UNITED STATES DEPARTMENT OF AGRICULTURE
Food, Nutrition, and Consumer Services

Statement of Nancy Montanez Johner, Under Secretary
Food, Nutrition, and Consumer Services
Before the Subcommittee on Agriculture, Rural Development,
Food and Drug Administration and Related Agencies

March 8, 2007

Thank you, Madam Chairwoman, and members of the Subcommittee for this opportunity to present the Administration’s fiscal year 2008 budget request for USDA’s Food, Nutrition, and Consumer Services (FNCS).

As this is my first opportunity to appear before you, I would like to take a moment to introduce myself. I was born and raised in a farming community in Scottsbluff, Nebraska. My parents, Joseph and Nancy Saldivar, were immigrants to the United States. My father worked long hours in the fields and as a young girl I worked beside him, along with the rest of my family. In addition to teaching me by example the importance of a good work ethic, my father and mother also showed me the value of family. I will always be grateful to them.

After high school, I worked part-time as a unit secretary at the local hospital, where I was able to serve families in the intensive care unit. I was very fond of this aspect of my work and decided to pursue an education in social work. I earned a college degree while working and raising two children. I was a single parent faced with many challenges. I am not embarrassed by that fact. I know what it is like to be on the verge of not making ends meet. I believe it is important to ensure those who are eligible for assistance have access to benefits.

After earning my degree, I served as a social worker. Experiencing the sometimes heartbreaking need first-hand did not deter or discourage me. It inspired me to work even harder, knowing that, as a social worker, I had the ability to impact the need and to ease for others the very struggle I faced as a single parent. When I was promoted to a Service Area Administrator, I viewed the added responsibilities as raising the bar for me as a public servant. It meant I could no longer simply tell the boss about my caseload concerns; I now had the ability, and therefore the responsibility, to address the challenges we face when working to improve the human condition.

I have a conviction that, in whatever capacity one serves the public, it is your core principles that bring quality to that service. The principles of compassion, integrity, respect, openness and honesty have kept me focused on service and the value of families. These are the principles I brought to my service as a social worker and as the Director of the Nebraska Health and Human Services. As Under Secretary for Food, Nutrition, and Consumer Services, I hold to these same principles. I pledge to listen to our customers, service providers, State and local partners, advocacy groups, and certainly you here in Congress to determine better ways to serve our clients.

Before I begin my discussion of the President’s budget request, I would like to introduce the members of the FNCS leadership team joining me at the table this morning. Accompanying me are Kate Coler, Deputy Under Secretary for Food, Nutrition, and Consumer Services; Roberto Salazar, Administrator of the Food and Nutrition Service (FNS), and Dr. Eric Hentges, Executive Director of the Center for Nutrition Policy and Promotion (CNPP).

The President’s budget request demonstrates the Administration’s steadfast commitment to our Nation’s nutrition assistance programs. These programs ensure a nutrition safety net for the country’s children, elderly and low-income families and, in conjunction with CNPP, inform all Americans about the importance of good nutrition and physical activity. I am proud of FNCS’ accomplishments and this Administration’s clear and consistent support for these programs that protect our children and low-income households from hunger, and help to prevent the health risks associated with poor nutrition and physical inactivity for all our citizens.

This budget reflects the fundamental challenge for this Administration: ensuring that the needs of all eligible persons seeking to participate in our programs are met while at the same time protecting the interests of current and future generations who must accept the consequences, both economic and social, of the unsustainable levels of deficit spending and Federal debt.

Funds requested within the budget fully support our best estimates of demand for program services, and the associated costs, for the major nutrition assistance programs in fiscal year 2008. We made tough choices and developed a budget request that makes every dollar produce maximum benefit for the vulnerable populations served by our programs and for the Nation as a whole. This includes:

• Monthly average participation of 26.2 million persons in the Food Stamp Program. This estimate represents a decrease of approximately 100,000 from fiscal year 2007 because of improved economic conditions.

• Participation in the WIC Program is expected to rise slightly in fiscal year 2008 from 8.2 million participants a month to a historic high of 8.3 million—the President’s budget provides for this increase.

• In the Child Nutrition Programs, daily meal service to our youth will reach 31 million students in the National School Lunch Program and 10.9 million students in the School Breakfast Program.

Three principle objectives guide our administration of these programs: 1) to ensure that low-income people have access to food by ensuring sufficient funding for the major nutrition assistance programs; 2) to promote healthful diets and active lifestyles by making nutrition education an integral part of the nutrition assistance programs; and 3) to manage prudently and efficiently so that every dollar invested has the maximum benefit for those truly in need. The President’s budget request for fiscal year 2008, like all prior requests submitted by this Administration, reflects these key objectives.

Ensuring Low Income Persons have Access to Food

At its most basic level, ensuring program access must begin with making certain that sufficient resources are available so all who are eligible and in need can have ready access to benefits. The President’s fiscal year 2008 budget requests sufficient funds to fully support anticipated participation in the Food Stamp Program, the Child Nutrition Programs and the WIC Program. The Administration’s strong commitment to adequately fund these critical programs acknowledges the inherent difficulties in anticipating future demand for program services, and provides for contingency funding should program costs exceed our estimates. In the Food Stamp Program we have continued the funding for the contingency reserve of $3 billion. Since $3 billion in contingency funds are expected to be carried over from fiscal year 2007, this request would make a total reserve of $6 billion available during fiscal year 2008. In the WIC Program, the President’s request would increase the contingency resources to $200 million, which reflects the Administration’s determination to insure access to WIC Program services for all who are eligible and wish to participate. These funds remain indefinitely available to ensure that the essential food, nutrition education, and health care referral services remain available to all who need them.

Promoting Healthful Diets and Active Lifestyles

FNCS plays a critical role in the integrated Federal response to the growing public health threat posed by overweight and obesity, which affects well over half of adult Americans. Our FNS programs provide nutrition assistance through access to healthy food and nutrition education, and through promotion to support and encourage a healthy lifestyle. In addition, CNPP focuses on the broader population, working to improve the diets of all Americans. These combined efforts are a key component of the President’s Healthier US Initiative. I believe the American public is served well by USDA’s contributions to addressing the critical nutrition- and health-related issues facing us today. This budget request provides approximately $690 million in resources tied specifically to improving the diets, nutrition knowledge and behavior among the people we serve, and to promoting the importance of physical activity.

The CNPP continues to have an integral role in the development and promotion of updated dietary guidance and nutrition education. The Dietary Guidelines for Americans (Guidelines), published jointly every 5 years by the USDA and the U.S. Department of Health and Human Services (HHS), are the cornerstone of Federal nutrition policy, allowing the Federal Government to speak with one voice. This request features an increase to support the efforts of the CNPP to maintain and enhance the extremely well-received food guidance system, MyPyramid.gov, which is one of the most frequently visited of all Federal Web sites for the public. In addition, this funding will allow CNPP to conduct adequately the administrative functions for the 2010 update to the Dietary Guidelines for Americans, for which USDA is the lead Federal agency.

Managing Prudently and Efficiently

With this budget request, we are asking the Nation to entrust us with over $59 billion of public resources. We are keenly aware of the immense responsibility this represents. To maintain the high level of public trust that we have earned as good stewards of the resources we manage, we will continue our ongoing commitment to program integrity as an essential part of our mission to help the vulnerable people these programs are intended to serve.

A key component of this year’s request is an increase to support additional program integrity and accountability efforts in the Food Stamp Program. In fiscal year 2005, the most recent year for which data is available, the Food Stamp Program achieved a payment accuracy rate of 94.2 percent, the latest in a continuing string of payment accuracy records. However, with each record achieved, our commitment to continuing improvement becomes progressively more challenging. The resources requested in this budget will support up to 30 additional staff dedicated to continuing our strong record of results in improving payment accuracy and improving our ability to provide oversight and technical assistance to our State partners. While I am very proud of our accomplishments in program integrity, maintaining those gains and achieving further improvement in payment accuracy is a daunting challenge. This request represents a small investment that will pay big dividends in our continuing efforts to make certain we get the right benefits to the right people and improve retail store oversight.

Additionally, for fiscal year 2008, the budget request provides $2 million for monitoring, training and technical assistance on program management in the Child and Adult Care Food Program (CACFP). This funding will allow FNS to provide comprehensive training and technical assistance to State agencies on program management and oversight in CACFP, and to directly conduct additional monitoring activities, as appropriate. In addition, the funds will support the Department’s efforts to collect and analyze extant State and/or sponsor data in order to develop estimates of erroneous payments in CACFP, as required by the Improper Payments Information Act. Finally, this funding will also support training on the final CACFP management improvement rule, which is scheduled to be published in fiscal year 2007.

In the remainder of my remarks, I’d like to discuss in greater detail a few of the key proposals contained in the President’s fiscal year 2008 request.

Food Stamp Program

The Food Stamp Program is fully funded in the President’s budget at $39.8 billion. This will support an anticipated average monthly participation of 26.2 million persons, about 100 thousand persons lower than expected in fiscal year 2007. This displays a key strength of the Food Stamp Program: its ability to respond dynamically to the changing levels of need within American society. The program responds to the strength of the economy, and is designed to expand and contract accordingly.

If our estimate of fiscal year 2008 program participation or cost proves to be too low, the program continues to be protected by a contingency reserve, proposed at $3 billion in new budget authority for the fiscal year. As I previously indicated, this would make available a total contingency reserve of $6 billion with the anticipated carryover from fiscal year 2007. As an alternative to the contingency reserve, the President’s request offers a proposal of indefinite authority. This form of appropriation would eliminate the need for an annual contingency reserve appropriation, while at the same time guaranteeing that sufficient funds will be available to meet the entitlement components of the program.

We continue to aggressively promote the message that Food Stamps Make America Stronger, in the sense that the program puts healthy food on the tables of low-income families and has a positive effect on local economies. The President’s budget features proposals targeted at ensuring those in need can access benefits without sacrificing their retirement savings or savings for their children’s education, making certain that all persons in need face the same program eligibility requirements regardless of where they live, and improving the ease and accuracy of the certification process. Given tough budget constraints, the food stamp proposals focus on those who are most needy.

The President’s budget proposes to expand and make mandatory the exclusion of the value of tax-preferred retirement accounts from the asset test. This exclusion was first made a State option for 401(k) and Keogh accounts in the 2002 Farm Bill. This proposal simplifies food stamp resource policy and makes it more equitable because under current law some retirement accounts are excluded and some are included. This proposal supports the President’s Ownership Society Initiative, by increasing the ability of low-income people to save for retirement. It is expected, when fully implemented, to add approximately 100,000 persons to the program and to increase benefits by $549 million over 5 years. The majority of the new participants will be workers and their families, most with children, but also improves access for elderly. On average, each new household will get $117 in benefits each month.

Similarly, we propose to exclude the value of IRS-approved college saving accounts from eligibility determination process. This proposal will exclude from the resource calculation the value of certain college savings plans that the IRS recognizes for tax purposes, including 529 plans operated by most States. Families’ efforts to save for their children’s future must be encouraged and protected. This proposal will help to insure that if a family seeks the assistance of the Food Stamp Program, their efforts to invest in their children’s education are not compromised. When fully implemented, this proposal will allow an additional 1,000 persons to participate in the Program and increase benefits by approximately $8 million over five years.

For the last two fiscal years, through the appropriations acts, we have protected the ability of our military families with members on the most dangerous assignments to access the nutrition safety net. While the Food Stamp Act requires that all military pay be counted as earned income when determining a household’s eligibility and benefit levels, we have worked with you to exempt special pay and compensation for combat or hazardous duty from this process. This additional income could reduce the family’s benefits or make them ineligible. To support the country’s servicemen (and their families) who are most at risk, this budget request proposes to make this exemption permanent by amending the authorizing statue. This proposal would help more than 1,000 military families in fiscal year 2008 providing them with an estimated additional $108 per month.

A fundamental principle underlying the Federal nutrition safety net is that when a person in need seeks to participate in the nutrition safety net, they must be treated in a fair, consistent and equitable manner, regardless of their State of residence. For this reason, we have once again included a proposal to eliminate categorical food stamp eligibility for Temporary Assistance for Needy Families (TANF) participants who receive only services and not cash benefits since these TANF participants generally do not have to demonstrate financial need. The President’s proposal restores equity among participants and ensures that food stamp benefits go to individuals with demonstrated need while retaining categorical eligibility for the much larger number of recipients who receive cash assistance through TANF, Supplemental Security Income and General Assistance. When fully implemented in fiscal year 2009, this change is estimated to affect approximately 329,000 individuals, all of whom have income or assets that exceed the program’s regular limits, and save $543 million in Food Stamp Program spending over five years.

Finally, the budget request reflects our continued commitment to working with Congress on a name change for the program. As reflected in both the President’s request and our Farm Bill proposals, we are prepared to bring this process which began in 2006 to a conclusion. Our name change initiative is intended to more accurately reflect the mission, priorities and operational methods of the Food Stamp Program as they have evolved over the four decades since the program’s inception.

Child Nutrition Programs

The President’s budget requests $13.9 billion to support the service of providing appealing, nutritious meals to children in public and private schools and child care facilities through the Child Nutrition Programs in fiscal year 2008. In the National School Lunch Program, we anticipate serving almost 31 million children per day in fiscal year 2008, for a total of more than 5.25 billion meals served during the fiscal year. Similarly, the School Breakfast Program will serve approximately 10.9 million children each school day for a total of more than 1.84 billion meals.

These programs play an essential role in improving the nutrition of our children and in promoting their awareness of the role that healthy food choices and physical activity play in their overall well being. To insure that these core program goals are met, support for the Child Nutrition Programs has grown by over 44 percent since fiscal year 2001. Over the same period, participation in these programs has grown substantially. We continually strive to insure that these programs are delivered in a manner that promotes access for all eligible children, reflects the most up-to-date science-based nutritional practices, and protects the public investment. The Food and Nutrition Service is reviewing the new Dietary Guidelines, as well as the Dietary Reference Intakes, and working to incorporate their recommendations into our nutrient standards and meal patterns. We also are continuing efforts to promote healthy behaviors through support for implementation of local school-based wellness programs required by the Child Nutrition and WIC Reauthorization Act of 2004.

WIC

In fiscal year 2008, the President’s budget request of $5.4 billion anticipates providing essential support to a monthly average of 8.3 million women, infants and children through the Special Supplemental Nutrition Program for Women, Infants and Children (WIC). This is an increase of approximately 100,000 participants per month from anticipated fiscal year 2007 participation levels. Additionally, the contingency reserve, originally appropriated in fiscal year 2003 at $125 million and replenished in fiscal year 2005, is proposed to be increased to $200 million. This increase recognizes the uncertainty the program faces with respect to future food costs and demand for program services. More fundamentally, it reflects the Administration’s deep commitment to adequately fund this program. WIC contingency funds are available to maintain program services if participation or food costs exceed our projections, and they remain available until expended. Finally, the request includes $14.9 million to continue our peer counseling initiative that is designed to enhance both rates of initiation and duration of breastfeeding among WIC participants.

In all of the Federal nutrition assistance programs, the Administration is committed to ensuring that benefits are targeted to those most in need. WIC applicants can currently receive adjunctive or automatic eligibility for benefits based on their participation in other means-tested programs, such as the Food Stamp Program and Medicaid. However, in some States, individuals with incomes significantly above the 185 percent of poverty level established for participation in WIC are eligible for Medicaid. Included in the budget request is a proposal to limit adjunctive eligibility based on participation in Medicaid to those individuals whose incomes are below 250 percent of Federal poverty guidelines.

The budget also reflects the Administration’s dual commitment to support the WIC Program and to control discretionary spending growth. We are committed to working with our State partners to manage program costs to ensure future access to this critical program for all who are eligible and seek its services. Historically, WIC State agencies have been extremely successful in containing food costs, but opportunities to further reduce food costs are limited. However, further cost containment is needed to meet our goal of protecting the program’s ability to serve all eligible persons expected to seek services in FY 2008 and limiting overall growth in discretionary spending.

Therefore, to encourage State agencies to work with us in efforts to achieve similar success in the containment of Nutrition Services and Administrative (NSA) costs, the funds available for NSA in FY 2008 would be limited to a guaranteed administrative grant per participant (AGP) of $14.12, the fiscal year 2006 level. This reduced AGP level would allow for a greater proportion of appropriated funds to be used for food benefits. It is anticipated that the total appropriation needed for FY 2008 would be reduced by approximately $145 million through this redirection of NSA funds to food funds.

Commodity Supplemental Food Program (CSFP)

Consistent with last year’s request, the fiscal year 2008 budget does not provide funding for CSFP. You, as Appropriators, are keenly aware of the very difficult fiscal challenges the Nation faces and the difficult choices which must be made to protect future generations. We have chosen this program, for several specific reasons which I will describe for you, as a place where we can begin to make these difficult but essential decisions. First, CSFP is not available in all States, or in all areas of those States where it does operate. Thus, the fundamental principle of fairness I referred to earlier is not adhered to since similarly situated persons may not have access to the same benefits. CSFP currently operates in limited areas of 32 States, in the District of Columbia, and through two Indian Tribal Organizations. Second, its benefits, to a great extent, overlap those available through other nutrition assistance programs. Finally, we believe our limited resources are best focused on those programs that are universally available to serve these needy populations. The priority of the Administration is to ensure the continued integrity of the national nutrition assistance safety net, including the Food Stamp Program and WIC.

FNS will work closely with CSFP State agencies to ensure that any negative effects on program participants are minimized, and that they are transitioned as rapidly as possible to other nutrition assistance programs for which they are eligible. The budget request includes funds to support the transition of CSFP participants to nationally available FNS nutrition assistance programs such as WIC and the Food Stamp Program. The budget requests $2 million to provide outreach and assist individuals with enrollment in the Food Stamp Program. Elderly participants who are not already receiving food stamp benefits will be eligible to receive a transitional benefit worth $20 per month ending in the first month following enrollment in the Food Stamp Program under normal program rules, or in 6 months, whichever occurs first. CSFP women, infants, and children participants who are eligible for WIC benefits will be referred to that program. Commodities obtained under agriculture support programs will be redistributed for use in other nutrition assistance programs, such as the The Emergency Food Assistance Program.

The Emergency Food Assistance Program (TEFAP)

TEFAP plays a critical supporting role for the Nation’s food banks. This support takes the form of commodities for distribution and administrative funding for States’ commodity storage and distribution costs. Much of this funding flows from the States to faith-based organizations, a cornerstone of the emergency food assistance provider community. The President’s budget requests the fully authorized level of $140 million to support the purchase of commodities for TEFAP. Additional food resources become available through the donation of surplus commodities from USDA’s market support activities. State and local administrative costs, which support the food bank community, are funded at $49.5 million in the President’s request.

Nutrition Programs Administration

We are requesting $148.9 million in our Nutrition Programs Administration account. This account supports Federal management and oversight of a portfolio of program resources totaling more than $59 billion, over 65 percent of the USDA budget.

The budget request includes $2 million to support the efforts of the Center for Nutrition Policy and Promotion. These resources will continue the Center’s work on the immensely successful MyPyramid, and will assist the Center as it prepares for its leadership role in the 2010 Dietary Guidelines for Americans. The USDA and the HHS, by law, must review and update the Dietary Guidelines for Americans at least every five years. The USDA has the lead administrative role for the development of the 2010 Dietary Guidelines for Americans, and the review process for the 2010 update must begin in FY 2008. Successful completion of these planning and implementation initiatives will promote the Federal Government’s goal of speaking with one voice regarding nutrition policy issues, and will promote USDA’s goal to improve the diets of Americans by providing sound, scientifically-based nutrition information.

Also included in the President’s request is $2 million to support important program assessment and demonstration partnerships focused on evaluating new and innovative ways of improving the delivery of Food Stamp Program services. States, local program agencies, community and faith-based organizations, and others are engaged in a variety of innovative efforts to improve service delivery in the Food Stamp Program. Several States are modernizing program operations to improve access, reduce administrative costs, and improve payment accuracy. These efforts include making greater use of on-line applications and automated data sharing; simplifying interview and reporting procedures; and expanding the use of private sector and community and faith-based organizations in the application process. Our objective is to use the requested resources to cooperatively evaluate these innovations with our State partners. What we learn in this process can then be shared program-wide to improve our effectiveness in meeting the nutrition assistance needs of the eligible population.

The resources requested within this budget are essential to ensuring that FNCS can continue to successfully execute its basic program administration, oversight and fiscal stewardship duties. We understand the difficult budgetary circumstances the Federal Government now faces and support and have participated in the tough choices that must be made. However, it is essential that FNCS address the serious challenge posed by the loss of critical skills and experience inherent in the impending retirement of close to 30 percent of its workforce over the next five years.

I have begun that process by improving the management of human capital planning processes, strengthening services provided to employees, and implementing programs designed to improve the efficiency, diversity, and competency of the work force. With just nominal increases for basic program administration in most years, FNCS has reduced its Federal staffing levels significantly over time. We have compensated for these changes by working smarter – re-examining our processes, building strong partnerships with the State and local entities which administer our programs, and taking advantage of technological innovations. We are extremely proud of what we have accomplished and continue to seek new ways to meet the challenges before us. However, our ability to continue to reliably meet these challenges will be in question if staffing levels continue to decline.

Madam Chairwoman, I appreciate the opportunity to present to you this budget and what it means for the millions of Americans that count on us for nutrition assistance. I would be happy to answer any questions you may have.

Last modified: 11/26/2008