 
there are 20 or 30, 40 food programs in the government, and 
that there may be some potential benefits to be gained by 
considering some--consolidation.
    Mr. Farr. Consolidation. Oh, I totally agree.
    Ms. Fong. And I have not yet had a chance to read the 
report, but I am very interested in that whole topic. We 
certainly need to take a look at it from our perspective which 
we haven't done yet.
    Mr. Farr. But do you do this--my first job was auditing in 
a legislative analyst's office in Sacramento, California. And 
what I found out in auditing school programs, categorical 
school programs, and the legislature essentially gave this 
mandate to go out and find out which works and which doesn't, 
and then come back and tell us what we ought to eliminate.
    Now, what we found was that the way the programs were 
designed and the measurement tools they had didn't relate to be 
able to relate to outcomes. It really got back to legislature. 
You have got to rethink and redesign this program in order to 
get the outcomes that you really want to have. You know, that 
is not what they wanted to hear. They just wanted the black and 
white, good and bad. And you would never be able to solve the 
goals without changing the ask languages. And it seems to me 
that is one of the things I have noticed in Congress, we never 
come back to people that are involved in the trenches. There 
must be a lot of people out there administrating laws that we 
created. It would just say, where did they come up with this 
one? Because it just doesn't make sense. And how do we get that 
feedback? Is it your responsibility or your authority, or is 
that the audit--? I mean, I don't know.
    Ms. Fong. That is something that we do view within our 
purview, and we do make recommendations where we think 
legislative change is necessary, after we do an audit and we 
find whatever we find.
    If we think the cause of the problem is that the 
legislation is not clear or perhaps is not what it should be, 
then we will come back and say we think you really need to 
reconsider a definition on this or put some controls on that.
    One of the examples that we were talking about earlier this 
morning was the peanut, the collection of data on that. The 
legislation does not require NASS to verify data. It does not 
require producers to give the data. It is a purely voluntary 
program.
    We did make a recommendation that we believe NASS should be 
given statutory authority to verify that data, and that it 
should not be voluntary.
    That is one example of where if we identified it as a 
legislative issue, we will bring it forth.
    Whether Congress is able to then take that issue and run 
with it, it is kind of out of our hands at that point.
    Mr. Farr. I understand that. For those of us who are 
interested, I am particularly interested in how to clean up the 
nutrition program so we get a better bang for our buck.
    My argument is look, we do not measure kids that get on the 
bus as to their financial well-being or when they check out a 
library book, but if you go in to get a meal, all of a sudden, 
your parents have to prove they are poor for you to be able to 
eat.
    The people you are talking about, proving how they are 
poor, they do not know how to do that. They are poor and they 
do not know how to do things like that.
    It is an awkward system. You wonder whether the 
requirements equal the costs, what the value of the enforcement 
is, when the outcome is to try to get kids to have nutritious 
meals, and we also have to change what we are feeding kids in 
schools.
    Thank you, Madam Chair.
    Ms. DeLauro. Mr. Kingston.
    Mr. Kingston. Thank you, Madam Chair.

                    CONSERVATION STEWARDSHIP PROGRAM

    Ms. Fong, I want to go back. I do not know if I should ask 
Mr. Young or Mr. Harden these questions. It may lend itself 
better to the record in this case, a followup, but I would like 
it to be timely.
    I would like to know on the conservation stewardship 
program, CSP, which Mr. Alexander was talking about, what is 
the trend, if 50 percent of this is going to ineligible people, 
what was the trend?
    You have been auditing them for many years; correct?
    Mr. Young. Yes.
    Mr. Kingston. We are up to 50 percent. Is that going down? 
Is that coming up? How long has that trend line been tracked 
going back five years, going back ten or whatever?
    When did we stop worrying about it? If we are not worrying 
about it, does that correlate with the trend line?
    I think the next question is something that the Chairwoman 
and I think the whole Committee--who is next? We need a 
schematic as to where the breakdown is. You are reporting this 
information to somebody within the agency and there seems to be 
you do not know, it is important, but I have other things.
    I understand that. Up here, you do have a full load every 
day. You go out, audit it, you report to Congress. Who do you 
report to in the USDA and what do they do about it? I just want 
to know that ladder.
    I would like to have kind of a schematic, a flow chart, but 
more importantly, I would like--I hope the Chairwoman does 
this--a report on whose desk is this sitting on. I would like 
to know that not just for CSP but everything else.
    My other question is in terms of the farm payment programs, 
do you know what the error rate is in that program, in farm 
payments, just in general? I know there is an error rate in 
that. Do you know offhand?
    Mr. Young. There is a variety of farm programs.
    Mr. Kingston. There are some payment limitations that have 
caused some problems and then just eligibility. I would like to 
know that. It would appear that if we are not going to do 
anything with this information, then you are going to continue 
to have a 50 percent error rate.
    One other question, which you may know right now on CSP, of 
that 50 percent, how much of it is a mistake and how much of it 
is fraud?
    Mr. Young. We have no estimates on how much is actual 
fraud. They are still working on trying to collect that money. 
It is not something they have given up on.
    That was an unique program. The error rate we found there 
was substantially higher than some of the error rates we found 
in other audits that we have done. That program was not in 
existence for a long period of time.
    It varies by program and with the Improper Payment Act, one 
of the responsibilities of the agency managers is to ascertain 
what their error rate is or what their improper payments are.
    Mr. Kingston. Do you have legislative recommendations on 
it?
    Mr. Young. On CSP?
    Mr. Harden. The program itself changed with the 2008 farm 
bill. It went from the conservation security program to the 
conservation stewardship program. What NRCS has said to us is a 
lot of the fixes or the recommendations that we had for the CSP 
will help them better put the next program in place.
    Mr. Kingston. It just would appear to me that on a program 
like that, if you have a 50 percent error, maybe 50 percent 
fraud, maybe 50 percent incompetency, whatever the reason, it 
would almost be to the level that the Secretary would go back 
to us and say you just need to kill this program for now or you 
greatly need to trim it until we can reshuffle and try to work 
this thing out.
    You are saying there are some legislative recommendations, 
but since it is a relatively new program, they are still 
finding their way?
    Mr. Harden. I do not believe we made legislative 
recommendations in that report.
    Mr. Kingston. You did on the peanut program.
    Mr. Harden. Right. The program itself changed as we were 
looking at it. What we started looking at was the conservation 
security program, and then that program disappeared and came 
back as the conservation stewardship program as part of the 
2008 farm bill.
    When we go to look at it again, we will be looking at the 
new program, and what they have said is we will take 
recommendations made to the old program for the new program and 
make sure they strengthen them in that way.
    Mr. Kingston. I know I am out of time.
    Ms. DeLauro. Just quickly, with the legislative 
recommendations made with regard to the old program, were you 
on your way to that or did it just stop in midstream and then 
you----
    Mr. Young. No.

                        FSIS RESIDUE INSPECTION

    Ms. DeLauro. I would like to go back to FSIS and the 
residue inspection. I found that particularly troubling. Really 
disturbing reports about FSIS.
    You found some problems were identified as far back as 
1985. Would you walk us briefly through your findings and tell 
us what the gap in management is at FSIS that allows programs 
like this to go unaddressed for 25 years?
    Mr. Harden. Actually----
    Ms. DeLauro. This is residue. This is metals, antibiotics, 
et cetera, that are not being tracked. This is a serious public 
health issue.
    Mr. Harden. The coordination here, the real big problem 
that goes back a long way is not solely with FSIS. We are USDA 
and we can make recommendations to them. The biggest problem is 
their coordination with FDA and EPA on this issue.
    FDA sets the standards for the residues from the drugs. The 
EPA sets the standards for the residues for the chemicals. They 
need to work together to set those things up.
    That is the heart of the matter as to the key 
recommendation we made there, FSIS, you need to get that 
coordination re-energized and make sure that you have it at the 
right level and you have the right people at the right meetings 
so you can make the decisions you need to make in terms of what 
we are going to test versus what we are not going to test, how 
you are going to rotate things in and out, and if there are 
disagreements between the three--FSIS is the one that is on the 
front line to do the testing, but they cannot hold anything 
back if there is not a level to say it is over or under. You 
have to have the right people there to help make those 
decisions.
    Ms. DeLauro. First of all, I might just say in terms of 
your report you say ``FSIS does not attempt to recall meat even 
when its tests have confirmed the excessive presence of 
veterinary drugs.''
    Mr. Harden. I agree. That is a huge problem. When we found 
that, it was very disturbing to us. I know the Secretary has 
recently said now that he is looking at it, there may be a 
different answer for that, as I viewed the press on that 
particular issue.
    We found it important to bring it forward because similar 
decisions were not made elsewhere, and that is where we make 
the example of what we are comparing it to is the hallmark 
recall where it was not a Class 1 recall, it was a Class 2, but 
yet you had the largest beef recall.
    The residues would fit, if you do not want to say it is 
Class 1, why it would not be comparable to a Class 2, which 
they do work with companies to do those results.
    Ms. DeLauro. You have said this and very clearly about FDA, 
EPA, FSIS, is there anybody in charge? Is there a person that 
is in charge of any of this?
    Mr. Harden. No. The way they have approached it is very 
much from a coordination standpoint, which that goes back to a 
1984 memorandum of understanding. That is where we said you 
need to go back and make sure that is up to date, so that you 
have somebody that is in charge, you have some way of resolving 
whatever problems there are between the different people.
    Ms. DeLauro. There is no one in charge. I am going to say 
this, as I have said in the past, and this is in regard to food 
safety. No one is in charge. No one has authority. No one is 
responsible. There is no accountability. It is diffuse.
    Therefore, we cannot get to answers, we cannot move the 
process because no one is in charge of food safety in the 
Federal Government in the United States of America. No one.
    You lay out the case. Three agencies that cannot come to 
identifying knowable chemical difficulties. It is annullable 
scientifically. They cannot either define the standard and they 
cannot enforce the testing of the standard. They do not recall 
it when they find it.
    The public has every reason to believe that there is gross 
ineptness here, on this issue, unlike CSP, the public health is 
at risk. People can get sick. People can die. There is no one 
in charge.
    I have one last piece on FSIS. I really throw up my hands, 
but since 2000, your office has done by our count 34 audits of 
FSIS covering a broad range of issues.
    In these reports, your office has made 396 recommendations 
to improve the Agency's operations. As a result in many cases, 
changes have been made and the program has been improved in the 
specific areas that you identified.
    However, while one thing gets fixed, the next audit of FSIS 
finds new problems. This is an area and an agency with a single 
area of responsibility, inspecting meat and poultry plants. 
That is what their responsibility is.
    It is not rocket science. I am exasperated. I am tired of 
this. Again, I believe if the American public had any idea of 
what their exposure is on this, there would be a real outcry.
    There is a fundamental issue here. This is years and years 
and years. What has to be done to change the culture at FSIS? 
You continue to do reports. You do audits. They sit on a shelf. 
They evaporate. It does not get implemented. Some of the stuff 
does.
    We keep hearing the same things over and over again, and we 
cannot come to changing the infrastructure in a way that allows 
for a procedure or a process to move forward affirmatively.
    You all have looked at this. What is your judgment on 
trying to change the culture at FSIS?
    Ms. Fong. Let me offer a couple of comments and then I will 
invite my colleagues, as always, to participate.
    You are right. We have done an awful lot of work in this 
area and it has been one of our top priorities for all the 
reasons that you state. I will say that in my own tenure here 
in the last eight years, we have had some ups and downs.
    I am harking back to the BSE situations and some of the 
trade issues that came out of that, the recalls, I will say as 
you also recognize, there has been some improvement.
    For example, the BSE surveillance process, it has really 
settled down and it is probably now where it needs to be. On 
equivalency of inspections, Canadian beef and other kinds of 
beef, we have seen improvements.
    Normally, what it takes is a crisis and then a report, an 
analysis, and then reaction.
    Of course, there are areas that still do need further work, 
and what we find whenever we do an audit is that FSIS will take 
those recommendations and they will focus on them in the heat 
of the moment and we will get some forward movement, but then 
we always find spin-offs, issues that we had never realized 
were issues, so we will pursue those.
    It looks as if it is an agency that has challenges that 
perhaps some people may say have not been met. I will say that 
we would say there have been some successes.
    We also recognize it is a very tough mission. Inspecting 
food in slaughter houses takes a certain kind of employee. It 
takes a certain dedication to the mission. It is a very tough 
mission, very hard on people as individuals.
    All the classic things that I can say to you about how you 
change an organizational culture, you start with tone at the 
top. I think it is critical to have excellent leadership from 
the top down because that dedication to the mission and clear 
vision of what the agency is up to has to be the first step.
    Of course, you would look at the workforce, and is the 
workforce getting the kind of training it needs? Are they all 
fully professional to the extent we would all want them to be? 
I think that has been an ongoing challenge.
    You also look at are the procedures in place within the 
agency to make sure the employees, once they are trained, do 
they know what they are supposed to do, is it clear?
    We have had a number of findings in those areas, and in 
some cases we find that the procedures are good, but people are 
not following them. In other cases, we find that no, the 
procedures really need to be established.
    There is that whole range of issues.
    Ms. DeLauro. Maybe we need a single food agency where they 
concentrate on food safety and we do not have to have multiple 
agencies not doing, quite frankly, anything to address this 
issue.
    Mr. Latham.
    Mr. Latham. I thank the Chairwoman. I think you have 
expressed the frustration a lot of us have, and I think rather 
than to beat up on the Inspector General----
    Ms. DeLauro. I am not beating up on the Inspector General. 
She knows that.
    Mr. Latham. My concern is we have turned over our 
responsibilities in Congress by not doing the oversight of 
these agencies, whether it be this committee or the authorizing 
committee, to find out what the heck is going on, and we are so 
worried about starting new programs and spending more money 
elsewhere, that we are not doing what we should be doing here.
    Just to have oversight hearings on these agencies, and it 
is not just FSIS, we do not do oversight on anybody, and to 
expect the Inspector General to find out all the bad stuff 
going on without us doing our job, I think is misplaced 
responsibility, that we need to do our job here. We should have 
the power rather than turning everything over to the Inspector 
General.

                               OIG BUDGET

    I would ask you, the President is only asking for an 
additional $1.6 million for your office. It appears the 
workload is increasing as Congress charged you and your fellow 
Inspector Generals for policing the massive stimulus bill that 
was passed, and this committee did not really have a hearing on 
our $28 billion share of the stimulus bill. We never had one 
hearing and never had a discussion in the Committee.
    Is this request adequate? Do you need additional funding to 
do your job?
    Ms. Fong. That is always a tough question to answer.
    Mr. Latham. Did you ask for more?
    Ms. Fong. I think we have some needs that we had wanted to 
fund, for example, we wanted a stronger IT system to track our 
investigations, but we are finding another way to fund that. 
That is being taken care of.
    With the Recovery Act money that we are getting within the 
IG Office, and we have been very grateful to you all for that 
money, it has enabled us to hire up additional staff in the 
audit and investigative sides, so that we can actually do more 
work.
    We are a level of effort office. If you fund us at a 
certain level, that is the amount of work you are going to get. 
Clearly, there are programs within USDA that we only are able 
to look at on a cyclical basis because of our resources. If we 
were to get more money, we would be able to do more work. 
Similarly, if we are held to this level, then we will 
prioritize.
    In response to Mr. Kingston's concerns as well, what we 
look at is dollar risk. We look at history of performance in a 
program. We look at interest from the Congress and the 
Administration, as we decide which programs to look at each 
year.
    My answer to you is right now, because of the Recovery Act 
and the disaster money that you all gave us, we are adequately 
staffed to do what we need to do, to deal with critical issues. 
If we had more money, we would be able to expand our range of 
operations.
    Mr. Latham. That is my question. Are there a lot of other 
things that you should be looking at today but you are 
restricted? The $28 billion in the stimulus bill, like you 
said, the disaster, I know there was a little bit of money in 
the stimulus for your office.
    I guess I would ask how much of that have you spent so far? 
What do you need to actually do your job in a competent way?
    Ms. Fong. In terms of stimulus, we received $22.5 million 
available for five years. We are in the second year of 
recovery. As I might have mentioned to all of you, we are 
actually looking at every program that received dollars through 
recovery. We are going to be looking at all the nutrition 
programs.
    We have issued 30 reports this past year on it. We are 
cranking it out.
    We have to date spent about half of that, about $11 
million, in my understanding. We are moving through it pretty 
rapidly. We have about 50 audits underway across RD, Forest 
Service, FSA, FNS, Departmental Administration.
    We have a huge initiative going on in that area.
    Mr. Latham. What would you look at if you had the funds to 
do it?
    Ms. Fong. Well, every year we go through our planning 
process and we have tiers of audits that we consider. At this 
point, we are only addressing our top tier of what we consider 
critical high risk issues.
    There are other tiers of issues that have been surfaced by 
our staff that we at some point will get to.
    Mr. Latham. Are there any examples?
    Ms. Fong. Actually, I think some of the farm programs, some 
of the nutrition programs, some of the AMS programs.
    Mr. Latham. That you are not looking at because of funds?
    Ms. Fong. They will be scheduled in the out years.
    Mr. Latham. A small part of the budget; right?
    Ms. Fong. We do what we can.
    Mr. Latham. Thank you very much.
    Ms. DeLauro. What I would like to do if it is agreeable, we 
have talked about resources and funding for what you do, which 
is Mr. Latham's point, which is a reality, but I would very 
much like to talk to you about what kind of authorities you 
think you might need in order to deal with follow up, with what 
you do with the money that we appropriate you.
    You lay out the reports. You lay out the recommendations. 
In several of these programs, we have seen rather it is 9 out 
of the 23 recommendations that are acknowledged or 14 out of 
22, et cetera.
    How do we provide you and what is it you believe you would 
need in terms of authorities to be able to move to a next step?
    We are not going to do that here today. I would love to be 
touch with you and sit down and talk about how we get to that. 
Sometimes it is not just the money, but we cannot get the 
implementation of what you have already done on some of these 
programs.
    I think we have to address that issue first and foremost 
and then deal with resources.
    Mr. Farr.

                       NATIONAL ORGANICS PROGRAM

    Mr. Farr. Thank you very much. I want to ask a question 
relating to the Organics Standard Act and the fact that the 
national regulations allow for state management under the state 
organic program, SOP.
    You indicated that only two states have been approved for 
SOP, and California has some problems with theirs. I think 
there are about 14 recommendations that came out of that. They 
indicated AMS has agreed that they are going to get those 
recommendations in place by June of this year.
    Do you plan another audit after that? What is the follow 
up?
    Mr. Harden. Normally, when we do a follow up of this 
nature, we give them time--they give us the time frames in 
which they are going to make the changes or implement the 
changes, and we will come back and schedule work later.
    Maybe an overview of the program in the next year or so, 
but before the end of this year, there is another part of the 
organic program that we are going to look at in terms of how 
they take substances on and off the national list of prohibited 
substances.
    I would say in terms of a comprehensive review, it would 
probably be in a year or two.
    Mr. Farr. The one you have dealt with now is the inspection 
process; right? Certification process?
    Mr. Harden. AMS oversight and the type of oversight they 
give to the certifiers. By doing that, we did go to a number of 
operations.
    Mr. Farr. The next one is going to be sort of how you 
manage the----
    Mr. Harden. There was a specific question that we received 
from the Committee staff in terms of what did we do in this 
audit with regard to how they decide on which substances are on 
the list or not on the list, which we did not do detailed work 
on previously, and we are going to be doing that in the future.
    Mr. Farr. I have probably the largest number of organic 
growers in the United States who are very interested. 
Obviously, they want to comply with the law because it protects 
them.
    I am curious as to when can they expect to have your 
oversight to say yes, it is in place, working well. You said 
that will probably take about a year once it is in place?
    Mr. Harden. We would probably give an agency that amount of 
time so we can go in and see how effectively their corrective 
actions were.
    Mr. Farr. We can expect perhaps about 2012 that you would 
start; right? End of this year?
    Mr. Harden. That would be an expected time frame, but we 
have to take that into consideration with other priorities at 
the time, in terms of when we actually would get that started.
    Mr. Farr. I appreciate that. I appreciate you doing your 
oversight on it.
    Ms. DeLauro. Mr. Kingston.
    Mr. Kingston. Thank you, Madam Chair.
    Ms. Fong, I was hoping to bring Ms. Ellis and Mr. Lebo in, 
because I think they have had a free ride today. [Laughter.]

                         INTERNATIONAL FOOD AID

    Mr. Kingston. I am not sure what their area is. To move in 
a different direction, do you audit international food aid? 
Going back to Mr. Harden. You just cannot get enough. 
[Laughter.]
    Ms. Fong. We have done a couple of audits in that area in 
the last few years. Did we not have some investigations? Never 
mind. [Laughter.]
    I am trying.
    Mr. Kingston. Well, you do audit it. P.L. 480 and McGovern-
Dole.
    Mr. Harden. I do not know that we have done specific work 
on that program. The GAO has done work in that area, and we try 
to make sure we do not overlap one another. It has been several 
years since we have actually looked at the food aid programs 
specifically.
    Mr. Kingston. We had a great hearing with GAO on 
international food aid, and one of the things that somewhat 
came out of it is that it appears to be somewhat haphazard in 
that we do not have measurements as to where it has been most 
successful, and often there is a cliff when you do food aid and 
then a country is moving up the ladder but because they are 
moving up the ladder, they are no longer eligible for 
development aid.
    I was just wondering if you had any information on that.
    Mr. Harden. Not from current work.
    Mr. Kingston. How long has it been since you audited this?
    Mr. Harden. Five to ten years.
    Mr. Kingston. I am not sure why you would not when P.L. 480 
is $4.7 billion and McGovern-Dole is $2 billion. It would 
appear that would be on your radar.
    Mr. Young. It is. That is something we have talked about, 
looked at, when we go through what audits we can schedule and 
do. It has not made it into the ones that we are able to start.
    Mr. Kingston. I do not know what we could do to urge you to 
put that on there, maybe actually in instructive language. It 
would appear to me based on our GAO hearing that it is 
certainly something that we should be looking at.
    We give food aid, as you probably now, to 153 countries. It 
does not seem to be as effective in combating food security in 
many ways because we are not helping with the development aid 
along with it, and as a component of it.
    If you have not audited it, you are not in a position to 
discuss it; correct?
    Mr. Young. Correct.
    Mr. Kingston. Let me just come out with some bad questions 
for Ms. Ellis and Mr. Lebo, we have a few minutes. No, I yield 
back.
    Ms. DeLauro. Thank you. Let me just try to run through 
some--I am going to give you a question on the N60 testing 
protocol, testing that is used by USDA, as you know, a 
screening test for E. coli in ground beef products.
    What I asked about was statistical validity, the testing 
method, how the samples are allocated and analyzed by USDA 
employees, and the application of the N60 test results, and you 
agreed to look at this. If you can just get back to us and 
update us on the findings.
    [The information follows:]

    The first phase of this audit request is in process. Our audit 
objective in this phase is to follow up on matters reported in our 
memorandum, ``Food Safety and Inspection Service Sampling and Testing 
of E. coli,'' issued January 29, 2008, related to examining the 
adequacy and effectiveness of FSIS N-60 sampling method. The report 
will be issued by late summer 2010.

    Again, questions here that follow up on Mr. Bishop's 
commentary on peanuts, and you can get back to me on this. Are 
peanuts the only commodity that does not have a public 
commodity market?
    [The information follows:]

    According to FSA program staff, in addition to peanuts, there may 
be some minor oil seeds (rapeseed, crambe, and sesame) that may receive 
farm program assistance and that may not have a public commodity 
market--that is, without a spot, cash, futures, or terminal market. In 
the case of these minor oil seeds, Farm Service Agency officials have 
stated that not much is produced and most of what is produced is by 
contract with processors.

    What authority does NASS need to be able to verify the 
price data reported by buyers, and is the reliance on this 
unreliable market data more likely to cause under payments or 
over payments to peanut producers?
    [The information follows:]

    In our audit report, ``Farm Service Agency's (FSA) Reliance on the 
National Agricultural Statistics Service's (NASS) Published Peanut 
Prices,'' issued in March 2009, we recommended that FSA work with the 
Department to seek authority to establish mandatory price reporting of 
peanut purchases by buyers as well as the authority to verify buyers' 
reported data to NASS. We believe that such authority needs to be 
mandated, since the buyers' reported data may be considered as 
confidential business proprietary information.

    With regard to repeated abusers of USDA programs, you note 
that ``USDA has excluded many of its programs from the 
suspension and debarment regulations using questionable 
justification.''
    Which programs has USDA excluded from suspension and 
debarment regulations based on questionable justification?
    [The information follows:]

    Our audit of the effectiveness and enforcement of debarment and 
suspension regulations in USDA is expected to be issued by mid to late 
summer. Our report will identify if some or all of the programs within 
several USDA agencies have used questionable justifications to exclude 
programs from suspension and debarment requirements.

    Let me just ask a couple of questions on the AMS. This is 
purchases of frozen ground beef. This is another area of 
unbelievable exasperation.
    You found in procurement, a staff did not accurately 
identify supplier non-conformances and tracking used to monitor 
supplies, suppliers' continued eligibility, weakness--around 
924,000 pounds of ground beef product entered the national 
school lunch program from a supplier whose eligibility had not 
been properly evaluated by AMS.
    I have grave concerns, really grave concerns about how an 
agency can adequately determine a supplier's eligibility for a 
program if they do not know if all the non-conformances are in 
the tracking system and they are not looking at the full 
universe of these non-conformances.
    Do you think AMS had adequately addressed the OIG's audit 
findings for the ground beef purchase program?
    Mr. Harden. What we can say right now is the response they 
gave to our report which we issued just earlier this month. 
What they stated they plan to do in response to our 
recommendations looks good. It will be after they have done 
that that we can then go in----
    Ms. DeLauro. What is the timing to do it?
    Mr. Harden. They plan to have the changes in place for this 
coming school year purchases, so that would be this June/July. 
The other thing to their credit, they are contracting with the 
National Academy of Scientists to look at this program as well 
as all their programs.
    When we brought these issues to the table for them, they 
embraced them, so to speak, and are trying to move out in an 
expeditious manner.
    Ms. DeLauro. Also, you make a recommendation on bonding, is 
anybody looking into that to see whether or not we ought to 
move on that with regard to liability?
    Mr. Harden. They agreed to take a look at that and do a 
formal determination there, where they have done it very 
informally before. That again relates to the hallmark example 
where the Department had to spend money to help recall the 
product, where if they had a bond or some kind of insurance----
    Ms. DeLauro. It would have made them more reliable as well, 
and not to have to pick up the charges when they were picking 
up the tab.
    Many of the suppliers continue to have non-conformance 
issues. They are still allowed to participate in the ground 
beef purchase program. For reviewing a supplier's eligibility 
for the program, is it enough only to review repeated non-
conformance violations in a 30 day period?
    Mr. Harden. That is the way they treat the repeated ones. 
There is also a process they have in place where they would be 
in the plants on a regular basis. I do not know if I can detail 
that process off the top of my head. I know we looked at that.
    Ms. DeLauro. We continue to have these bad actors selling 
ground beef to the national school lunch program. Can anybody 
tell me what has happened with Beef Packers, Inc., the company 
that over and over again has serious violations but was still 
allowed to move forward?
    If you cannot, I am very interested in this. Again, we 
continue to allow contractors who are in gross violation, not 
once, not twice, many times over, to continue to participate 
and sell a product to the school lunch program, and it would 
appear to me that AMS is not doing what it needs to do in order 
to protect what they are supposed to do by way of their 
mission, to protect the product going into the school lunch 
program.
    They are supposed to have certain criteria around it that 
does not exist elsewhere. It would at least appear we are not 
following this dictate. I would like to hear back about Beef 
Packers, Inc., if you can. If you have some information now, 
that would be great.
    Ms. Fong. I do not know if we can comment on the record, 
but we would be happy to talk to your staff about that.
    Ms. DeLauro. That is fine. A bunch of questions on flood 
control on dams and NRCS. Staggering, again, as to what we are 
not doing with dams that are hazardous and which we cannot seem 
to get any compliance in that area. We will send you the 
questions on that.
    We are going to go vote. I know Mr. Kingston cannot come 
back. Those are the last votes of the day. We want to not have 
you just sit here.
    Mr. Kingston. One thing I just wanted to mention, in your 
various reports, it would appear to me there might be 
categories of what is a mistake, what is likely fraud, and what 
is non-compliance of existing laws that are already in place 
but for some reason people are not complying with procedures.
    I do not know if you put that in your report, but to me 
that would be of interest, too, as we look at these things.
    Ms. DeLauro. It would be very much of interest. I would 
also like to indicate I asked you and we need to talk about 
this not here but in another venue, to talk about what 
authorities you need.
    I would very, very much like and I think Mr. Kingston would 
as well to know what authorities you believe the agency needs 
in order to be able to change the culture, change the 
infrastructure, and change the outcome in a number of these 
areas.
    Thank you very, very much, and this hearing is concluded.

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                                           Thursday, March 4, 2010.

                        CHILD NUTRITION PROGRAMS

                               WITNESSES

KEVIN CONCANNON, USDA, UNDER SECRETARY FOR FOOD NUTRITION AND CONSUMER 
    SERVICES
DR. KELLY BROWNELL, YALE UNIVERSITY, RUDD CENTER FOR FOOD POLICY AND 
    OBESITY
DR. MARIANA CHILTON, DREXEL UNIVERSITY, SCHOOL OF PUBLIC HEALTH, 
    PENNSYLVANIA
SCOTT FABER, GROCERY MANUFACTURING ASSOCIATION
ZOE NEUBERGER, CENTER ON BUDGET AND POLICY PRIORITIES

                      Ms. DeLauro Opening Remarks

    Chairwoman DeLauro. Good morning. The hearing is called to 
order. I will make some opening remarks. Our colleague, Mr. 
Kingston, who will be here shortly as ranking member will make 
opening remarks and then we will move to testimony and then to 
questions. Thank you very, very much for being here.
    I again want to welcome my fellow committee members and our 
distinguished guests. This is the second hearing of the 
Agriculture Appropriations Subcommittee this year. Let me 
welcome our witnesses. Kevin Concannon, who is the under 
secretary for Food Nutrition and Consumer Services at USDA; Dr. 
Kelly Brownell of Yale University's Rudd Center for Food Policy 
and Obesity; Dr. Mariana Chilton of the Drexel University 
School of Public Health, Pennsylvania; Scott Faber of the 
Grocery Manufacturing Association; and Zoe Neuberger of the 
Center on Budget and Policy Priorities.
    I am really very, very excited that you are here today to 
share your insights and your expertise with all of us. This is 
not just ``we do hearings on the budget and with the agency 
representatives''. This is another aspect of the hearings that 
we will hold, as we have in the past; this one focusing on, 
obviously, the issue of nutrition. We will be doing several 
others, but quite frankly this is not mandated for us to do, 
but the issue is so critical and so important that we really 
wanted to get you here to address this.
    We kicked off our committee hearings last week with 
Secretary Vilsack and his staff, who outlined goals and 
priorities for the 2011 budget. Among them, as many will 
remember, was the issue that is dear to the hearts of many on 
this panel as well as to the First Lady, which is improving 
child nutrition. With WIC, with the CSFP--Commodity 
Supplemental Food Program--the SNAP program, the School Lunch 
Program, and other crucial food assistance and nutrition 
programs under the Subcommittee's purview, our thought was that 
we really needed to take a closer look at the ways that we can 
work to improve the health and the nutrition of our children. 
In addition, we want to help frame the issue by listening to 
experts. Your input is critical this year as Congress works on 
the reauthorization of the Child Nutrition Act, so we must act 
before the current extension runs out later this year.
    When it comes to child nutrition we are confronted with 
what at first appears to be a two-headed problem. On one hand 
we face a problem of access. Far too many children in America 
are simply not getting enough to eat. Parts of the testimony 
that I've read, it is chilling, and it's unconscionable what is 
happening with children in this country with regard to hunger, 
and we have the opportunity to do something about it. This 
institution can do something about it, so it's a moral 
responsibility, in my view, what we're talking about here.
    And then you have on the other hand as a result of poor 
nutrition and unhealthy food options in our schools and on our 
dinner plates, we face a growing epidemic of child obesity that 
is harming the health and the quality of life of our kids. So 
we need to do more to ensure that the foods our children eat 
have the nutritional value that they need to thrive. In fact, 
the problems are two sides of the same coin.
    Research has shown, time and again, that families that are 
struggling economically have a harder time affording healthy 
food options. Simply put, unhealthy food is cheaper. It's 
easier to get. It's a problem that we in the government and on 
this committee who are overseeing nutrition funding must do 
more to rectify. In fact, the discussion begins with the 
current economy. Right now, we know that families are 
struggling. In America today, almost 14 million children--
that's one in five--live below the Federal poverty level.
    That number is expected to rise as high as 27 percent as a 
result of the recession. If you factor in that the poverty line 
is actually much lower than what families need to really get 
by, it is estimated that 41 percent of our kids live in a low-
income household right now. I mentioned this at the prior 
hearing, so my colleagues have heard it before, but the Speaker 
Of The House in Connecticut is doing a wonderful service, I 
believe. He is going from district to district and, in a 
bipartisan basis, talking about the recession and its impact on 
children. And the one for the Third Congressional District was 
about two weeks ago and I was there. They asked me to speak and 
then we listened to testimony.
    One woman stood up and said she has five children. She 
rations food. She has to. Her older two are boys and she 
provides a little bit more for them. And the three girls a 
little bit less, and she said that it's a terrible thing to 
have to tell your kids that they can't have seconds, and if 
they ask to have a sleep over, she has to say ``No,'' because 
they do not have enough food. Her husband lost his job and she 
is trying to take on part-time work and also to try to take 
care of five children.
    The dismaying poverty rate very quickly translates into 
hunger and malnutrition for our children. According to the Food 
Research Action Center, 18 percent of Americans across the 
country have experienced food hardship in the past year, 
meaning that they have not had the money to purchase the food 
their families desperately need.
    My view is that they are not fed and secure. They are 
hungry. People in this country are hungry. In fact, more than 
two out of every three children who participate in the school 
lunch program in our public school system, 69 percent currently 
qualify for free or reduced school lunches.
    Government has a role in helping to alleviate hunger, which 
we try to accomplish in many ways. For example, one in five 
children receives food stamp assistance. But one of the 
problems we face and need to find better ways to redress is to 
make sure that kids across the country are actually getting the 
help that they qualify for.
    According to the Carsey Institute at the University of New 
Hampshire, almost one in three children in rural households, 29 
percent participated in one of our Child Nutrition Programs. 
That being said, too many of these qualifying households do not 
participate in any of these programs, including 55 percent of 
those eligible for the National School Lunch Program, and 92 
percent of those eligible for the Child And Adult Care Food 
Program.
    Time to take a hard look at our nutrition efforts so that 
the aid is getting to the people that need it. We need to move 
forward. We need to ensure that the resources we apply to child 
nutrition are translating directly to these kids. To take just 
one example, I believe we ought to increase the reimbursement 
rates for the school food programs.
    At the same time, we also need to reduce waste, overhead in 
the programs, make sure that money is actually being used for 
what it has been intended for, and that's food for children. In 
addition, we must do more to improve the nutritional quality of 
the food in our schools. We should work to encourage in the 
small but notable ways that the government can encourage 
families and consumers towards healthier food options.
    I read in Mr. Concannon's testimony that the Administration 
``has two main priorities for Child Nutrition Programs: one, 
reducing barriers and improving access to combat childhood 
hunger; and, two, enhancing nutritional quality and the health 
of the school environment.'' We on this committee share these 
two priorities. These are two sides of the same nutritional 
problem that I outlined. So I look forward to the testimony 
today how we can better address both of these issues and help 
to ensure that our kids have a happier and a healthier future. 
And, with that, let me yield to my colleague, Mr. Kingston.
    Let me then proceed with testimony and remind the witnesses 
that your entire statement will be made part of the record, and 
you are free to summarize your remarks. And, Mr. Concannon, we 
will start with you.

                       Statement By Mr. Concannon

    Mr. Concannon. Thank you very much, Madam Chairwoman; and, 
members of the committee, thank you for the opportunity to 
discuss the reauthorization of the Child Nutrition Programs and 
the Special Supplemental Nutrition Program for Women, Infants 
and Children.
    It's a very special opportunity to be here today to talk 
about the Department of Agriculture's priorities for 
reauthorization. The reauthorization of the Child Nutrition 
Programs presents us with an historic opportunity to combat 
child hunger and improve the health and nutrition of children 
across our country.
    The proposed investment of $10 billion in additional 
funding over 10 years would significantly reduce the barriers 
that keep children from participating in the Child Nutrition 
Programs. It would also improve the quality of school meals and 
the health of the school environment and enhance the program 
performance in the National School Lunch Program, School 
Breakfast, the Summer Food Service Program, the Child and Adult 
Care Food Program, the Special Milk Program, and WIC, the 
special program for women, infants and children.
    We are confident that the following recommended changes 
will move us towards achieving our goals and achieving a 
groundbreaking and robust child nutrition and WIC 
reauthorization. As the Chairwoman mentioned, our two 
overarching goals are to reduce barriers and improve access as 
well as enhancing the nutritional quality and health of school 
environments.
    In keeping with the recommendations made by the Institute 
of Medicine, reauthorization must substantially improve the 
nutritional value of the meals being served to our children. 
But, we know that improved foods will require increased cost 
for schools. That is why we are calling on Congress to increase 
the reimbursement rate for the National School Lunch and School 
Breakfast Programs. Our expectation is that school meals will 
improve as USDA issues new meal requirements to emphasize 
fruits, vegetables, whole grains and low fat dairy products.
    Any increases in the reimbursement rate must be conditioned 
on the fact that the increases will pay for improved quality 
and improved nutrition, not just the status quo. We also 
recommend the establishment, importantly, of nutrition 
standards for all schools, for all foods, rather, served in 
schools, including vending machines and a la carte lines.
    We support providing competitive grants to states and 
local, public and private, non-profit organizations to promote 
increased consumption of healthy foods through innovative food 
service delivery systems based on behavioral economics.
    I read a wonderful book recently called ``Nudge''; nudging 
people in the right direction. We also support a challenge to 
the Nation's governors to eliminate hunger by 2015 as part of 
reauthorization. State childhood hunger challenge grants will 
provide competitive grants to allow governors to implement 
creative and innovative approaches to eliminating hunger. To 
reduce barriers to access and approve program operations, we 
support offering grants to streamline the application process 
and expand efforts to enroll eligible students through direct 
certification.
    Recognizing that many schools do not have the equipment 
necessary to provide more healthy food selections, 
reauthorization should include funding to improve school 
kitchens so that schools can provide the food that meet these 
Dietary Guidelines. We should continue supporting Farm-To-
School Programs to increase the amount of produce available to 
cafeterias and to help support local farmers by establishing 
regular institutional buyers. We found a great example in the 
Hawthorne Elementary Schools in Bozeman, Montana, which started 
networking three years ago with Grow, Montana, and this has 
resulted in a wonderful partnership.
    Recently, I've been in contact with the New Haven schools 
program, Chef Cipriano, and they have developed programs along 
this line. A month ago I was in Summerville, Massachusetts, and 
they over the past three years have been expanding their 
reliance on area farms to make wonderful win-win phenomena for 
schools, for healthier eating, and helping local economies.
    One idea I think that warrants attention is to expand the 
existing authority of the Child And Adult Care Food Program to 
provide after school meals to at-risk kids in all 50 States. 
The committee may be aware that's currently limited to 14 
States.
    Finally, while the focus of reauthorization must remain on 
access and improving quality, we understand the underlying 
responsibility: We have to make sure that the food our children 
eat is both nutritious and safe. That's why we've begun a 
complete review of our programs and protocols to enhance the 
safety of all food that is served to our children, and why we 
recently announced a series of reforms designed to ensure that 
foods we procure are safe and of the highest quality.
    Our priorities and many more will be debated by Congress in 
the near future as you consider legislation to modernize these 
programs. Our Administration is committed to combating hunger, 
providing healthier foods to our Nation's children, and I hope 
we will have your support on these efforts.
    Again, I want to thank the committee for the opportunity to 
appear before you today to discuss the reauthorization of the 
Child Nutrition Programs administered by the USDA, and I look 
forward to answering questions that you may have.
    Thank you very much.
    [The information follows:]

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    Chairwoman DeLauro. Dr. Brownell.

                       Statement by Dr. Brownell

    Mr. Brownell. Thank you for the opportunity to appear 
before the Committee. Before talking about specific policy 
proposals, I'd like to address two broad issues.
    One is the issue about pushing healthy food into the system 
versus extracting unhealthy food from it. It's far easier to 
address the issue of increasing fruit and vegetable 
consumption, whole grains and the like, than it is to talk 
about reducing anything.
    The first doesn't require combat with the food industry. 
The second may. This model that the healthy and unhealthy foods 
appear on the opposite ends of a see-saw may not be the case, 
that if you increase healthy foods it's going to push out of 
the way the less healthy option. That does not seem to be 
supported by recent scientific evidence. So what I would 
suggest in any government policy that will simultaneously 
address increasing incentives for the consumption of the 
options, like fresh fruits and vegetables, but also addressing 
the calorie dense, nutrient poor foods, that it's clear that 
populations consuming too much of things like sugared cereals, 
sugar sweetened beverages, candy and the like, high on that 
list, fast food would appear on that list as well.
    So that's point number one. Broad point number 2 has to do 
with the concept of changing defaults, and this is quite 
consistent with what Mr. Concannon said about the concept of 
nudging people. The fact is we have a pretty terrible nutrition 
environment in this country that's been engineered in a way 
that maximizes consumption of calorie dense foods. Would the 
Americans who've been systematically taught--and this is unlike 
it was when I was a boy--that the default serving size of a 
sugared beverage is 20 ounces compared to the 8 ounces when I 
was young. The muffin can be the size of a softball now, 
compared to the baseball of the earlier days, and there are 
example after example of this.
    We've been recalibrated to believe that we can eat in all 
sorts of places, like the automobile; not true when I was a 
boy. We've been readjusted to believe that food should be 
available everywhere: drugstores, shopping malls, gas stations. 
That wasn't the case when I was a boy. And we've also been 
trained systematically to believe that three meals a day is no 
longer adequate. One can witness the Taco Bell campaign that 
talks about a fourth meal, and the fast food restaurants 
enticing people to come in late at night to eat there. These 
are deeply woven now into the American mind-set.
    They're supported by a massive economy involving the food 
industry marketing people, advertising people and the like, and 
is having a disastrous impact on the health of the American 
population. These are unhealthy defaults. The question is can 
action be taken to create a better set of defaults so that the 
healthy choice becomes the easier one, and the answer is 
unquestionably yes.
    We can look, for example, at data on people who agree to be 
organ donors in European countries. There are countries in 
Europe that use the U.S. model where you're not an organ donor 
by default, but you can agree to be one when you get your 
driver's license. Other countries in Europe, you are an organ 
donor by default, but you can opt out. Consumers have the same 
set of choices under both circumstances, but the rates of organ 
donation in the countries that use the U.S. model are between 
15 and 20 percent. In the other countries it's over 90 percent, 
a startling difference, stunning difference.
    You could never produce that with education. You can never 
implore people to do those sort of things, or you can just 
change the law, change the defaults. So the question is are 
there food defaults. Well, Mr. Concannon talked about a number 
of them that we fully support.
    Getting rid of trans fats in restaurants would be a 
wonderful example of this. New York City took the first action. 
It's now happening around the country. So when you eat in a 
restaurant in New York City you have a better default. You're 
not going to get trans fats. Now, you could try to educate your 
way toward that goal, but it would be hard. It would cost a 
fortune, and you wouldn't get nearly the impact of just doing 
something that costs nothing. You change the law.
    So can defaults occur in the context of the issues we're 
talking about today, and I believe they can. So specifically 
I'd like to talk about three areas: school nutrition, food 
marketing directed at children, and the special case of sugar-
sweetened beverages. First, the school nutrition environment; a 
number of things can be done to strengthen the school nutrition 
environment, which is obviously important because children 
consume a number of meals there, but also, it's a wonderful 
opportunity for learning. So among the things that we would 
recommend would be for the USDA to adopt the Institute of 
Medicine Standards for the School Lunch Program and School 
Breakfast Program, completely consistent with what Mr. 
Concannon said.
    Increase reimbursement for the National School Lunch 
Program. We specifically recommend a dollar per meal to enable 
schools to purchase healthier foods, including more fruits, 
vegetables, whole grains, et cetera. Next is to make the School 
Breakfast Program universal and free to everyone. There are 
some children who can afford to eat meals at home, but they may 
not be; and, if they're eating healthier foods at schools, it 
could help the Nation's health overall.
    Next would be to apply the Institute of Medicine's 
nutrition standards for foods in schools to all competitive 
foods sold, offered and served in schools. This becomes a major 
problem; because in fact one of my colleagues observed 
recently, although we haven't documented this, that even though 
school systems will sometimes write contracts where the food 
service providers to the schools have agreed not to sell foods 
that compete with the National School Lunch Programs, they do 
anyway. They sneak them in, because they become a profit 
center.
    Mr. Concannon mentioned the Child And Adult Care Food 
Program. Certainly, nutrition standards can be applied there so 
that the youngest children and the oldest in our society are 
getting good nutrition. And there are specifics in my testimony 
about what we would recommend for that. And then school 
wellness policies is another area where considerable progress 
can be made where schools around the country have been required 
to show that they have a wellness policy, but nothing beyond 
that.
    The mere fact that they've been asked to provide wellness 
policies is a real advance, because at least it gets school 
systems thinking about these policies. But if something can be 
done to mandate the fact that the policies get enforced, that 
would be even more helpful.
    I'd now like to turn my attention to the issue of food 
marketing to children. This is an overwhelmingly negative 
influence. The industry claims it's making progress on 
protecting children from the negative influences of marketing 
unhealthy foods, but a recent report found that that's not the 
case and they've made scant progress in protecting children in 
that regard. So this cries out for government action.
    To give an example of how overwhelming these forces are, 
the Robert Wood Johnson Foundation is the single greatest 
funder by far of work across the nation to address prevention 
of childhood obesity. They're now spending a hundred million 
dollars a year on this. The food industry spends that much 
every year by January 4th, just marketing, just unhealthy food, 
just to children. So there's no way government can compete with 
that, no amount of education the government can do that can 
ever override the negative influence that the industry is 
having on our children.
    So specific things can be done in this regard. One is there 
could be legislative action to create a ban on all food 
marketing and advertising in schools. When parents release 
their children in to the care of schools, they expect a safe 
environment. They don't expect air that will hurt their 
children. They don't expect water that will hurt their 
children, and they shouldn't expect food that hurts their 
children either.
    To the full extent of its power, the FCC should regulate 
food marketing to children and adolescence, and Congress could 
enhance the FCC's power accordingly. Thankfully, the FTC, FCC, 
are taking new levels of action that we've never seen before on 
this, so I believe that the Administration's appointments for 
key positions in these agencies has been very important. But 
Congress can get involved in this as well, and I think there 
are very specific and constructive things that can be done to 
protect our children.
    Last, I'd like to talk about the issue of sugar-sweetened 
beverages, and these come up as a particular contributor to the 
obesity problem in the following way. First, there are the 
single greatest source of added sugar in the American diet. The 
beverage industry claims that somewhere around only 5 percent 
of total calories come from sugar-sweetened beverages for the 
American diet.
    That's a misleading statistic, because a lot of people are 
drinking none of it, which means that the people are drinking a 
lot more than 5 percent of their calories. And, in teenagers, 
some estimates are that between 15 and 20 percent of total 
calories are coming from sugar-sweetened beverages. That's a 
startling number. These beverages are of special concern, 
because they're the single greatest source of added sugar. As I 
mentioned, they are marketed relentlessly by a very aggressive 
and persuasive industry. And, also, they tend to thwart the 
body's calorie detection radar.
    The body recognizes when it's consumed calories and tries 
to make up for it. If you eat too much at one point, your body 
tries to adjust by eating less later. The body does better with 
solid foods than it does with foods that deliver calories in 
liquid form, and so sugared beverages become a special problem 
there; and, in addition, they deliver almost no nutrition at 
all except when the nutrition is added gratuitously by the 
industry in the form of vitamins and minerals, and the like.
    So my colleagues and I have proposed a penny per ounce tax, 
national tax, and State taxes on sugar-sweetened beverages, 
with the revenue to be used for prevention programs, especially 
to help the poor. Now, this is a controversial issue. I can 
tell by the look of the faces of people in front of me that 
it's a controversial issue. The States all around the country 
now are considering this. We're getting called almost by a new 
State every day. Cities are doing the same thing. And my guess 
is that it will just be a matter of time until we have such 
taxes.
    The challenge to the legislators is doing taxes that have a 
fundamentally sound, scientific base; that is the tax has to be 
of a certain amount; has to be an excise rather than sales tax, 
and the revenue needs to be used wisely in order to get the 
maximum benefit from it. The average American now consumes 50 
gallons a year of sugar-sweetened beverages. A penny per ounce 
tax would reduce that to 38.5 gallons a year, hardly a 
hardship, hardly the place where government could be accused of 
nanny-state and over intrusion into the institutional lives of 
its citizens.
    Mr. Kingston. Madam chair. I don't see this on the 
testimony, the statistics.
    Mr. Brownell. On my testimony?
    Mr. Kingston. Yeah. If you just hold one second I want to 
get back on the page. Where is that on there about the 50 
gallon per day and the one cent?
    Mr. Brownell. Oh, that's not in my testimony. I'm sorry.
    Mr. Kingston. Well, aren't you supposed to have a written 
testimony? I mean what you're saying is interesting and I want 
a track record of it, but it's not in this. So aren't we 
supposed to have that?
    Chairwoman DeLauro. I don't know that people have to.
    Mr. Kingston. This is not an unfriendly question.
    Chairwoman DeLauro. No. No, I understand. But we ask that 
we put the testimony in the record. We ask people to summarize 
and they're free to summarize.
    Mr. Kingston. But it's not in the record. That's what I'm 
saying.
    Mr. Brownell. Okay. Okay.
    Chairwoman DeLauro. And we can get it into the record if 
that comes from another report that the Rudd Center has done, 
and that can be put into the record as well. But what we will 
do in order to have you take a look at it, and then we'd be 
happy to put that into the record.
    Mr. Brownell. Fine. I'm happy to do it. Okay. But I 
apologize.
    Mr. Kingston. No, I think you know me well enough to know 
that if I ask an unfriendly question I'll let you know that in 
advance. I'm just trying to get it for the record.
    Mr. Brownell. Okay. Thank you.
    Mr. Kingston. Thanks.
    Mr. Brownell. Okay. So that really ends my testimony. I'm 
delighted to be here, and I believe that government can play a 
very constructive role in these three areas that I mentioned, 
especially around school nutrition. So I'm very happy with the 
committee's interest in these issues and I appreciate the 
opportunity to be here.
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    Chairwoman DeLauro. Thank you. Thank you very much.
    Ms. Chilton.

                        Statement by Dr. Chilton

    Ms. Chilton. Good morning. Chairwoman DeLauro and 
distinguished members of the Committee, I am honored to be 
invited to provide this testimony today. Thank you very much 
for having me.
    I'm a public health research scientist at Drexel University 
School of Public Health in Philadelphia. And I'm a member of 
the National Network of Pediatric Researchers, called 
Children's HealthWatch.
    I bring to you evidence of scientific research from over 
36,000 families across the United States. Our work monitors how 
the public policies being created right here on the Hill are 
written into the bodies and the brains of infants and toddlers.
    Children's HealthWatch. We are watching the children. 
Watching children's health take a major turn for the worse in 
the past two years makes us almost want to turn our heads away 
in shame.
    Take, for instance, last year's increase in food 
insecurity. Food insecurity is the lack of access to enough 
food for an active and healthy life. The number of people that 
were food insecure in 2007 was 36.2 million. In a single year, 
that number jumped to 49 million. For children, it increased 
from 12\1/2\ million children to 17 million children.
    Hunger is in almost every community in the United States. 
I'll give an example. Last week, I was visiting my childhood 
home of Martha's Vineyard Island. Even there, one of the 
premier vacation spots of the Washington elite, the elementary 
school in Vineyard Haven has one-third of its children 
participating in the Free Lunch Program. Sometimes it's hard to 
fathom the numbers.
    But I'll tell what's even harder to fathom is the gaze of 
the fourth-grade girl from Martha's Vineyard, as she was 
accompanying her father to the local food pantry.
    In Philadelphia, it may be hard to fathom that more than 
one in three people do not have enough money for food. But 
harder to fathom is how Lewis Roman, a 13-year-old boy, 
explains how he is often hungry, how when he is hungry, his 
stomach hurts so badly that he feels like throwing up.
    Food insecurity is the worst for the youngest children in 
America. Nearly one in four children under the age of six is 
food insecure. That translates to over 9 million 
kindergartners, pre-schoolers, toddlers, and infants, that are 
not getting adequate nutrition, because their families cannot 
afford it.
    Our research with Children's HealthWatch demonstrates that 
young children living in food-insecure households are more 
likely to have a history of hospitalization, more likely to be 
in fair or poor health, and have increased risk for 
developmental delay.
    This is a major public health crisis, occurring right 
before our eyes. If we do not act on behalf of these children, 
we are very literally squandering the potential of our next 
generation.
    But you, all of you here, can improve the condition of 
millions of children through appropriating the full amount of 
dollars necessary to fund the Child Nutrition Programs. Our 
children's health research shows that these programs do prevent 
hunger and they do improve health. But they need to work 
better.
    For instance, our research shows that children who receive 
WIC were more likely to be a household that was food secure. 
They're more likely to be in excellent or good health, and less 
likely to be at developmental risk.
    The children that did not fare well were those that were 
eligible but did not receive WIC, due to administrative 
barriers.
    We recommend to decrease the barriers to application and 
reapplication, there is still a great need for outreach, 
translation services, and schedule accommodations for working 
mothers.
    Another program that funds the youngest children in America 
is the Child and Adult Care Food Program, the CACFP. The CACFP 
currently subsidizes healthy meals for nearly 3 million low-
income children in licensed day-care centers. Our Children's 
HealthWatch research found that toddlers participating in the 
CACFP were less likely to be in fair or poor health; and 
they're less likely to be hospitalized.
    But the CACFP needs to work better. We recommend a 
streamlined and simplified program and paperwork requirement 
and to add a third meal or snack option to meet the nutrition 
needs of children in care for longer hours.
    For school breakfast and lunch, access for low-income 
families must improve. The best way to do this is to instate 
area eligibility for school breakfast and lunch. The model of 
the Philadelphia Universal Service Program shows how this 
eliminates barriers to participation, such as unnecessary and 
time-consuming paperwork.
    Finally, the United States has missed every single one of 
its goals for reducing hunger over the last ten years. This 
year it will shamefully miss the Healthy People 2010 goal of 
reducing hunger to 6 percent.
    But what can the American people do, if there is no 
mechanism for accountability? While you work to appropriate 
funds for Child Nutrition Programs, please appropriate funds to 
develop a strategy, a national strategy, that documents the 
effectiveness of our efforts to end child hunger, and sets 
achievable goals to end it by 2015.
    So much of what is written into legislation looks good on 
paper; yet it often does not work or function according to 
plan. The people who participate in these programs--in this 
case, the parents and caregivers of children--know best how 
they work.
    This committee could appropriate funds to establish a 
mechanism of accountability that ensures the inclusion of low-
income families in the implementation and evaluation of new and 
ongoing initiatives within the child nutrition reauthorization.
    Children's bodies and minds are growing right now. We do 
not have time to wait. Let's not turn our heads away from the 
harsh realities of hunger, and make sure that we have a plan to 
end hunger once and for all.
    As a scientist, I can be your partner in this. But your 
true partners are the parents of the most vulnerable children 
in America. They know what hunger is, and they too can show you 
the way.
    Thank you very much.
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    Chairwoman DeLauro. Thank you very much, Dr. Chilton.
    Scott Faber. Thanks, Scott, for being here.

                         Statement by Mr. Faber

    Mr. Faber. Thank you for inviting me.
    Good morning. My name is Scott Faber. I'm the Vice 
President for Federal Affairs for the Grocery Manufacturers' 
Association. We represent more than 300 food, beverage, and 
consumer product companies. We look forward to working with all 
of you to reauthorize the Child Nutrition Act to improve the 
health of America's children.
    To do so, we must provide USDA with the tools and the 
resources to feed many more children, and we must give USDA 
clear authority to set standards for all foods sold to students 
during the school day in the school environment, including 
competitive foods.
    We share the priorities announced by Secretary Vilsack, 
including new science-based standards for competitive foods, 
increased access to meal programs, more education about healthy 
diets, more healthy foods in the cafeteria, and increased 
training and better equipment in the kitchen.
    As Secretary Vilsack said, we will not succeed if any of 
our children aren't learning as they should, because they are 
hungry and cannot achieve their potential, because they aren't 
healthy.
    In addition, we look forward to working with you to meet 
the goals set by First Lady Michelle Obama to solve the problem 
of childhood obesity within a generation. Over the past three 
decades, child obesity rates have tripled, and as soon as 
result, nearly one in three children in America is overweight 
or obese.
    To meet this challenge, we must provide parents and 
children with more healthy choices; we must promote healthy 
diets; and we must provide new opportunities for physical 
activity.
    As the First Lady said, ``This is not like a disease, where 
we're still waiting for a cure to be discovered.'' We know the 
curer for this.
    Everyone has a role to play in this fight: The public 
sector, private industry, and parents. We pledge to do our part 
by continually improving the way we develop and market our 
products.
    In recent years, we've changed the recipes and sizes of 
more than 10,000 of our products to reduce calories, fats, 
sugars, and sodium, without sacrificing the taste and 
convenience that consumers demand.
    We are also working with FDA and USDA to devise new food 
labels that will make information about calories and other 
nutrition facts clearer for busy parents and consumers.
    And we have significantly increased messages about healthy 
food and active lifestyle during children's programming. As a 
result of a pledge that many of our companies took, two-thirds 
of advertisements to children during children's programming now 
feature healthy foods and active lifestyles.
    Clearly, our industry has a big role to play. Government at 
all levels has a role to play as well. Government can do much 
more to promote physical activity in school and after school. 
Government can do more to promote nutrition education, not just 
in school but in the marketplace and in the work place, as 
well.
    Government can do more to promote greater access to healthy 
foods by bringing grocery stores and farmer's markets to 
underserved areas. And government can do much more to ensure 
that low-income children participate in Federal nutrition 
programs.
    As Dr. Brownell has said, we need to work together to make 
the healthy choices the easy choices. And we look forward to 
working with you to reduce the number of hungry children, and 
to increase the number of healthy children in America's schools 
and neighborhoods.
    Thank you.
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    Chairwoman DeLauro. Thank you very much.
    Zoe.

                       Statement by Ms. Neuberger

    Ms. Neuberger. Thank you.
    I'm Zoe Neuberger with the Center on Budget and Policy 
Priorities. And we are a non-profit public policy institute, 
that focuses on how public policy affects low and moderate 
income people.
    Thank you very much for the opportunity to testify. I'm 
going to focus on the importance of improving access to the 
Child Nutrition Programs.
    You really have a terrific opportunity to make it easier 
for low-income children to get healthy meals. And in light of 
the recession, access to these programs is even more critical.
    My testimony will focus on two specific proposals that are 
included in the Hunger-Free Schools Act. The first proposal 
would help high-poverty schools. It would allow them to provide 
all of their students with free school meals, without using a 
standard application process.
    The second proposal would help low-income children get free 
school meals, regardless of where they attend school.
    But before I get into the specifics of the proposal, let me 
just say a little bit about why we think investments in access 
to these programs is so very important.
    Over the long term, a thriving economy that provides 
economic security for all is the most effective mechanism to 
reduce hunger. And even when the economy is in great shape, 
millions of American children rely upon the Federal nutrition 
programs on a daily basis.
    In light of the recession, children need these programs 
even more. The experience of the last two recessions suggests 
that unemployment and poverty will remain high long after the 
recovery officially starts.
    In a recent Gallup poll, nearly one in four households with 
children said there were times in the past year when they 
didn't have enough money to buy needed food.
    As Dr. Chilton spoke to you very eloquently, children are 
especially vulnerable to the effects of recession. Failure to 
meet their basic needs could undermine their healthy 
development and impede learning, with potentially lifelong 
consequences.
    That's why it's critical for Congress to expand access to 
the Child Nutrition Programs. We hope that a significant share 
of available resources will be invested in making it easier for 
children to get the meals for which they're eligible, offering 
new meals to eligible children, or expanding eligibility to 
reach additional low-income children.
    Now let me explain the first proposal that I mentioned, 
which would help high-poverty schools. There are about ten 
thousand schools around the country, in which at least four-
fifths of the children are poor enough to qualify for free or 
reduced price meals.
    It doesn't make sense for these schools to process the same 
paperwork that other schools do, just to identify the very 
small numbers of children who are not qualifying for free and 
reduced price meals.
    The Hunger-Free Schools Act would create a new option--it's 
known as community eligibility--that would enable these schools 
to serve all breakfasts and lunches free. Instead of spending 
time on paperwork, staff could focus on more important issues, 
like giving their students a good education.
    Federal reimbursements would be based on the share of the 
school students receiving other public benefits. As I 
mentioned, there are about ten thousand schools nationwide, 
that could qualify for community eligibility.
    These schools serve more than one in ten school children 
nationwide. To qualify, a school or district would have to 
automatically enroll at least 40 percent of its students in the 
School Meals Program, based on their receipt of other public 
benefits, like food stamps.
    That's a very high bar, actually. But it would make sure 
that the option is targeted to schools serving the poorest 
communities.
    The goal here is really very simple: Hunger should no 
longer be a barrier to learning in schools that serve high-
poverty areas.
    I've actually got fact sheets here for each of your 
districts, if you're interested afterwards, that show which 
schools we think might qualify for this option.
    The second proposal that I wanted to mention has to do with 
expanding automatic enrollment. Under the current school lunch 
eligibility roles, all children in households receiving food 
stamp benefits are eligible for free school meals. But they 
still have to be enrolled to get those meals.
    It doesn't make sense to require parents who've already 
gone through the rigorous food stamp application process to go 
through a similar application process to get school meals.
    And schools shouldn't be faced with this unnecessary 
paperwork. They have better things to spend their time on.
    So Federal law requires school districts to automatically 
enroll these children. The automatic enrollment process is 
called direct certification.
    The Hunger-Free Schools Act includes an important expansion 
of direct certification. It would expand direct certification 
by allowing the use of Medicaid data. Under the current rules, 
Medicaid data can't be used for this purpose.
    We estimate that there are two million low-income children 
around the country who could be automatically enrolled for free 
school meals for the first time, using Medicaid data.
    Some of these children are already being enrolled for these 
meals by filling out a standard paper application. Some of them 
aren't getting the meals now.
    Directly certifying more children would not only simplify 
the enrollment process, it would also likely reduce program 
error. And it does that by shrinking the number of children 
approved through the paper application process.
    As I can imagine, parents or schools can make mistakes when 
filling out an application or processing one. Relying instead 
on income data that the Food Stamp program or Medicaid program 
has carefully gathered and assessed and verified will limit the 
opportunity for error.
    So let me just conclude by reiterating that we urge you to 
let schools focus on feeding hungry children by including the 
Hunger-Free Schools Act in reauthorization legislation. No 
vulnerable child should miss out on healthy meals because of 
red tape. Thank you.
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    Chairwoman DeLauro. Just a quick question, Zoe. Is that 
Medicaid--I know the bill, but does it have SCHIP as well, or 
is it----
    Ms. Neuberger. It would allow for the use of SCHIP data up 
to a certain income limit.
    Chairwoman DeLauro. Okay.
    Ms. Neuberger. The idea is to mimic the income cut-offs--
program----

             INSTITUTE OF MEDICINE REPORT--RECOMMENDATIONS

    Chairwoman DeLauro. Cut-offs, okay. Thank you. Thank you 
very much.
    Mr. Concannon, let me start. The IOM, the Institute of 
Medicine, released last October a report on School Meals, 
Building Blocks for Healthy Children. The report recommended 
revisions to the nutrition standards requirements, so that the 
school meals are more healthful. The recommendations included 
increasing the amount and variety of fruits, vegetables, whole 
grains, setting minimum and maximum level of calories, and 
focusing more on reducing saturated fat and sodium.
    What is FNS currently doing to implement the 
recommendations?
    Mr. Concannon. Thank you for that question, Madam Chair. 
We're very enthusiastic about the recommendations that the IOM 
made to us in October. And we are currently working vigorously. 
We were charged by our Secretary when those recommendations 
came in to move this forward as quickly as possible, and we 
expect that later this calendar year we will have the first 
round of proposed regulations to implement those IOM 
recommendations.
    Chairwoman DeLauro. Mm-hmm.
    Mr. Concannon. Now as I mentioned in my testimony, it's 
very important that there be additional financial resources 
made available to schools to help them implement these, as one 
of my adult children often reminds me of that very well-known 
chain of high-quality food stores, sometimes those wholesome 
foods take a much larger portion of a paycheck. And I think we 
know that in our own lives, and I think institutions, schools 
have that same experience.
    Chairwoman DeLauro. What additional authorities--well, you 
talked about the funding--any additional authorities would USDA 
need to fully implement the recommendations in IOM?
    Mr. Concannon. I believe that there may be some, but I 
think they're significantly parallel to what we currently 
require of the Healthier U.S. Schools Challenges.
    So I don't think that, per se.
    Chairwoman DeLauro. Mm-hmm.
    Let me ask the rest of the panel. Do you think FNS could do 
more under current authorities to implement the IOM 
recommendations?
    [No response.]
    Chairwoman DeLauro. If you do, fine. If you don't, that's 
okay.
    Are there additional authorities that you would recommend 
to FNS to implement the IOM recommendations?
    [No response.]

                    NUTRITIONAL STANDARDS IN SCHOOLS

    Chairwoman DeLauro. Okay.
    Let me just ask a question on schools that are failing to 
meet current standards. Okay.
    Only 67 percent of schools are meeting all of the Federal 
nutrition standards today. If we are now to implement higher 
nutrition standards, will we just have more schools failing to 
meet these standards? How do we work with schools? How do we 
provide them with the necessary tools, so that 100 percent of 
them are able to feed children with what the IOM 
recommendations are for?
    Mr. Concannon. If I may try to answer that. I believe 
schools, like many organizations, will respond to incentives, 
and we're proposing that the increased reimbursement for meals 
be related to those schools that, in fact, meet the higher 
standards.
    I might say as an aside, that First Lady's recently 
announced national effort to reduce obesity has urge-directed 
the USDA to double the number of healthier U.S. schools across 
the country.
    I've been in some wonderful schools. I was in a school in 
rural Georgia, a very poor area of the state, that is doing 
marvelous work, both in the nutrition programs, but also in 
physical activity.
    So I know it can be done. I've seen it in urban areas. I've 
seen it in rural areas. I think part of we are proposing again 
in our--I didn't highlight every single one of the elements we 
have proposed, but we've proposed creating additional 
incentives for States, for schools, for others really to up the 
ante, so to speak, and improve the nutritional quality of 
meals.

                          REIMBURSEMENT RATES

    Chairwoman DeLauro. Mm-hmm. Would love to know, and have 
you get back to us on what incentives you are offering.
    You did speak to increase the reimbursement rate. Dr. 
Brownell talked about a dollar. Mr. Concannon, how much would 
you increase the reimbursement rate? And what would it cost?
    Mr. Concannon. I don't think we could go as far as a 
dollar.
    Chairwoman DeLauro. Mm-hmm.
    Mr. Concannon. But there are 31.5 million children who have 
lunch each day in American schools. And our proposed 
reimbursement would be a fraction of that.
    Chairwoman DeLauro. Mm-hmm.
    Mr. Concannon. And while we haven't really pencilled it 
out, it's part of that additional billion dollars that the 
President proposes in his budget. And we'd be happy, we want to 
work with the Committee on that.
    [The information follows:]

    USDA is eager to expand the number of schools who can achieve 
HealthierUS School Challenge (HUSSC) recognition since that translates 
to more children having access to healthier meals and opportunities for 
nutrition and physical education/activity, major factors in preventing 
and reducing childhood obesity. In addition to the plaque, banner, and 
recognition currently provided to HUSSC schools, those approved under 
the current criteria will receive the following monetary incentives:
     $2,000 for Gold of Distinction Award;
     $1,500 for Gold Award;
     $1,000 for Silver Award;
     $500 for Bronze Award.
    USDA is also exploring additional recognition options for meeting 
the HUSSC criteria. We would be happy to work with members of Congress 
to identify other creative recognition opportunities.

    Chairwoman DeLauro. Okay.

                     REIMBURSEMENTS FOR PAID MEALS

    Also--and this follows up a little bit on what I said 
before--so that you're talking about where you do have poor 
performance and nutrition standards, is these incentives plus 
the reimbursement rate. And as I said, if you're putting those 
incentives together, it would be good for us to know what they 
are, and to work with you on that.
    Let me ask--I've got a minute here--FNS reimburses schools 
a modest amount for paid lunches. Okay. Paid lunches are for 
children whose parents have higher incomes and were not 
eligible for free and reduced price meals.
    Why does FNS reimburse the school systems for a portion of 
the paid lunch? Shouldn't the schools charge the full cost of 
paid meals to students that can afford to pay, and then use the 
increased funding to improve overall nutritional quality of the 
school food programs?
    Anybody else can chime in as well. Go ahead.
    Mr. Concannon. Well, we think it's important to continue to 
provide support to schools for paid meals, as well, because we 
view it as a broad public utility. We don't want the School 
Meals Program to be simply for the poor children, and the 
resultant potential stigma that might occur with that.
    Chairwoman DeLauro. Mm-hmm.
    Mr. Concannon. We think that that very modest amount that 
still goes to subsidize, basically, meals for paid children is 
part of, again, our commitment sort of broadly, like education, 
is for all children.
    Chairwoman DeLauro. Okay. So, go ahead, because your 
testimony--yes.
    Ms. Neuberger. Yes, thank you. We agree that it is 
important to subsidize paid meals. However, we have concerns 
about the prices that are charged to students for those meals.
    Chairwoman DeLauro. Okay.
    Ms. Neuberger. Basically, the way the system works now, 
school districts get Federal reimbursements, and they can spend 
those reimbursements on whatever they want that's part of their 
school food program.
    What USDA's research has shown very consistently is that 
the prices that are charged for paid meals--and also actually 
for competitive foods--are not in some places set high enough 
to cover the cost of providing them.
    What that means, in essence, is that some of the 
reimbursements that are designated for free and reduced price 
meals are being used to make up the revenue gap there. They're 
cross-subsidizing the paid meals and competitive foods.
    Chairwoman DeLauro. Mm-hmm.
    Ms. Neuberger. We think that's a problem. We'd like to see 
those reimbursements for free and reduced price meals going to 
benefit the children who qualify for free and reduced price 
meals.
    We're also concerned, as Congress is considering 
significant reimbursement rate increases that, unless something 
is done to address this issue, those reimbursement rate 
increases might not result in healthier meals. Even if that's 
the goal.
    Chairwoman DeLauro. Mm-hmm.
    Ms. Neuberger. And what we would like to see is a change in 
the law that would essentially say that if schools want to 
offer competitive foods, the prices that they set for those 
have to cover the cost of providing them, so that the Federal 
program won't be covering those costs.
    And we'd also like to see, for the schools that are 
charging relatively little--you know, some schools are charging 
$1.00 or $1.25 for a paid meal--for them to be put on a path so 
that eventually the revenue they're bringing in for those meals 
covers the cost.
    Chairwoman DeLauro. Do it gradually.
    Ms. Neuberger. Right. We are concerned. You know, some of 
the children getting paid meals are at 200 percent of poverty. 
They certainly don't have it easy.
    And so I think we need to be very careful in how this is 
approached, that you wouldn't want increases that would drive 
too many kids from the program, particularly the kids at the 
lower end of the income group that are getting those meals.
    But if you consider, you know, an increase of ten cents a 
year, let's say, we think that even the families in the paid 
category could absorb that, and that it's an important source 
of revenue to consider for the programs, because it would 
bolster the programs and put more money on the table for some 
of the improvements that people are very interested in.
    Chairwoman DeLauro. Mm-hmm. Okay. My time is expired--to 
know why we have competitive foods in the schools at all. But 
that's my approach.
    Mr. Kingston.
    Mr. Kingston. Thank you----
    Chairwoman DeLauro. Sorry. There are three votes? One 15, 
two 5's. And so if anyone wants to go and then come back----
    Mr. Kingston. And do you know what, Madam Chair? If anybody 
is unable to come back, I will yield my time to them now. You 
and I will be here for a while. So if anybody has another 
hearing they have to go to?
    Chairwoman DeLauro. You got two? Well, Mr. Bishop? Let me 
do this, Mr. Latham? Mr. Latham. Let me go to this side of 
the--okay, Mr. Bishop.

                           CHILDHOOD OBESITY

    Mr. Bishop. Thank you very much.
    Dr. Brownell, I smiled. You're pretty big on the stick as 
opposed to the carrot. I like Dr. Concannon's suggestion as far 
as the incentives are concerned.
    I can relate very much to your comparison contrast of the 
way things were when you were a boy as when I was a boy, 
growing up. One of my best experiences in school growing up was 
the school nutrition program.
    Those were among my favorite memories. It was healthy, 
nutritious food. But we did not have the sedentary lifestyle. 
And I think with Leave No Child Behind and the incentives on 
performing better on tests academically, today's youngsters are 
much more sedentary.
    As a consequence, they don't burn those calories.
    But I would just caution you that while I believe that the 
beverage industry has been a culprit in terms of some of the 
increase in calorie consumption in our schools, and we do need 
to have some regulation there, I have to at least salute them 
for their cooperation, particularly their involvement with the 
First Lady's new initiative.
    And they have set some specific guidelines and some targets 
as to how they will do their part to help us reach the goals 
that we are trying to reach.
    But I'm not sure that using the stick in terms of a $1.00 
tax is necessarily going to be politically palatable or very 
well received.
    I do think that increased reimbursement rates, as the Under 
Secretary suggested, could go a long way.
    I have some concerns--and I just want to mention that I 
don't know that we should punish those families who are 
participating in the paid lunch program, because certainly it's 
a strain on all families, for children particularly if they've 
got multiple children. And any increase, a dime increase per 
year, is going to impact them, particularly with the economy.
    I'd like to see us do the general subsidization to the 
extent that we can for the overall program, and of course 
specifically target the people who are lower on the poverty 
line.
    So I just want to let you know that all of us are very 
concerned with good, sound, healthy child nutrition, that the 
obesity programs that many of us have been involved in 
targeting over the last three years, through this Subcommittee 
and other Subcommittees, I think illustrate the fact that we 
are very, very concerned about it.
    But it's going to require a number of approaches, and of 
course I hope that we can do it more with incentives than with 
the stick. I just don't know that taxes in this environment are 
going to be good on targeting certain industries.
    But I do think that with incentives, we can encourage very 
strongly and probably get the results we need to reach the 
goals.
    And I look forward to working with you, with the 
Subcommittee, particularly with the Department in nutrition. 
And farmer's market programs, I think, can go a long way to 
doing it, with the SNAP Program, with the vouchers. We've had 
some pilot programs in Georgia, for example, that have allowed 
local producers of fresh fruits and vegetables to actually 
participate with people leaving out of the office, where they 
get their electronic benefits, where they can get a voucher so 
they can actually buy them right there on the grounds. And that 
has been very helpful.
    And I look forward to expansion of that program, perhaps 
nationwide, because fresh fruits and vegetables would make all 
the difference in the world for healthy outcomes.
    Chairwoman DeLauro. Thank you, Mr. Bishop.
    Is there any commentary?
    Mr. Brownell. If I could respond quickly? The idea of 
incentives sounds really good to me, and I think that's a 
wonderful place to start. My only concern is that issue that I 
mentioned when I began my testimony, of the healthy and less 
healthy foods not being on the opposite sides of a seesaw.
    So things like farmer's markets, which we support totally, 
and I think is a wonderful idea, may help with nutrition and 
under-nutrition issues. But it may just be pushing more 
calories into the system--good calories, to be sure--but if 
it's pushing more calories into the system, and the less 
healthy foods aren't dropping as a consequence, then you've got 
more of a problem potentially with childhood obesity.
    We don't know that to be the case, but the recent data 
suggests it might be.
    And just the other thing regarding the taxes is, I agree, 
the political feasibility at this moment is questionable. All 
the signs to me point that it's increasing in likelihood almost 
by the day.
    And the comment about it now being politically feasible is 
exactly what would have been said 30 years ago about tobacco 
taxes. And look where we are with that now. And I'm not saying 
tobacco and food are the same. But certainly tobacco taxes were 
a highly successful public health maneuver. Government got 
involved, first the States, and then at the Federal level. And 
it's really protected public health.
    So maybe at some point, people will look at classes of 
foods, like sugared beverages, in that same light.
    Chairwoman DeLauro. And it is not a dollar tax. I just 
wanted to correct the record on that. It's a penny.
    Mr. Brownell. A penny per ounce.
    Chairwoman DeLauro. It's a penny. It was increased 
reimbursement of the programs at a dollar.
    And with that--oh, you have a comment? Yes, a quick.
    Mr. Faber. One comment. And for your benefit, I don't want 
this to become a debate between Dr. Brownell and myself. But 
I'm not sure everyone's aware that full-calorie beverages are 
entirely out of elementary and middle schools, and will soon 
be, this year, out of all our high schools.
    Chairwoman DeLauro. Mm-hmm. The high school issue is the 
big issue, high school is a big issue----
    Mr. Faber. Will be diet beverages. So a lot of progress has 
been made. More progress could be made.
    On the tax issue, I think it's a complicated issue for a 
number of reasons. One is that when people go to the grocery 
store, the tax that would have to be placed on a certain item 
to discourage the use of that, would be extraordinarily high.
    Even if we were willing as a society to pass an 
extraordinarily high tax on certain foods, there is a 
substitution effect. So it's just as likely that people would 
consume other beverages that may pose other problems or other 
health challenges.
    The other practical problem is that these taxes fall on 
everyone, regardless of income, regardless of whether they have 
a healthy weight, and so in many respects are unfair and 
regressive.
    Chairwoman DeLauro. Mm-hmm.
    Mr. Faber. But I think the big point here is that there is 
literally a library of evidence of what will help address 
childhood obesity, where we have family-based and school-based 
multi-component programs that combine physical activity, 
nutrition education, behavioral counseling.
    As the First Lady said, there is no question about what 
works. We're not waiting for a cure. And I worry that 
conversations about taxes are really a distraction from what we 
can do today to start to change the number of children who are 
suffering with these challenges.
    Chairwoman DeLauro. But I would just sit here, and I think 
we're going to have an opportunity to go do some back and 
forth. Which I think we need to do.
    Because, quite frankly, I think with the moral imperative 
of this issue, we must have everything on the table. We must. 
Because it is not--we have to figure it out, and we can't use 
standard arguments on both sides. We have to take a look at a 
new debate.
    And I know there's no time left on the vote, so.
    Chairwoman DeLauro. So my point is that that's why I wanted 
to have this hearing. We need to engage in the fulsome debate 
with everything on the table. For too long, we all stand in one 
corner or another. We don't come together to figure it out, as 
it applies to the public health.
    This is where we are now dealing. I deal with this on the 
food safety side of this, and it is in the interest of the 
public health. And we do know that we have a crisis in public 
health with regard to these issues.
    And that's why I appreciate the candidness of everyone at 
the table.
    We have to vote, so we will recess and come back quickly 
after these votes.
    Chairwoman DeLauro. The hearing will resume. I know Mr. 
Kingston is coming back, and I know several other members are 
as well. This is the appropriations season, and everybody has a 
Committee or chairing a Committee or a member of a Committee.

                 PHILADELPHIA UNIVERSAL SCHOOL PROGRAM

    But let me--Dr. Chilton, let me ask you a question. In your 
testimony, you discussed the success of the Philadelphia 
Universal Service School and program support for expanding this 
model to other school districts. What additional benefits has 
Philadelphia seen from having the ability to operate the 
Universal School and its program for the last--they're doing 
this now for 18 years----
    Ms. Chilton. That's correct, yes.
    Chairwoman DeLauro. And it's universal and free?
    Ms. Chilton. Yes.
    Chairwoman DeLauro. Okay. Is Philadelphia able to focus 
resources on serving healthier meals? Have you seen a 
correlation between the kids served by this universal program 
and improvements in health outcomes?
    Ms. Chilton. We have not been studying the health outcomes 
of children who are participating in the universal meal 
program, so I can't really speak to the scientific evidence on 
that.
    Chairwoman DeLauro. Okay.
    Ms. Chilton. And that's where I like to stay whenever I 
give a testimony is on our research. But we know that the 
school district saves about $800,000 a year by not having to 
process paper applications. And we know that they've been able 
to utilize that money for other types of things at the school, 
and thinking about ways to improve their school, the school 
district feeding programs. About four or five years ago, they 
completely got rid of sodas in school and competitive foods in 
most of the schools.
    One of the problems with the universal feeding program is 
however that the charter schools are not mandated to provide 
free reduced price lunch. And so it's very difficult--so 
there's--most of the charter schools are not really 
participating in the program at all. And so you have those 
schools in the low-income areas of Philadelphia, and the 
children are not receiving any assistance.
    One of the other issues that we have with universal feeding 
is that it's fantastic for lunch, but it has been lots of times 
sort of opt-in for school breakfast. So we've been working very 
hard with the school district to mandate if they have the free 
lunch program that they actually--that they need to have school 
breakfasts and that we can actually grade the schools on that. 
It becomes a part of the grading system.
    Chairwoman DeLauro. Let me understand. The breakfast 
program is universal and it's free and you've now said though 
that charter schools are apart from that.
    Ms. Chilton. Yes.
    Chairwoman DeLauro. So that's an issue that again on the 
table with what's happening in charter schools. Because in fact 
you're right about where they are located. I'm confused. Are 
you talking about universal school lunch program being free as 
well? Is that what you were----
    Ms. Chilton. The school lunch program is free.
    Chairwoman DeLauro. It's free.
    Ms. Chilton. Breakfast would be free, but there are many 
principals that don't participate, don't work hard to do 
outreach to have school breakfast at the school.
    Chairwoman DeLauro. I've got it. I've got it. I've got it.
    Ms. Chilton. Which has been a major issue, and we know that 
breakfast is very important for school performance, et cetera.
    Chairwoman DeLauro. Well, that's why I was talking earlier 
about how we try to move this in the direction of schools that 
are not, you know, participating in these efforts. Now you said 
they save $800,000 a year. You also said that--so this was the 
entire school system then outlawed competitive foods? Help me 
with that again.
    Ms. Chilton. Soda. Sorry, soda.
    Chairwoman DeLauro. Soda?
    Ms. Chilton. Sodas in the school.
    Chairwoman DeLauro. Sodas in the schools.
    Ms. Chilton. We're working on competitive foods.
    Chairwoman DeLauro. And now they're working on the 
competitive foods as well?
    Ms. Chilton. Mm-hmm.
    Chairwoman DeLauro. Okay.
    Ms. Chilton. One more thing about my testimony, which I 
would like to correct for the record, in my testimony I said 
that all Philadelphia schools have free lunch, and that's not 
true. That's true for two-thirds of the schools that have a 
child poverty rate of 75 percent or below. So there are one-
third of the schools that are still serving many poor children 
that do not have universal access to those programs, and that's 
something that needs to be improved.
    Chairwoman DeLauro. Okay. Thank you. I would love at some 
point to sit and talk about that but also to see if we can 
bring in some of the Philadelphia folks to--and maybe meet 
informally with the members of the Subcommittee to talk about--
--
    Ms. Chilton. I guarantee it, you would have enthusiastic 
response from Philadelphia to meet with you or anybody on your 
committee.
    Chairwoman DeLauro. Yeah. In addition to that, it's--
because the Secretary spoke last week about, and I talked to my 
colleague, Allyson Schwartz, where this healthy food initiative 
is working to get nutritious foods into what are the food 
deserts, and a way in which to do that, and apparently that's 
been an ongoing in Philadelphia as well.
    Ms. Chilton. Yes.

             COMMUNITY ELIGIBILITY FOR SCHOOL MEAL PROGRAMS

    Chairwoman DeLauro. So on both of those issues, and I--and 
what we are going to do is to proceed with that, and as I say, 
I think try to do it informally with my colleagues so we can 
get the benefit of their understanding on this.
    Let me just have a quick follow-up on this issue from Zoe. 
You talk about a similar concept I think in the Hunger Free 
Schools Act, which is a community eligibility. What changes 
from the Philadelphia model would you recommend and why? And 
what are the barriers in implementing community eligibility in 
other areas that have a high percentage of children living 
around the poverty line?
    Ms. Neuberger. Sure. The important similarity between what 
Philadelphia is doing and this community eligibility model is 
that in both instances, schools would be offering meals free to 
all kids and their reimbursements would be set based on 
something other than applications. It would take them out of 
the business of processing applications each year and having to 
track meals in the cafeteria.
    What's different is that Philadelphia's reimbursements are 
set based on a household survey that they conducted, and that 
is actually a very resource-intensive process. They invested 
about half a million dollars up front in designing a very 
detailed survey.
    Chairwoman DeLauro. I've got you. Got you, yeah.
    Ms. Neuberger [continuing]. That is meant to be rigorous. 
We are concerned that for many districts around the country----
    Chairwoman DeLauro. It's not affordable.
    Ms. Neuberger [continuing]. And schools that's not going to 
be feasible, that kind of up-front investment.
    Chairwoman DeLauro. Not that affordable.
    Ms. Neuberger. What's nice about the community eligibility 
option is that it is based on the direct cert process which 
every district must be conducting right now. By law, every 
school district must be doing direct certification to reach 
kids that are already enrolled for food stamps.
    What we'd like the community eligibility model to look like 
is that it would be very simple to operate. Schools and school 
districts that qualify would essentially get a notification 
each year telling them you are eligible for this option, here 
is what your reimbursement rate would be under it. If you want 
to take it up, let us know, and you won't have to do the 
regular application process. If you don't, you can still use 
the standard system.
    So we think it would actually have very low obstacles to 
participation in terms of operational issues. The key issue 
that I think that schools and districts will look at is whether 
they think the reimbursement level will be enough for them to 
cover their costs.
    Chairwoman DeLauro. Okay. Thank you. Let me yield to my 
colleague, Mr. Kingston.

                             BUDGET DEFICIT

    Mr. Kingston. Thank you, Rosa. And I wanted to begin with 
to make sure everybody, you know, start at point one. Does 
everybody know what the deficit is as a percentage of spending? 
We've got five people here who want to spend more money. This 
is the spending committee, not the authorizing Committee. No 
one knows? Anybody want to guess? No guesses? Do you think it's 
high, do you think it's low, do you think it's where it should 
be?
    Mr. Faber. I'm willing to take a guess, Mr. Kingston, I 
imagine the deficit is about two-thirds of our annual spending, 
about $1.5 billion, and we are spending about somewhere between 
two-and-a-half and three--I'm sorry, trillion, two-and-a-half 
to three trillion annually. Is that about right?
    Mr. Kingston. Well, I'd give you some credit on that. The 
spending--probably a C-minus, but.
    Mr. Faber. Well, I went to law school, sir, not good with 
the numbers.
    Mr. Kingston. You know, the spending is $3.7 trillion. The 
deficit is $1.5 trillion, 37 percent roughly of our spending is 
deficit. Now add that to the debt and add that to our problems 
that we're having with Medicare and Medicaid and the war, you 
know, whatever spending example you want, we're running down 
the road possibly off a cliff sooner or later. Not my opinion. 
A lot of economic experts on that that might be your equivalent 
in the world of the economy in terms of expertise in their 
area.
    You know, we keep talking about free lunches. I think we 
ought to quit calling them free lunches. It's tax-subsidized. 
Somebody else has worked to pay for those lunches. And some of 
it, the money is borrowed, and some of it, it's printed. But 
when we throw around the term ``free lunch,'' we've got to 
remember there's no free lunch here, and, you know, these very 
children that we're trying to help will be the ones inheriting 
such a large debt. So, you know, I wanted to bring that up.

                CHILD NUTRITION PROGRAMS REAUTHORIZATION

    Mr. Secretary, a question to you is the proposals of the 
USDA are about a billion dollars.
    Mr. Concannon. Yes.
    Mr. Kingston. Do you have the price tag broken down in 
terms of the reimbursement rates or the bonus payments or the 
additional enrollment or the kitchen costs or--do you have that 
broken down?
    Mr. Concannon. For the billion dollars we have what amounts 
to about 16 individual priorities, and that's something that we 
continue to work on. It's something we would want to work with 
the Committee on. We know a significant portion of that would 
be required for improving or increasing the meal reimbursements 
for better quality meals.
    But we have another--I mean a number of smaller items, and 
I'm very sensitive to the Congressman's concerns about deficit, 
but I'm at the same time mindful, this is an area, if we do it 
properly, that can actually result in significant cost 
avoidance down the road.
    And I know just recently we met with some retired military 
generals, flag officers, who are concerned about the fact that 
three-quarters of young people between the ages of 17 and 24 
don't qualify for military induction because of--27 percent of 
them--because of obesity, others because they've dropped out of 
high school, others because they have criminal records. And 
they view it as a national security issue.
    I for a number of years administered health programs at a 
State level, and I know people with chronic conditions are the 
most expensive patients you have in the system. So to the 
extent we could make a breakthrough in this child nutrition 
reauthorization, I believe it can save us. It costs us money in 
the short term, but I sincerely believe it can result in cost 
avoidance down the road.

          FUNDING OFFSETS FOR CHILD NUTRITION REAUTHORIZATION

    Mr. Kingston. Well, let me ask you this. What are your 
offsets?
    Mr. Concannon. I know there have been offsets discussed 
within the USDA, but our hope is that there are offsets even 
beyond the USDA.
    Mr. Kingston. I don't know if this Committee can help you 
with offsets beyond the USDA, but we certainly can do it within 
the USDA. What are they?
    Mr. Concannon. I'm not familiar with what they have settled 
on at this point. I know there have been discussions of 
different offsets, but----
    Mr. Kingston. Well, you know, it's interesting. This town 
always loves to talk about PAYGO after we just spent a lot of 
money. Both parties have this franchise, by the way. I mean, we 
always talk tough about budgets after we've spent an enormous 
amount of money. Jim Bunning actually brought hypocrisy to a 
national limelight last week, you know, that we're calling 
things emergencies as if suddenly we're in a recession. No one 
knew it the week before or the month before or the year before, 
but suddenly Mr. Bunning figured it out, and, you know, it's an 
emergency. We always push things into emergency spending so 
that we can get around what? The PAYGO rules.
    So the question that I would have is that if this program, 
the expansion of these programs are a top priority of the USDA, 
then the USDA should be saying we want another billion dollars, 
and here's where the money comes from, and it's a real offset, 
not a fictitious one where we're going after, you know, 
increased veterinary fees and taking it out of some nebulous 
pot somewhere that will never be done. But, you know, I think 
that that would be something that we should, you know, the 
merits of this program, I think we could talk about a lot of 
different things here.
    I actually was--I always like to hear what Mr. Brownell 
says because he always is thinking outside the box, very brave 
guy, and coming up with creative ways to irritate somebody in 
this town, which is somewhat of a good thing to do on a regular 
basis. But I still think we've got to quit fooling ourselves as 
a Congress, Democrat or Republican, and we've got to start 
paying for things, because if we want to stop starvation, we 
want to help children, we need to have a sound fiscal policy, 
and that's the best way to help them.
    So what I would like you to do is give us very specific 
offsets so that we know where this money is coming from, and 
then we can talk, well, maybe you don't need a billion or maybe 
you need a billion and a half, maybe something lower than that 
but.
    Mr. Concannon. I'd be glad to work with you on that, 
definitely.
    Mr. Brownell. May I make one comment too in response to 
that? I'm not an expert on economics, but one thing that has 
been proposed, if people can find this idea of a tax on 
something like sugar-sweetened beverages acceptable, is to use 
that money for these very programs.
    Mr. Kingston. You know, I was so tempted to get a Coke 
during the break, and then I knew I had to face you, so. But--
--
    Mr. Brownell. Well, buy it while you can.
    Mr. Kingston. I yield back.
    Chairwoman DeLauro. That's a way to pay for something and 
we've got a whole lot of things in the ag bill that we might 
take a look at in terms of paying for this priority. I want to 
make one comment, Sam, before I turn it to you, because I think 
this is very interesting. It was Harry Truman I guess it was 60 
years ago who dealt with the School Lunch Program, National 
School Lunch Program, as a direct result of the military, and 
the military finding that the recruits were malnourished, 
undernourished, et cetera. And there's a report which is called 
Mission Readiness. Twenty-seven percent of our Nation's young 
people are too overweight to now serve in our armed forces.
    We literally have come full circle in 60 years. And a quote 
by Mr. Truman is, in the long view, no Nation is healthier than 
its children. And that was a guy who said the buck stops here. 
The buck stops here. Mr. Farr.

                         PROGRAM SIMPLIFICATION

    Mr. Farr. Well, thank you very much, Madam Chair. I'm 
delighted we're having this hearing. I've spent a lot of time 
visiting the feeding programs at the school level, and I think 
the offsets are there, Mr. Kingston. They're in the 
administrative costs of this program. It ranks number three in 
paperwork after the IRS, and I forget what number two is. But 
number three is the child nutrition program. And the reason is 
that the forms that one has to fill out are just outrageous. 
And it's also a reimbursement program. Think if you told people 
go out and buy all the groceries on your own money and then 
we'll reimburse you. And then you get dinged because you bought 
the wrong things. Well, that's essentially what the School 
Lunch Program is.
    And we have approached this thing, and the testimony shows 
that we have six different programs that we call school feeding 
programs. And I want you--and my question goes to this. You 
said you want to reduce the barriers. And I wonder how you're 
going to reduce the barriers by--more money is going to do one 
thing, but how can you in one school have a National School 
Lunch Program, a School Breakfast Program, a Summer Food 
Service Program, a Child And Adult Care Program, and a Special 
Milk Program, each one requiring a different set of 
circumstances to qualify for? All perhaps the same child in the 
same school. It's obvious that what you ought to do, and this 
is where I think the Administration and the leadership is 
wonderful on talk about child nutrition. But I think you're 
very lax on leadership and reorganizing the management of it. 
Because George Miller just told me on the floor that he's 
marking up the Child Nutrition bill perhaps this weekend. And 
to me, we ought to reduce these things into two feeding 
programs, a community feeding program and a school feeding 
program.
    And I wish the academics would look--because I think with 
Mr. Kingston we have that barrier, I mean, you know, people are 
looking at all the costs. But we have got to modernize this by 
eliminating that and duplication of bureaucracy and things like 
that. So I really want to know that if you're just going to 
throw more money at it, it ain't going to solve the problem. It 
will help more kids get in the program.
    So here are my overall themes, Madam Chair. That's ten of 
them, ten things. We expand and improve the direct 
certification. Find model State programs that have proven 
effective in identifying eligible children and match them with 
school enrollment lists. Utilize Medicaid and SNAP and TANF for 
categorically eligible where the Medicare rosters can 
adequately identify eligibility and direct certification. 
Reduce the barriers to school meal applications by simplifying 
the application process.
    I have one right here. I don't think anybody in this room 
could fill it out. This is what you have to fill out when 
you're an uneducated person. You have to say the names of all 
the household members in your house, the monthly earnings from 
work before deductions, monthly welfare child support and 
alimony payments. Monthly payments from pensions, retirement 
and Social Security, if you even know what those are, by 
definition. Monthly earnings from job two or any other monthly 
income. All of those have to be filled out. I mean, I'm filling 
out my taxes right now and I was looking at all this stuff, and 
you need a CPA to fill out your application for free lunch.
    We should allow districts to choose to use Title I funds to 
buy electronic point of sale systems that help eliminate the 
stigma of participation. These systems have increased 
participation for free and reduced and for--this idea that 
you've got to line up in the poor line, the poor kids line and 
the rich kids line. Just--it's absurd. It's obscene and it's 
embarrassing that America has to do that.
    Eliminate tiering of the CACFP. The CACFP is the only 
program that produces--provides standards for child care and 
meals. Tiering has reduced the number of child care providers 
participating in the program. Diminishing the standards in 
nutrition for every young child. Simplify and streamline. 
Should not have multiple programs, multiple applications and 
reports and approved. Again, it's on a reimbursement basis. 
It's outrageously complicated.
    Improve the nutritional quality, which you've spoken about. 
Establish some national standards for both meals and other 
foods available in the cafeteria. Additionally give the 
Secretary of Agriculture the authority to set standards for 
food sold outside of the cafeteria during the school day, so 
that all the junk food shouldn't be able to--we help all these 
schools with all these categorical Federal programs, and then 
we allow them to turn around and sell things that are not 
healthy.
    Provide community entitlement for school breakfasts. I 
think there ought to be, school breakfasts ought to be just for 
every child and there ought not be any means test. Wellness.
    Add to local wellness policy provisions of the last Child 
Nutrition Reauthorization Act to add more specific minimum 
standards and fund nutritional education. Those are things that 
we have to do, and I've got a bill which I think most the 
members of this committee are co-sponsors on, which would 
require all the schools in the country to have salad bars, and 
we hope we can get that into the reauthorization bill.
    But, Madam Chair, I think that if we don't focus on having 
to reduce the bureaucratic barriers which my school 
administrators tell me are up to 60 percent of the cost of a 
program. There's your savings, Jack. There's your offset. And 
we certainly could do that. The leadership's got to go in and 
bust these special interest--I mean, these, you know, what did 
I call it, the categories that are all their own special rice 
bowls. There are people that won't want to, you know, each 
one's got administrative politics to it. And they've got to be 
pulled into one, particularly when you think that that same 
child can qualify for six programs in the same school. And it's 
extremely costly to administer all that.
    Mr. Concannon. Let me just comment on that, Congressman. I 
think you make a very good point, and that is one of our goals 
is to simplify access, and that's why we propose a number of 
incentives to make broader use of direct certification which 
will eliminate the requirement for parents to fill in those 
applications. And we're urging that it be done increasingly in 
States like Ohio.
    Mr. Farr. Have you urged that to the committee?
    Mr. Concannon. Pardon?
    Mr. Farr. Have you urged that to the committee? Have you 
made your recommendations to the Education and Labor Committee?
    Mr. Concannon. Yes it has. It's gone forward with them. And 
we are, states like Ohio have done a wonderful job of 
processing these data for certification at a state level. So we 
know there's great variability across the country. It can be 
done simply if there's a commitment to do it.
    I do want to make a comment factually. All kids have to go 
through the same line together. There should be no free lines 
or separate lines for children in America's schools if they are 
receiving a free or reduced priced lunch. So we certainly would 
like to know if that's occurring, because that would be a 
violation.
    Mr. Farr. Well, I hear--I don't know exactly whether it's 
two separate lines, but I do hear that it's easy to distinguish 
between the children that are getting the free lunch and the 
children that are having to pay for it.
    Mr. Concannon. There shouldn't be.
    Mr. Farr. Have you visited some of the schools lately?
    Mr. Concannon. Yes I have. I've been to schools.
    Ms. Neuberger. I'd like to jump in and say something on the 
use of direct certification, because I think you raised some 
very important points there. You held up the school meals 
application as an example of something complicated for parents 
to fill out. That is very, very simple compared to the 
applications for the food stamp program or the Medicaid 
program, as it should be. It's a form that's completed by 
parents at home. They don't get help. The people at schools who 
are making eligibility determinations, you know, are people at 
schools who don't get a lot of training in this. They process 
applications a few times each year.
    If you look at what the food stamp programs and Medicaid 
programs are doing, they've got offices of caseworkers whose 
full time job is to look at people's income and make sure 
they're verifying it and getting it right. It makes no sense 
for schools to duplicate that effort, and that's why we've been 
very big supporters of using data from other programs through 
the process of direct certification. That's in place now for 
food stamps, and that's why we think expanding the allowable 
data sources to Medicaid makes so much sense.
    Mr. Farr. I'll come back. I guess my time has expired. I 
have some other questions.

                            A LA CARTE FOODS

    Chairwoman DeLauro. It may be, and this is not a question, 
maybe we can discuss it later, it's the a la carte lines, as I 
understand it, that are there that--they do not have to--I 
could be wrong. The a la carte lines, kids can go through them 
and they don't have to meet nutrition standards. Is that 
correct?
    Mr. Concannon. Not Federal standards.
    Chairwoman DeLauro. No Federal standards. And, I mean, 
we're not paying for that, but that's there, so that's a 
competitive food which challenges what kids should be doing. 
Anyway, a big issue which we need to really focus on. I'm 
sorry. Mr. Boyd.

                         FARM TO SCHOOL PROGRAM

    Mr. Boyd. Thank you, Madam Chair. And all of you, I enjoyed 
your testimony. It's all--all of your thought-provoking 
testimony and especially you, Mr. Brownell, Dr. Brownell. But a 
couple of points first. The farm to--I mean, you talked a 
little bit about the farm to school. The farm to school is a 
great program.
    I have a very successful farm to school program in the area 
that I represent, and I've visited that program and I visited 
with the schools that all are engaged on the back end of that 
program, and everybody is happy. Everybody seems to be happy, 
and everybody thinks this is a great program, so I just wanted 
to make that plug. I notice you included that as a prominent 
part of your testimony.
    I did want to also ask you, Mr. Concannon, about the after 
school meals that you--that we have going. I understand we have 
14 states now, is that right?

                           AFTER SCHOOL MEALS

    Mr. Concannon. Correct. That's part of the Child And Adult 
Care Feeding Program. It's limited currently to 14 states, and 
we are proposing that program be expanded to all 50 states.
    Mr. Boyd. I have advocated and worked real hard last year 
to get Florida included in that. Does your President--our 
President's proposed budget include funds to include Florida in 
that program?
    Mr. Concannon. Yes it does.
    Mr. Boyd. Okay.
    Mr. Concannon. Yes it does.
    Mr. Boyd. And you presume that this budget would take in an 
additional $140,000? Is that the number I saw?
    Mr. Concannon. That's the estimate that was seen, yes.

                            SUGAR BEVERAGES

    Mr. Boyd. Okay. Thank you. Dr. Brownell, I was very 
interested in your thoughts on sugar drinks, and they're good 
thoughts, part of them were anyway. And I was very interested 
in the exchange with Mr. Concannon and the chairwoman about how 
we on the additional funding that we will provide for the cost 
of the meals, whatever that number is, 35 cents or whatever 
you're saying it is, and the chairwoman had suggested that we 
put incentives in the program somehow or another so folks could 
be incentivized to do better in terms of health if they would 
receive this.
    I had one idea, Madam Chair, that I think would make 
everybody here happy, or at least the panel. The Florida citrus 
industry is a great industry that provides a lot of jobs and a 
great healthy product, but it's very difficult to find 100 
percent juice in the schools. They're taking the juice and 
putting water and sugar, and, I mean, you know, a lot of the 
drinks that you find in the schools are sugary drinks, and that 
was your point. Just my suggestion, Madam Chair, was one of the 
incentives to be that we provide 100 percent pure Florida 
orange juice in the school districts as an incentive.
    Mr. Boyd. You don't have to respond to that, I mean.
    Chairwoman DeLauro. But the 100 percent is great. I think 
that's in the IOM standards is 100 percent.
    Mr. Faber. Can I just clarify that? Because one of the 
things we did talk about a little bit earlier is the commitment 
that the beverage industry has made through the Alliance for a 
Healthier Generation, which is a partnership that involved the 
Clinton Foundation. As a result of the pledge those companies 
took--I've got a copy that I could submit for the record--all 
soft drinks are out of elementary and middle schools, but the 
only thing that you can get in elementary and middle schools 
are eight-ounce servings of milk which are fat free or low fat, 
as well as 100 percent juice.
    And in middle schools, it is the same except milk may be 
sold in a slightly larger portion. And then in high schools, 
you can get low calorie beverages, but again, only 100 percent 
juice. So this has been a three-year commitment. This is the 
third year. So in all of our schools, you will only be able to 
purchase 100 percent juice beginning essentially next----
    Mr. Boyd. And that's your--I'm sorry. You were reading from 
that proposed----
    Mr. Faber. This is just a summary of the commitment that 
the beverage industry has made through the Alliance for a 
Healthier Generation.
    Mr. Kingston. Will the gentleman yield?
    Mr. Boyd. Certainly.
    Mr. Kingston. Is that juice from concentrate or not from 
concentrate?
    Mr. Faber. It's 100 percent juice. It can be from 
concentrate.
    Mr. Boyd. It's just not as--it's just not as good tasting, 
Jack. It might be as good for you, but who would want to drink 
it? I'm on your side on this. I just want you to know. One more 
question if I could--am I out of time?
    Chairwoman DeLauro. No, go ahead.

                SENIOR FARMERS' MARKET NUTRITION PROGRAM

    Mr. Boyd. Okay. The 2008 Farm Bill, Mr. Concannon, mandated 
an increase from 15 million to 20.6 million in the Senior 
Farmers Market Nutrition Program. Can you tell us the expected 
impact this increase will have on the program and its impact on 
nutrition, or do you have any thoughts on that or any data?
    Mr. Concannon. We'll have to get back to you on that 
subsequently. But I know I've been out--was out in a--up in New 
Hampshire back in December, and they spoke glowingly of the 
importance of that program in that State, but I don't know that 
data. We will get that to you.
    [The information follows:]

    [GRAPHIC] [TIFF OMITTED] T7780B.042
    
    [GRAPHIC] [TIFF OMITTED] T7780B.043
    
    Mr. Boyd. Thank you very much. Thank you, Madam Chair.
    Chairwoman DeLauro. Thank you, Mr. Boyd. Ms. Kaptur.

                      AGRICULTURAL EFFORTS IN OHIO

    Ms. Kaptur. Thank you so much, Madam Chair. Welcome. It's 
really great to have you here as we do America's important 
work. I will share a story. Last weekend I spoke to the Ohio 
Teachers Association from all the major communities in our 
State, and at the end of my speech I said I'd now like to ask 
you a question. How many of you on a regular basis experience 
hunger among the children that you teach as a contributing 
factor to their not being able to learn? Thinking that about 10 
percent of the audience would raise their hands. Over 90 
percent of the teachers did.
    I share that with you because that's why we're here today. 
Under Secretary Concannon, thank you. You're the right man in 
the right place and you've got a big job to do. And from my own 
perspective in Ohio, I'd like to share a few things that might 
help.
    First of all, I very much want to encourage you in your 
efforts to engage the local farmer and grower in providing 
product to the schools. I love this local farm, local grower 
connection. In Ohio, 98 percent of the food we eat is not from 
Ohio, which is an oxymoron, because we have the capability to 
feed ourselves and certainly our children.
    But the USDA has been the most difficult instrumentality to 
work with in the urban setting, quite frankly. We've gotten 
much better cooperation from our Botanical Gardens where we 
have now over 90 community gardens that will go up this year. 
We have high tech, vertical growing systems. We have the 
largest greenhouse industry in the midwest, and we are working 
with our county commission using Department of Labor funds and 
HHS funds through TANF, for example, through WIA. USDA is not 
at the table effectively. You know that. That's why you're in 
the job you're in today.
    So I just want to make you aware that these connections are 
very, very hard to achieve and the system that existed in the 
20th century is not effective in the 21st for USDA's effective 
participation in this local farm, local grower to local school 
connection. We have to rediscover those connects.
    Number two. Engage the youth. I am very interested in 
replicating this experience. I was at the Martin Luther King 
day commemoration in our district about a month ago, and there 
were thousands of people. And afterwards, I was standing 
talking to some of the gathered people, and I felt a tugging at 
my jacket. And I looked around and here was this little girl, 
and she said, ``Hi. My name is Shelby. I'm six years old, and I 
don't want you to close the Padua Center because I want to be a 
plant scientist.'' This is in the heart of one of the poorest 
neighborhoods in America. And USDA has not been involved.
    Working with our Botanical Gardens, the Catholic Church, 
our county, we have found a way to raise chickens in the city 
now. We have found a way to raise vegetables. It's not high 
tech yet, but we're going to get it there. But you know, it 
would be really nice to have USDA conscious of these kinds of 
experiences. And then Shelby said, and I just share it because 
it's such a great story. She goes, ``And do you know what? 
Chickens, when they're little babies, they have yellow 
feathers. But when they grow up, their feathers change color.'' 
And she was so excited, and she was so happy. And she said, 
``And they give me the eggs to take home to my mommy.''
    All right. That experience is very important, because the 
city has been robbed of the extension programs, of working with 
the earth. We have a whole generation of youth, one young woman 
in a program back home said, well, you know, they said this is 
a potato. She said do you have to take the paper off to eat it? 
Did not know what a potato was. To her, a potato was a french 
fry. We have so much work to do to restore agricultural and 
plant science knowledge in the cities and suburban areas of our 
country.
    So my--we need education. We need to link growing at the 
school site, not just for the culinary classes, but for the 
youth. I have a group in my region called Veggie U. They have 
tried--they're so frustrated. Great farmer, he donates a 
million dollars a year out of his profits to help to put these 
little kids in fourth grades to teach children how to grow 
plants, and they love to do it, but USDA doesn't help. I'm not 
yelling at you for USDA, I'm describing reality, because I know 
if you hear reality you can help us change it.
    So my question is, you know, yes, let's connect the grower, 
let's connect the farmer to the school, but let's engage the 
children, because they are our future. And I have no doubt that 
we will raise new growers, new farmers, new greenhouse 
operators, new food processors, new chefs, new small 
businesspeople with the products that they will grow. One group 
says, hey, let's take these peppers and let's grind them up and 
create paprika. I said now you're talking my language. All 
right. But the city people have been robbed of that really over 
the years. They've been relegated to snack coupons. And I just 
want to make you aware of the great potential.
    I want to thank Michelle Obama. She is right, she's right 
on. I never thought I'd live to see somebody who had that kind 
of position in our country lead us forward. So I wanted to 
mention those issues to you, the importance of USDA being a 
partner with our Botanical Gardens, with TANF, with WIA, and I 
know my time has expired, Madam Chair, so I'll just summarize 
again. And also engaging the children. Find a way through our 
educational programs.
    My advice to you is to take the top ten poorest communities 
in America, take five in the rural area, five in the urban area 
or ten and ten, however you're going to do it. Focus your 
tactical teams there. We've placed an invitation to USDA 
through the Toledo School of the Arts for a tactical team to 
come out to us, but I just don't want it to be that school. I 
want it to be the whole system, so they can see how we can work 
with you and help USDA be as effective in this environment as 
you have been in production agriculture across this country. 
Thank you very much, Madam Chair.

                          NUTRITION EDUCATION

    Chairwoman DeLauro. Thank you very much, Ms. Kaptur. Let me 
just mention this to you, and this is for all the Committee 
members. And I, this is not self-serving in any way. One of the 
things that I'm going to do in my district, and obviously we 
all operate in our own districts, is--and I had an experience 
with working years ago on a program called ``Kick Butts 
Connecticut'' which was about moving to middle school kids and 
encouraging them not to start to smoke.
    So we've gone through that effort, and I'm now going to set 
up in all of the middle schools and put a program together that 
allows us to do a middle school nutrition program, doing 
several things. It may be you get somebody from USDA to come, 
but it's about the gardens, it's about cooking, it's about what 
a nutritious--we'll bring someone in to cook. Engage starting 
at the middle school level. This is something I think that we 
can do. I really do. It means the cooperation of the schools, 
and with the latter program, once a month we would have a 
program in some school, the school has cooperated by busing the 
kids from their schools to this one. So the schools were 
engaged and involved.
    We brought in--they did skits, we brought in people to talk 
to them. They were engaged in learning about smoking and what 
detrimental effects it could have on their health. So we're 
going to try it. We're going to try it this--before the end of 
this school year as a pilot in one of the towns that I have, 
and hopefully it works, and I would let you know that. But I 
think that there's something that we can do here in terms of 
educating our kids and engaging the Federal agencies, the 
academic institutions, the medical profession and others in 
terms of assisting us with this issue and getting to kids.
    Ms. Kaptur. Could the gentlelady yield?
    Chairwoman DeLauro. Sure.
    Ms. Kaptur. Madam Chair, I'd just say those kinds of 
prototypes, because we're talking about turning a massive 
agency created in what, 19th Century? When was USDA created? 
1860. I mean, think about this.
    Mr. Farr. President Lincoln.
    Chairwoman DeLauro. Lincoln.
    Ms. Kaptur. Okay, Lincoln. Think about this mindset of 
where we've come from and where we are today. And I do think we 
need those prototypes to use the best practice at USDA and to 
connect it to other resources in our communities. And I know 
from our situation we are not maximizing that opportunity, so I 
welcome the gentlelady's proposal.
    Chairwoman DeLauro. Thank you. Mr. Kingston.

                           OBESITY VS HUNGER

    Mr. Kingston. Mr. Concannon, I wanted to visit the 
statistic on obesity. Do you feel obesity is a bigger problem 
than hunger in America?
    Mr. Concannon. It's ironically, and it's a paradox that 
they coexist and they're variations on the very same theme. I 
saw reference in several pediatric journal articles that 
appeared just within the past two weeks pointing out the 
studies that showed very young preschool children putting on 
extra weight and that listed the risk factors--poverty. That's 
the 800 pound gorilla, to use a bad maybe pun in this respect, 
but that's one of the variables. Single parenthood, chaotic 
households, difficulty in people having meals together. These 
are all factors in very poor households.
    And some of the citations that have been mentioned by other 
members of the subcommittee here today, Congress people, on the 
existence of whether it's school teachers running into children 
who are hungry or the USDA's own studies or studies done by 
several of these national organizations this past year, they 
coexist, ironically. And so I think they're both major 
challenges for us. And hunger exists, unfortunately, in this 
country, and we certainly have the capacity to produce the 
food. It's a matter of getting it aligned to the right people 
and getting healthy food to people.
    Mr. Kingston. We have a definition of obesity though, 
right?
    Mr. Concannon. Yes.
    Mr. Kingston. Do we have a definition of hungry, of hunger?
    Mr. Concannon. Yes we do. And the definitions relate on the 
USDA side to food insecurity and severe food insecurity. And we 
published a study back in November of this year, this year 
past, showed that some 17 million people over the course of the 
year experienced food insecurity, and a small number but a 
significant number, about a million children, actually 
experienced the severe form, meaning hunger.
    Mr. Kingston. And what would be the number of obese? It's 
14 million hungry. How many obese?
    Mr. Concannon. Not within that--I can't relate which of the 
people who are obese were hungry, but we actually have 
statistics that break out by age cohorts the statistics for 
obesity by age groups. And it relates to where they fit in the 
BMI and which percentage they are.
    Mr. Kingston. Do you know what city has the most healthy 
people in the country? Has anybody--has anybody ever looked at 
that?
    Mr. Concannon. I've seen--not so much on cities, but I have 
seen data in the past on States based on, and I know States 
like Colorado and Oregon, for example, on balance have lower 
rates of obesity than the general populations. But I don't have 
that right in front of me.
    Mr. Kingston. You know, there's some things about obesity. 
There's so many different reasons. Technology has made it, you 
know, we don't have to do the physical labor. Technology has 
also brought down the cost of food production, therefore giving 
us a great abundance of food at a lower price. There's no 
incentive on insurance to have your optimal body weight because 
you're not penalized if you're overweight on insurance. So 
there's so many different things to it, but Portland, I think 
14 percent of the people actually commute by bicycle. And I 
think, Mr. Farr, Evans, California I guess, University of 
California-Evans is a very high----
    Mr. Farr. Evans?
    Mr. Kingston. Yes. I don't who----
    Mr. Brownell. Davis.
    Mr. Kingston. Davis. Excuse me. I don't know why--is Davis 
in Evans or why am I flipping that?
    Mr. Farr. Well, Davis is flat and has nothing but bicycles.
    Mr. Kingston. Actually, Davis has even higher percentage 
than Portland. And I'm wondering if you have any statistics on 
those, particularly those two communities in terms of healthy 
lifestyles.
    Mr. Concannon. I actually lived in the city of Portland for 
eight years, so I'm familiar with the variety, and it goes back 
to I think the comment Dr. Brownell made. Some of the 
challenges faced in terms of obesity reflect sort of a culture. 
It's both the lack of activity, the more foods, larger 
portions, more processed foods. There are a variety of factors 
that converge, but I'm very familiar with Portland, having 
lived there in this sense. It both is a community that has 
bicycle trails, that has an excellent public transportation 
system, that has--their public school systems currently don't 
allow, for example, competitive foods. So there are the 
convergence of a number of policies that actually I think 
result in the kind of----
    Mr. Kingston. How has that worked in their school policy? 
Are you able to trace that empirically?
    Mr. Concannon. You know, I can't speak to that directly. 
Now I'm aware of it, but I don't know what studies have been 
done, and I'm not sure. That policy was implemented after I 
moved from Portland in terms of the schools. But I know there 
is a culture there of, you know, walking, biking, making better 
use of the land use, access to the outdoors. The whole Oregon 
coast is substantially accessible to the public because of 
policies that were enacted way back in the 1970s, so it's a 
number of things together I think.
    Mr. Farr. It's engineering by building bike trails.
    Mr. Concannon. Yes.
    Mr. Farr. And that's the idea, you've got to build them.
    Mr. Kingston. Yeah. It would appear to me that as we look 
at nutrition--healthiness--obesity that we should look at those 
type communities in terms of what is being done right and what 
can be duplicated, and, you know, where the balance is.
    Mr. Concannon. I agree with you, Congressman. The President 
in early January issued an executive order across the Federal 
Government, not just to USDA but to other agencies, HUD, HHS, 
to devise a plan for attacking and reducing obesity across 
Federal agencies in terms of what are the unintended if not 
intended consequences at times of Federal policy. And I know 
that more recently when I visited schools up in Summerville, 
Massachusetts, excluding children with special needs, the city 
of Summerville has a policy of kids walking to school. Now you 
have to have safe venues. You have to have sidewalks that are 
shoveled. You have to have--it has to be safe for children, but 
that to me was an example of city policy that extends beyond 
the school. Now they also happen to be a school system that 
promotes farm to school purchases and incorporates into the 
school curriculum the use of food in the math programs, food in 
the gym program, food in the music programs even, and activity. 
So it really isn't isolated to one hour or to the cafeteria. 
It's really--it's back to this concept of culture. And places 
like that are, you know, they have a number of very poor 
children in that community as well, but are to me doing great 
things for these children. But it extend beyond. All of it 
isn't just related to how much does this cost. It's a policy, 
or sets of policies.
    Ms. Chilton. Can I add a couple of things, Mr. Kingston?
    Mr. Kingston. Yes. And I did want to just say, one of the 
things that's interesting is that so many of those activities 
are free activities, and I know that in Davis and in Portland 
they were initiated locally rather than top down. Yes.
    Ms. Chilton. Thank you very much. I just wanted to return 
to the definition of hunger. The definition of food insecurity 
is lack of access to enough food for an active and healthy life 
due to economic circumstances. In other words, food hardship. 
It's not only about enough food, but it's also about enough 
food for an active and healthy life. So it has a health 
component in it. So it's very difficult to distinguish between 
those families that are obese and those families that are 
hungry. You cannot see hungry in the body visually, and even by 
weight or height. You can see it in the very undernourished 
children that we treat at the Grow Clinic in Philadelphia. We 
have served over 400 families that have children with failure 
to thrive. It still exists here in the United States, and we're 
dealing with that all across the country. But you see hunger in 
poor attention, poor development, and increased hospitalization 
rates. You do not see hunger necessarily in body size. And most 
families that are food insecure will overcompensate with the 
cheaper foods that are high in saturated fat and in sodium, 
which are both contributors to obesity. And so you cannot--you 
can't separate the two things, oh, these are the obese kids. 
Let's deal with obesity, or these are the hungry kids, let's 
deal with the hungry kids. You work on both at the same time, 
you'll solve problems.
    Mr. Kingston. I know I'm way over my time. I really 
appreciate that answer. I think it's very important for us to 
look at these things as empirically as possible and as 
objectively as possible so that we can figure out, okay, what 
really does work and what doesn't. And as you know, often 
behind children there are a lot of poverty brokers who stand to 
gain a lot of money by expansion of Federal programs. And so, 
you know, one of the things that I think we should always go 
back to, well, what is the definition of this and who falls 
into these categories and who doesn't and are we just--you 
know, are we doing this effectively? That's what, you know, my 
interest is. But I think it's a great answer, and I appreciate 
it.

                              COMMODITIES

    Chairwoman DeLauro. I have a question. Mr. Hinchey gets 
back here. This is about commodities, Mr. Secretary.
    Mr. Concannon. Yes.
    Chairwoman DeLauro. And I'm going to try to move quickly, 
and I want to ask several of you to look at something.
    What types of commodities? How much are you recommending 
for the school breakfast program? How will the Department 
procure the additional commodities? Through which program?
    Mr. Concannon. Thank you very much, Madam Chair.
    First of all, let me say that the commodity programs of 
USDA have gotten healthier. And I think that's contrary at 
times to public perception, that when I have seen the 
commodities out in warehouses--I was in San Francisco not too 
long ago, and saw commodities in that warehouse run by the San 
Francisco Food Bank.
    But the reason I mention that they're healthier, is we in 
the USDA procurement specs require from these producers that 
there be less sodium. And we've heard from producers, for 
example, they say, ``You know, you have to let us know when 
you're going to purchase this, because we can't sell these cans 
of string beans or peas with that reduced salt amount, because 
that's a lot less than our commercial house brands or brands 
that they're selling to people.''
    Chairwoman DeLauro. Yes.
    Mr. Concannon. Same way with several of the chefs that I 
met with earlier this week are using USDA commodities bone-in 
chickens, for example. And I saw it when I was down out in 
rural Georgia as well, a school that is making use of those 
USDA commodities for healthy foods.
    So I say that as a parenthetical and aside, that the 
commodities are getting healthier.
    Now we're proposing that commodities be available to the 
school breakfast program. They haven't been up to this point in 
time.
    Chairwoman DeLauro. Right.
    Mr. Concannon. And they're an important part for schools to 
be able, when they use commodities. And by the way, the choices 
to schools are they decide which commodities they want to 
purchase. We don't say ``You must buy this,'' or ``You must buy 
that.''
    Chairwoman DeLauro. I understand.
    Mr. Concannon. And it's from a list of, I believe the total 
number is about 180.
    Chairwoman DeLauro. Right.
    Mr. Concannon. So getting healthier, the procurement for 
commodities is typically done by another part of USDA. We work 
with them. But it's done over in the Ag Marketing Service area. 
We don't buy it----
    Chairwoman DeLauro. But, you know, it's about 20 percent of 
the food served in school lunch program comes through 
commodities support.
    Mr. Concannon. Yes.
    Chairwoman DeLauro. And I understand your commentary on 
it's becoming more healthy.
    But when you look at the food being provided, heavily 
weighted to meat and to cheese, this is usually my colleague, 
Sam Farr's line of questioning. I want to ask, obviously you, 
Dr. Brownell, Dr. Chilton, Scott, Zoe: This is the list. We got 
the whole list. I want people in the area of science and 
practicality to review the list, and let us know what works and 
what doesn't work.
    Because they are buying; but if we're giving them--you 
know, they're looking for bang for the buck, they're looking 
for, you know, something--you've got to--I can't even read the 
print on this one, Sam. I like your list better. It's big, I 
can read it.
    We need objective folks reviewing these lists, and then 
making, so that we can make appropriate recommendations about 
what happens. It's just not every commodity that we have a 
surplus of, or that, you know, we have there. So that we are in 
fact saying ``We're going to serve a nutritious meal, and we're 
doing it, and we're subsidizing it.'' And it may potentially 
not be based in their selection on what really can work in a 
healthy and nutritious way.
    So I'm going to get it out to everyone and I really do want 
to hear back from people, so that we can get that information 
to our----
    And I'm going to make this point as well----
    Mr. Concannon. Would you yield for a point?
    Chairwoman DeLauro. I'd be happy to yield for a point.
    Mr. Concannon. Just for your point. We spent $786,000 on 
apples last year, and $148 million on mozzarella cheese.
    Chairwoman DeLauro. That's Sam's favorite is the mozzarella 
cheese----
    Mr. Concannon. That's the biggest----
    Chairwoman DeLauro. I understand. That's why I think that 
this is where we need to have some very good sound advice as to 
what we can say. Now that may put some folks, you know, it may 
not be to the liking of a lot of folks. But I think we have 
again, I'm going back to moral responsibilities. And if we want 
to do this and we want to, then we have got to provide the 
sheet from which they are selecting nutritious foods. So.
    Let me ask this question, Mr. Secretary. This is about 
local food purchases.
    My colleague, the Chairman of the Appropriations Committee, 
Mr. Obey, had this experience. A reporter in his district tried 
to unravel the food chain for commodity purchases of processed 
beef the School Lunch Program. They wanted to find out if the 
Federal Government was feeding the children in their community 
processed beef, meaning beef trim sanitized with ammonia. He 
talked to the school, who said to talk to the State. State said 
to talk to the companies. The companies said talk to USDA. USDA 
said talk to the companies. In essence, nobody wanted to answer 
the question.
    AMS, which purchases the beef products, says that AMS does 
not require any special labeling when this processed beef is 
used in the AMS-purchased ground beef.
    It appears that no one but the supplier knows what is in 
the processed beef. Not AMS, not the state, the local school, 
the parents, or the children, who are eating the beef.
    AMS pointed out that the schools are not required to order 
AMS-purchased commodity beef. They can instead use a cash 
reimbursement they receive from USDA to purchase the beef 
product.
    A flaw in the logic here. Suppliers use processed beef and 
provide the beef in bulk to the Federal Government. Schools 
cannot afford not to buy the AMS-purchased beef. They'll pay a 
much higher price for the beef if they buy it on their own.
    I realize that you do have initiatives that will help 
farmers to supply directly to the local school system, and 
which we applaud. But how will any of these initiatives solve 
the price disparity issue on ground beef for these local 
schools? How do we deal with that issue?
    Mr. Concannon. I'm certainly not an expert on price 
disparity issues.
    Chairwoman DeLauro. Mm-hmm.
    Mr. Concannon. I do know this, that AMS has considerably 
strengthened the role in the oversight there. And they've made 
substantive changes to improve the safety of meat. They're 
doing more frequent microbiological testing of purchased ground 
beef for the USDA programs. They're increasing and adding 
rejection criteria for beef supplied to manufacturers of USDA-
supplied ground beef.
    They're reviewing the food safety record of vendors of 
commercial sales. We have the HACCP program, as I think the 
Chair of the committee is very familiar with that.
    Chairwoman DeLauro. Yes.
    Mr. Concannon. And that involves again, USDA commodities.
    We're also aware of, again, the urgency and the importance 
of increasing the microbiological sampling frequency.
    So we're adding rejection criteria for beef supplied to 
manufacturers of USDA-purchased ground beef. Those are all over 
in the AMS side. That's where the supply comes in. But I know 
that is being strengthened across the----
    But I asked recently, by the way, at a supermarket here in 
Maryland in one of the suburbs, ``Where did this beef come 
from?'' I asked the butcher. And he said, ``I have no idea. It 
came from the U.S.'' he said to me.
    So----
    Chairwoman DeLauro. Well, that's another issue, that's 
another issue, Mr. Secretary (laughing)----
    Mr. Concannon. We have these challenges in supermarkets, 
even when you want to know. This was so-called organic beef. I 
said, ``Where does it come from?''
    Chairwoman DeLauro. Yeah. Well, the issue is--and I'm not 
putting you on the spot with the price disparity--but unless we 
have real control of what we're doing in these areas and what 
is going into this program, that our schools are not able, 
really, given the economics, of being able to go out and, you 
know, to purchase something that, you know, in essence, meets a 
higher standard.
    So, with that, Mr. Hinchey?
    Mr. Hinchey. Thank you very much, Madam Chair. And thank 
you all very much. And I'm awfully sorry that because of other 
obligations here, I unfortunately missed a lot of the responses 
that you've given to the questions.
    I very much appreciated the opening remarks that you made, 
and I paid a lot of attention to those, and I'm very grateful 
to you for what you said, and also for what you're doing.
    I think that you've made a significantly positive 
difference in the operation of this organization, and the 
benefits of that just flow out to a great many people all 
across the country.
    And so I thank you for that, and express my appreciation 
for it.
    I just wanted to try to understand myself a little better 
maybe these questions that were responded to earlier. But they 
have to do with the same thing that our Chairwoman was asking.

                         FARM TO SCHOOL PROGRAM

    With regard to the way in which children in schools are 
able to get some good food, breakfast and lunch: Just this past 
week, I was out in a part of State of New York, a place called 
Binghamton, which is a city along with two other cities in New 
York that got a great attraction, and a lot of, well, praise 
for the way in which they were providing good food to a lot of 
the students there.
    And then I was so delighted to see that Ms. Obama talked 
about it in the context of something that she was dealing with, 
I think it was just yesterday.
    So this is something that's very important and something 
that really needs to be dealt with across the country.
    So one of the circumstances is where this food comes from, 
and how we're going to bring about good food in as many of 
these schools as possible, both breakfast and lunch, and maybe 
even something else. I guess there are other things that 
sometimes pop up in some other places.
    So maybe you could just talk about that again. Probably you 
did. Maybe just talk about that again for a few minutes. And 
then also about the way in which the food can originate.
    One of the most significant things would be the ability to 
originate it locally. If you're living in a rural area and you 
can bring in the food from farms that are located locally, that 
would be something that would be very good.
    I understand that there is some requirement here with 
regard to where you obtain the food, based upon the price. But 
it would seem to me that if you're getting food for a couple of 
cents less at some place that's far away, there has to be a 
cost of transportation. There has to be the cost also of the 
deriding of the quality of the food, perhaps, in the context of 
that trip.
    So I'm just wondering what can be done to promote the 
generation of food locally in the context of these school 
operations and what can be done to extend them, strengthen them 
in places across the country?
    Mr. Concannon. Thank you very much, Congressman.
    Let me just say, in your reference to Binghamton schools, I 
know we had our Deputy Under Secretary up in Binghamton 
recently to acknowledge schools there, that are a part of 
Healthier U.S. Schools Challenge.
    And that's been one of the initiatives that we are 
promoting. We've had that opportunity now for about four years. 
Ms. Obama has directed us, challenged us to double that number 
in the next year and over the next several years to add 
thousands more schools in that regard.
    But to your question about local sourcing, I listened to a 
presentation by an Iowa State Ag Economist here, back some 
months ago, where he used the concept of food sheds in the same 
way we speak of water sheds--if you think of all the 
tributaries--and that we need to reinvigorate our systems, so 
that actually support that.
    Now that's happening in various places across the country, 
not as broadly as it needs to be occurring. But it is 
occurring.
    And at USDA we have something called a Tactical Farm Team, 
Congresswoman Kaptur referenced in her remarks earlier. And we 
know there are hundreds of schools as of right now that ask 
for, ``Please send that Tactical Farm Team out to help us.''
    Now we're working with the Ag Marketing Service. That's 
really more their side of the house, so to speak, on procuring 
locally grown or regionally grown foods. And we are encouraging 
that, because that starts right at the top of the agency with 
the Secretary and the Deputy Secretary.
    We concur and agree with you that it makes a lot more sense 
to have locally grown foods. One, they're fresher. Some of the 
members here have spoken to the benefits of school children 
coming to better understand where food comes from. I think that 
has, you know, wonderful effects in and of itself. But it also 
helps the local economy. It doesn't make much sense, with all 
due to respect, to some of the States that grow a lot of food, 
to have it shipped across the country, that would much rather 
have those that can be grown in different climates closer to 
home.
    We have in initiative that way. We are promoting that. 
We're working with the Ag Marketing Service in that regard.
    And we're also working on food safety issues related to 
that too, because we want to make sure that locally grown 
produce, for example, is safely handled, it's part of the issue 
of making sure that above all else we do no harm.
    And we want to make sure that--as I said, our reference, I 
was in Summerville, Massachusetts six or seven weeks ago. And 
Summerville over a period of years has married up with other 
regional school systems in Massachusetts to jointly purchase 
from regional farms within that State. And they are building up 
the capacity of those regional farms to supply the goods that 
they need.
    And we need to have this happen right across the country. 
We highly favor it.
    Mr. Hinchey. I'm very glad to hear that. And I thank you 
very much, and I hope that you're successful in moving it in 
that direction, who are predominantly in every place of the 
country.
    Mr. Concannon. Thank you.

                           CHILDHOOD OBESITY

    Mr. Hinchey. This operation is very critically important to 
the future of all of these children who are in elementary 
school, particularly, and in secondary school afterwards.
    One of the major problems that we have with young people in 
this country now is obesity. And that situation is having a 
major impact on them, on their ability to live longer, to be 
stronger, to be more effective. And it also has some effect on 
their intellectual ability, as well.
    Mr. Concannon. Right.
    Mr. Hinchey. So if we can provide breakfast and lunch for 
kids who are not going to get it in their own homes or their 
own set of circumstances, but then make themselves get this 
fat-producing food quickly--later, that would be a big 
improvement.
    It would be a big improvement on the future of this 
country, future generations.
    Mr. Concannon. Mm-hmm.
    Mr. Hinchey. And I deeply appreciate what you're doing in 
this regard, and I hope you begin to be successful. And I'm 
sure that we will be very happy to do whatever we can to work 
with you on this to make sure that it is done confidently and 
very effectively.
    Mr. Concannon. Thank you.
    Chairwoman DeLauro. Thank you, Mr. Hinchey. Oh, I know that 
we're going to have some votes again. And you may not be able 
to, but I in good conscious can keep people here, it could be 
another 45 minutes or an hour in terms of votes.
    So what I'm going to ask us all is, you know, three 
minutes. Ask your question. Let's get an answer, and let's just 
move, so that we get in as many questions as we can.
    I think everybody here knows all of us on both sides of the 
aisle, and with the panel how concerned we are about this 
issue, and how we want to get to some conclusions.
    And with that, Mr. Farr, you're on. Three minutes.
    Mr. Farr. Thank you much.
    Could you report back--your program is about $18 billion, 
and it's estimated you could save about a third with clean-up 
of administrative costs of streamlining. I mean, that's $6 
billion. That's more than you're going to get from Congress in 
the next six years.
    So I'd really appreciate it if you could get back to the 
committee on what it would take to create one school nutrition 
program, which would contain the School Breakfast Program, the 
School Lunch Program, Special Milk Program, and the new Fresh 
Fruit and Vegetable Snack Program. And put that under one 
administrative, hmm.
    And then I'm going to ask the Department in another 
category to do the community nutrition program, which would 
include After-School Snack Program, the Summer School Snack 
Program, the Child and Adult Care Program. And perhaps we'll 
get into all the Food Stamps and all the other, WIC, and all 
those other programs.
    [The information follows:]

    [GRAPHIC] [TIFF OMITTED] T7780B.044
    
                        SCHOOL BREAKFAST PROGRAM

    But I do want to know, following up on the Chairwoman's 
question about you in your testimony, you want to increase the 
school breakfast reimbursement and provide for community 
support by supporting with USDA-purchased goods. What are the 
things you want to add to that, provided through community 
support? What specifically do you want to buy in the commodity 
program?
    Mr. Concannon. Well, right now the School Breakfast Program 
does not have access to the commodity program. So we would make 
them, we would give them access to the commodity program and 
allow them----
    Mr. Farr. And that's the program that we have listed here?
    Mr. Concannon. Correct.
    Mr. Farr. Could you name some things on there that you'd 
like to see put in the School Breakfast Program?
    Mr. Concannon. Sure.
    Mr. Farr. Because the only thing I see on here is pancakes.
    Mr. Kingston. Soft drinks.
    Mr. Concannon. No, not soft drinks.
    Mr. Farr. No, there isn't any.
    Mr. Kingston. Skim milk and 100 percent juice.
    Mr. Concannon. If the Congress gives us authority to expand 
the commodity program to include breakfast that we can add 
commodities, that would be----
    Mr. Farr. That's the question, what commodities are you 
going to add?
    Mr. Concannon. Well, I would assume we'd add eggs, among 
other----
    Mr. Farr. They're not on the list.
    Mr. Concannon. No, they're not on there right now, but 
that's what we're saying, we would add them.
    Chairwoman DeLauro. Do you need Congressional authority to 
expand that list?
    Mr. Concannon. I think we'd need approval for it, would we 
not?
    Chairwoman DeLauro. No, no, but to approve it for 
breakfast.
    Mr. Farr. Are they in the Commodity--I don't think they are 
in the Commodity Purchase Program.

                           DOD FRESH PROGRAM

    Let me ask you another question. Marcy Kaptur and I, well, 
maybe we'll share this question. The Department of Defense used 
to do the DOD Fresh Program. We were able to leverage DOD's 
expertise in buying it. DOD now has outsourced its procurement. 
On top of that there are large fees to schools to access the 
new ordering system. Schools tell me that to qualify for the 
program, it's no longer a level playing field with the DOD; but 
that that big purchase does save something.
    And the question is, what is the Department doing to 
ameliorate the discrepancy on food costs, no longer using the 
DOD procurement program?
    Mr. Concannon. I think we'd have to get back to you with 
that answer.
    Chairwoman DeLauro. Was there an answer?
    Mr. Concannon. Yes. I said we'd have to get back to you 
with that.
    [The information follows:]

    The Department has successfully partnered with DoD to operate the 
DoD Fresh Program since 1995. The program does indeed leverage DoD's 
procurement abilities to greatly increase the amount of fresh produce 
made available to schools. In the last few years, DoD has transitioned 
from its own Produce Buying Offices to a system of prime vendor 
contracts. However, there are no additional fees to schools associated 
with this operational change in the DoD Fresh program. Schools continue 
to receive quality fresh products at a competitive price. The DoD Fresh 
Program is especially important for schools in remote areas served by 
few commercial vendors. The Department believes the program continues 
to play a critical function in providing and increasing fresh produce 
offerings to our Nation's schools. DoD Fresh is offered as an option. 
Schools should and do compare prices to commercially available products 
for every commodity made available by USDA. In some instances, schools 
can get better pricing through their existing distribution chains.

    Chairwoman DeLauro. Okay.
    Mr. Kingston. Three minutes, Jack, because we're trying to 
answer any questions before we go.
    Mr. Kingston. Okay. Mr. Under Secretary, let me get back to 
PayGo, because I do think, you got a billion dollar proposal 
here.
    Mr. Concannon. Mm-hmm.

                        REAUTHORIZATION OFFSETS

    Mr. Kingston. I would like you to follow up for the record 
on the breakdown of that in terms of, you know, which costs 
reflect increased reimbursement rates for school, increased 
reimbursement rates for breakfast, and added commodities for 
bonus payments, added enrollments to the programs, kitchen 
equipment and after school care. I'd like to know the break 
down of that, but more importantly, Pay-Go is now law, and I'm 
going to do everything I can, whether it's a Democrat or 
Republican proposal to make sure we don't waive it in the name 
of some phony emergency.
    One of the things that I, as a member of the Defense 
Committee, I'm glad that we have done the last year or two 
under Mr. Murtha's leadership is the war is not an emergency. 
We know we are at war. It's not like suddenly something 
happened out of the blue, but we should not be waiving Pay Go 
and so we need real offsets, very specific offsets, and I would 
like to know what those are.
    And I think once we establish that then we can kind of 
nibble around the edges; and, I don't mean nibble to the degree 
that we can have some honest discussion in terms of where the 
dollar should be effectively allocated to get to where we want 
to be, and I regret there has not been time to ask everybody 
questions here. We've got a good brain trust here, but there 
are so many things to continue talking about, so I'll yield. 
Thanks.
    Chairwoman DeLauro. Ms. Kaptur.
    Ms. Kaptur. Thank you, Madam Chair.

                     STREAMLINE PROCUREMENT PROCESS

    In the 2010 Appropriation Bill the Committee directed USDA 
to provide a report outlining needs to streamline the 
procurement process for good to allow schools to buy food 
locally. That has not been provided as yet, so I please request 
it, and also state I would appreciate for the district I 
represent, since it has been impossible to obtain this data, 
consolidated accounts explaining how the funds flow from the 
Federal Government to the State of Ohio to the Ohio's 9th 
Congressional District.
    That's four counties for the Federal School Nutrition 
Programs, and what was procured. How much was spent and what 
was procured? If you can find those, you will be the first 
person in America that has ever been able to do that and you 
can't go forward unless you know where you are, and so that is 
essential.

                   PURCHASE LOCALLY GROWN COMMODITIES

    Number two, I would suggest for the local grown, local farm 
to school effort, one of our problems in the region I represent 
is processing. Farmer's don't like to process the food. I would 
encourage you to look at regions like mine where we have large 
numbers of people who have physical challenges, who in past 
years when they would get auto contracts as a not for profit 
organization would do these contracts for local employers. Food 
could be the new substitute for the contracts that have been 
lost in the automotive industry where a disabled community 
could clean the food.
    We have kitchens where this can be done, but that would 
mean USDA would have to partner with organizations it is 
unfamiliar with in the urban environment. I would seriously 
place that before you. It can't be the only place in America 
where this is possible to achieve to help our local growers 
meet the market of the school or whatever.
    [The information follows:]

    The report to Congress you have requested is currently in the final 
stages of clearance and will be provided to the Subcommittee soon. In 
response to your question regarding funding under the FNS Child 
Nutrition Programs, the programs are operated through State agencies 
and therefore all funding including cash and commodity entitlements, 
flow through the State agencies to the appropriate entity, i.e., school 
food authority. For example, for the school meals programs, FNS 
provides a per meal cash and commodity rate per meal claimed on a 
monthly basis by the State. The State is responsible for providing 
funding and commodity support to the school district, and we do not 
require State agencies to report detailed data on how funds are 
distributed and subsequently utilized by school district. Detailed 
information on funding at the school district level should be available 
from the State.

                              WIC PROGRAM

    Thirdly, WIC: my question is do you have incentives within 
the WIC program to purchase locally.
    Mr. Concannon. On the WIC Program I believe people buy 
directly through supermarkets and stores. We don't buy it 
wholesale, for example, or the State agencies don't buy it 
wholesale.
    Ms. Kaptur. Well, there's a WIC farmers market coupon 
program that I wish were mandatory, but there's the regular WIC 
program. And, again, as we try to connect the growers and 
producers to the consumers, here is this massive program where 
we've added fruits and vegetables. I would just like to suggest 
that you take a serious look at that and review that program. 
Thank you, Madam Chair.

                        SCHOOL WELLNESS PROGRAM

    Chairwoman DeLauro. Thank you. Let me ask about, Dr. 
Brownell, wellness programs. Are you still recommending that 
school wellness programs be mandated in the upcoming 
reauthorization? You talked about that.
    Mr. Brownell. Yes, colleagues of mine at the Rudd Center 
have developed a way to score school wellness policies on the 
quality and variety of areas, and they found that the schools 
that have better wellness policies tend to do better regarding 
wellness. So there seems to be some benefit of having these 
policies in place, but having something where better policies 
are required and then practices coming from the policies would 
be mandated would be helpful.
    Chairwoman DeLauro. And, again, very quickly, if you have 
measurement tools of that where we can do that, if you can get 
those to us so that we can deal with that effort in terms of 
making recommendations on to the Authorizing Committee, just 
very, very quickly, in terms of the Authorizing Committee, Mr. 
Secretary, are you making recommendations on the utilization of 
wellness programs?
    Mr. Concannon. Yes, part of our recommendation is to 
strengthen them, and so yes.

                          NUTRITION EDUCATION

    Chairwoman DeLauro. Okay. Is FNS, Mr. Secretary, going to 
be more assertive in telling children what is not good for them 
and what foods we should be limiting the intake of? I, for one, 
don't have a clue why we are subsidizing non-nutritious food in 
our schools. I'm going to tell flat-out where I'm going: No; 
end of, you know, that's what I want to accomplish. So are we 
going to be talking about describing what they shouldn't do?
    Mr. Concannon. Yes, but we have proposed----
    Chairwoman DeLauro. Are we going to do that with framing 
messages for kids in schools? We frame messages about what's 
healthy. Are we going to frame messages about what is not 
healthy?
    Mr. Concannon. Yes, we are. And I might say we are 
following up on a Directive we received from Congress in the 
Omnibus budget Bill that directed the USDA, the Federal Trade 
Commission. I believe the FDA is included in that as well, to 
present a report to Congress by the 15th of July of this year 
on marketing foods to children between the ages of 2 and 17. 
And we're going to be entering something in the Federal 
Register later this month, and we will have that report to 
Congress by the middle of July. And the purpose of that is 
again to provide more transparency, better communication to 
Americans about what's good for you and what isn't so good for 
you.
    Chairwoman DeLauro. Okay. Mr. Faber, is GMA going to 
support school districts' efforts to restrict the sale of foods 
of minimal nutritional value that compete with meals sold in 
the school meal programs?
    Mr. Faber. Yes, ma'am. We, as I testified earlier, support 
giving USDA clear authority to set standards to what can be 
sold or served to students in the school environment, including 
competitive foods, and we would permit a process by which local 
school districts and schools could set higher standards for 
what can be sold through the competitive foods program.
    Chairwoman DeLauro. Okay. Great. Mr. Kingston.

                        SCHOOL WELLNESS PROGRAM

    Mr. Kingston. I wanted to ask Mr. Concannon a question 
following up what Rosa just asked you about the wellness 
programs in schools. Isn't that more U.S. Department of 
Education than USDA?
    Mr. Concannon. It is, but with something we've worked with 
them on, because they have a program that is targeted towards 
increasing, for example, academic performance in schools. And 
we have a focus on, again, the health in U.S. schools, and we 
have been dialoging with them to say let's make it easier for 
schools, and let's recognize there's a connection between the 
two as well.
    Mr. Kingston. But physical education is----
    Mr. Concannon. Is not ours.
    Mr. Kingston. Yes. And that's one of the big problems.
    Mr. Concannon. Agreed.
    Mr. Kingston. And in terms of a partnership you are a 
minority shareholder, I would suspect, maybe even a 10 or 15 
percent shareholder.
    Mr. Concannon. Possibly, but in our healthcare at U.S. 
schools, and again I think of the visit I made out to Brooke 
County in your state, a school that not only had outstanding 
nutrition, but had all kinds of little reinforcers for all of 
the children in those elementary schools about how many 
thousand steps they take each day and pictures of the high 
school football coach full blow in the elementary school gym 
where he is urging, ``Make sure that you get out during 
exercise and run around,'' and so on. All kinds of reinforcers, 
back to that comment about culture, it's not limited to just 
the phys-ed program. It's again part of the culture, and we 
work with the U.S. Department of Education to develop those 
standards.
    Mr. Kingston. Thanks.

                            FOOD INSECURITY

    Chairwoman DeLauro. Just very quickly, and if you have 
this, Dr. Chilton, it would be great to have an estimate of the 
costs that are incurred by families with regard to your Health 
Watch initiative, the increase of folks where there are kids 
with food insecurity, hospitalization, 90 percent more likely 
to be reported in fair or poor health than living in more 
secure homes.
    Do you have an estimate of the costs that are incurred by 
the families and the country as a result of the increased 
hospitalization and the poor health of food insecure children, 
and what kinds of illnesses result in hospitalizations among 
the population?
    Ms. Chilton. We do have an analysis of the cost incurred by 
increased food insecurity, and that's by my colleague, Dr. John 
Cook.
    Chairwoman DeLauro. Okay.
    Ms. Chilton. And I can supply that to you from my 
colleagues at Children's Health Watch. The increase in risk of 
illness due to food insecurity are mostly associated with more 
infections, more severe infections, because of the poor 
nutrient intake of the children that we're seeing. We also see 
an increase in respiratory problems with the children and just 
more complaints of overall poor health by the parents on behalf 
of their children. So it's mostly by more infections and more 
severe infections.

                      KITCHEN EQUIPMENT IN SCHOOLS

    Chairwoman DeLauro. Okay. Thank you. This is about school 
kitchen equipment. Why is improving school kitchen equipment 
and providing training for school food services workers 
important parts of improving the nutritional quality of meals 
served in the school meal program?
    Mr. Concannon. It's extremely important. In the stimulus 
bill passed earlier this year.
    Chairwoman DeLauro. Right.
    Mr. Concannon. USDA was awarded a hundred million dollars 
to put out to schools. There are two principal reasons. I know 
one of the Chairwoman's concerns about food safety 
appropriately so. There are two principal reasons why we run 
into food safety issues in schools. One is personal hygiene, 
neural virus, people not washing their hands; but, the other is 
the temperature of food, either too cold or too warm. And many 
schools, when I was in New York this week, reminded that some 
of the existing schools in the city of New York were built 140 
years ago and they may not have adequate, modern equipment.
    If you're going to have healthier foods, more fruits, more 
vegetables, you're going to have to have the equipment to make 
sure that you can properly store it, properly refrigerate it, 
and make sure that that food is healthy when it gets to the 
serving table.
    Chairwoman DeLauro. Are you all prioritizing the funding to 
schools that make a commitment to serving and preparing non-
processed foods?
    Mr. Concannon. Not at the moment.
    Chairwoman DeLauro. Do you provide any guidance or 
suggestions to schools on their purchases? Will you be looking 
at that kind of guidance in terms of, I know you met with Chef 
Cipriano, and I met with him as well, doing good stuff in the 
New Haven school system. Are you going to provide any guidance 
in that area?
    Mr. Concannon. Well, we're encouraging more fruits and 
vegetables, so that clearly, that's one of the central parts of 
the recommendations for the IOM. And many schools are going to 
need the capacity to be able to properly store and serve those.
    Chairwoman DeLauro. Should we prioritize funding to schools 
that certify they will upgrade their kitchen so they can 
prepare fresh fruits and vegetables?
    Mr. Concannon. I think we should provide incentives to the 
schools that are meeting the increased expectations of the IOM 
recommendations, but I'm also mindful of another chef I met 
with this week, who was the principal chef at Yale who's now in 
a consulting business.
    Chairwoman DeLauro. Right. I met with him too, yeah. Yeah.
    Mr. Concannon. And he has said to me he's now working out 
in West Virginia. He said, you know, I think it's important to 
recognize this tremendous variability in American schools and 
you start with what schools have. You go out and make an 
assessment, and then you say this is what we can build on here. 
So I'd be leery of setting a standard that would be unfair to 
schools that don't have the resource or the capacity.

                         FOOD POLICY ASSESSMENT

    Chairwoman DeLauro. That don't have the wherewithal, yeah. 
I understand. I understand. Just quickly, Dr. Brownell, you've 
got a study that you all were working on a study with Robert 
Wood Johnson about a tool kit to assess food policies and 
nutrition environment of childcare in pre-school settings. Is 
that report out yet?
    Mr. Brownell. No. Not yet.
    Chairwoman DeLauro. When will it be out?
    Mr. Brownell. I'll have to check with my colleagues, but 
we're making good progress on it.
    Chairwoman DeLauro. Okay. And that gets to the various, you 
know, child care, other kinds of settings in dealing with that 
effort. You have a very poignant story about the shelter and 
that young boy. I thank you. Okay.
    Let me just see. I have a question, and it opens up a lot 
of things, but we can come back on this because I think it's a 
good debate. You're talking about voluntary measures by 
industry, et cetera, and you've got the alliance, et cetera, 
and also I've met with the folks from the beverage industry, et 
cetera.

                            INDUSTRY SUPPORT

    Dr. Brownell, you're talking about looking at a penny tax 
on sugar-sweetened beverages. Your view on the voluntary side 
of it, and I know this is quick. There's more to it than this 
and I'll do a minute on back and forth here. But it sounds to 
me like in reading your material, your commentary, that you 
don't think a voluntary methodology works. Is that right?
    Mr. Brownell. Well, the food industry is a lot of players 
doing a lot of things, and some of the voluntary pledges, I 
think, will be better, more effective than others. What's 
important is to have some standard benchmarks in advance of 
these voluntary pledges, saying ``Here's what we expect if 
we're going to give you the self-regulatory benefit of the 
doubt.''
    And then if industry doesn't reach those kind of benchmarks 
and if there's not an objective evaluation of them, then all 
you have is the industry's word for it that they're doing good 
things. Some of the self-regulatory things, like the beverage 
industry's recent announcement about putting calorie values on 
the front of packages, I fully support.
    Chairwoman DeLauro. That's right.
    Mr. Brownell. I think some of the other pledges have been 
empty and completely ineffective, and so we pretty much need to 
take them one by one. But, as a default, yielding to industry 
when they have so much at stake here is probably a mistake, and 
that's been proven in self-regulation and previous industries 
time and again.
    Chairwoman DeLauro. That's, I mean, a mistake, but go 
ahead.
    Mr. Faber. But I think an important point is that we have 
voluntarily pulled soft drinks out of elementary schools and 
middle school, and so on, but we are also supportive and have 
supported for a number of years giving USDA clear statutory 
authority to set the standards for what we can sell in the 
school environment. So I'm not suggesting that we should 
voluntarily regulate what we can sell or not sell in the school 
environment.
    It's a special environment. It's important that USDA has 
those authorities. On programming to children I think Dr. 
Brownell and I probably disagree about the success of the 
pledge that we've undertaken through the counsels of Better 
Business Bureau. As a result of that pledge, we've dramatically 
changed the programming that you see on children's television, 
so that the vast majority of messages are now for healthy 
products that meet nutrition standards that are consistent with 
the DGAs, the Dietary Guidelines and that are approved by the 
BBB. So we made real progress there, not only in what people 
are seeing, but also in driving reformulation of many of the 
products so that those things can continue to be advertised.
    So I think we probably disagree about whether that's been 
successful or not. Our sense is that delivering those messages 
around healthy products and healthy lifestyles are ultimately 
going to help address this issue if those efforts are 
undertaken with a lot of other government and private 
interventions.
    Mr. Brownell. Now, the schools, the reducing the shipment 
of sugared beverages to schools is important only to the degree 
to which it reduces sugar beverage consumption in children 
overall. And if industry simply deploys its marketing to other 
venues, like the Internet, point of purchase sales, et cetera, 
then doing anything you want in schools is really not going to 
help very much. And I've seen no data to suggest that American 
children are drinking fewer calories and beverages than they 
were before. And the tobacco industry is a perfect example of 
this.
    They cut-back marketing on television voluntarily. People 
thought it was a great public health victory, and it wasn't. 
They used other methods to recruit children to smoke, and so 
it's easy to get sucker-punched here by an industry that says 
it's going to help us when it's really not. Now, regarding the 
marketing that you just talked about, an objective evaluation 
was just done of marketing the children by a group called 
``Children Now,'' and a well-known researcher to study this, 
and found that there's virtually no change in what's being 
marketed to children on television. And the industry has set 
itself such lack standards and is so narrowly defined 
``children's media,'' that they can meet their own pledges, but 
it's not very meaningful.
    Mr. Faber. Can I just briefly.
    Chairwoman DeLauro. Sure. Give a comment, then I'm going to 
make a comment then wrap it up here.
    Mr. Faber. That research was based upon advertisements at a 
time before industry launched the initiative to children's food 
beverage and advertising initiative, and there have been really 
significant changes. I'm happy to provide the Neilson data that 
verifies that children are seeing very different programming 
today and advertising on children's programming today than they 
were seeing five or ten years ago.
    Chairwoman DeLauro. I'm just going to make one comment, and 
this is to be continued. I mean, again, I think we need to have 
these kinds of conversations. But I'll just give you the whole 
smart choices fiasco--fiasco--and the television advertising in 
addition to labeling some of these projects as smart choices, 
ones I found offensive. And then I am bombarded on the TV with 
three children: one dressed as a doctor, one a nurse, and one a 
patient. And the nurse brings in this little child who's the 
patient, and we explain why the product is so healthy when the 
sugar content is well over the top.
    But I will also point out to you as when I looked into this 
it just said here, and I'll get that, and this has to do with 
the FDA, not the USDA. It says they coordinated with FDA's 
healthy regulations, the levels set for trans fat is consistent 
with FDA policies where no governmental levels are set 
regarding adding sugars.
    Important to note that FDA does not restrict added sugar 
levels in any of its applicable nutrition-related regulations. 
So, we got a gaping hole here of which we're going through big 
time in terms of its result in nutrition. Again, I want to 
continue this. Obviously, I have strong opinions. You do and 
others here, but we need to sort this out.
    Mr. Faber. Absolutely.

                            Closing Remarks

    Chairwoman DeLauro. Thank you. Oh, my God. I'm out of time 
here. I'm getting to vote. You all, I can't thank you enough.
    Someone said earlier, I think this is not the Authorizing 
Committee. We are not the Authorizing Committee, but it is my 
intent to provide the Authorizing Committee with a blueprint of 
what we think ought to happen. You have, you know. We will have 
done a lot to help us inform that today and we will continue to 
be in touch as to how you can help us to inform that process 
before we reauthorize these programs in the next several 
months, and it's supposed to come by the end of September.
    I didn't know Mr. Miller was already marking up, but I'll 
check in with Mr. Miller. Thank you all very, very much. I'm 
going to dash. I can't say a formal thank you to you.

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                                          Thursday, March 18, 2010.

          FY2011 BUDGET HEARING FOR FOOD AND NUTRITION SERVICE

                               WITNESSES

KEVIN CONCANNON, UNDER SECRETARY FOR FOOD, NUTRITION AND CONSUMER 
    SERVICES
JULIA PARADIS, ADMINISTRATOR, FOOD AND NUTRITION SERVICE
ROBERT POST, DEPUTY DIRECTOR, CENTER FOR NUTRITION POLICY AND PROMOTION
SCOTT STEELE, BUDGET OFFICER, U.S. DEPARTMENT OF AGRICULTURE

                      Ms. Delauro--Opening Remarks

    Ms. DeLauro. The hearing is called to order. Let me welcome 
Ranking Member Kingston, our fellow members of the Committee, 
our distinguished guests today, as we take a look at the 
President's budget request for our vital nutrition assistance 
programs, which are under the Subcommittee's purview, including 
the Food and Nutrition Service, FNS, and the Center for 
Nutrition Policy and Promotion, CNPP.
    Our distinguished panelists today include Kevin Concannon, 
Under Secretary for Food, Nutrition and Consumer Services, and 
I thank you for being with us again. You were here two weeks 
ago as we did talk about child nutrition issues.
    In addition, we are going to be hearing from Julie Paradis, 
the Administrator of FNS, and Robert Post, Deputy Director of 
CNPP.
    We understand that you are filling in for Mr. Anand, and we 
understand he is ill, so please do convey to him our very, very 
best wishes.
    At some point, I really do want to talk with him. I was 
interested in reading his biography on the issue of maternal 
nutrition and its effect on the fetus.
    I think it is very interesting research and would love to 
pursue and investigate that further as we take a look at the 
nutrition quality that mothers are getting and what that effect 
is, especially with regard to low birth weight babies, et 
cetera, and what the health problems are as a result of that.
    Dr. Concannon, a quote from your testimony a fortnight ago 
has just stayed with me ever since, and that would be President 
Harry Truman's admonition that ``Nothing is more important in 
our national life than the welfare of our children, and proper 
nourishment comes first in attaining this welfare.''
    As you explained, the President came to this conclusion 
after discovering how often soldiers engaged in the World War 
II effort came to the Army undernourished and malnourished.
    What was true then is even more true today. Secretary 
Vilsack noted in our opening hearings last month that ``One 
report recently found that as many as 75 percent of Americans 
age 17 to 24 are currently unfit for the Armed Services due 
mainly to malnutrition and obesity.''
    If you want to talk about a security issue and a national 
security issue, I think that strikes home for all of us.
    As I said to you two weeks ago and what the First Lady has 
also been making clear with her ``Let's Move'' campaign, the 
coexistence of obesity and hunger seems paradoxical at first, 
until you come to realize that they are in fact a double edged 
sword aimed right at our children.
    With one in five kids living below the poverty line and on 
food stamps, not to mention a staggering 69 percent of school 
lunch program participants who receive free and reduced price 
lunches, it becomes that much harder for struggling families to 
afford the healthy, nutritious foods that would improve 
children's health, which is why I am concerned about reports 
that the Senate might move forward with a child nutrition 
reauthorization bill that cuts the administration's request by 
more than half.
    It is vitally important that we fund nutrition assistance 
to the fullest of our ability, especially in these times. We 
must do what we can to give this generation of American 
children the access to healthy, nutritious foods that will 
allow them to thrive.
    Indeed, our funding of these programs becomes even more 
critical when you consider the woeful budget situation at the 
State level right now.
    This recession has driven State budgets all across the 
country to the brink. Right now, local and State governments 
are slashing the social safety net that families depend on to 
survive in order to be able to compensate.
    New Jersey, Virginia, let's take those two examples. Child 
meal programs have been drastically cut. Millions in proposed 
cuts to their respective School Breakfast Programs. This 
despite the fact that research shows time and again that kids 
who eat breakfast before school learn more, they behave better, 
and are healthier than those who do not.
    I have been focusing a lot on children, but particularly in 
the midst of this virulent recession. Hunger knows no age, no 
sex, or region of this country. With one in eight Americans 
relying on food stamps right now, we must continue to give 
crucial nutrition assistance programs like SNAP and WIC our 
strongest Federal support.
    Given the finite resources at our disposal, we need to 
ensure that the money put forward with these programs are being 
well spent.
    As I said two weeks ago, if we increase reimbursement rates 
for school food programs, we should also work to reduce the 
waste and the overhead in these programs, maximize the amount 
of money being used to help kids, but let us also remember that 
SNAP and WIC have extraordinarily high accuracy rates for 
government programs, 95 percent and over 95 percent 
respectively.
    I defy other Federal programs to have that kind of accuracy 
rate. This is an arena where it appears that the people's 
resources seem to be very well spent.
    In addition to maximizing our bang for the buck, we should 
also make sure that we are making it as quick and easy as 
possible for American families to access the best and the most 
up to date science based health and nutrition information 
available.
    With that in mind, I am pleased to hear about the revamping 
that is going on at the popular MyPyramid.gov Web site, which I 
believe you will tell us more about, Mr. Post.
    At the same time, I look forward to hearing more about the 
revised Dietary Guidelines coming out this Fall. I hope we can 
find ways to put an end to industry generated nutrition 
charades like the one we saw last year with the Smart Choices 
Program.
    To qualify for Smart Choices' label, the product had to 
meet a certain set of criteria based on Dietary Guidelines. 
However, because the Dietary Guidelines do not set a standard 
for sugar, we saw extraordinarily sugary cereals, such as Fruit 
Loops and Cookie Crisp being promoted as an FDA approved 
healthy option.
    As my colleague, Mr. Kingston, suggested at our last 
nutrition hearing, just because you eat one doughnut instead of 
two, that does not make it a smart choice.
    In any case, those are the broad parameters of what I hope 
to hear today. I look forward to hearing today's testimony on 
how best to help fulfill our nutrition responsibilities from 
the panel.
    With that, Mr. Kingston, I recognize you for comments.

                     Mr. Kingston--Opening Remarks

    Mr. Kingston. Thank you, Madam Chair.
    Ms. DeLauro. How many doughnuts did you have today, Jack?
    Mr. Kingston. Actually, I skipped lunch. I might have a 
problem later on, go on a junk food binge.
    Mr. Latham also wants to know who I should attribute that 
quote to. He says it does not come from me. He is probably 
right on that.
    I am also interested in this fetus feeding issue and the 
correlation. I think that would be interesting.
    I want to go back to something I brought up in the 
Committee a couple of weeks ago about the concept of children 
who are on school lunch programs or getting assistance, having 
the opportunity, which so many of us in this room did to earn 
some of this, and the reason why I say that is who when you ask 
as an adult does not swell with pride when you ask him or her, 
what was your first job? What did you do around the house? What 
were your chores?
    We all learned something from that. I think in the context 
of allowing 32 million children to participate in these 
programs, they should have that opportunity. I think it would 
be a positive thing. I do not think it would be Stalinist, send 
them to work camp. I think it would be an opportunity to allow 
these kids to really get some of the great lessons that so many 
of us learned from.
    The Secretary said we need to take the stigma out of food 
stamps. This is one way to do it.
    I want to bring that up again. I also feel very concerned 
about our deficit, growing as it is. We Republicans spent too 
much money. We had 12 years of deficits. If you add those 12 
years together, it was less than the deficit in 2009.
    We can blame it on we have a war to fight, TARP, and there 
were some tricky things that we felt compelled to spend money 
on, but so often in Washington, whether it is Democrats or 
Republicans, we have a disingenuousness.
    For example, PAYGO. We got PAYGO. It's a great slogan. 
Everybody understands it, and yet everything is exempt from it, 
including the increases which you are asking for today, exempt 
from PAYGO.
    People back home do not understand that because they 
understand PAYGO, but they do not understand the exemptions.
    A freeze, we had a 26 percent USDA budget increase, and now 
we are talking freezing. I guess we should.
    I feel like we need to look at some charts, and if I could, 
Madam Chair, would you mind standing by the easel and sort of 
turning it so Committee members can see it?
    I want to show you some numbers that come from various 
different sources but the one on the left shows that in 1962, 
the number of people who got a Federal Government check--I want 
to be quick to point out this is not welfare strictly. Welfare 
is included in it but a farm subsidy check would be included.
    Mr. Farr. Social security.
    Mr. Kingston. Social Security. Medicaid, Medicare. I am 
talking strict accounting here. This is not a philosophical 
evaluation as much as it is just context.
    Twenty-two million people, now it is up to 61 million 
people. Percentage of population, we have gone from 11.7 
percent to 20 percent. Something to be aware of. I am not 
saying let's base decisions on that at all.
    Let's look at the next one. This one shows it a little more 
dramatically in terms of the increase of people depending on 
government checks, again, of some nature, a government subsidy. 
Again, this is not child nutrition. This is not welfare, 
although it is included in this. This would also include farm 
payments and other things.
    As Mr. Farr points out, this is not just USDA but other 
things. You have about a 240 percent increase since 1962, but 
maybe this last chart is the one that is the most important, 
and this chart shows that the percentage of people who are 
paying taxes is getting smaller in comparison to the people who 
are not paying taxes.
    Forty-eight million people right now are not paying taxes, 
34 percent of the population. In the 1960s, that number was 28 
percent.
    You have a narrowing gap between people who are paying 
taxes and people who are not paying taxes.
    Ms. DeLauro. State tax as well as earned income?
    Mr. Kingston. It is all Federal taxes. It is all filers. 
Yes, it would include State tax, capital gains tax, income tax, 
payroll tax, everything.
    Again, my point here is not to say therefore, we should 
bring the hammer down on this group or that group or this 
program or that program.
    My point is whether we are in the Defense Committee or the 
Health Committee or the Agriculture Committee, whether we are 
measuring spending on our friends or foes, politically, we 
should keep in mind the context of spending in Washington, 
D.C., which I would attribute to both parties, politicians.
    I can tell you as a member of the Appropriations Committee 
particularly, nine out of ten of the visitors in my office come 
to ask for more spending on every single aspect.
    I think these numbers are just going to show there comes a 
time when we actually do have to have meaningful spending 
freezes and do have to have real PAYGO.
    I wrote the President a letter. I talked to the President 
personally about serving on the Commission, I was not selected 
by our leadership, but at the same time, I told the President, 
if you need somebody, call me. I have hope in it. I have hope 
that good people could come together and look at these things.
    I think you and I if we just say okay, we have a starving 
child, throw money. If we have a defense program, we have 
Taliban coming over the hill, throw money. I think we are not 
doing our full job. We have to look at the big picture.
    I say that, Madam Chair. I appreciate your indulgence. I 
know you have heard my discussions on this before, but you have 
not seen my charts before, so I wanted to make sure I shared 
them with you.
    Ms. DeLauro. I am glad this is a public invitation to see 
your charts here, Jack. [Laughter.]
    Mr. Kingston. Thank you.
    Ms. DeLauro. With that, let me ask our guests today to 
provide their testimony to us. Mr. Concannon, you will speak as 
well as Ms. Paradis and Mr. Post. We look forward to your 
testimony. The entire testimony will be part of the record. You 
are free to summarize. Thank you.

                     Mr. Concannon--Opening Remarks

    Mr. Concannon. Thank you very much. Thank you, Madam 
Chairwoman and members of the Subcommittee for allowing me this 
opportunity to present the President's fiscal year 2011 budget 
request for the Food and Nutrition Service and the Center for 
Nutrition Policy and Promotion.
    With your permission, I would like to begin by introducing 
the members of the Food, Nutrition and Consumer Services' team 
sharing the witness table with me today, Julie Paradis, as she 
has been introduced, Administrator of FNS, and Dr. Robert Post, 
the Deputy Director at CNPP.
    The President's budget for fiscal year 2011 for FNCS 
requests $96 billion in budget authority, reflecting the 
President's and Secretary Vilsack's commitment to combating 
food insecurity and poor nutrition among the Nation's children 
and low-income households.
    The first challenge in meeting the nutrition assistance 
needs of the Nation is to make certain that funding is 
available in the major programs that serve all eligible persons 
seeking these program services.
    Our major nutrition assistance programs are designed to 
respond rapidly to the changing needs of our populations. The 
strength of these programs has been put to the test in the 
current economic crisis and they have risen to that challenge.
    SNAP provided benefits to 39 million individuals in 
December 2009, the most recently reported month. That 
represents a 41 percent increase over the previous 24 months. 
Each day, 32 million American children participate in the 
National School Lunch Program. Over 60 percent receiving free 
meals or at reduced prices.
    The Special Supplemental Nutrition Program for Women, 
Infants and Children or WIC, which serves half of the infants 
in this country, is now serving over nine million persons a 
month, another historic level.
    USDA continues to provide unprecedented levels of 
commodities and administrative support to our partners in the 
food bank community as they respond to widespread need for 
emergency food assistance.
    The President's budget requests $68.7 billion for SNAP, 
enough to serve an average of 43.3 million people each month in 
fiscal year 2011. That budget requests $19.2 billion for Child 
Nutrition Programs, which provides millions of nutritious meals 
to children in schools and in child care settings every day.
    This level of funding supports our reauthorization 
proposals as well as an expected increase in daily 
participation in our school meal programs.
    The President's budget includes $7.6 billion for WIC. This 
year's request will allow local communities to provide food, 
nutrition education, and a link to health care to a monthly 
average of over ten million low-income women, infants and 
children during fiscal year 2011.
    Our budget request for 2011 will ensure that the nutrition 
assistance programs continue to respond to the needs of the 
most vulnerable by fully funding participation levels in all 
the major nutrition assistance programs, but if we are to meet 
the challenge before us to end childhood hunger by 2015, we 
cannot be satisfied to simply maintain these programs as they 
currently exist.
    We must work to improve access to services for those 
already eligible and in need. We must expand eligibility to 
individuals currently not covered by a program but facing 
undeniable hardship, especially in these tough economic times.
    The President's fiscal year 2011 budget request reflects 
this pledge in its commitment to a $10 billion increase over 
ten years for child nutrition reauthorization and in the 
government-wide proposals addressing asset limits and the 
treatment of refundable tax credits in all means tested 
programs.
    The reauthorization of Child Nutrition Programs presents us 
with an historic opportunity to combat child hunger and improve 
the health and nutrition of children across our Nation, 
beginning at birth, with the increased emphasis in funding 
proposed for breast feeding promotion in the WIC Program all 
the way up through adulthood.
    As Secretary Vilsack noted recently, in addition to ending 
childhood hunger, a robust reauthorization is essential to meet 
the ambitious target set by First Lady Michelle Obama in the 
Let's Move campaign to solve the problem of childhood obesity 
in a generation.
    Of course, yesterday Senator Lincoln and Senator Chambliss 
unveiled the bipartisan Healthy Hunger Free Kids Act. We 
commend their leadership on the child nutrition reauthorization 
and view the announcement as a very positive step forward in 
the process.
    Still, we believe that additional access and nutrition 
goals can and should be accomplished by passing a more robust 
bill that fully supports the President's request of $10 billion 
in additional funding.
    As I discussed with this Subcommittee earlier this month, 
this proposed investment would significantly reduce the 
barriers that keep children from participating in school 
nutrition programs. It would improve the quality of school 
meals and the health of the school environment and enhance 
program performance.
    Its impacts will extend well beyond nutrition and will be 
felt in health promotion, educational opportunities, and even 
in economic development.
    USDA through CNPP currently serves as the lead Federal 
agency for the development of the 2010 Dietary Guidelines for 
all Americans that will be released later this year.
    The President's request features an increase of $9 million 
to promote the Guidelines as well as to maintain and enhance 
the extremely popular food guidance system, MyPyramid.gov.
    Finally, we are keenly aware that good stewardship of the 
public resources with which we are entrusted is essential to 
maintaining the strong broadly based support the nutrition 
programs have so long enjoyed. Support for new technology and 
increasing use of direct certification will help schools avoid 
inaccuracies in ineligibility determinations and maintain the 
confidence that the taxpayer's investment in these programs is 
used widely.
    In fiscal year 2008, the most recent period for which we 
have data, SNAP once again reduced its combined error rate and 
achieved a record payment accuracy rate of 94.99.
    We are committed to continuing our partnership with the 
States to maintain that great progress we have made over the 
last decade and to make further improvements in payment 
accuracy.
    In sum, I believe the President's request sets the right 
priorities to expand access to Federal nutrition assistance 
programs for the children and low-income people who need them 
while maintaining and improving program integrity in supporting 
our efforts to address the growing public health threat of 
obesity.
    The work of this Agency is especially critical as the 
Nation emerges from extended difficult economic times. The 
public investment we are asking you to make today in the FNCS 
contributions to addressing the critical nutrition and health 
related issues will pay dividends for generations to come.
    We appreciate the support provided by this Subcommittee in 
the past and look forward to working with you on this budget.
    We thank you for this opportunity to be with you today and 
to discuss our mission. I and my colleagues would be happy to 
answer your questions. Thank you.
    [The information follows:]

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    Ms. DeLauro. Ms. Paradis.

                     Ms. Paradis--Opening Statement

    Ms. Paradis. Thank you, Madam Chairwoman and members of the 
Subcommittee, for allowing me this opportunity to present 
testimony today in support of the President's fiscal year 2011 
budget request for the Food and Nutrition Service.
    FNS, as you know, is the Agency charged with administering 
the 15 nutrition assistance programs that serve as the Nation's 
nutrition safety net, and with providing Federal leadership in 
America's ongoing effort to reduce food insecurity and poor 
nutrition.
    Our mission at FNS is to increase the Nation's food 
security and reduce hunger in partnership with cooperating 
organizations by providing children and low-income people 
access to food and nutrition education in a manner that 
supports American agriculture and inspires public confidence.
    The President's fiscal year 2011 budget request contains 
almost $96 billion in budget authority to fund the nutrition 
assistance programs.
    This represents more than a threefold increase in funding 
since the beginning of the decade, and it reflects both the 
robust ability of the nutrition assistance programs to respond 
to changing economic and social conditions as well as the depth 
and breadth of need that currently exists within the Nation.
    The nutrition assistance programs now touch the lives of 
more than one in four Americans over the course of a year.
    The Under Secretary has spoken eloquently in his remarks 
about our major program initiatives. I will focus on a modest 
investment which I believe serves as an essential complement to 
the ambitious policy agenda reflected in our program requests.
    We are requesting $172.1 million in the Nutrition Programs 
Administration, or NPA, account, to sustain the program 
management and support activities of our dedicated employees 
across the Nation.
    This account supports both FNS' administration of the 
nutrition assistance programs and the Center for Nutrition 
Policy and Promotion's nutrition policy development and 
promotion activities targeted at the general population.
    I believe this NPA request is essential for our continuing 
efforts to expand program access, address food safety concerns, 
and improve overall program integrity and management.
    While FNS has recently received some targeted staffing 
increases, for which we are very grateful, long term budgetary 
trends have forced the Agency to significantly reduce its 
Federal staffing over time.
    At the same time, program funding, scope and complexity 
have grown dramatically. Agency staffing levels are now at a 
critical point. We must have the ability to acquire new staff 
if we are to successfully undertake important new initiatives 
and maintain the high levels of program integrity and fiscal 
stewardship essential to preserving public confidence in and 
support for the nutrition assistance programs.
    I firmly believe this investment, less than one quarter of 
one percent of program funding, is critical in order to 
maintain accountability for our $96 billion portfolio as we 
effectively manage the programs and provide access to all 
eligible people.
    Thank you for the opportunity to present this testimony and 
I, too, would be happy to answer any questions you may have.
    [The information follows:]

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    Ms. DeLauro. Dr. Post.

                       Mr. Post--Opening Remarks

    Mr. Post. Thank you, Madam Chairwoman and members of the 
Subcommittee for allowing me this opportunity to present 
testimony on behalf of the Executive Director in support of the 
President's fiscal year 2011 budget request for the Center for 
Nutrition Policy and Promotion.
    The Center's mission is to improve the health of Americans 
by developing and promoting dietary guidance that meets the 
most of recent and evidence based scientific research to the 
nutrition needs of consumers.
    The Center administers the process for setting the Dietary 
Guidelines for Americans, which it does in collaboration with 
the Department of Health and Human Services.
    The Guidelines are the basis for Federal policy development 
in government nutrition programs. They provide advice for 
Americans ages two and older about eating healthy, building 
healthy eating patterns that promote health and prevent diet 
related diseases.
    They also set standards for the nutrition assistance 
programs, and they guide nutrition research. They also serve as 
the foundation for Federal nutrition education programs, and 
they are the basis for USDA's nutrition promotion activities.
    Therefore, it is critical that the Guidelines be both 
scientifically up to date and in touch with the realities of 
contemporary living.
    In its leadership role for administering the 2010 Dietary 
Guidelines process, USDA is using its new nutrition evidence 
library, which is a state-of-the-art web based system to 
support evidence based reviews for the most relevant research 
on key nutrition and health related topics.
    The nutrition evidence library is being used by the Dietary 
Guidelines Advisory Committee as its members review the most 
scientific literature to make their recommendations.
    Because of support of the library, the 2010 Committee is 
able to review the science to answer over 170 questions, about 
five times as many as before, increasing the thoroughness of 
the Committee's work.
    By weighing the preponderance of evidence on a wider array 
of relationships between nutrition and health, USDA will be in 
a better position to recommend dietary guidance that positively 
affects behavior changes among Americans.
    To implement the Dietary Guidelines, the Center created 
USDA's food guidance system known as ``MyPyramid.''
    MyPyramid.gov has been extremely successful in reaching the 
public with scientifically based nutrition information. It has 
had over 12.5 billion hits, mostly from general consumers, 
students, educators and health professionals. Such a response 
makes it one of the most popular government Web sites.
    The President's budget requests $16 million for the Center, 
an increase of $9 million from the previous year.
    This budget would allow USDA to prepare for and complete 
the tasks associated with the implementation and promotion in 
2011 of the 2010 Dietary Guidelines for Americans, the research 
work of the nutrition evidence library, and the enhancements to 
the MyPyramid food guidance systems, specifically updating the 
MyPyramid.gov Web site and educational tool kits.
    The funding requested will help the Center to make a 
significant contribution to USDA's goal to help Americans in 
general and children in particular develop eating patterns that 
are more consistent with the Dietary Guidelines for Americans.
    With the support of the Subcommittee, we will set the 
foundation for future development of nutrition policy that is 
vital to addressing the problems associated with overweight and 
obesity and the related health challenges in America.
    Thank you for the opportunity to present this testimony, 
and I would be happy to answer any questions you may have.
    [The information follows:]

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                          CNP--REAUTHORIZATION

    Ms. DeLauro. Thank you very much, Dr. Post. Let me just 
also welcome Dr. Steele. Thank you very much. It is great to 
see you.
    Also, a personal privilege for me to recognize, Mr. 
Secretary, Audrey Rowe, who I had the great pleasure of working 
with in the State of Connecticut when she was the Health 
Commissioner and did an outstanding job there, and will do an 
outstanding job, I know, with the Department in terms of the 
special nutrition programs. I am really delighted to be working 
with all of you. Thank you.
    We have three votes. There will be one 15 minute vote and 
two five minute votes. We will start with the questioning and 
members will go and vote and come back and we will try to make 
it as seamless as possible in terms of the testimony.
    Let me just start because you referenced, Secretary 
Concannon, the work that the Senate did this week. I have a 
question about that. The bill does appear to have some good 
proposals. I am pleased about that.
    I am concerned about the funding level. I am also 
concerned--I am not talking about not paying for it. I am 
talking about where the offsets are, which I think is critical.
    I do not know that it will be adequate to meet the critical 
goals of the bill, that is increasing access and improving 
nutrition quality.
    What would not get achieved in your view if we are looking 
at what half of the request is? Is there any sense of 
approximately how many eligible children in need would not get 
access to a free or reduced price lunch under this level of 
funding?
    Mr. Concannon. Madam Chair, as I mentioned in my testimony, 
we think it is a terrific start. Many aspects of the bill by 
which we are very encouraged, but we believe the $10 billion 
that the President asked for, an additional $1 billion for each 
year over a ten year period, is truly and fully necessary.
    We are very committed to work with Congress to try to find 
those offsets that you referenced. We believe it is fully 
necessary because we know to improve, as I mentioned when I was 
here several weeks ago, to improve the quality of school meals 
is going to require additional resources.
    We know this in our own private experience that when we go 
to the store to buy better foods, they are often more 
expensive. That is true as well in the institutional settings 
when schools are approving the foods available in their 
cafeterias.
    Also, we have proposed a number of initiatives within the 
child nutrition reauthorization that are designed, for example, 
to help simplify the programs. I know I was questioned when I 
was here earlier about administrative challenges, about 
simplification for parents as well as administrations.
    We want to make the investments that will produce those 
kinds of changes that we want, and I have a very keen sense 
that Congress wants as well. We want to help schools. We know a 
number of schools have challenges around their equipment.
    We know in this economy, we fully expect that more children 
are going to rely upon or need a free or reduced price lunch as 
well as in some of our other programs.
    To settle for less, I think, would deny this one 
opportunity in every five years that we have to make the most 
significant impact on reducing hunger and dealing with child 
nutrition challenges.

         CNP--INDIRECT COSTS CHARGED TO SCHOOL FOOD AUTHORITIES

    Ms. DeLauro. We are going to work with you in trying to 
find the additional funding for that and where it can come 
from.
    Let me just ask a follow up. I am going to try to keep 
myself to the five minutes and everybody else.
    More and more school food authorities are charged with 
indirect costs that are not related to the operation of their 
programs. We have heard about school food authorities in North 
Carolina who after it was successful in getting an equipment 
assistance grant, qualified for an energy rebate.
    The rebate, which should have gone back to the school food 
program, was taken by the school to cover other expenses.
    We appropriate money for very specific purposes here, and 
we expect it will be used for the purposes for which it was 
appropriated.
    Are there any actions that we can take to stop this, what I 
view is unfair, I think it is improper, and I do not know, but 
it is arguably illegal, taking school food service funds and 
applying them elsewhere in the school system.
    Mr. Concannon. Indirect costs is one of the areas, Madam 
Chairwoman, as you correctly note, are an area of concern. We 
would be happy to work with the Committee and your staff on 
that issue.
    We know there are some school systems in the country that 
charge no indirect costs and other examples like you cite where 
it would seem from a reasonable point of view, these are costs 
that get charged to the feeding program.
    We know schools are struggling, as has been noted earlier 
today, States and schools generally in terms of their revenues. 
We do not want the school nutrition programs to become the 
source of offsetting some of the other fiscal challenges 
schools have.
    We would be happy to work with the Committee.

              SNAP--TIMELINESS OF THE APPLICATION PROCESS

    Ms. DeLauro. Thank you. I have a question about SNAP and 
the State timeliness rates. Lots of articles about the 
application process for States enrolling applicants in the 
program. In several States there are lawsuits.
    This Committee has provided $700 million in 100 percent 
administrative funds to help states cope with the increased 
workloads they are experiencing.
    What is the situation in the States in regard to timeliness 
rates? How many States are missing the Federally mandated 
application processing time lines? Is it improving? Is it 
getting worse? How many States have corrective actions in 
place?
    I might just note that States are mandated to process food 
stamp applications within 30 days and for emergency benefits, 
within seven days.
    If I can ask you to answer those questions.
    Mr. Concannon. Madam Chair, timeliness is one of the areas 
that in a very particular way we are watching, especially again 
in this economic environment, but I think it is fair to say 
that right across the country, 39 million people in the month 
of December receiving SNAP benefits across the country. There 
is not a State in the country that has not had a significant 
increase in enrollment of SNAP, again reflecting what is going 
on in the economy.
    Some of the issues of timeliness is a function of the 
increased surge of applicants. I might say there are some other 
examples, there are several examples of fairly large States 
that come to mind that are severely behind in terms of meeting 
their timeliness that reflect failed privatization efforts or 
just inattention, I would say, at the State level.
    Ms. DeLauro. What are you doing about this?
    Mr. Concannon. Texas is one State that comes to mind. We 
are regularly visiting with Texas. I have been down there 
several times. We speak to them regularly. We speak to the 
media regularly in Texas.
    We have made recommendations to Texas on ways to address 
that. Timeliness really is a reflection of an erosion in their 
program over a five or six year period. It did not happen in 
the last year.
    Among other things, we have made some direct 
recommendations of ways of simplifying their process. We have 
urged States, to the larger question the Chair asked, we have 
urged States to avail themselves of waivers, for example. We 
are prepared to give waivers to allow States to extend the 
period of certification.
    In Texas' case, I can tell you we have urged them to get 
rid of finger imaging.
    Ms. DeLauro. I will ask a question on that later.
    Mr. Concannon. It is complicated and adds to the complexity 
of the process. We have urged them to fix their telephone 
systems. As an example, we gave Texas waivers to waive a face 
to face interview so they could do telephone interviews, only 
to find that in the large cities, Dallas, Ft. Worth, some other 
places, the phone systems were grossly inadequate, so people 
could not call out or call in.
    Mr. DeLauro. They were supposed to get a report back to 
you. It was 60 days from a September 2009 dictate. Have they 
provided that report yet?
    Mr. Concannon. They have been giving us reports on a 
regular basis, and they are coming to the Secretary, and Texas 
is coming to see me in D.C. within the next month.
    I also know they are keeping our Dallas Office, our Federal 
regional office, regularly updated.
    We have also urged them, as we have other States, urged 
them to take advantage of a business process re-engineering. By 
that I mean most State agencies, and as you may know, I spent 
my career as a State director, most States manage programs like 
this through what they refer to as a ``caseload orientation.'' 
How large are the caseloads, how are we managing caseloads.
    Yet we are finding in this environment States are doing 
much better by managing the process by introducing, for 
example, imaging documents that come in rather than paper 
imaging.
    We are urging them to simplify the eligibility. We are 
urging them to take advantage of something called ``categorical 
eligibility,'' an authority that has been granted to us by 
Congress. Some 29 States have now availed themselves of 
categorical eligibility.
    In Texas' case, they have taken some of those options but 
they have not taken them all. We continue to work with them in 
that regard.
    There is new leadership in the State as well on the 
executive side. I am convinced that the current Commissioner is 
honestly and fully committed to improving their performance.
    Ms. DeLauro. Thank you. I think what we will do, Mr. 
Kingston, so that you get a full opportunity for your 
questions, is just to break, go vote and come back, and then 
you will be up next.
    Mr. Concannon. I did not fully answer your question. I 
should mention that we have some 21 States on conditional 
acceptance plans where they are required to work out a plan 
with them saying you have to address the following items. 
States that fall below 90 percent in their timeliness are 
required by us to move to a plan of action to make 
improvements.
    Ms. DeLauro. Which according to a list that I have is a 
substantial number of States. Just to think about this because 
I have to get to vote as my colleagues do, if we can work 
together on this. You let us know how we can assist in this 
process of making sure that we are adhering to what the mandate 
is.
    We are providing funding in order to be able to do this. We 
have not been just dealing with unfunded mandates in this 
regard.
    Mr. Concannon. I appreciate that. I have heard that in all 
the States I visited. They have appreciated especially, I 
think, the Department of Defense administrative funds that 
Congress made available to them because the States, as you 
know, either through layoffs, freezes in hiring or furlough 
days, have a very compromised ability to meet some of their 
obligations in that regard, and the funds that Congress 
provided have made a difference at the State level.
    Ms. DeLauro. Okay.
    [Recess.]

            SNAP--FINGER IMAGING IN THE APPLICATION PROCESS

    Ms. DeLauro. As soon as Mr. Kingston arrives, he will 
question, but let's start up again so the hearing is underway.
    There are four States that require applicants for the 
supplemental nutrition assistance program to be fingerprinted 
prior to their receiving food stamp benefits, Arizona, 
California, New York and Texas.
    You spoke about Texas. My understanding as well with the 
Texas example is it costs the State a significant amount of 
money but yielded no savings.
    Fingerprinting is one reason that has been given for low 
participation rates in some of the other States.
    What is the impact on participation in the States that 
require fingerprinting and what is FNS' view on that 
requirement?
    Mr. Concannon. Madam Chair, let me start with the last 
question, the easiest one for me. I have made it clear in 
public statements that we would not support additional States 
were they to come forward and ask to incorporate fingerprinting 
or ``finger imaging'' as it is technically called.
    Only three States plus the City of New York require finger 
imaging. We remain concerned about the practice. It takes time. 
It is an imposition on families. The States that require it 
require all adults in the household, even if they are not 
applying for benefits in the program, to come in and be finger 
imaged.
    The example I often use is if you had a young adult living 
in your house and you had a child who was 12 who was on the 
program, the young adult not, you tell that young adult you 
have to give up your afternoon working at the Safeway or 
working someplace else to come into a city office.
    As an example, the State of Florida declined to go forward 
with implementing the program because they felt it was 
ineffective.
    The auditor in the State of California examined it two 
years ago and found it to be lacking in effectiveness, and I 
know the California Assembly wanted to eliminate the program 
but the Governor in what is the equivalent of a line item veto 
struck that from a bill.
    Just as recently as today, a news release came out from the 
State of Connecticut where apparently Connecticut is requiring 
people, not in the food stamp program, but in the TANF and 
general assistance programs, to be finger imaged.
    I think that is an unfortunate direction for States to go 
because the alleged reasons for relying upon it are to prevent 
fraudulent double entries or dual applications.
    I think there are less intrusive ways and equally more 
effective ways to eliminate dual enrollment or fraud than to 
put people through finger imaging.
    I was a collections commissioner earlier in my life. I am 
very familiar with the practice of requiring finger imaging. I 
tend to associate it with suspicion of criminal behaviors.
    I would hate to see a reversion to that in any program, 
subjecting poor people to it.
    Ms. DeLauro. How about we try it on Wall Street? Sorry. 
Excuse me. That was an aside. [Laughter.]
    Ms. DeLauro. I will be happy to now yield to my colleague, 
Mr. Kingston. Thank you very much, Mr. Secretary.

                      CNP--REAUTHORIZATION OFFSETS

    Mr. Kingston. Thank you, Madam Chair. I was looking for you 
but I figured you were behind me.
    I wanted to ask Dr. Steele on these offsets, I am 
interested in them. Where are they coming from?
    Mr. Steele. Mr. Kingston, thank you for the question. That 
is a very complicated issue, obviously. This $10 billion 
increase in the President's budget was also in last year's 
budget as well, it is a carry over item.
    The Administration has the luxury of setting its own 
baseline and its own proposal and within that proposal, its 
offset.
    As you well know, the budget of the United States is a 
fairly big budget. It is over $4 trillion of which about 70 
percent of it is mandatory funding.
    Mr. Kingston. About 37 percent of it is deficit spending, 
too.
    Mr. Steele. Yes. All of the child nutrition money is 
mandatory money. You would have to have a mandatory offset for 
the Child Nutrition Programs.
    Within USDA, obviously, we have a large component of 
mandatory programs, roughly 80 percent of our budget is 
mandatory, which includes the food programs, child nutrition, 
SNAP. It also includes all the Commodity Credit Corporation, 
which are the farm programs, as well as crop insurance.
    That is the universe of programs in which you would have to 
look to if you were looking for a specific offset within the 
USDA.
    It gets more complicated than that because the jurisdiction 
for child nutrition is not within the Ag Committee of the House 
of Representatives. It is in the House Ed and Labor Committee, 
which has no jurisdiction over the farm programs.
    You are going to have to work this out, whatever offsets 
would have to come from whatever House Ed and Labor would have 
within its purview. I would assume those were HHS programs.
    Mr. Kingston. Would that not be the job of Congress but the 
job of the Executive Branch, particularly since this is 
President Obama's legislation? He has embraced PAYGO, and I am 
glad he has.
    Mr. Steele. The Administration, the Under Secretary and 
others have already said they would be willing to work with the 
Committee and we are working with the Senate.
    Mr. Kingston. As you know, we have a friendship and a lot 
of respect for you, but the Executive Branch, it is not willing 
to work with us, they need to comply with the job.
    The Executive Branch is not--we are willing to work with 
you and this is going to be a stretch, hey, we passed a law and 
it is not keeping with the spirit of the law, it is keeping 
with the law and the intent of the law. I am not lecturing you. 
I am just maybe speaking out loud with my own frustrations.
    Mr. Steele. If we proposed offsets within USDA, House Ed 
and Labor would have to somehow work with the Ag Committee to 
work that out because they do not have jurisdiction over the 
offsets.
    Mr. Kingston. What if in the back room of the 
Administration somebody says gee whiz, Mr. President, we are 
glad you want to increase this spending, it is a great idea, 
however, we have a problem. We have to comply with the law, the 
law which you just signed and made a big deal about, therefore, 
while we ask for this increase, hand and glove, we are going to 
also say here is the proposal and Ed and Labor to pay for it 
because we do not want somebody to accuse us of phoney-baloney 
here.
    Mr. Steele. Again, there was not a specific offset 
associated with the proposal. They have not submitted 
legislation at this point with an offset.
    There is a bill in the Senate which has been drafted in the 
Senate and they have offsets for that.
    I do not know if we are submitting a bill. I do not think 
we are at this point.
    Mr. Kingston. An appropriations bill is a bill.
    Mr. Steele. Yes, but you are not submitting a mandatory 
proposal in an appropriations bill.
    Mr. Kingston. I think the American taxpayers really would 
not care where the money came from, so to speak. Actually, they 
would care where it comes from but they do also want to know 
that it is coming.
    If 80 percent of the USDA budget is mandatory spending, it 
would appear that money should come out of that and maybe 
somehow down the road make it right with the Ed and Labor 
accountants.
    Mr. Steele. We would have to get Chairman Peterson to agree 
with that reduction.
    Mr. Kingston. If this committee passes the appropriation 
request as is, at what point does this meet PAYGO?
    Mr. Steele. We are not requesting the $10 billion in an 
appropriation context. It is in our total budget but we are not 
asking this committee to pass a child nutrition reauthorization 
bill with a $10 billion price tag. We have not requested this 
committee to take that action.
    Mr. Kingston. The additional money that we are talking 
about today would not be this year's budget?
    Mr. Steele. Not necessarily. It would not necessarily be in 
this appropriations bill.
    Mr. Kingston. I guess this is what people back home just 
cannot understand.
    Mr. Steele. It is like the Farm Bill. The money is in 
there, it is authorized, it is mandatory funding, and you spend 
the money authorized through the authorizing bill rather than 
the appropriations bill.
    Mr. Kingston. Yes, but it is that two step that somehow the 
PAYGO always gets postponed for another day.
    Mr. Steele. I assume Congress has rules on the PAYGO. To 
bring the bill to the Floor, they would have to have an offset 
for it in the House.
    Mr. Kingston. What has happened routinely, you know, is we 
have waived PAYGO. I give the President credit for PAYGO. I am 
glad he brought it up. We Republicans ignored it. It was the 
wrong thing to do.
    As I showed with my charts earlier today, this is 
everybody's problem. If we want to help children, we have to 
make sure we have a sound fiscal policy.
    This is not finger pointing at all. I have a lot to learn 
from you on budget matters. Again, I am not lecturing you or 
picking on you at all.
    It just does seem to me PAYGO but not on this bill, freeze, 
but not in this group of spending, expenditures and everything 
else.
    I know I am out of time.
    Ms. DeLauro. Mr. Farr.

                             SECOND HARVEST

    Mr. Farr. Thank you very much, Madam Chair. I am always 
interested in this hearing. It is a very interesting one to try 
to figure out how we can get a better bang for the buck.
    I have some questions for Ms. Paradis. First of all, thank 
you for your public service and your service when you worked 
here in Congress.
    As I understand from your resume, you also worked with 
Second Harvest.
    Ms. Paradis. I did.
    Mr. Farr. As I recall, Second Harvest receives funding from 
USDA through the TANF program--I mean TEFAP, The Emergency Food 
Assistance Program?
    Ms. Paradis. The food banks that are part of America's 
Second Harvest, now called Feeding America, many of them, if 
not most of them, do receive some funding through TEFAP, just 
as they receive the TEFAP commodities. Yes, that is correct.
    Mr. Farr. The purpose of that program is to feed hungry 
adults; right?
    Ms. Paradis. It is to feed hungry people.
    Mr. Farr. Who are low-income?
    Ms. Paradis. That is correct.
    Mr. Farr. Often times, they do not really do any checking 
as to whether you are low-income or high-income when you come 
through the food line, they give you the food packages. I have 
packaged a lot of foods and they use a lot of volunteers.
    Ms. Paradis. They do use a lot of volunteers, as I 
understand it, over a million volunteers a year participate 
with America's Second Harvest food banks. It is a legal 
requirement that if TEFAP commodities are being distributed, 
they must be going to low-income households.
    My understanding is that what typically happens is families 
are asked for their income level, they fill out a particular 
form, and then the food bank or the food pantry or the shelter 
certifies them as low-income, and then they are eligible to get 
TEFAP commodities.
    If they do not get TEFAP commodities, if they get privately 
donated commodities, then it is up to the distributing agency 
to determine whether those households would get that food or 
not.
    If it is Federally provided commodities, those are to go 
only to low-income households.
    Mr. Farr. I would be interested in the percentage of Second 
Harvest food they put out that is commodity related. I have 
never seen that kind of check off system.
    I am trying to make a point. In this, it is essentially 
based on census data of where these low-income communities are 
and where the unemployment levels are high. There are figures 
that one uses. It does not necessarily have to go to the 
individual.
    Ms. Paradis. That may be true in terms of generally where 
these food banks are located or where the pantries are located 
for the percentage of TEFAP commodities that are going to any 
particular State or locale, but when it comes to the actual 
point of providing that food benefit to a family, if it is a 
Federally provided commodity, that family is supposed to be 
low-income.
    We are happy to sort of see if we can get some additional 
information to clarify how that works at the local level.
    [The information follows:]

    Food banks and other emergency feeding organizations may be 
distributing food from a variety of sources, including food donated 
through USDA's Emergency Food Assistance Program. State agencies 
administering TEFAP are required to set statewide criteria for 
determining the eligibility of households to receive TEFAP food for 
home consumption. TEFAP regulations require that these criteria: (1) 
ensure that only households which are in need of food assistance 
because of inadequate household income receive TEFAP food and (2) 
include income-based standards and the methods by which households may 
demonstrate eligibility under such standards. TEFAP regulations require 
that each TEFAP distribution site maintain records to demonstrate the 
basis for determining that a household is eligible to receive food for 
home consumption. Any organization such as a food bank or food pantry 
distributing TEFAP food for home consumption must follow these 
requirements as well as any additional requirements imposed by the 
State with regard to income guidelines and documentation of 
eligibility.
    However, TEFAP income standards apply only to distribution of TEFAP 
food for home consumption. Many food banks also distribute food that is 
donated to them from nongovernment entities or is purchased by the food 
bank. The Federal Government does not regulate these distributions or 
require any sort of means test.

                       CNP--PROGRAM APPLICATIONS

    Mr. Farr. Were you here last week when I was talking about 
the Child Nutrition Programs?
    Ms. Paradis. I am sorry. I was not.
    Mr. Farr. I had copies and I do not have them today of the 
applications for those programs. Are you aware of the 
application for the National School Lunch Program?
    Ms. Paradis. I am.
    Mr. Farr. Are you aware of the application for the School 
Breakfast Program?
    Ms. Paradis. I am.
    Mr. Farr. Are you aware of the application for the Special 
Milk Program?
    Ms. Paradis. I am not sure I am aware of that.
    Mr. Farr. How about the child and adult care feeding 
program?
    Ms. Paradis. Yes.
    Mr. Farr. The Summer Food Service Program?
    Ms. Paradis. Yes.
    Mr. Farr. Why cannot all those be one application?
    Ms. Paradis. In many instances, they are one application.
    Mr. Farr. Why can they not be electronic?
    Ms. Paradis. In some places, I think we are moving in that 
direction, and that will be wonderful, when we can make them 
electronic.
    I think the interesting thing is we see these as different 
programs at this level, but for example, when a family enrolls 
their children in school and sign up for school meals, that 
also means they are eligible for school lunch and school 
breakfast and an after school at risk program, so it is 
seamless to the household. They see it as seamless.
    Of course, with SNAP direct certification, if the household 
is participating in SNAP, then they do not even need to apply 
separately for programs in the school meals.
    To the household itself, it appears seamless.
    Mr. Farr. The mission of the Agency is to--it says 
``Federal agency responsible for managing domestic nutrition 
assistance programs. Its mission is to increase food security 
and reduce hunger in partnership with cooperating organizations 
by providing children and low-income people access to food, a 
healthy diet and nutrition education in a manner that supports 
American agriculture and inspires public confidence.''
    There are eight programs within the Agency and within the 
programs, as I just indicated, under the Child Nutrition 
Programs, there are five of those.
    It is very bureaucratic dominated. It seems to me where we 
need to go now is to--the problem is it is sort of a conflict 
with Kingston, and I do think we want money wisely spent, but 
you opened your remarks about wanting to hire a lot more 
people. I am wanting to feed a lot more people.
    I am not sure hiring people in Washington is going to feed 
a lot more kids or adults, and I think we can find savings 
within the Department and the Administration by essentially 
collaborating. It takes leadership to do this. You have to 
break some rice bowls in this case.
    I think programs ought to be consolidated into a community 
feeding program and a school feeding program, and they all be 
under one, and we look at ways--I hate the concept of block 
granting, but we do a lot of funding of Federal programs that 
way, that is transportation funding, and it has to stay in the 
transportation field and cannot be spent on anything else. We 
restrict it but we give that money in big clumps for those 
services.
    This is where I think the Department needs to go because we 
are not going to keep having more and more money to hire more 
people and not get kids fed.
    Ms. Paradis. I could not agree with you more.
    Mr. Farr. We will look for great recommendations coming out 
of you for how we are going to change this bureaucracy.
    Ms. Paradis. We will certainly give it some more thought 
and we would love to talk to you some more about that, 
Congressman, because we could not agree with you more. I 
honestly do mean that.
    We have a one page application, for example, front and 
back, that is the application for all of the programs that are 
provided through schools.
    For our programs that are provided in community settings, 
we have a similar sort of thing.
    It does appear here in Washington as though it is very 
bureaucratic, but as it actually works at the local level, it 
is really quite seamless, but we are constantly looking for 
ways to make this work better for all of the people who need 
it.
    Mr. Farr. I am out of time. My local providers at the 
school level tell me 60 percent of the costs of the programs is 
administration. That is unacceptable.
    Ms. DeLauro. Ms. Emerson.
    Ms. Emerson. Thank you, Madam Chair. Let me say to you all 
that I really am so very impressed with the caliber and 
commitment and dedication of the workers of the Food and 
Nutrition Service, Secretary Concannon, and just so you know, 
Julie does a great job and the whole team does. We are very, 
very proud of them. Let me say that first.
    Mr. Concannon. Thank you.

                      SNAP--MISSOURI PAYMENT ERROR

    Ms. Emerson. My question goes to you, Secretary Concannon. 
Unfortunately, Missouri happens to be one of those States that 
was the beneficiary of grants for high performance, high 
participation rates in food stamps. This was due to a computer 
error.
    When somebody else got put on or somebody was due to go off 
food stamps or made enough income to be able to go off, they 
were not removed from the rolls. I think there is about $14 
million of extra bonus award money that was given to the State.
    I just wanted to know if you could possibly give me an 
update regarding what is being done about these already awarded 
funds, particularly given our very, very, very fragile and 
tight budget situation in the State.
    Mr. Concannon. Yes, I will attempt to do that.
    Julie, if you want to, jump right in, but I am familiar 
with it. And, first, I should point out that Missouri is one of 
the highest performing States still, but there was certainly a 
mathematical problem. It looked as though they were absolutely 
the single highest of the 50 States. And when that was 
discovered, our Mountain Plains office out of Denver, which is 
the regional office that serves that part of the country, has 
been working directly with the State. We want to make sure that 
those bonuses, we need to make sure that in fact they were 
earned. And we need to weigh how we deal with that, the issues 
of the $14--or the numbers of dollars that are involved.
    What we may end up doing, it is not a decision at this 
point, is if we find they were improperly awarded, again given 
the situation States are in, I can tell you what we have done 
in instances like that as a State Director is if we spread out 
the repayment period and simply did not require the State to 
pay us, we subtracted it from future grants that were given to 
that State. We have not reached that point at this point. We 
continue to work with Missouri to make sure that that is 
corrected, the practices that resulted in that overstatement of 
their performance. But it is one of the higher performing 
States, happily from my point of view.
    Ms. Emerson. Right, and mine too. And my district happens 
to be the highest, has the highest percentage of recipients. 
And, of course, I bragged and bragged and bragged about how 
well we have done at outreach, and then I read about this, and 
I think oh my goodness even though I know we are still doing 
quite well. There are others that we need to reach. Hopefully--
can you provide some assurance to me that any effort by you all 
to recapture any of those funds are not going to impact those 
who rely on the FNS programs?
    Mr. Concannon. I can tell you that is an operating 
principle that we use. I mean I am very distressed, as has been 
clear, I think the committee is as well, with what is going on 
for example in the State of Texas, but have been loathe to pull 
the trigger and penalize the State financially because of my 
concern that it would result in hurting poor people in the 
result. So that is a last resort before we would be ever forced 
to take action.

                          CNP--REAUTHORIZATION

    Ms. Emerson. And I appreciate it. Thank you very much. Let 
me also, to sort of follow on to what Chairwoman DeLauro was 
talking about, we have $1 billion a year over 10 years for 
purposes of investment in Child Nutrition Programs. And on the 
one hand, one of our priorities is to be certain that we 
improve access to combating hunger and on the other, we need to 
enhance nutritional quality. This is sort of Washington talk. 
We talk about it like that, but I guess I need to know from you 
if you can tell me this, what portion of that $1 billion extra 
dollars a year is going to go to combating hunger and what 
portion will go to enhancing nutrition?
    Mr. Concannon. I don't think we can solve hunger without 
making sure that it is adequately nutritious foods. And we have 
the report that is guiding us from the Institute of Medicine, 
given to us in the fall, that said we look at the experience of 
American children who are not getting enough fruits and 
vegetables, are not getting enough whole grains or getting too 
much fat in their diet. This is one of the factors causing 
obesity. So we--our recommendation, the best scientific 
recommendation in the country, or the best minds represented 
there, have made serious recommendations to us that we are 
committed to to improve the quality of those meals. And I think 
it is going to require a significant portion of the $1 billion 
to really improve those meals in ways that are recommended by 
the IOM.
    Now, what exact percentage, I think that is where we are 
going to have to work with Congress on where that split comes, 
but I know a significant portion of it, it is not a small 
portion of it, a significant portion of it is going to be 
required to really go into the meals portion of it for schools, 
both recognizing, unfortunately what is going on in the 
economy. We expect that by 2010, 69 percent of the children in 
school meals will be receiving a free or reduced price meal. We 
are now at I believe 62 percent this year, but when you are 
talking about 33 million children it adds up----
    Ms. Emerson. Right.
    Mr. Concannon [continuing]. Even a few cents, so, I think a 
significant portion of the $1 billion.
    There is no question in my mind, it came up I think 
implicitly in the Chairwoman's comments earlier or questions, I 
think the $1 billion is needed. And it is needed both a 
significant portion on the meals side, but also if we are 
indeed going to end up reducing obesity in a generation but 
also end up eliminating hunger in this country for children, it 
is going to take the full investment on our part.
    Ms. Emerson. Well, I have no issue with the nutritional 
piece simply because I think it is important that we teach our 
children good eating habits. However, I worry that because of 
the increased cost that that will, part of that $1 billion the 
nutritional piece will take that we will somehow might not meet 
that goal of ending childhood hunger by 2015. And that was my 
point. It is not that I am disagreeing, it is just that I am 
worried about the ending hunger part because that is such an 
important goal of what we are all trying to do.
    Mr. Concannon. We are there with you, but we believe it has 
to be--they have to be nutritious foods, and we believe it has 
to be performance based, that we do not just--we are not going 
to recommend, we are not recommending in the bill that we just 
spread the money whatever the distribution Congress settles on 
to all schools. We believe it has to pay for performance in the 
sense of paying for schools to meet the criteria in the IOM 
recommendation.
    Ms. Emerson. Thank you.

              CNP--SCHOOL MEALS COST STUDY BUDGET REQUEST

    Ms. DeLauro. Thank you. Let me ask about--the budget 
includes an increase of $8 million for a school lunch and 
breakfast cost study. As I understand it, it was estimated that 
the cost to produce reimbursable school meals in the school 
year 2012-2014-13, I'm sorry, with the results available in 
2014. And the study is going to incorporate additional 
information on nutritional quality from previous studies. I am 
delighted that you are looking at what it takes to make 
available a healthy lunch for our kids. In the meantime, as you 
know and I know, we are working on the reauthorization bill and 
asking what reimbursement rate is necessary to feed our 
children healthy foods. So let me ask you today what 
recommendations would you make on the reimbursement rate 
necessary for improving their diets? To be very honest, we do 
not have time to wait until 2014 to start improving the health 
of our kids. We are meeting. This thing is going to happen. So 
what is your recommendation?
    Mr. Concannon. We agree with you, Madam Chair. And I 
believe the Institute of Medicine report recommended that by 
their assessment, and they had, as I remember, their 
physicians, they had a single economist as I remember on that 
panel as well, recommended that they believed it would take 
about a 5 percent increase to meet, 5 to 9 percent was the 
range that they showed to meet the IOM recommendations. So we 
think it is important to do that study though. I do not want to 
overlook that because one hears from time to time, and I am 
confident that members of this committee probably hear from 
some people at least, that they believe the current 
reimbursement is not sufficient. There was a USDA study but it 
is now dated, it was several years ago, that showed at that 
time the reimbursement for free and reduced price meals from 
USDA did meet the cost of the meals. But in the meantime you 
have--if we want better foods, better foods----
    Ms. DeLauro. Cost more money.
    Mr. Concannon [continuing]. Generally cost more money. So I 
think it is important, that $8 million study is intended to 
look at all the cost elements of producing a meal, not just the 
ingredients. And the IOM, by the way, recommendations recommend 
that more fruits, more vegetables that in and of themselves 
require more handling, so there will probably be more--there 
will certainly be a significant corresponding manpower cost.
    But also to the questions that have been raised about the 
admin costs, respectfully, I think that that percentage that 
has been used, most of that cost is associated with people on 
the feeding line. It is not somebody handling that one or two 
page application. But we certainly would like to settle it.
    Ms. DeLauro. Sure, okay.
    Mr. Concannon. So I think it is important to do it. But I 
agree with you we cannot wait----

                 CNP--HEALTHIER U.S. SCHOOLS CHALLENGE

    Ms. DeLauro. Well, we are going to need your input on that 
as we move to do this because we have to do it this year, and 
we cannot afford to make the delay. You talked about the 
Healthier U.S. Schools Challenge program and wanting to reach 
3,000 schools participating within the next three years. How 
many schools are currently participating? How many do you 
propose to have participating in 2011? And how do you plan to 
get 3,000 schools participating in three years?
    Mr. Concannon. Thank you very much for the question. There 
are just over 600, I believe it is 620-plus, schools currently 
participating in the Healthier U.S. Schools Callenge. Michelle 
Obama, the First Lady of the land, has challenged us to double 
that within that year. We are definitely working on that right 
now.
    Ms. DeLauro. Okay.
    Mr. Concannon. One of the elements in that is currently 
those 600 schools are all elementary schools. We have expanded 
the class eligibility for the program to include middle schools 
and high schools, but we are also--we are going to provide 
some, as I call it, a somewhat American aspect to this, an 
American cultural aspect, of having a very modest financial 
reward for those schools that meet the gold, silver and bronze 
level. I have been out to a number of those schools, and it 
just is very exhilarating, I believe, when you see kids eating 
healthy in school cultures, and school climates committed not 
just to feeding the child but to exercise, some of the other 
factors as well.
    So we are very committed to that. And we are very committed 
to working with schools to simplify the process too because we 
hear from some schools. We know there are a number of schools 
that are providing the quality meals that would meet the 
current U.S. Healthier Schools Challenge, but they may be 
dissuaded by either the paper process. We are very committed to 
simplify that without compromising the substantive requirements 
of the program.
    Ms. DeLauro. Thank you. Mr. Kingston.

                         CNP--IMPROPER PAYMENTS

    Mr. Kingston. Thank you, Ms. DeLauro. Mr. Concannon, I 
wanted to ask you about the $1 million a year, according to 
your own estimates, on payment errors--excuse me, $1 billion.
    Mr. Concannon. Yes.
    Mr. Kingston. Would it not make sense to go after that 
before we go after more funding?
    Mr. Concannon. Mr. Kingston, you have identified a very--an 
area that we are very concerned about. We have a concern, but I 
also have to share that the White House has a concern about 
that. We are as an agency, the FNS are part of a group of 
Federal agencies working on improper payments. And to the point 
the actual numbers, as they pertain to the School Lunch/School 
Breakfast programs, are $1.8 billion a year in improper 
payments, now net about $800 million of that are under payments 
on the part of the Federal Government. So the costs to the 
taxpayers are $1 billion a year, a significant amount of money 
still.
    Now, as I recall, there are three factors that sort of 
drive that. One is misinformation communicated by families 
enrolling their children. That is not quite half of that, but 
it is a significant portion of it. Another portion relates to 
the State, or I am sorry, the school agencies themselves making 
mistakes in processing the information, even if it is properly 
conveyed or proper information is conveyed to them. And a third 
part is the--is caused by the cashiers when you come through 
the line, a reimbursable meal has to meet the food group 
requirements of the Act.
    And I was in a school I think since I was at your hearing 
here a couple of weeks ago, I was up in Jessup, Maryland during 
National School Breakfast Week, the week before last, and when 
I went through the line in the morning, I had had a healthier 
breakfast at home, it goes down hill personally the rest of the 
day, but breakfast I do right, and when I went through the line 
I took just a bottle of juice, a container of juice, and an 
apple. And when I got to the cashier, she looked at me and 
said, ``That is not a reimbursable meal.'' So part of it is 
training. What we are doing is we are working with State 
agencies on the training side. We are working with and urging 
them to work with schools as well. We are urging schools to 
make better use of direct education, the process of where you 
are transferring information that has been provided to a State 
or county on families' income. And in the budget proposal we 
have as well a budget request, it is $22 million to provide 
incentives to States that are doing the least or least 
currently reliant on direct certification. Congress directed us 
to do that.
    Mr. Kingston. Let me ask you this, wouldn't it make sense 
to address this before we expand the program or possibly take 
it out of the reserve because you are going to have a $5 
billion reserve, right?
    Mr. Concannon. No, the recent----
    Mr. Kingston. Aren't you asking to increase the reserve $2 
billion in SNAP?
    Mr. Concannon. The reserve portion is in the SNAP program.
    Mr. Kingston. Okay, but can you not use any of that money 
to get this thing straight before we expand it? Because I think 
so often we have intention of expanding it but it just never 
seems to come.
    Mr. Concannon. No, we have more than an intention of doing 
it. We are actually in the middle of attempting to mitigate and 
modify that right now. We are part of, as I say, a group that 
not only internally in USDA but in other parts of the Federal 
Government. The President signed an Executive Order in improper 
payments in November of 2009, and we are identified as one of 
the object groups, if you will, that he has an expectation, and 
actually I am the identified official responsible for both 
improper payments in SNAP and in the School Lunch Program. So I 
am highly motivated to make sure that we do as much as we can 
with schools.
    And part of it is simplification. Complication invariably 
produces some of these problems. So also, we are also trying to 
create incentives for schools to rely upon direct 
certification, and also helping schools. We had an earlier 
question here, many schools do not have electronic capabilities 
in terms of going through those lines and so on. To the extent 
we can work with them on modernizing the way in which they do 
their claiming, and the way they count meals, we can help them 
do that.
    Mr. Kingston. Well, thank you.
    Mr. Concannon. This is a huge program.
    Ms. DeLauro. Mr. Farr.

                           HUNGER IN AMERICA

    Mr. Farr. Yes, malnutrition does not respect boundary 
lines. It is not a means test. And I think that is one of the 
problems. We have written this program, all these programs over 
the years is this accountability, that, my God, we might feed 
somebody whose parents are not poor, but the kid is hungry. And 
you just go to these feeding spots, and you will see that 
teachers have been putting money, I will just feed it. I will 
take the money out of my pocket. It is like the school pencils 
and books and everything like that.
    I mean I do think that we need to have this stuff 
accountable, but I think we also need the goal of the United 
States of America ought to be, the first goal is that nobody 
goes hungry in this country. And that we make that the goal, 
and then we try to figure out how do you do it. And I think 
that, frankly, you take the amount of money like we do in 
transportation, you just kind of get it to the places.
    We have two kinds of feeding programs in our country, what 
am I trying to think of, the second harvest type food service. 
There is one we have, and I go to these things, in the parking 
lot when they are giving away free food. I represent the 
biggest growing region of the United States, and most of that 
food is given to us by--all the lettuce and the cucumbers and 
everything all free because it is excess from the packers. That 
parking lot and the line goes as far as the eye can see. Nobody 
asks a question as to who you are, your ID or anything, no 
citizenship requirements, green card requirements, no poverty 
requirements, and it goes on and on. The next week we will have 
the USDA market, and it is limited. The commodities they are 
giving, nice stuff they were giving away. But I think we are so 
hung up on accountability right now that we are not cost 
effective anymore.
    We are worried about--we had actually--teachers told me 
that came into the school and took a cup of trail mix and 
dumped it out and said, ``Too many M&M's in here, they do not 
meet the nutritional test.'' How much did it cost to send 
somebody to do that versus the benefit derived from it?
    Those are the things that I think, this is why I am kind of 
getting involved in this of figuring, I mean we do not means 
test the soldiers when they get fed as to whether you are an 
officer, an enlisted person or what your payment is. We do not 
means test the prisoners in our prisons. I think we have--if we 
are going to get into trying to feed hungry people, we ought to 
get away from these barriers, and we ought to feed them. And we 
ought to figure out how to do it smartly and how to do it cost 
effectively.
    And I do not like the segregation that we are doing. Do you 
know what it means to a kid to be told that you have got to go 
stand in one line because your parents are poor and you kids 
can go through another line? I mean that is so humiliating. And 
trying to build self-esteem in children. That is why I have 
been sort of on this for a long time because I share your 
concerns about this, we do not have a lot of money to go 
around. But what I think you would agree to is that we 
certainly do not want to just employ a bunch of bureaucracy 
when we really are trying to get the service, the food in 
people.
    We built this program, you look at this whole agency, and 
it is just stacked of trying to solve particular solutions, 
milk supplements, after school programs, breakfast programs, 
lunch programs. Frankly, the WIC Program that the mom is going 
to, the Food Stamp program perhaps for that dad or other people 
in the family. The whole family is getting food one way, but 
boy it sure is complicated to get into the system. And I think 
we ought to make it less complicated.

                          WIC--INFANT FORMULA

    If I have any time left I want to ask a question. It is 
about the WIC Program, and it is about whether--I noticed the 
cost of buying WIC formula has just gone up and up and up. And 
I understand, or at least I heard, that the reason it has gone 
up so much is there are new formulas coming out all the time 
and they are more and more expensive. And it gets compounded as 
to what we are adding and what we are not adding, and I do not 
know whether you have to buy the sort of improved formula, but 
is this cost----
    Ms. DeLauro. Is it improved or enhanced?
    Mr. Farr. Is it any more cost effective to do that than 
just to buy the formula, the cheaper formula? Is there value 
added here or are we just making the formula producers a lot of 
money?
    Mr. Concannon. It is my understanding there are only three 
manufacturers in the country that actually make those infant 
formulas and actually bid on them. And we award them to the 
manufacturer with the lowest net cost for the infant formula, 
and they must bid a higher rebate on its new higher priced 
enhanced formula to be awarded a contract. It reminds me of my, 
I spent many years administering Medicaid, where the 
prescription drug companies come in, but they have to give us 
the deepest discount. So it is a net cost.
    Now, to your larger question about efficacy of what is 
alleged----
    Ms. DeLauro. Just can I, will the gentleman yield for a 
second?
    Mr. Farr. Sure.
    Ms. DeLauro. At this point because you are going to go on 
and talk about this, but my understanding is that, just to add 
to what Congressman Farr is saying, that there are findings in 
a USDA report that found that WIC is paying $127 million more 
annually for infant formula under the rebate contracts that are 
currently in place than under previous contracts after 
adjusting for inflation. So that is data that is coming out of 
USDA. So I just wanted to----
    Mr. Farr. That is what it went to.
    Ms. DeLauro. Yes.
    Mr. Concannon. The contracts are, the State agencies have 
the discretion to deny the inclusion of some of these allowable 
foods. And the course of these contracts typically go three to 
five years. But I can tell you one of our concerns that has 
been raised with us at times, well, why wouldn't you just limit 
or not allow the formulas to include some of the new additives, 
so to speak, that have been incorporated into them. And I 
worry----
    Mr. Farr. Do you have the authority in law to do that, 
administrative authority?
    Mr. Concannon. I do not believe we do at this point, but we 
also would have--worry about that, would we end up with formula 
for poor people versus the formula that, the infant formulas 
that the rest of the population have available to them. We 
would be very concerned about the unintended consequences of 
that.
    Mr. Farr. Can you force the companies to come in with a 
lower bid on these?
    Mr. Concannon. Right now they have to, they have to give a 
higher rebate on the new higher cost.
    Mr. Farr. Or do something on the not be enhanced?
    Mr. Concannon. It has to be a new higher priced enhanced 
formula, does it not?
    Ms. DeLauro. Is that all that they are selling to us? And 
so that is the only opportunity we have, are these enhanced?
    Mr. Concannon. Yes, that is my understanding right now, 
that there are three companies that bid and that is all that 
they offer. And we have had discussions. Again, they have been 
offline discussions.
    Mr. Farr. But I mean do you have to buy the enhanced 
formula? They are going to offer it, if they are all three, 
they can just--that is what you have to buy or can you put out 
a bid for a lower--for less enhanced?
    Mr. Concannon. Well, I think, Congressman, that is what the 
worry is that would we in effect be denying to poor people in 
the WIC Program who depend on the formula, would it be denying 
them access to the latest formulas that are being provided that 
have benefits that those formula manufacturers claim at least 
have additional benefits. Would we in effect be saying, well, 
for poor people we are going to have a generic brand that does 
not have that? And my fear in that, I think our fear, is that 
what we would be doing in infant formula, are some of the 
concerns you have expressed about what does it mean if you are 
put off in a separate line.
    Mr. Farr. Well, generic is good. Maybe we ought to go with 
our own brand.
    Mr. Concannon. Well, I do not think--well, I do not think 
we have the capacity to do it. We also are--we have to honor 
States that do the, that do the bidding.
    Mr. Farr. It is a concern though that you can see that if 
the program costs are rising because supply, the cost of the 
supply is going up, then there has got to be, somebody has got 
to look at that.
    Mr. Concannon. I think we are happy to work with you on 
that because I know, I believe we purchase half of the infant 
formula in the U.S.
    Ms. DeLauro. Science ought to come into play somewhere. Ms. 
Emerson?
    Ms. Emerson. Well, Madam Chair, without taking away my 
time, just for a second. It seems to me when we talk about here 
in the United States we are the largest consumer of 
prescription medicines anywhere in the world, the largest by 
far, and we pay the highest prices. So you know what, you are 
getting ripped off. And I think we got to get to the bottom of 
it.
    Ms. DeLauro. Bingo.

                        CNP--REIMBURSEMENT RATES

    Ms. Emerson. Alright, so let me start my question, please. 
Thank you. And I am not blaming you, I just hope that we can 
get to the bottom of this.
    I think it has been two or three weeks ago now. I think it 
has been two or three weeks ago now, my school nutrition folks 
came to visit me. And one of my school nutritionists was 
telling me that they on every free lunch they serve, they are 
losing 35 cents. In other words, they are not being reimbursed. 
And we are talking about a poor school district here, so trying 
to make up the difference is not exactly easy. And everything--
back to what Rosa was saying about that North Carolina or some 
Carolina school district where on al a carte or any other type 
of extra payments they may get, the school board snaps it up 
and uses it for improvements in the school. And so consequently 
we have got a real issue. And so what I am worried about is 
that when we are going to ask the schools to provide healthier, 
more nutritional foods, they are never going to be able to make 
ends meet. They are going to keep losing money and keep losing 
money. And I guess is there any way that we can create a system 
whereby the schools are actually being reimbursed for the real 
cost for the meals as opposed to just some formula?
    Mr. Concannon. Let me say that several years ago, it is now 
outdated, the USDA did a--because some of these same claims 
were being made then, that the USDA does not reimburse the full 
cost of the meal, and the USDA or FNS did a study, a very 
extensive one, and found that indeed we were reimbursing the 
cost of the meal. So that study now is several years old, so I 
want a truth in lending, to express that.
    Ms. Emerson. Right.
    Mr. Concannon. But we have a budget proposal here of $8 
million to actually take a very extensive, rigorous look at 
what does it cost to produce a meal, not only in terms of the 
food elements that are there but the manpower, the labor cost 
associated with it.
    Ms. Emerson. Right.
    Mr. Concannon. But I also have to say, as an example, I was 
in rural Georgia now about three months ago in a county with a 
very large number of very poor children, and a very talented 
school service director involving three elementary schools 
pointed out to me, she said, ``We can pay the rate that USDA is 
reimbursing us, it covers all of our cost, labor everything 
else.'' And she was a talented, part of it is leadership I 
guess, I want to say that, but also she was making very good 
use of the commodities program, and she pointed out to me in 
that visit, she said, ``See these little ketchup,'' those 
little plastic ketchup individual items, ``if I buy those from 
one of the major suppliers, I pay 12 cents. I produce them for 
two cents because I take the tomatoes made available to us by 
commodities and have them processed.'' And then she pointed out 
some chicken inside a freezer as well. So I think--I do not 
want to understate the fact that there is a tension, a pressure 
there, but I do not just take it as the gospel either that when 
people tell me that you are not meeting the cost. That is why 
we want to do this study. In the meantime, we keep pushing back 
and saying, well, what else are you doing in terms of how you 
are managing this?
    Ms. Emerson. Well, I am just worried that in situations in 
some parts of the country we are not even getting reimbursed 
for what we are doing now, and then we are going to have 
something layered on top of it. And I am not complaining about 
the layered on top. I am complaining about the fact that we are 
in a poorer school district that is in a national forest that 
keeps getting less and less money, and this is happening not 
only in my district but other districts too.

                   HEALTHY FOOD FINANCING INITIATIVE

    Let me ask you about food deserts if I might. And then, 
Madam Chair, I am going to have to leave because I have got a 
meeting that started 20 minutes ago. The Administration has 
proposed an array of priorities for improving access to foods, 
including its Healthy Food Initiative, targeting the problem of 
food deserts. And one part of this actually concerns the 
Subcommittee on which I am ranking, and that is the Financial 
Services Subcommittee. There is a Treasury Department program, 
you know through the CDFI. And an example of one of the huge 
past successes of the program is the Super Giant store over in 
Anacostia, which is now one of the companies, I might say a 
foreign-owned company's most successful store.
    So I come from a rural area, and I am talking to families 
and it is a huge ordeal sometimes to go to the grocery store, 
seriously an hour long trip. And you have to to take the whole 
family. You do not have a big enough car to bring the stuff 
home, et cetera. But I wonder if it is the best way, if this is 
one of the better ways to combat hunger and improved nutrition, 
that is to use our tax dollars to subsidize the construction of 
grocery stores, and apparently very profitable ones. So there 
is no one who wants to tackle the problem of hunger more, I 
just want to make, I want somebody to convince me that 
subsidizing Super Giant that is very profitable is in the best 
interest of the taxpayers. If we could not be somehow putting 
that money into other--using it for other ways to help make up 
the deficit that we see in combating hunger among children now?
    Mr. Concannon. No, I appreciate the question, and I am very 
familiar with your leadership in a whole bunch of these areas. 
Let me say that I have lived in States where, again rural 
States, but where there were huge challenges for poor people 
that have to travel many, many miles to get access to a 
supermarket. And in general the supermarkets, the prices are 
better and often the quality of choices are better for people. 
But I understand you are going to be hearing from several other 
under secretaries because this initiative that is one of the 
priorities at USDA is really under the aegis of several of the 
other mission areas within USDA, the Rural Development and one 
of the others. So I think you are going to be hearing from them 
in subsequent weeks when they are here before the Committee. 
But I know there is always that balance between or the tension 
between our wanting to extend and support with tax dollars 
initiatives that ultimately help people but you do not want 
to--you do not want to unfairly, or at least be perceived to be 
unfair in terms of taxpayers with private entities or private 
companies.
    Ms. Emerson. Yes, I mean it is a really tough, tough 
balancing act. Do you know yet what the key factors that the 
USDA will use in considering how you target that money?
    Mr. Concannon. I do not.
    Ms. Emerson. Okay.
    Mr. Concannon. It is Rural Development and one of the other 
mission areas, yes.
    Ms. Emerson. Well, okay. Thank you.

                   SNAP--INDEFINITE FUNDING AUTHORITY

    Ms. DeLauro. Let me ask you a question about the budget 
language that says, ``Make such sums as may be necessary 
available for the SNAP benefit payments.'' Congress did this 
kind of indefinite authority in the 2010 Department of Defense 
Appropriations Act in light of the uncertainty of program 
growth due to the recession. There have been previous concerns 
that this indefinite authority could lead to less oversight by 
the agency when projecting a SNAP cost in the budget. What 
budgetary controls would be in place to ensure that estimates 
provided in the President's budget continue to receive the same 
level of scrutiny they currently do? When would you use the 
indefinite authority and for what expenses? And I have another 
question, which is why have you not proposed a contingency fund 
for the Child Nutrition Program? And should a contingency fund 
be provided for that account as well?
    Mr. Concannon. I think the last question is the easiest one 
for me. I believe that that has been recommended in the past 
and was not, it just was not found to be a policy that was 
supported or enacted. But I think were the Congress to be so 
disposed, I think we would be more than happy to work with you 
on that, on the latter question.
    Ms. DeLauro. Okay.
    Mr. Concannon. Now, I do not know, it obviously preceded me 
long--by many months or interactions, that question of how we 
deal with a contingency. I know in the SNAP program, 
historically the agency I think has been, has had amazingly 
reliable estimates on--based on both experience and what is 
going on in the economy on enrollment numbers. But I would have 
to admit that in this current economy, I do not think anybody 
anticipated we would be in as an extended downturn as we are 
currently in. And I think it requires ongoing oversight on our 
part. I pay attention, I can tell you that, each month to where 
those figures are and what they are leading us toward. This 
budget as proposed, as I mentioned earlier, the figure 
estimates about 43 million in people enrolled in the program in 
2011. And that is based on again current trends as well as 
econometric models that have been used to forecast that.
    I do not know if you want to add anything to that, Julie? 
Do you want to say something?
    Ms. Paradis. Well, just to clarify that it would clearly 
only be used when participation exceeded expectations.
    Ms. DeLauro. Expectations.
    Ms. Paradis. And we monitor that as you know very, very 
regularly. And it would only be used for benefits and State 
admin costs, not for anything else. So I think it is something 
that we would have a pretty good handle on, we would be 
coordinating with the Congress on a regular basis----
    Ms. DeLauro. Okay.
    Ms. Paradis [continuing]. Were we to have that authority.

                       CNP--FARM TO SCHOOL TEAMS

    Ms. DeLauro. Thank you. The Farm to School Teams, it is $2 
million for these tactical teams. What are the obstacles that 
keep schools from buying locally? What is FNS currently doing 
to help schools buy from local food producers? Are these 
tactical teams being deployed already? Do we have some idea of 
how many districts will be visited, selected? How many staff 
are dedicated to this effort? What do we propose to do with 
these tactical teams, somebody just describe that to me?
    Mr. Concannon. We do not have--we currently have an 
initiative within the Department called Farm to School.
    Ms. DeLauro. Yes.
    Mr. Concannon. And that was promoted, conceptually and 
otherwise, by the Deputy Secretary. It involves individuals 
from the FNS mission area as well as from AMS, the Ag Marketing 
Service, another mission area. And we are working with both. At 
the current time, I am told, the last update I had on this, 
there were more than 100 schools across the country that had 
applied to receive some technical assistance from this tactical 
farm team. There is a $2 million budget request----
    Ms. DeLauro. Right.
    Mr. Concannon [continuing]. That was in this budget as 
well, both to provide support to that team and also to provide 
assistance to schools.
    Ms. DeLauro. What kind of assistance? Give me an example of 
what they are doing here?
    Mr. Concannon. Well, I will give you an example. I was up 
in Somerville, Massachusetts back a couple of months ago. 
Somerville has a school system, has now a history. The City of 
Somerville but also the school system is very committed to 
Healthier US Schools, walking to school, healthier meals in 
school, but now for about three years, the Somerville school 
system has been purchasing locally grown, meaning within 50 
miles, foods for use in the schools.
    Ms. DeLauro. Sure.
    Mr. Concannon. But the school service director said to me 
that she has gradually built up doing this because you need to 
be assured that if you put this on the menu for three weeks 
from now, that those carrots are going to be there or whatever 
particular commodities are required.
    And she gave the example of local farmers wanting to grow 
squash. And the school department wanting to purchase squash. 
But she said we cannot possibly have farmers coming into 12 
different schools delivering squash and then expecting those 12 
different elementary schools to somehow spend all the time to 
peel the squash and get it ready. So she said, ``When we met 
with the farmers, the farmer came to the agreement that one 
farmer would buy the equipment to peel all the squash.'' All 
the other suppliers would bring their squash to him or her, I 
do not know the details of that farmer, and that farmer would 
then deliver it to the 12 schools. And she said, ``Since then 
we now have relationships with like five or six other school 
systems where we are jointly purchasing.''
    So it is a learning experience on the part of the schools 
that are procuring these goods and on the farmers that are 
supplying it. And that is the kind of information and technical 
assistance we would provide. We do not know enough about this 
yet.
    Up in your area, the chief chef or the chief school service 
person in the New Haven schools has told me the same thing. 
They are buying from within a 100 mile radius of New Haven from 
Rhode Island and parts of Massachusetts for certain goods. And 
the poundage each year is going up. So it is a new experience. 
It is sort of going back to the old days in many respects, in 
the positive sense of old days. And we know there are benefits 
for fresher foods. That kids for whatever reason, if they have 
a sense and a knowledge of where the foods come from, this 
enhances their interest in eating some of those foods, and it 
also helps the local economy. And why truck this stuff across 
the country from just one or two States.
    Ms. DeLauro. Thank you. Mr. Kingston.

           NUTRITION ASSISTANCE PROGRAMS CONTINGENCY RESERVES

    Mr. Kingston. Thank you, Madam Chair. Mr. Voncannon, the--
or Concannon, I am sorry, the interesting thing, we had a full 
Committee hearing the other day in which Mr. Orszag, Mr. 
Geithner and Ms. Romer spoke. Rosy pictures of how well the 
stimulus is working. I was even told my concern, because I kept 
looking at unemployment going from 8 percent to nearly 10 
percent, I was told by Ms. Romer I needed to go talk to the 
regular people, and I would see how well it is working. So I 
have a hard time doing that in one of my counties with 16 
percent unemployment and many of them with 14 percent. But here 
you are I think being a lot more realistic, a lot more 
accurate, but it is so frustrating, ``Oh, yes, the economy is 
turning around,'' and yet you have the contingency reserve. You 
are asking for $2 billion for it. Maybe you guys ought to get 
the economic forecast and get Mr. Geithner and some of these 
other people in other positions because it is totally 
inconsistent with they are saying. And we had a two hour 
hearing on it, about how great things were.
    Ms. DeLauro. He did not say that.
    Mr. Kingston. He said that, Madam Chair.
    Ms. DeLauro. He did not say how great things are. They 
talked about----
    Mr. Kingston. It was trending, you are right. It is 
trending. But if it is trending, why are you asking for a $2 
billion contingency reserve? What are the uncertainties that 
remain? What is out there? And we all know what they are. We do 
know the economy is bad. I am just saying rhetorically. I wish 
the rest of the team might get on the same message. But what 
are the uncertainties in terms of that $2 million--$2 billion, 
is it just the economic concerns or are there other issues?
    Mr. Concannon. I think it is principally the economy. This 
is the longest, as I say in every talk I give outside of 
buildings like this, in our lifetime, short of-- and none of us 
here are old enough to have been around in the Great 
Depression, this is the deepest recession and the most extended 
in the history of the country. And the need for these programs 
has never been as urgent as it is right now.
    Ms. DeLauro. And does not SNAP lag, I mean in terms of the 
economy?
    Mr. Concannon. SNAP lags, but also I might say Mr. Zandi, 
who I think has testified before Congress for Moody's, said 
that the SNAP program is the best example of a stimulus program 
because it goes right out there, 85 percent of these benefits 
are spent within 30 days.
    Ms. DeLauro. I think it is important to note that Mr. Zandi 
was the economist for Senator McCain in the presidential 
election, who said it was one of the most stimulative programs 
there is, is to get food out.
    Mr. Concannon. And so I mean I think to your question it is 
just uncertainty about--I think things are turning. I spoke to 
a businessperson up in Maine today, I am from Maine, and I 
asked him about business and he said, ``You know, we are seeing 
some signs.'' So I hope he is right.
    Mr. Kingston. Well, listen, I hope so too. And I hope this 
Administration is successful on many of the things that they 
want to accomplish for a better America. It is far more 
important that politics, but I am not impressed with their 
economic recovery and apparently you guys are not either 
because you are hedging the bet that it is not turning the way 
that they are saying.
    But now on the WIC Program, that is discretionary money, 
not mandatory, 3 percent increase. The contingency is $175 
million, is that right?
    Mr. Concannon. Yes.
    Ms. Paradis. It is $250.
    Mr. Kingston. $250 million?
    Mr. Concannon. Yes.
    Mr. Kingston. Since that is discretionary, why do we need a 
contingency because it would appear to me that unlike a 
mandatory program, that would be a little bit more--there would 
be more flexibility in it?
    Mr. Concannon. Well, I think one of the things in WIC, we 
want to make sure that we can--that is why I mention it in my 
opening remarks, the President's budget proposes to fully fund 
the major nutrition programs so that we can avoid telling a 
pregnant woman who comes into a WIC clinic, you have to go on a 
waiting list.
    And we anticipate--we are currently just over 9 million 
people in WIC per month; for 2011, we are anticipating in 
excess of 10 million per month, partly, again, reflecting the 
economy, but also wanting to be sure that we can serve those 
pregnant women and their infants.
    Because it is one of the best investments--I mention that 
in my testimony--we can make in terms of preventive health 
care, cost avoidance in the future. In the Medicaid program 
alone, it saves money by getting healthy foods to pregnant 
women, their infants, and very young children.
    So we don't want to be in a situation, which the program 
has been in past years--I can speak from a State level--of 
putting waiting lists on WIC. Because you are telling somebody 
who is already pregnant, or an infant that has been born, I am 
sorry. We have to put you on a waiting list.
    Mr. Kingston. Let me ask Dr. Steele. Have we ever put WIC 
supplements on a supplemental bill? You know, where we did 
these maybe disaster bills or things like that?
    Mr. Steele. Well, in the Jobs Bill, there was additional 
money for WIC. In fact, there is a standby----
    Mr. Kingston. So we could actually do that without 
endangering the population that Mr. Concannon has spoken of.
    Mr. Steele. Well, the only problem we have here is that we 
are forecasting a year in advance. And there is a lot of 
uncertainty about participation that far in advance, and our 
estimates are not perfect.
    So it is a little bit of a cushion. It is not a big 
cushion. $250 million is not a real big cushion, you know. So I 
think it is just, you know, to be safe, like he says.
    Mr. Kingston. But you do have a lot more flexibility on 
discretionary than you would a mandatory program?
    Mr. Steele. Oh, definitely. Yes.
    Mr. Kingston. Thank you.

                          NUTRITION EDUCATION

    Ms. DeLauro. I will get back to that one, if we can.
    Let me ask a question with regard to nutrition education. 
In the testimony, the budget request, approximately $1.1 
billion in resources for improving the diets, nutrition 
knowledge, and behavior, as well as to help promote the 
importance of physical activity.
    I asked in--I discussed this last year with Mr. O'Connor. 
And he said that FNS was implementing a new reporting 
requirement to monitor the effectiveness of the funds we 
currently spend on nutrition education.
    The $1.1 billion in the budget is a lot of money on 
education, nutrition education. And I believe in nutrition 
education, but we don't know whether it is effective or not 
effective.
    Where is FNS in implementing the new reporting requirement 
on education? And can you point to concrete examples of current 
nutrition education that is effective through FNS programs?
    Let me just tell you that this is a stumbling block for me 
in terms of understanding how this really works. Sometimes the 
staff looks at me with eyes glazed over. I deal with 
communication and getting messages out from a perspective of 
both having run campaigns and in my own campaign effort.
    When you translate to a communications specialist what you 
want to about your campaign, they take that. They translate 
that into a script or materials. That gets--that message gets 
tested to see whether or not it provides any attraction with 
the audience you are trying to persuade, you know, to vote for 
you, to buy your product or, you know, your brand, or whatever 
it is.
    Explain to me--I don't understand how this works. And we do 
this, by the way, in very short periods of time because we 
don't have two years to test and to see what is effective. You 
have a very short window in which to get something out there 
and, you know, to get some benchmark here.
    How does this work? What is happening? What are the 
messages? What works? What doesn't work? What do we know that 
is effective? I want to provide education materials, but quite 
frankly, don't want to provide good money--and I am not saying 
after bad; I don't even know what is good or not good that is 
out there.
    I am asking for help in terms of understanding the 
education materials and communication process.
    Mr. Concannon. If I may, I can start. I can start to try to 
answer that.
    First of all, I think the genesis of your question speaks 
to an issue I am mindful of with Dr. Post next to me. Studies 
done or a polling done last year show that 60 percent of 
Americans were familiar with the Dietary Guidelines and with My 
Food Pyramid.
    Ms. DeLauro. My Food Pyramid. Okay.
    Mr. Concannon. But only about 2 percent of Americans 
actually practiced fully, lived up to, adhered to the 
requirements of it. So there is a difference between having an 
intellectual awareness and then converting it into behavior.
    And I think that is where we are currently part of a 
working group because we are very concerned about that in the 
Administration, just as an aside. Now let me get back to your 
original question.
    Ms. DeLauro. The reporting requirement. Yes.
    Mr. Concannon. More work, definitely much work, underway. 
Some additional requirements were initiated last year. And EARS 
is an acronym that stands for Early--what does it stand for? 
Early Assessment--Education Assessment. That just started in 
2009, and we'll have a report done the middle of this summer, I 
believe, on the outcomes of that. But we are----
    Ms. DeLauro. The outcomes of?
    Mr. Concannon. Of the reporting we are getting from EARS in 
terms of what effect is it having. What can we ascertain by the 
messages that go out to people? And we share the general 
concern about--we are committed to education, committed to 
nutrition education. We know it has to be part of what we do. 
But we also want to know what seems to make a difference.
    Ms. DeLauro. What happens? Do States ask you for the 
materials, and then they are distributed in the State? Is there 
any--I mean, how is this used? Is it getting out to the 
schools? Or is this part of what your assessment is?
    Mr. Concannon. It is used in a variety of ways. All 50 
States have it. But some States--like California has a very 
significant program compared to other States, even larger than 
the population of California would singly account for. And it 
is used in a variety of--it is used with SNAP, you know, food 
stamp recipients.
    Ms. DeLauro. Yes, I know.
    Mr. Concannon. It is used with community organizations. 
There is a lot of material that gets printed.
    Ms. DeLauro. It is about 339--is that million?
    Mr. Concannon. $350 million or so in round figures, I 
think.
    Ms. DeLauro. For the SNAP program? Yes.
    Mr. Concannon. Yes. For SNAP ed, for the SNAP education 
program associated with that. And again, it makes sense to say, 
let's try to educate the people so that when they are using 
their benefits, they purchase the most nutritious foods that 
they can for the funds available to them.
    Ms. DeLauro. That number, let me use that number. And I 
have got to yield to my colleague. But the $338 million, is 
what you are assessing now its effectiveness? Is the use of 
that, is that doing the job? Is it----
    Mr. Concannon. I think the reporting of what was started 
last year was as a result of the hearing, was it not? Part of 
an assessment, I am told, by OMB as well as interaction----
    Ms. DeLauro. Okay. So by some time later this year, we will 
know----
    Mr. Concannon. We will have----
    Ms. DeLauro [continuing]. About whether or not--what these 
materials are. They are printed materials. Are they TV ads? Are 
they radio announcements? If we could just get some idea of 
what it is that is going out there and that we are paying for. 
Okay? I think that would be very, very--it would be helpful to 
me. I think it would be helpful to the committee.
    And I would love to see some of the ads. I mean, you know, 
when they had the frog with the beer, they figured out that the 
frog could sell the beer, you know. Ribbit, ribbit, whatever it 
was. You know, we need to figure out what is helping people get 
to where we want them to go.
    Dr. Post, I am sorry. I am sorry, Jack.
    Mr. Post. I have an additional comment, Madam Chair. We do 
know that there is a benefit in looking at the weight of the 
evidence out there. And because we now have a tool within the 
Food, Nutrition, and Consumer Services to do that through this 
evidence analysis library that we have built, we will be 
looking at and working with FNS, working at the evidence base 
to compile research on the best practices, to make sure that we 
can figure out what makes good instructional systems in 
classrooms as well as communities.
    And that work is beginning now. So we will be able to 
evaluate these systems.
    Ms. DeLauro. Okay. I will look forward to the material. 
Thank you.
    [The information follows:]
    [GRAPHIC] [TIFF OMITTED] T7780B.093
    
    [GRAPHIC] [TIFF OMITTED] T7780B.094
    
    Mr. Kingston. Thank you, Madam Chair. And as I was telling 
you guys earlier today, the kind of part of the hearings that 
the Chair and Mr. Farr and I like is when everybody is gone and 
we can start really getting into discussion. So this is good. 
[Laughter.]

                     FEDERAL AND STATE PARTNERSHIPS

    Mr. Kingston. You know, one of the things as I listen to 
the discussion, I feel that so much of our problem is that we 
have this centralized Washington mandate on so many of these 
things. And yet, as I hear you describe the school in Georgia, 
for example, and the squash up in Connecticut, that a lot of it 
is local leadership.
    And I feel so often we tie the hands through--well-
intended, some of it to protect the physical responsibility, 
physical integrity, the eligibility, things where Mr. Farr and 
I could probably find a lot of common ground.
    But, you know, I am wondering if, going back to block 
grants or going back to certain areas that are targeted, which 
doesn't empower Washington, and I understand block grants are--
you know, we just have this counter-intuitive--we don't want to 
let go of power.
    But I do think that if you took some States, some regions, 
and said, look, you know. Why don't we try some things, have 
some real serious on-the-job pilot programs, figure out who 
does what, give them a lot of flexibility, I am wondering if 
that would work.
    Because I am interested in this EARS program, too, because 
I don't know how--and I had written a note to the Chair, 
serious and jokingly, that this is like sex education. The kids 
considered it interesting, but nothing that applies to them.
    And, you know, as you know, we spent lots of money on sex 
education and, you know, we are still wondering what works and 
what doesn't. And we are still committed to it, but it kind of 
gets back to that local leadership, that nutritionalist in 
Georgia and the principal in Connecticut on the squash to say, 
look. If you give me the tools and maybe get out of my way a 
little bit, give me two or three years, let me come back and 
show you some things.
    Mr. Concannon. Well, let me say my career, long career, was 
in State government. And I dealt with all the major Federal 
agencies in Health and Human Services. And the Food and 
Nutrition Service historically--I don't just say it because I 
am here now; I had no plan to be here now--was the most 
flexible in terms of working with States.
    And we still are in terms of--I mean, that is an ethic; I 
am not saying it because I am here--of regional offices saying 
to States, we encourage waivers. We don't just say, you may 
waive. We say to States that are struggling, why don't you 
think about reducing your intervals, your time intervals, for 
reporting. Why don't you go to telephone interviews. Get rid of 
finger imaging. And in the case of schools, so much of it does 
depend on local leadership. It really does. And I think the 
value--we try to promote that, of wanting to be supportive.
    And to your question on get out of the way and try some 
things, one of the proposals in the budget here is to give 
governors--it is to say to governors, you want policy relief? 
You want waivers? We will give you that if you want to really 
take on the issue of solving hunger in your State.
    Because we don't have all the answers right now. We think 
these programs are part of it, but they may have to do some 
other things. And we want to say, let's try that, in some 
States competitively, say what would you be willing to try, and 
let us get out of the way.
    I know over in health care--I hate to go back there too 
much--but in the Medicaid program, 1,115 waivers are major 
waivers that are given under Federal authority. And States have 
done--the most creative States have done wonderful things with 
it. And I believe in it, and I believe in States as 
laboratories. I absolutely do.
    Mr. Kingston. Well, you know, I think we would all be 
interested in your ideas on that because--and since my 
governor, Sonny Perdue, who is Republican, has embraced many of 
the education reforms that President Obama is proposing right 
now and--you know, I think there is a great willingness on the 
State government side to, you know, let's figure out what works 
and let's try to get together on it. And we have so much--I 
don't know. I think there is a lot of great power 
decentralized.

                        WIC--ADJUNCT ELIGIBILITY

    I wanted to, though, say I want to talk a little bit about 
that eligibility question because I think you have asked a good 
question. But aren't something like 53 percent of the kids on 
WIC today infants? It is a pretty high number.
    Mr. Concannon. It is 49 percent of infants.
    Mr. Kingston. Okay, 49 percent. But in that group, not 
everybody is at the same income level. And some of them are 
qualified because they are on Medicaid, and some States have a 
very high Medicaid eligibility, like maybe as high as 300 
percent of Federal poverty level, I think. Is that----
    Mr. Concannon. No. The WIC kids cannot be above 185 percent 
of the Federal----
    Mr. Kingston. I know they can't. But in some States, I 
understand that if you are on Medicaid, you can still get WIC 
even if you are above the 185.
    Mr. Concannon. That I am unfamiliar with, actually. And 
there would be a few States--again, I would back up. That is 
the SCHIP that----
    Mr. Kingston. I am told from the smart people sitting 
behind me that that is correct. So if you are thinking it is 
not correct--yes, adjunct eligibility. And in some States, you 
can be very high--I say 300 percent--to get on Medicaid. I am 
not sure where that number is.
    But the reason why I say that is because if we are running 
out of money and the lowest of the income folks aren't getting 
fed, then in that 49 percent there may be some people in there 
who maybe shouldn't be on WIC because they are on WIC at the 
expense of the lower folks, I would suggest.
    You know, not saying that is absolute. But I would say that 
is why some of that eligibility stuff is of interest to me.
    Ms. DeLauro. Let's go to three minutes, Sam, because we are 
going to have to vote and we can't come back. We have got 
several votes.
    Mr. Farr. Three? I can't do three minutes.
    Ms. DeLauro. Yes, you have to.
    Mr. Farr. Well, this is very interesting----
    Ms. DeLauro. Okay. We are okay. We are okay. I am sorry. I 
thought it was a vote. Go ahead, Sam.

                           POVERTY IN AMERICA

    Mr. Farr. This is a very interesting discussion. And it is 
a discussion because if you look at the membership of this 
committee, the best-kept secret in Washington is that most of 
these people are not coming from agriculture, per se, not 
agriculture in their States.
    But you look at Jesse Jackson from Chicago and Maurice 
Hinchey--we are rural, but we are--Rosa, myself. I mean, we are 
here because USDA is really the first responder to poverty in 
America.
    Perhaps we made a big mistake when we created the whole new 
Homeland Security Administration. We should have put you over 
there because then you would be labeled as first responders, 
and all we would have to declare is that we have a disaster in 
poverty in America with this recession and money would be just 
flowing to try to solve the problem.
    But I think, Jack, what is really missing here--and I liked 
your idea of maybe giving--you know, put the challenge out 
there to the States for a waiver because Arne Duncan in 
education is telling us that these schools where we are feeding 
these kids--and in my district I just got ten of them that are 
ranked at the bottom of the bottom--I mean, there is probably 
not a kid in those schools that speak English. So it has a lot 
to do with cultural issues. But they are all in--probably come 
from poverty backgrounds.
    In asking him how you solve this problem, he says, the only 
way you can solve it in those communities is to have what you 
call total wrap-around. You take all of the social programs and 
all of these things, and it is all integrated. But it is very 
hard to get all of these silos that we create at the Federal, 
State, and local levels to really get together.
    It seems to me that the challenge that we have--and Jack, 
this is where you get at because what you are concerned about 
is waste. I am concerned about waste because waste doesn't get 
to solving the problem.
    And maybe what we ought to do is challenge that we will 
give these--if you can create these wrap-arounds in our 
communities, in our schools--this is related to school, and 
this is part of the services of the school--or in the community 
with WIC and so on--I mean, it is all about infants and 
children. Right?
    Mr. Concannon. Yes.

                         CNP--EQUIPMENT GRANTS

    Mr. Farr. And it is also about nutrition because that is 
the other thing. You are Food, Nutrition, and Consumer 
Services.
    Let me ask you a question. You talked--and Rosa was talking 
about messaging, and you talked about going to the school. You 
know, we have your service right up there on the wall. Look at 
that picture up there. What is missing in that picture?
    Mr. Concannon. Fruits.
    Mr. Farr. Yes. Fruits. Fruits and vegetables. In fact, we 
ought to get new pictures and get a fruit and vegetable in 
there because we have got a message. Right? It is not just 
about waffles and fruit--whatever that--maybe that is apple. I 
don't know what is in that cup.
    So I want to ask a question about salad bars. I'm carrying 
legislation to try to get them in every school in America. I am 
told that many schools would like to have salad bars, but lack 
the financial resources to purchase the equipment.
    USDA's regulations at 7 CFR 3016.3 and OMB Circular A-87 
define equipment for the purposes of the National School Lunch 
Program equipment assistance grants as articles, tangible 
personal property with a useful life of no more than one year, 
and a per-unit acquisition cost of $5,000.
    The typical school salad bar--which is made of plastic; it 
is non-electric--costs $3,000. Schools are not eligible to 
request salad bars with the ARRA applications, nor will they be 
able to use funding through the fiscal year 2010 AG 
appropriations or the CNR.
    And so what funding sources are available for schools 
wanting to purchase salad bars?
    Mr. Concannon. I am not sure about the citation you cite, 
Congressman. I know in this budget we are proposing a $25 
million capital line to allow schools to buy cooling equipment 
or to replace stoves or what. We know that America's schools 
are deeply inadequately resourced as far as infrastructure.
    In the ARRA funds, you awarded $100 million, and we had 
$640 million in requests right away for it. And that was in a 
very short turnaround. I have seen some of that, in that 
school. I was out in Georgia. They put more additional cooling 
equipment in.
    So schools have--before you even get to salad bars, I think 
schools have even more basic needs around basic cooling 
equipment. Because if you are going to have some of those goods 
in the salad bar, they are going to have to be properly----
    Mr. Farr. Well, as you look at these regulations and--I 
mean, the idea of putting a minimum threshold of $5,000 per 
unit, it seems to me if we are trying to get a salad bar, get 
that--what it is going to take to get into that lunch line 
right there, it might not cost that much.
    Are you familiar with that----
    Ms. Paradis. Well, I am not familiar with the citations. 
But I do know that with the ARRA funding, salad bars do qualify 
unless they are extraordinarily high end, and that some of it 
was used to purchase salad bars. And we certainly encourage 
that, and would use any additional funding we get to do that.
    But I would like, when I go back to my office, to take a 
look at those citations so that I better understand that 
because that just seems a little perplexing. I appreciate you 
bringing that to our attention. We certainly would not want to 
do anything to discourage schools from purchasing salad bars 
with this funding.
    [The information follows:]

    School districts can use meal reimbursements to buy food service 
equipment at any time from the non-profit food service account. 
However, Congress recognized that these funds are often fully utilized 
to provide meals on a day-to-day basis and therefore are not available 
for large equipment purchases. Taking this into consideration, Congress 
provided $100 million for food service equipment through the American 
Recovery and Reinvestment Act of 2009 (ARRA) and another $25 million 
through FY 2010 National School Lunch Program (NSLP) Equipment Grants.
    Food service equipment, one example being salad bars, may be 
purchased with either an ARRA or FY 2010 NSLP Equipment Grant provided 
that the equipment is used to serve reimbursable meals. The equipment 
purchased with these funds benefits school meal programs by enabling 
them to offer more nutritious meals and fresh fruits and vegetables. 
The grant request to purchase equipment must fit into one of four focus 
areas, one of which is to improve the quality of school food service 
meals that meet the dietary guidelines. While we do not have data 
breaking out salad bar purchases per se, the purchase of salad bar 
equipment lends itself to improving the quality of school food service 
meals that meet dietary guidelines, and we are aware anecdotally that 
some schools have obtained salad bar equipment using these funds.
    The food service equipment procured must meet the definition of 
equipment as defined in 7 CFR 3016.3 ``as articles of nonexpendable, 
tangible personal property with a useful life of more than one year and 
a per unit acquisition cost of $5,000.'' On occasion the definition of 
equipment has presented a challenge; however, in many cases State and 
local level thresholds are lower than the Federal threshold, which 
helps schools meet the requirement.

    Mr. Farr. Nor would I. Thank you.

                     SNAP--BENEFITS ISSUED BIWEEKLY

    Ms. DeLauro. The SNAP benefits are provided to participants 
at the beginning of the month, and most participants spend the 
benefits in the first part of the month and then have to 
struggle through the rest of the month with little or no food, 
as I understand it.
    One recommendation that has been made is to begin to 
provide SNAP benefits on a biweekly basis. It seems to me this 
is a common-sense approach, and most people get paid biweekly. 
Can we--or why can't we provide SNAP benefits on a biweekly 
basis? We now have the electronic system to be able to deal 
with this, and that means that--well, I think it just--I think 
in two pieces it would deal both with nutrition and, you know, 
with regard to the hunger issue here, that you would combine 
these two pieces.
    So I would just like to get your view.
    Mr. Concannon. I am advised that that was prohibited to 
break up the benefit in the last Farm Bill. But I am also 
mindful--I just read something, in getting ready for this 
hearing--in which a person, you know, we have instances where, 
if we could provide that benefit, let's say, twice a month, 
that it might have a beneficial effect on purchasing and people 
going from having a house full of food resources at the 
beginning of the month and being, you know, starved at the end 
of the month.
    And I don't know what the origin of the prohibition against 
that----
    Ms. DeLauro. Can we maintain the accuracy rate that you 
have by doing this twice a month? And I will go back to find 
out why the Farm Bill, you know, did that specifically. But my 
presumption is it may have to do with waste, fraud, and abuse. 
But do you think we could deal with this accurately?
    Mr. Concannon. I don't think it would, either. I don't 
think it would have an effect on waste or abuse. It may have 
something to do with the ability of States to issue benefits, 
or it may have been concern on the part of people that it would 
result in fewer benefits going to people.
    But it is certainly worth looking at. It is the kind of 
thing that I think a pilot--to try a pilot to see what benefits 
it provides for people. We certainly would be open to working 
with you on that.

                        SNAP--COMMUNITY NETWORKS

    Ms. DeLauro. Okay. Terrific. That's great.
    The President's budget requests $12\1/2\ million for 
community networks to promote healthy eating. Can you give us 
some examples of how this program will work? What strategies do 
you see communities using with this funding to encourage 
healthy eating, and how will you judge the effectiveness of 
these pilots?
    Mr. Concannon. Madam Chair, I just finished reading--and 
actually, Dr. Post provided it to me at my request--but Health 
Affairs is one of the major, you know, health journals in the 
country, I think one of the best.
    And it devoted its most recent issue just to the whole 
issue of nutrition, obesity. Dr. Brownell, who was here from 
Yale testifying----
    Ms. DeLauro. Oh, yes. Sure.
    Mr. Concannon [continuing]. Is the author of one of the 
articles in there. But it was for the first time I saw the term 
``obesogenic,'' obesogenic meaning obesity-promoting, 
facilitating. And one of the authors said, you know, we live in 
an American society that is obesogenic insofar as we promote, 
you know, processed foods that add too much weight to people. 
We push for bigger portion sizes. We don't provide access to 
healthy foods for people.
    And they basically came to the conclusion that part of it 
is a cultural thing, that it isn't any one thing. It isn't just 
that single donut that was referred to earlier. It is a variety 
of practices that result in this.
    So that the purpose of the approach, I think, is one that I 
happen to concur with, that I think back analogously to the 
1960s and to the challenges we had in smoking. And it took a 
whole series of policy and other changes to really reduce the 
smoking rates in the country.
    I think to really solve the problem of obesity is going to 
take a whole series of things, not any one single thing. And so 
what we are interested in in these--in this grant is turning to 
a community and saying, you know, what are the--what steps are 
you as a mayor or city council or county supervisors willing to 
take in an area, for everything from schools to billboards to 
messaging?
    We know that you see ads on TV that say, you know, you 
should have a hamburger. Guess what? People go out and start 
snacking. There is lots of evidence now that is built up around 
what promotes and triggers these behaviors on our part.
    So if we have governors, or communities in this case, who 
say, we will take this on in terms of the policies in our 
schools--I don't want to go back to Somerville, Massachusetts, 
but they have made decisions over the years to have kids walk 
to school.
    You know, reduce the buses. Have kids walk to school. It is 
one of the elements. You got to have safe streets. You got to 
have safe neighborhoods.
    Ms. DeLauro. Yes.
    Mr. Concannon. But they have done some things over time 
that have all reinforced their commitment to healthier living, 
healthier eating. And I think that is what we want to do.
    Ms. DeLauro. So we are going to try these pilot programs, 
see what works. Best practices.
    Mr. Concannon. We want to say, what can we do? And 
creative, you know, county supervisors or mayors or what have 
you in a community that say, we will do a variety of things.
    Ms. DeLauro. Okay. Thank you.
    Mr. Kingston.
    Mr. Kingston. Thank you, Madam Chair. I need to bring Dr. 
Post into this conversation. It has been a bad day for him as a 
University of Maryland graduate. On national television today, 
President Obama picked Michigan State over you guys in the 
bracket. And having gone to Michigan State, I find myself once 
more agreeing with the President. [Laughter.]

                          NUTRITION EDUCATION

    Mr. Kingston. But you had, actually, in your testimony said 
that obesity costs are $147 billion a year to our country. And 
so what I want to do is ask you what some of those costs are 
and to talk about that little bit.
    But then also to Ms.--is it Paradis?
    Ms. Paradis. Paradis, yes.
    Mr. Kingston. It is a French word. That is what I thought.
    Ms. Paradis. Yes, it is.
    Mr. Kingston. And, you know, we go to a lot of food banks 
or Second Harvests and, you know, interested in what you guys 
do. But you also get a lot of free food from manufacturers, and 
some of that might be obesogenic. And yet it--so I am just sort 
of wondering. And maybe the two of you, if I could hear from 
the two of you on the challenges of that. The costs.
    Mr. Post. Well, in terms of the costs----
    Mr. Kingston. Yes.
    Mr. Post [continuing]. I think it is essentially the costs 
of health care related to coronary heart disease, hypertension, 
all the other dietary-related illnesses that are associated 
with overweight and obesity. And I guess I will look to Julie 
to perhaps add to----
    Mr. Kingston. Because, you know, one of the things that we 
kind of all three of us have talked about a little bit about 
sort of healthy communities, if you could sort of, you know, 
block grants and pilot programs, one of the elements of, you 
know, in Somerville, Massachusetts the kids walking, Davis, 
California and I think Portland have a 14 percent ridership in 
bicycles, which is a huge deal.
    But it is a major community commitment to get folks there. 
And it is a challenge. But that is part of that cultural shift 
that we need to--I like this word obesogenic. We need to 
declare war on it.
    Mr. Post. If I could then add to that, at least from the 
Center's activities, we know that in this future work, 
especially with this edition of the Dietary Guidelines, we are 
going to have to focus on getting to people where they work, 
where they play, where they learn, where they shop, where they 
buy foods, where they purchase foods in a restaurant.
    This time around, we know we need to get to people with 
those actionable, understood, tested messages. And so that is 
our plan, to make sure that we have partnerships not only with 
Federal agencies but also with--and State organizations and the 
private sector.
    So that the constituents that they serve will be those 
fitness centers or the YWCA or the YMCA or the future leaders 
of America, where we can get those messages out there into the 
community, and people have become aware of them in a way that 
is more robust than you find right now.
    And perhaps looking at the picture back there, you would 
have those messages even on containers of food. And when those 
kids go to restaurants, they would find them on menus. That is 
our goal this time around, and that is a community-based 
approach.
    Mr. Concannon. You remind me, if I can just add to that, 
Dr. Post is part of a group that again was directed by 
Congress--he is representing the FNS--but with the Federal 
Trade Commission, the FDA, us, and the CDC, working on a 
recommendation that is coming to Congress by the middle of July 
on food advertising or food marketing to children between the 
ages of 2 and 17.
    And again, that to me is another example of that because if 
there is evidence that if I see an ad that tells me I should 
have, you know, a super-sized burger and something else, 
chances are I am going to--I may not do that, but I am going to 
be reaching for something else. It is just one of those things 
we have to get out.
    Mr. Kingston. Ms. Paradis, are you guys watching those food 
donations in terms of--I know it is very difficult for you.
    Ms. Paradis. Well, I hesitate to speak. Let me speak first 
to the USDA foods that are provided to the food bank community. 
And as you probably know, we have worked for, as I recall, at 
least 20 years to improve the nutritional quality of those 
meals, so we now--or of those foods.
    So we now are distributing vegetables with far less sodium, 
fruits with far less sugar that are packed in either juice or 
light syrup. We are doing much more with whole grains, whole 
grain pastas. Less fat in the meat products.
    So I think the quality, the nutritional quality, of the 
USDA foods has come a long way, and we feel very good about 
that. And in fact, what we hear from food banks is that the 
U.S.--that take--those food banks that do take TEFAP 
commodities are very pleased to have them and use them, really, 
as sort of the centerpiece when they put together their food 
baskets or their food bags.
    I haven't been associated with Feeding America for about 
three and a half years. So I sort of, as I say, hesitate to 
characterize where they might be now. But I do know that when I 
was there, they were in the process of sort of transitioning in 
terms of their mindset with respect to the kinds of foods that 
they were getting from the private sector.
    And in the early days of food banking, they were more than 
happy to take any kind of food that they could get just to feed 
these hungry families. And it was sort of a cultural shift that 
took some time for them to come to understand that the ideal 
thing was to be getting nutritious foods.
    They didn't have the freezers. They didn't have the 
coolers. So they have come a long way. They have used our 
administrative funding, to a significant degree, to get the 
coolers and the freezers that they need to be able--and they 
have reached out into to their community, into their 
agricultural community districts, like Mr. Farr's, that have 
over-abundance of fresh fruits and vegetables.
    And that is now a very significant part of what the Feeding 
America network does, or at least it was when I left three and 
a half years ago.
    Mr. Kingston. Well, thank you.
    Ms. DeLauro. Mr. Farr, do you have any further questions?

                      FRESH FRUITS AND VEGETABLES

    Mr. Farr. Thank you, Madam Chair. A couple questions, one 
on WIC Fresh. You expanded in the WIC Program in October to 
include fresh produce. Not necessarily all the answers now, but 
could you provide for the Committee what you have done to make 
the public aware of this change in the WIC Program, and what 
that messaging, as the Chairwoman talked about, is all about?
    And at the same time, we have included in the fruit and 
vegetable snack program, referring to all the reasons I think 
you just stated, that it is not quite as successful as you 
hoped it would be because kids--some, and some don't. I mean, 
they follow the patterns of their parents in what their eating 
habits are. But could you respond on how we could make that 
work better?
    And then what I want to get into is the TEFAP program and 
the commodity support. But let me--do you want to respond to 
those questions quickly?
    Mr. Concannon. Yes, if I may. Just on the point made on WIC 
also, in this budget we are proposing to fully fund that. We 
are able to do most of what the Institute of Medicine 
recommended, but we did for children; we didn't do it for 
adults. We add another $2, so that actually, I think, the food 
package for WIC will be further improved as a result of this 
budget.
    But to your question on how do we--we believe that it is 
important to try to incent. Every once in a while we get 
questions: Why don't you prohibit, proscribe, in SNAP certain 
foods so you can't buy this? And we believe that, one, that 
would be an unfortunate direction to go.
    We think a better way to do is to see--we have a healthy 
incentive pilot right now that was funded by Congress, and that 
we will be--we will be awarding that later this year. And the 
goal underlying that is to say: What is the effect of--for 
example, if I go in and buy $50 worth of--in my monthly order, 
$50 worth of fruits and vegetables, to subsidize that so it 
actually only costs me $25? I am making that up. But to create 
financial incentives.
    And in this budget, we are proposing an additional $6 
million to further strengthen the educational component with 
that so that I come to know the messaging and can practice it. 
And I was using the example, in talking with Dr. Rob Post here 
earlier today, of some communication just works better than 
owners.
    And one example that I saw recently said the benefit of 
having a glass of either nonfat milk or 1 percent milk compared 
to having a glass of whole milk is the difference between four 
strips of bacon on the fat side.
    Well, that is a pretty basic message. I passed that on to 
one of my children, who has young children. That is an 
understandable message. You don't have to be a chemist or a 
nutritionist professionally to understand that.
    And so I think we want to get--I believe in the benefit of 
the school programs for--I am committed to----
    [The information follows:]

    As part of our effort to provide technical assistance to State and 
local WIC agencies as they implemented the changes to the WIC food 
packages, FNS developed a variety of materials, including a Fresh Fruit 
and Vegetable Resource Guide that includes lesson plans and educational 
materials for WIC mothers and children about the new WIC food packages. 
Information about the WIC food package changes has also been 
communicated to the general public on the FNS Web site. In October 
2008, FNS released a set of core nutrition education messages to be 
used in interventions to increase the consumption of fruits and 
vegetables in FNS nutrition assistance programs.
    Our Office of Research and Analysis will be conducting an 
evaluation of the Fresh Fruit and Vegetable Program, FFVP, and a report 
to Congress is due by September 30, 2011. The evaluation results may 
provide information that can be utilized in making improvements in FFVP 
operations at the State and local levels. The study will estimate 
program impacts on participating students, including whether children 
experience increased consumption of fruits and vegetables and decreased 
consumption of less nutritious foods as well as examine how the FFVP is 
currently being implemented.

    Mr. Farr. Well, I will invite you out to our area. We have 
probably the best elementary science, art, math program all 
based around foods, fresh fruits and vegetables. Kids taking 
these vegetables, looking at the color, banana, the shape, 
round, square, oblong, whatever it is.
    Mr. Concannon. Yes.
    Mr. Farr. Whether you peel it, whether you cook it. They 
make fruit salads out of it, so they get color. They get 
quantities. Count them all. It is first grade, kindergarten 
stuff. And then the kids eat it.
    And you know what the local superintendent of the Safety 
there--he's the manager--said? What is going in the school? I 
have never seen so many kiwis come through my--and he said the 
kids tell their parents, you have got to buy this, Mom. This is 
really good for us.
    So it is--yes, it works, if we get it out there.
    Mr. Concannon. I believe in that.

                           TEFAP COMMODITIES

    Mr. Farr. But let me ask you because I know time is running 
here on this. I think we have a lot too, and I hope we can all 
work to do a better job, get more fresh produce in all of our 
programs.
    The TEFAP program and other feeding programs received a 
record number of commodities in 2009. These programs provide, 
you know, emergency feeding assistance to record numbers of 
people. There are some concerns that the expected levels of 
commodities that will be available this fiscal year and next is 
going to hurt the ability of these programs to assist with the 
need.
    What are the commodity levels that you are expecting to 
provide these programs in the rest of this year and next year? 
And what impact will these commodity levels have on the 
programs that they are benefitting?
    Mr. Concannon. First of all, let me acknowledge we believe, 
along with that question--and we hear it from those food banks 
and shelters and so on--they, like us, I think I mentioned in 
my testimony, they are facing unprecedented numbers of people 
coming their way, just as you mentioned, endless long lines.
    The TEFAP budget proposal that you have before you is $247 
million. That is a slight--that is a 1-plus percent reduction 
from the previous year. And I am told that that reduction is 
basically a function of that benefit is tied to the cost of 
food in the Thrifty Food Plan. So there is a modest reduction 
in it.
    We also--in addition, we have already purchased this year 
some $60 million in dairy. That occurred back right at the 
first of the year. So I don't know what the amounts will be on 
those bonus purchases, so to speak. I do know the budget 
proposal here for what I would call the core commodity program 
is just under $250 million.
    If you go back just a couple of years, the amounts in that 
program area, it was only a hundred--about half of that, 130 or 
150. So it does represent an increase. But last year, there was 
a significant amount of additional purchase in the bonus foods 
that came to those food banks.
    So I know they are concerned about it. Our budget is--
again, the core budget is down by about a million and a half, 
or 1\1/2\ percentage points. We have bought some bonus 
commodities. I don't know what the rest of the year at this 
point will be in that regard.
    Mr. Farr. Do the commodity folks share with you what they 
think is going to be the----
    Mr. Concannon. I don't know if even they know at this 
point. But we could certainly ask them.
    Ms. Paradis. Yes. Mr. Under Secretary, we do have some 
expectation. I mean, the food banks, I think, are justifiably 
concerned. We do have some indication that bonus commodities 
may come down somewhat.
    And this is very difficult because the food banks really do 
rely on these. But as you know, in agriculture, those bonus 
levels just do fluctuate from year to year. And it is a source 
of continuing concern.
    Mr. Farr. You know what? I want to end this, but do an 
exercise with my staff here in the building. I take them down 
to Costco out here at Pentagon Center and I have them go to the 
produce. And I say, just read the labels on that store and tell 
me where that stuff comes from.
    And they are just amazed. They say, it is all grown in your 
district. I said, yes. You know what? If it is on the shelf 
today, it left that district Monday morning. They do team 
driving and they get it here in three days. That product was 
probably harvested last Saturday.
    I mean, we have the ability to bring fresh fruits and 
vegetables anywhere in the world with the incredible 
transportation and distribution system we have. And, you know, 
the program here as it was stated, it is to support American 
agriculture.
    The problem is that we have been supporting commodity 
products which came out of the old, you know, recession eras, 
and when all the commodities can be stored. So what we did is 
we created this financial system, guarantees, so that we could 
keep farmers, the growers, in business because the buyers were 
saying, I got enough wheat, I got enough corn, I got enough 
beans from last year. We are going to control the market flow 
and I don't need your product this year.
    Well, you can't have a grower just sort of, you know, 
selling a product one year and then having nothing to sell. So 
the government stepped in to essentially stabilize the market. 
And we did a damn good job of it.
    And we have now got all these products, and we are 
worrying--you were talking about messaging, and those products 
have done a very good job of getting processed into every kind 
of food form. But because we have never helped the fresh fruits 
and vegetables, they get no subsidies whatsoever. No help. It 
is all just free market enterprise.
    But they are now able to package their goods and get them 
across this country and around the world in days. And there is 
no reason we can't get them into the feeding chains of our 
poverty programs that you are running. And that is my--that is 
what I am concerned about. Thank you.
    Thank you, Madam Chair.

                          NUTRITION EDUCATION

    Ms. DeLauro. Thank you. Let me just make one point, which I 
think--we will pass the health care bill on Sunday, and one of 
the pieces that I think is particularly important that hasn't 
had that much focus or retention is that--that is in menu 
labeling, which I think is going to be real behavioral change.
    I think we are seeing the results of that in New York. I am 
particularly proud of the legislation in that context, having 
drafted that legislation. But that is not to be self-serving in 
terms of that issue.
    But there was a real consensus between the legislation and 
the industry on looking at how we could provide information to 
the public, especially in the fast food restaurants, where they 
are about to order, looking at the menu board, and can make a 
decision, an informed decision, on what to order and where 
there will be calories listed next to the items.
    Those are the kinds of--you talk about education. Now, you 
don't know what people are going to select, but they certainly 
have the information. And we are not all scientists by 
profession, and they can calculate, you know, what is, you 
know, tuna fish with mayonnaise, roast beef with mustard, et 
cetera. And so you make inaccurate decisions based on no 
information.
    I think this information will provide people with a 
guidepost. And I think it is unfortunate that that didn't see 
the light of day in many respects in the messaging of a health 
care bill. But I think it is particularly important, and I am 
excited about what can happen as a result of that.

                          DIRECT CERTIFICATION

    I have a final question, which has to do with--which goes 
back to the issue of eligible families and making sure that 
they are enrolled for free or reduced price school meals, and 
what your plans are to engage schools in the outreach campaign 
for the upcoming school year. That is a question.
    I also know that Congress has provided $22 million in this 
year in order to improve direct certification rates. And in the 
meantime, we are going to look at the reauthorization as a way 
to deal with this.
    But in the meantime, so a second question is: What are 
impediments that currently keep children away from being 
directly certified? And how do we take the steps that are 
necessary with the grant funds to improve this circumstance? 
And what support are you providing to share best practices and 
support improvement efforts in this regard from now?
    Mr. Concannon. Madam Chair, thank you. As you mentioned, 
the $22 million is very important to us. We are targeting that 
to the States that have the lowest rates of direct 
certification. We believe in certification. We are promoting it 
missionary style with different States and places.
    The best States, the States who are doing the best job in 
terms of certification, I think I mentioned the last time I was 
here, Ohio being one of them. Kansas being one. Iowa being one. 
These are States that we are finding are doing the data matches 
at a State level. Rather than leaving that to local schools or 
having schools have to go through the drill, do the data 
matches at a State level of all the children on TANF or SNAP, 
and then feed that down to the schools.
    When you were talking about getting product across the 
country, it is very easy to communicate that in terms of data 
matches and so on. So we are urging and telling States, that is 
one of the things to do. We have sent letters out to States, to 
Commissioners of Education as well as to Health and Human 
Service Commissioners and Directors, as well, saying, this is 
an opportunity.
    And whenever we go out to States, we also say, one of the 
triggers on that--and I said this when I was out in California 
recently--if States would do a better job enrolling people in 
SNAP, that is not the end of the story. That is a wonderful 
help and it is needed for them, but that extends and that 
benefits the schools because those kids automatically then come 
into the certification process.
    So we try to convey to people the benefit and the efficacy 
of, one, enrolling the people that are eligible; some States 
are doing a much better job on that over in SNAP. But then use 
direct certification. Use that State level as an example of 
data match, but also the frequency of doing the data matches.
    New York City is a place where they are doing the data 
matches a half dozen times a year. We are aware of other States 
in the country where they do the data match after October 1, 
when typically the States require them for census purpose to 
say, this is how many kids we have.
    And we say, we all know people whose financial 
circumstances----
    Ms. DeLauro. Have changed.
    Mr. Concannon [continuing]. Changed, especially in this 
economy. So we say, do the data match frequently. And it 
benefits kids, but it also benefits your schools when schools 
are struggling with revenues.
    And the school that I was in a couple weeks ago for 
breakfast, even though it was one of that county's wealthier 
areas, even they pointed out to me that just over the past 
couple years, they are now up to about 35 percent of the kids 
in free and reduced, when it was running single digits two 
years ago.
    So, I mean, we are seeing, you know, the effect of that. We 
are messaging it through our regional offices and in any 
messaging we have to do with State agencies.
    Ms. DeLauro. Okay. Thank you. You have been very patient, 
you know, with the time here, with your time, and we are 
appreciative of that.
    It is an important critical area that you all are engaged 
in, and I can't tell you how gratifying it is. We have an 
unbelievable team. And we thank you for your candor. We thank 
you for your commitment to this area.
    We are committed on this committee, across the aisle, to 
both the issue of hunger and nutrition, and also making sure 
that we utilize the resources in the most efficient and the 
most effective way.
    We also understand that the resources are not--you know, 
that they do have boundaries around them. But I would just say 
to that, I will go back to Harry Truman, President Truman and 
what he talked about. And making sure that the children of this 
Nation are well-fed is part of our national security. But it is 
a moral responsibility.
    And we know you take your moral responsibility very 
seriously. We do as well. And I am of the view that--where I 
come from in terms of my own philosophical views is that 
government does have a moral responsibility in these areas.
    And we want to work with you to make sure that you can 
exercise what you need to do, and with the accountability that 
you need, but that we are carrying out that responsibility to 
provide food and good nutrition to the people of this country. 
So thank you very, very much for your good work.

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                           W I T N E S S E S

                              ----------                              
                                                                   Page
Brownell, Dr. Kelly............................................217, 222
Chilton, Dr. Mariana...........................................230, 232
Concannon, Kevin..........................................203, 206, 325
Faber, Scott...................................................241, 243
Fong, P. K.......................................................   147
Glauber, Joseph..................................................     1
Merrigan, Kathleen...............................................    55
Neuberger, Zoe.................................................246, 249
Paradis, Julia...................................................   337
Post, Robert.....................................................   349
Steele, W. S.....................................................   364
Vilsack, Hon. Tom................................................ 6, 10


                               I N D E X

                              ----------                              

                        SECRETARY OF AGRICULTURE

                                                                   Page
Animal Disease Traceability......................................    71
Animal Identification............................................    71
Animal Identification Enforcement................................    80
Anthropod-Borne Animal Disease Lab...............................    75
ARRA Broadband Program...........................................    44
Biofuels/Bioenergy Industry......................................    76
Biofuels/Bioenergy Investments...................................    76
Biomass Crop Assistance Program..................................65, 67
Broadband in Rural America.......................................    63
Broadband in Rural and Remote Areas..............................    64
Broadband in Rural Schools.......................................    60
California's Cut Flower Industry.................................    73
California's Plant Pests Eradication.............................    73
Catfish Inspections Rule.........................................    95
Charging Children for School Lunch...............................    86
Child Nutrition Programs Delivery................................    45
Chinese Food Safety Processes....................................    44
Chinese Poultry Imports and Food Safety..........................    90
Civil Rights Administration......................................    62
Climate Change Research..........................................    58
Cost of the Animal Identification System.........................    80
Cotton and Peanut Storage........................................    65
Country of Origin Labeling.......................................    78
Creating a New Animal ID System..................................    72
Creating School Gardens..........................................    85
Crop Insurance...................................................    56
Departmental Administration Reorganization.......................    64
Direct Farm Payments.............................................    65
Discrimination Settlements for Women and Hispanic Farmers........    93
Economic Rural Development Plans.................................    98
EPA Regulations on Greenhouse Gas Emissions......................    89
Farm Safety Net Payment Limitations..............................    63
Florida Rural Development Director...............................    95
Food Safety Infrastructure.......................................    91
Food Safety Processing Equivalency...............................    77
Food Safety Research at Clemson University.......................    89
Food Vendor Eligibility Requirements.............................    41
Fresh Fruits and Vegetables in Schools...........................    46
FSIS HACCP Regulations...........................................    92
Generating Economic Activity in Rural America....................    97
Grass-Fed Beef From Tennessee....................................    77
Greenhouse Gas Emissions Regulations.............................    90
Horticulture and the Nursery Industry............................    60
Illegal Imports from China.......................................    90
Impact of Indirect Land Use on the Biofuels Industry.............    58
International Agriculture........................................    68
International Feeding Initiative.................................    66
Investment in Rural America......................................    61
Lack of Chinese Food Safety Cooperation..........................    91
Legislation to Compensate Women and Hispanic Farmers.............    94
Market Access Program............................................64, 66
Mr. Kingston Opening Statement...................................     4
Ms. DeLauro Opening Remarks......................................     1
National Animal ID Program.......................................    79
National Export Initiative.......................................    69
National School Lunch Program Suppliers..........................    41
Nutrition Programs Participation.................................    86
Organic Agriculture..............................................    55
Parity for Discrimination Against Minority Farmers...............    82
Questions for the Record, Mr. Boyd...............................   112
Questions for the Record, Mr. Davis..............................   114
Questions for the Record, Mr. Farr...............................   108
Questions for the Record, Mr. Jackson............................   137
Questions for the Record, Mr. Kingston...........................   100
Questions for the Record, Mr. Obey...............................   140
Questions for the Record, Ms. Emerson............................   142
Questions for the Record, Ms. Kaptur.............................   115
Reauthorization of the Child Nutrition Act.......................46, 68
Regional Innovation Initiative...................................    62
Regional Innovation Initiative and Healthy Food Financing 
  Initiative.....................................................    96
Rural Electric Loan Program Budget Cuts..........................    78
Rural Housing Assistance.........................................    60
School Lunch Program.............................................84, 85
School Lunch Program Reimbursement...............................    88
School-to-Farm Issues............................................    67
Secretary Vilsack Opening Statement..............................     6
SNAP Eligibility Requirements....................................    83
South Korean Trade Agreement.....................................    83
Statutory Authority for FSIS.....................................    92
Strengthening Food Safety Requirements...........................    42
Sudden Oak Death Syndrome and Consistent Plant Pests Protocols...    87
The Budget Deficit...............................................    43
The First Lady's Lets Move Initiative............................    43
The School Lunch Program.........................................    59
Trade with Cuba..................................................    69
USDA's Role in DOL's H2A Program Regulations.....................    63
Violations of Food Safety Requirements...........................    42

                      OFFICE OF INSPECTOR GENERAL

Conservation Stewardship Program...............................177, 183
Dairy Support Programs...........................................   170
Food Nutrition Service Programs..................................   171
Food Safety Inspection Service...................................   165
FSIS Residue Inspection..........................................   185
International Food Aid...........................................   190
Mr. Alexander Opening Remarks....................................   146
Ms. DeLauro Opening Remarks......................................   145
Ms. Fong Opening Statement.......................................   147
National Organics Program......................................169, 189
OIG Budget.......................................................   188
Peanut Price Data................................................   175
Questions for the Record, Ms. Kaptur.............................   195
Risk Management Agency...........................................   167
School Nutrition Programs........................................   181
USDA Local Food Procurement......................................   179

                        CHILD NUTRITION PROGRAMS

A La Carte Foods.................................................   273
After School Meals...............................................   274
Agricultural Efforts in Ohio.....................................   278
Budget Deficit...................................................   268
Child Nutrition Programs Reauthorization.........................   268
Childhood Obesity..............................................262, 288
Closing Remarks..................................................   299
Commodities......................................................   283
Community Eligibility for School Meal Programs...................   267
DoD Fresh Program................................................   291
Farm to School Program.........................................273, 286
Food Insecurity..................................................   295
Food Policy Assessment...........................................   297
Funding Offsets for Child Nutrition Reauthorization..............   269
Industry Support.................................................   297
Institute of Medicine Report--Recommendations....................   259
Kitchen Equipment in Schools.....................................   296
Ms. Delauro Opening Remarks......................................   201
Nutrition Education............................................279, 294
Nutritional Standards in Schools.................................   260
Obesity vs. Hunger...............................................   280
Philadelphia Universal School Program............................   265
Program Simplification...........................................   270
Purchase Locally Grown Commodities...............................   293
Questions for the Record, Mr. Davis..............................   316
Questions for the Record, Mr. Jackson............................   317
Questions for the Record, Mr. Kingston...........................   300
Questions for the Record, Ms. Kaptur.............................   308
Reauthorization Offsets..........................................   292
Reimbursement for Paid Meals.....................................   261
Reimbursement Rates..............................................   260
School Breakfast Program.........................................   291
School Wellness Program........................................293, 295
Senior Farmers' Market Nutrition Program.........................   275
Statement by Dr. Brownell........................................   217
Statement by Dr. Chilton.........................................   230
Statement by Mr. Concannon.......................................   203
Statement by Mr. Faber...........................................   241
Statement by Ms. Neuberger.......................................   246
Streamline Procurement Process...................................   292
Sugar Beverages..................................................   274
WIC Program......................................................   293

                       FOOD AND NUTRITION SERVICE

CNP--Equipment Grants............................................   391
CNP--Farm to School Teams........................................   381
CNP--Healthier U.S. Schools Challenge............................   372
CNP--Improper Payments...........................................   373
CNP--Indirect Costs Charged to School Food Authorities...........   361
CNP--Program Applications........................................   368
CNP--Reauthorization...........................................360, 370
CNP--Reauthorization Offsets.....................................   364
CNP--Reimbursement Rates.........................................   378
CNP--School Meals Cost Study Budget Request......................   372
Direct Certification.............................................   401
Federal and State Partnerships...................................   389
Fresh Fruits and Vegetables......................................   397
Healthy Food Financing Initiative................................   379
Hunger in America................................................   375
Mr. Concannon Opening Remarks....................................   325
Mr. Kingston Opening Remarks.....................................   323
Mr. Post Opening Remarks.........................................   349
Ms. DeLauro Opening Remarks......................................   321
Ms. Paradis Opening Statement....................................   337
Nutrition Assistance Programs Contingency Reserves...............   382
Nutrition Education.......................................384, 395, 400
Poverty in America...............................................   391
Questions for the Record, Mr. Jackson............................   403
Second Harvest...................................................   366
SNAP--Benefits Issued Biweekly...................................   393
SNAP--Community Networks.........................................   394
SNAP--Finger Imaging in the Application Process..................   363
SNAP--Indefinite Funding Authority...............................   380
SNAP--Missouri Payment Error.....................................   369
SNAP--Timeliness of the Application Process......................   361
TEFAP Commodities................................................   398
WIC--Adjunct Eligibility.........................................   390
WIC--Infant Formula..............................................   376

                                  
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