BEFORE THE
COMMITTEE ON AGRICULTURE, NUTRITION AND FORESTRY
U.S. SENATE

MARCH 17, 1998
 
 

 Good morning, Mr. Chairman.  I am Shirley Watkins,  Under Secretary for Food, Nutrition and Consumer Services at the U.S. Department of Agriculture (USDA).  I am once again accompanied by George Braley, Associate Administrator at the Food and Nutrition Service (FNS).
 
 I am very pleased to be here today to discuss the reauthorization of  the Special Supplemental Nutrition Program for Women, Infants and Children (commonly referred to as WIC).   WIC is one of the Federal Government’s true success stories.  For almost twenty-five years, WIC has served as the first line of defense for America’s infants, and today serves 46 percent of all newborns.  WIC not only provides food to women and children at nutritional risk,  but also teaches them the importance of good nutrition.  Importantly, it serves as a gateway to other necessary health and nutrition services they may otherwise not receive including immunizations, health insurance, family planning, smoking cessation,  and food stamps.
 
 Dozens of studies show that WIC reduces infant mortality and other medical problems associated with childbirth like low birth weight and anemia.   At the same time, WIC participants have better immunization coverage and earlier prenatal care.
 
 And amazingly, WIC saves money....studies show that every dollar that we invest  in prenatal WIC saves the Government $3.50 in other health care costs.  It is little wonder that I am proud to say “WIC works.”  And this Administration is committed to making WIC work even better as we move into the new millennium.  We are committed to making sure it is accessible to those who can benefit, that WIC maintains its integrity, and that it is administered as simply, and effectively, as possible.
 
 The Secretary has transmitted to Congress a legislative proposal for WIC reauthorization that embodies these principles.  We developed the legislation after a series of roundtables and listening sessions that my staff or I have held in various parts of the country.  We listened to participants and providers in determining how best WIC can be improved.
 

 Our legislative package contains the following improvements for participant eligibility, responding to the concern that WIC program integrity is assured:

•    All applicants must be present at each certification visit;
•    All applicants must provide documentation of household income or show participation in a low-income program; and
•    Income should be verified.

 We proposed these changes because we believe that applicants should appear at the WIC office to receive the nutrition education and health referrals benefits that make WIC successful.  In addition, physical presence is critical in determining health and developmental problems.  It facilitates immediate delivery of important adjunct health services such as well-baby care;  dental screening, and referral to sources of health insurance including referral of children to the new Child Health Insurance Program and to needed immunizations.  In-person certification guards also against fraudulent certifications of nonexistent, or ghost applications.
 
 Providers and supporters want us to improve the income determination process to enhance the program’s integrity.  This is the reason we are proposing that there be a standardized process by which all applicants present documentation of household income or participation in one of the adjunctive programs, such as food stamps, Medicaid, or Temporary Assistance to Needy Families.  Our proposal also would require the Secretary to promulgate regulations pursuant to current law that would prescribe when and how income verification would be required.

 Our legislative proposal also contains improvements to the infant formula rebate system.  Last year, rebates of $1.3 billion provided  benefits and nutrition services to 1.9 million participants, beneficiaries who would have gone unserved were we to rely only on appropriated funds.  Our bill requires State agencies to offer infant formula rebate contracts to the bidder offering the lowest net price to ensure that continued savings flow back to the program and that all infant formula companies offer rebate bids on a competitive playing field.
 
 Our legislative proposal also limits the base for the funds that can be “spent forward”, that is, used by state agencies during the fiscal year subsequent to the fiscal year in which these funds are allocated, to nutrition services and administration funds only.  Food funds could not be carried over to the next year.  While state operators would like understandably to retain cash reserves in food funds for unanticipated needs, we believe it is unwise because unspent food funds could be used
to serve waiting participants who need food benefits now in other States.  We believe this is a more cost-effective strategy than allowing States to hold funds idle until a need arises.
 
 We propose to increase from 1 percent to 5 percent the amount of nutrition services and administration “spend forward” funds a state may retain, if it is pursuing an electronic benefits transfer (EBT) initiative.  We are committed to moving forward with EBT, but realize that many states will need funds to cover development costs.  By expanding the spend forward authority with prior approval from the Secretary, a State can conserve nutrition services and administration funds in one year to cover the costs of EBT development in the next year.

 Next, with regard to the WIC program, I would like to discuss improvements in vendor management.  Currently, WIC food delivery system regulations provide State agencies considerable autonomy to develop their own  vendor management policies and procedures.  However,  the USDA Office of Inspector General and others believe that stricter national standards will improve the program’s integrity and the effectiveness of vendor management.  The Department plans to propose new vendor regulations to improve system integrity and consistency in vendor management policies and procedures.  Also, in response to a mandate in the welfare reform legislation, the regulations will require the disqualification of any WIC vendor who has been disqualified from the Food Stamp Program.  In addition,  our legislative package proposes permanent disqualification of WIC vendors who have been convicted of trafficking in WIC food checks or food vouchers, or of the sale of firearms, ammunition, explosive or controlled substances in exchange for WIC food vouchers.  We believe such disqualifications would ensure greater integrity in WIC vendor management, an objective repeatedly voiced by the Congress and the USDA Office of Inspector General.

     Now I would like to discuss briefly our legislative changes proposed for the WIC Farmers’ Market Nutrition Program, which currently operates in 32 states, on two Indian reservations, and in the District of Columbia.  This program is the direct link between farmers and consumers, enabling participants to become acquainted with where food comes from and to meet the people that grow it.  It has increased opportunities for WIC participants to make healthy food choices and has enhanced local agricultural economies by promoting farmers’ markets, thus increasing the customer base for farmers who rely on these markets as a major source of income.  The Administration’s budget requests $15 million – an increase of $3 million – and makes it a part of the Commodity Assistance Programs, separate from the WIC appropriation.
 

      The farmers’ market program is very important, and we want to ensure that it continues to be funded independently of projected WIC spending.  To respond to concerns from states unable to participate in this program, our legislative package proposes to reduce the amount of state matching funds required to enable more States to participate in the program.

 In addition to these legislative changes, we are also improving WIC through the following regulatory and management actions:

• Proposed regulations to improve the formula for allocation of both food and administration funds;
• Standardization of nutritional risk criteria for eligibility; and
• A scientific review of the WIC food package to be completed by next fall.

Mr. Chairman, our budget request for the WIC program for FY 1999 is $4.081 billion, which would serve 7.5 million participants.  This supports the President’s goal of reaching full participation for the WIC program.

 Finally, Mr. Chairman, I return to the familiar phrase I cited at the beginning of my testimony, “WIC works.”  And one of the major reasons WIC works is due to the determined bipartisanship of this Committee and this Congress to make certain this program reaches and serves the
individuals who are most vulnerable in our society -- at-risk women, infants, and children.  I look forward to working with you and this Committee in that spirit, and I share the enthusiasm that you have for accomplishing our mutual goals.  Mr. Chairman, that concludes my testimony.  I will be happy to answer any questions you may have at this time.