Domestic Food Assistance and the 2008 Farm Bill

August 22, 2008 (RL33829)

Contents

Summary

The nutrition title of the omnibus 2008 "farm bill" is the focus of legislation affecting domestic food assistance programs in the 110th Congress. The program areas that are addressed include the regular Food Stamp program, programs operating in lieu of food stamps (e.g., Puerto Rico, Indian reservations), The Emergency Food Assistance Program (TEFAP), the Commodity Supplemental Food Program, Community Food Projects, the Seniors Farmers' Market Nutrition Program, initiatives to provide fresh fruit and vegetable in schools, and newly proposed nutrition and health promotion or support projects. Other nutrition programs (child nutrition and WIC programs) have not been a major part of the active legislative debate, although a number of bills noted in this report address them, and some legislative changes affecting them are part of appropriations law and the farm bill.

The 2008 farm bill has been enacted as P.L. 110-246. The nutrition title of this law has a projected new cost of about $3 billion over the next 5 years (FY2008-FY2012) and well over $9 billion over the next 10 years (FY2008-FY2017). The major share of this spending is due to changes in food stamp rules—increasing benefits and loosening eligibility standards—and expansion of support for TEFAP and fresh fruit and vegetable initiatives.

The most significant substantive nutrition program issues that were raised in the farm bill debate were those surrounding the Food Stamp program and support for fruit and vegetable programs, particularly how much to add in new spending. Despite cost differences, the House and Senate bills were very similar in the policy changes they proposed. Their nutrition titles (Title IV) renamed the Food Stamp program, increased program benefits, and loosened some eligibility rules. They increased spending for TEFAP, added support for the fresh fruit and vegetable program, and allowed exercise of geographic preference when procuring food for child nutrition programs. However, they differed in some policy aspects. The House proposed substantial limits on states' ability to "privatize" their administration of food stamps (not adopted in the final measure). And the Senate's bill included a number of initiatives not covered in the House (only some of which were incorporated in the final law) relating to food stamp eligibility for able-bodied adults without dependents, eased access to the Food Stamp program, support for farmers' markets, projects to promote health and nutrition through the Food Stamp program, and dietary supplements.

A lingering issue involves the response of food assistance programs to recent, relatively rapid, food price inflation, although no legislation has been introduced in this regard.

This report will be updated as warranted by legislative action


Domestic Food Assistance and the 2008 Farm Bill

Introduction

In the 110th Congress, legislative action on virtually all domestic food assistance issues outside the annual Agriculture appropriations measures has been focused on the omnibus "farm bill"—periodic legislation (the last farm bill was enacted in 2002) that covers most programs and activities carried out by the U.S. Department of Agriculture (USDA or "Agriculture Department" in this report). Farm bills serve as a vehicle for reauthorizing a wide range of expiring authorities, making changes in (or ending) existing programs, and launching new initiatives.1

On the other hand, some food assistance efforts are reauthorized and reviewed on a different schedule and are up for review in 2009; these include child nutrition programs (like the School Lunch program), the Special Supplemental Nutrition Program for Women, Infants, and Children (the WIC program), and the WIC Farmers' Market Nutrition program.2 With exceptions, annual appropriations laws typically are not the arena for significant policy decisions relating to nutrition assistance programs.3 And some important nutrition program changes now under way at the USDA are unlikely to become the subject of legislation per se, such as revision of the content of food packages distributed through the WIC program, revamping the nutrition guidelines for school meals, modification of food packages offered under the Food Distribution Program on Indian Reservations (the FDPIR).

This report covers issues and legislative changes addressed in the farm bill, legislative changes included in the FY2008 Agriculture appropriations measure (included in the FY2008 Consolidated Appropriations Act; P.L. 110-161), and proposed legislation that involves programs and activities that are normally not part of the farm bill (e.g., child nutrition program proposals).

The 2008 Farm Bill

Background

In FY2006, the $35 billion spent for federal programs and activities covered by the nutrition title of the 2002 farm bill (and addressed in the most recent farm bill) accounted for over half of the spending projected for all farm-bill-covered programs and activities and 36% of USDA outlays.4 The lion's share of this support was for the Food Stamp program, which (along with child nutrition and WIC programs) is widely viewed as the federal government's primary response to the food needs of low-income Americans. Nutrition assistance programs also play a role in federal support for the agricultural sector through direct commodity purchases and increased demand for food.

The USDA oversees almost 20 domestic nutrition assistance programs and related activities, spending some $54 billion in FY2006, 55% of USDA outlays.5 Virtually all are administered by states, schools, or local grantees under federally prescribed rules. Federal oversight of these programs (e.g., regulations governing program operations) is the responsibility of the USDA's Food and Nutrition Service (FNS). In addition, the USDA's Agricultural Marketing Service (AMS), the Farm Service Agency (FSA), and the Commodity Credit Corporation (CCC) play roles in the procurement and distribution of food commodities for some programs.

The farm bill covers 8 of these program areas accounting for about 65% of federal spending on domestic nutrition aid. Farm bills traditionally reauthorize expiring authorities and appropriations for these domestic nutrition assistance initiatives and are the principal vehicle for revising rules that govern how they operate and how much they will cost. They regularly include the following 5 areas:

Moreover, the 2002 farm bill added 3 items to this list. It provided statutory authority and mandatory funding for a new Seniors Farmers' Market Nutrition Program (the SFMNP) and established a pilot program to distribute free fruits and vegetables in schools (later expanded and made permanent). It also included a provision affecting commodities distributed to schools—earmarking some federal spending on these commodities for fresh produce acquired and distributed through Defense Department procurement facilities (the "DOD Fresh" program).

All farm bill domestic nutrition assistance programs, except for the CSFP, the FDPIR, and the administrative and distribution-cost component of TEFAP, generally are treated as mandatory entitlements for budget purposes. For the regular Food Stamp program, this means that, in order to affect costs, eligibility, benefit, or other program rules must be changed. Specific annual mandatory funding levels are set by law for the Puerto Rico and American Samoa grants (these are indexed), the food component of TEFAP, Community Food Projects, the SFMNP, and fresh fruit and vegetable projects. The amount of the Northern Marianas' grant is negotiated between the USDA and the Commonwealth. And decisions made with each year's appropriation govern the CSFP, the administrative and distribution cost component of TEFAP, and the amount set aside for the FDPIR.

The 2002 farm bill made extensive changes to Food Stamp program rules and relatively minor revisions to those for the other programs.6 Using its March 2002 "baseline," the Congressional Budget Office (CBO) estimated that the total additional cost of the provisions in the nutrition assistance title of the 2002 farm bill would be about $3 billion over the six-year life of the bill, representing 5%-6% of total new spending prompted by the bill. However, while there is no direct measure of the real cost of the 2002 bill's nutrition title (as opposed to costs incurred because of other variables like unforeseen participation changes related to economic conditions or increased participation rates), total actual costs through FY2005 for the programs covered by the nutrition title—including both "baseline" spending and new spending caused by the farm bill—were 12% higher than projected in 2002. If current CBO estimates for FY2006 and FY2007 are added in and compared to the 2002 estimates for those years, the gap widens to 20%.

Food Stamps7

The largest of the nutrition assistance programs is the Food Stamp program. At $33 billion in FY2006, it represents some 95% of the federal spending for farm bill nutrition assistance programs, is the foundation of federal initiatives to give low-income households the chance to obtain at least a minimally adequate diet, and is a major factor in overall federal policy for the poor.

The purpose (and structure) of the program has evolved over time. It is meant to play a role in three areas of federal public policy. Food stamps originated as a way of providing an outlet for surplus agricultural production, with the notable side benefit of supporting poor families. However, its goals and role in the country's support system for the low-income population have shifted and expanded greatly. To the extent it expands food purchasing power, it continues to support demand for agricultural products.8 But it now also is seen as the government's primary response to important concerns about the overall "food security" status of the low-income population, although only an estimated 65% of eligible individuals choose to participate by the most recent count (2005). A 2006 Economic Research Service (ERS) study reports that, in 2005, 11% of U.S. households were "food insecure," and that the prevalence of "very low food security" was 3.9%.9 Finally, the Food Stamp program has become an integral part of the overall "safety net" for the needy. It ranks as the fourth largest needs-tested program, behind Medicaid, the Earned Income Tax Credit, and the Supplemental Security Income program. It is perhaps the largest on-going program providing immediate aid to those affected by natural and other disasters. According to the USDA's Economic Research Service, when its benefits are added to other income, food stamps are estimated to move almost 10% of recipients out of poverty, and, for a typical low-income recipient family with children, food stamps can provide some 25% of their purchasing power.

Program Operation

The regular Food Stamp program provides inflation-indexed monthly benefits to low-income households that supplement their own spending on food; benefits vary by income, household expenses (like shelter costs), and household size—but generally not by state or region.10 They are delivered through electronic benefit transfer (EBT) cards that are used like debit cards. Eligibility for food stamps is primarily based on a household's financial status. Monthly gross income typically must be below 130% of the inflation-indexed federal poverty income guideline for the household's size (e.g., $1,107 for a 1-person household and $1,861 for 3 persons in FY2008), and liquid assets must be under $2,000 ($3,000 for those households with elderly and disabled members). However, some households can be "categorically eligible" if they participate in or receive services under another income-tested program like Temporary Assistance for Needy Families (TANF) or the Supplemental Security Income (SSI) program. And certain categories are barred irrespective of their financial need, such as many noncitizens, able-bodied adults without dependents (ABAWDs) not meeting a work test.

Program costs are shared with the states, which administer the program under generally uniform federal rules. The federal government pays the full cost of benefits and about half the cost of administration, operating work or training programs for recipients, and state-directed nutrition education and outreach activities. States, and in some cases localities, pay the remainder (some $2.7 billion in FY2006).

The level of food stamp spending varies with participation, which is closely linked to economic conditions and eligibility rules, and benefit levels. Benefits are indexed to food-cost inflation and adjusted for recipients' income, household size, and certain nonfood expenses (like high shelter costs, child care spending); in addition, a basic (unindexed) minimum amount (the "standard deduction," typically $134 a month for each household) is disregarded when calculating a household's ability to contribute to its food needs. The basic theory underpinning food stamp benefits is that they should provide the difference between what a recipient household can afford for food out of its own monthly cash income (assumed to be about 30% of counted income) and the estimated minimal cost of an adequate diet (the monthly cost of the USDA's "Thrifty Food Plan" for its size). Since the 2002 farm bill, participation has increased substantially, from some 19 million persons per month in FY2002 to 27.2 million (October 2007), and the average monthly benefit level has jumped from $80 a person in FY2002 to $101 in October 2007.11 Federal costs have grown from $20.6 billion in FY2002 to an estimated $33 billion for FY2007.

Finally, the Food Stamp program has a "quality control" system that measures the degree to which eligibility and benefit decisions are erroneously made. The most recent national quality control statistics (for 2005) show historically low error rates: 4.5% of benefits over-issued and 1.3% under-issued.12 States with persistently high error rates can be assessed financial sanctions; those achieving high performance criteria can receive bonus payments.

Issues and Proposals

The 2002 farm bill reauthorized expiring Food Stamp program authorities and appropriations through FY2007. It greatly expanded eligibility for noncitizens (most notably allowing eligibility for noncitizen children and those who meet a five-year legal residence requirement), raised benefits modestly for larger households (by counting less of their income), and allowed states to provide "transitional" food stamps for families leaving the Temporary Assistance for Needy Families (TANF) program. In addition, the 2002 bill set up a number of state options to ease access to the program and administrative burdens on applicants and recipients and program operators (e.g., allowing states to reduce recipient reporting requirements, simplify benefit calculations, conform some food stamp rules to those used in the TANF and Medicaid programs) and revamped the quality control system to reduce the number of states subject to financial sanctions and grant bonus payments to states demonstrating exemplary administrative performance.13 Virtually no program cuts were made.

Even small changes to eligibility or benefit rules in a program as large as food stamps can bring on relatively large budget costs or savings. And, as with the 2002 farm bill, the ability to revise the Food Stamp program depends heavily on budget constraints at the time the farm bill is considered. Major issues that emerged in the House and Senate consideration of the farm bill, and the Administration's farm bill package, related to eligibility for food stamps (including the treatment of household assets), the use of food stamp benefits, benefit levels, state administration, and program access. Details of congressional action on these issues are covered at the end of this report (and touched on in the following discussion); the food stamp proposals in the Administration's package are addressed in each of the issue areas covered in the following outline.

Eligibility

Both loosening and tightening current rules governing the eligibility of noncitizens have been raised as potential changes to food stamp rules. Although no major legislation to further restrict noncitizens' eligibility was introduced, in the 109th Congress, the House of the bill implementing spending reductions to comply with the FY2006 budget reconciliation measure would have further limited eligibility for noncitizens. On the other hand, several bills called for ending existing limits on legally resident noncitizens. The farm bill did not address the issue of noncitizens' eligibility for food stamps.

States may make households participating in their TANF programs categorically eligible (automatically eligible) for food stamps, and most states make use of this option. The Administration contends that states have taken advantage of this rule and made those with financial resources above normal food stamp standards eligible, simply by providing some minimal TANF-linked services. And, to protect program integrity, it proposed to limit categorical eligibility to those TANF recipients getting cash aid, which presumably is subject to financial tests similar to or more stringent than food stamps. On the other hand, opponents of this view noted that many of the estimated 300,000 persons affected are receiving services (e.g., child care, transportation assistance for work) that help them keep working, that they still must have their benefit calculated under normal food stamp rules and can only qualify for a benefit if they have high living expenses (e.g., shelter costs), that limiting categorical eligibility would impose added administrative burdens on states and applicants, and that, as a side-effect, a number of children would lose eligibility for free school meals.14 No legislation concerning categorical eligibility was introduced (and the farm bill did not address this issue), but it is important to remember that limiting categorical eligibility is one of very few proposals that put forward that would produce significant cost savings.

Opponents of the current restrictions on participation by able-bodied adults without children (ABAWDs), which bar eligibility after three months unless the individual meets a work-related test, contend that they should either be abolished as too punitive (and administratively complex) or greatly eased. These restrictions were put in place as part of the 1996 welfare reform law, and, in many cases, they can be (and are) waived by states; although the Senate farm bill would have eased them, the enacted law did not.

Finally, the Administration proposed (1) new rules that would disqualify food stamp recipients who exchange food purchased with their benefits for cash or misuse benefits to obtain container deposits and bar from food stamps those who have been disqualified from the Food Distribution Program on Indian Reservations (the FDPIR) and (2) making permanent a rule disregarding combat pay when considering the eligibility of (and benefit amounts for) military households. The enacted farm bill contains similar provisions.

Assets

Current policy excludes most, but not all, retirement savings from consideration as assets when testing for food stamp eligibility. While the 2002 farm bill allowed states to expand the list of excluded retirement savings (e.g., to include Individual Retirement Accounts) under certain conditions, very few states have. In a similar vein, current food stamp policy disregards savings for education as assets only if a determination is made that they are "inaccessible." The Administration and others supported disregarding all tax-recognized retirement savings or plans and education savings to avoid penalizing those who save for retirement or education but are temporarily in need. The Food Stamp program's dollar asset limits have not been significantly changed in over 25 years. Program advocates argued that they should be raised (or possibly abolished) to encourage saving and simplify administration. In addition to the Administration's farm bill package, a number of bills dealing with loosening asset rules have been introduced. The enacted farm bill loosens asset rules along the line discussed above.

Use of Benefits

Food stamp benefits can be used for virtually any food purchase; they cannot be used for alcohol, tobacco, hot prepared food, or dietary supplements. Food choice has been a recurring theme in food stamp policy debates. Critics argue that nutrition-related limits should be placed on the types of food that can be bought with food stamps. On the other hand, others contend that incentives to purchase healthy foods should be built into the Food Stamp program and that support for nutrition education should be increased and expanded to cover a broader range of initiatives. Separately, some have proposed to allow food stamps to be used for dietary supplements, as in the Senate version of the 2002 farm bill. The Senate version of the 2007 farm bill included provisions that opened up the possibility that food stamp benefits could be used to purchase dietary supplements and included provisions for projects to encourage the use of food stamp benefits for healthful foods. The enacted farm bill does not include changes with regard to dietary supplements but does authorize efforts to support the purchase of healthful foods.

Benefit Levels

A major contention of critics of the current structure of the Food Stamp program has been that the value of food stamp benefits has been significantly "eroded" since the 1996 welfare reform law; that is, benefits are significantly smaller than they would have been without the changes made in 1996.15 Although basic (maximum) food stamp benefits are indexed annually, they point out that rising non-food living costs are heavily affecting recipients' budgets (limiting their ability to supplement their food stamp benefits as the program expects) and that one of the program's major methods for taking these costs into account when calculating benefits (a uniform income disregard called the "standard deduction") has been effectively frozen (at $134 a month) since 1996. They also note that the 1996 law imposed an across-the-board 3% benefit cut. Program advocates, and a number of bills, aim to address this by increasing and indexing the standard deduction, raising maximum benefits by 3%, or both. Opponents of this type of action are concerned about the substantial costs involved and argue that the Food Stamp program should not be expected to be a general purpose income support program responding to all of the needs of the low-income population. The enacted farm bill addresses this issue with a boost to the standard deduction.

Separately, the Administration and several bills proposed to remove the current dollar limits on the degree to which dependent care expenses are considered when calculating benefits, thus increasing assistance for those with very high dependent care expenses related to work—as does the enacted farm bill.

Finally, as in earlier farm bill debates, there were proposals to increase and index the Food Stamp program's minimum benefit level ($10 a month for 1- and 2- person households). It has not been changed since originally set in the late 1970s and is seen as so low that it discourages participation, especially among the elderly. However, this relatively costly change would most help those in the program with the highest incomes. The enacted farm bill increases the minimum benefit.

State Administration

States (most notably Florida, Indiana, and Texas) have taken, or are taking, major steps to revamp the way they administer food stamps, Medicaid, and the TANF program.16 Food stamp law requires that final eligibility and benefit decisions be made by government employees and that contracts for computer-related services with federal matching money be federally approved. However, these state initiatives can involve "privatizing" (contracting out or outsourcing) many "back-office" and other, more important administrative tasks and "modernizing and streamlining" administration through efforts like performing program intake by computer application and establishing "call centers" using private-sector employees, resulting in cost savings from fewer state staff and offices and, it is hoped, better client service. There are few federal standards for these types of initiatives (e.g., with respect to client service, pilot testing, what roles private company employees can play, how extensive displacement of government employees can be). Many of those watching the current initiatives have argued that standards should be set legislatively to give the federal government the ability to more effectively oversee the progress in this area or that limits should be placed on states' ability to delegate administrative responsibilities to non-state employees and entities. They point out that modernization and streamlining steps can potentially leave some vulnerable groups without real access to food stamp help, needlessly complicate the application and benefit process, blur lines of accountability, result in incorrect information for, or treatment of, applicants and recipients, and end many state jobs. However, a number of states are concerned that legislatively set privatization standards/limits will severely restrict innovation in administering food stamps and other public assistance programs and reduce or eliminate cost savings that might result. On the other hand, the Administration has been concerned about widespread benefit overpayments that can occur in a changeover to new administrative systems and would like to hold states (not recipients) responsible in cases of "widespread systemic errors."

The enacted farm bill includes a number of provisions for oversight of state changes in their systems for administering food stamps but does not have provisions substantially limiting "privatization" initiatives.

The Food Stamp program's quality control system for overseeing state administration also is under some scrutiny. The Administration proposed two important changes: (1) impose financial penalties on states with high rates of error in denying food stamp benefits and (2) end an option for states to "invest" amounts owed as financial penalties for high rates of error in overissuing or underissuing benefits in administrative improvements as an alternative to paying part of their fiscal sanction to the federal government. Others would increase bonus payments to states meeting high performance standards. The enacted farm bill includes no changes in the quality control system.

Program Access

The participation rate among food stamp eligibles has increased since 2002 (when a number of changes were put in place to encourage this). However, with the most recently reported rate at 65% (2005), program advocates have argued that further steps need to be taken. In their view, procedural rules governing how applicants and recipients are treated (e.g., reporting requirements), as well as those relating to eligibility for applicants participating in other public assistance programs, could be further loosened to ease access to food stamp benefits. For example, added federal administrative cost-sharing for access-oriented state administrative changes (e.g., longer office hours), grants for access-improving efforts, loosened reporting requirements, and changes in application procedures could be legislated. Moreover, advocates have been concerned about any access restrictions that might result from the initiatives to privatize, modernize, or streamline administration noted above.

In addition to issues surrounding applicants' access to food stamps, proposals from the Administration would change rules governing food retailers' participation in the Food Stamp program, such as revising rules governing fines imposed on retailers' violating food stamp rules.

The enacted farm bill incorporates a number of provisions dealing with program access issues and retailer participation questions.

Administration Food Stamp Initiatives 17

In early 2007, the USDA advanced a number of recommendations for changes in the Food Stamp program as part of the 2007 farm bill; they were not introduced as a legislative package, and only a few have been adopted in the enacted 2008 farm bill.

Programs in Lieu of Food Stamps

Four programs, three directly authorized in the Food Stamp Act, operate in lieu of food stamp assistance.

Issues and Proposals

The 2002 farm bill extended through FY2007 the three programs now authorized under the Food Stamp Act: grants to Puerto Rico and American Samoa and the FDPIR.23 It also slightly increased and indexed the nutrition assistance grants for Puerto Rico and American Samoa, and specifically authorized American Samoa's grant as part of the Food Stamp Act. Legislative issues related to these programs have been focused on Puerto Rico's nutrition assistance grant and the FDPIR.

Puerto Rico advocates argued that funding for assistance in Puerto Rico lags behind need. Bills in the House and Senate would increase Puerto Rico's nutrition assistance grant (and then index it for both food-cost inflation and population growth), require a study of the feasibility and effects of treating Puerto Rico as a state under the regular Food Stamp program, or both. Opponents are concerned over the costs associated with expansion of the grant and the prospect of having (potentially) over half the Commonwealth's population receiving aid. There were no Administration proposals (other than extending existing law) with regard to Puerto Rico. The enacted farm bill extends Puerto Rico's current indexed grant and directs a study of the effects and feasibility of treating Puerto Rico as a state for food stamp purposes.

Significant questions have been raised over the level of federal support for FDPIR costs for administration and distribution of commodities on Indian reservations and the degree to which funding for the FDPIR limits the types and quality of the foods provided. The Administration proposed a slight increase in the amount provided for FDPIR administrative and distribution costs in order to speed implementation of a new formula for allocating federal aid that is more directly tied to participation while easing the negative effects for tribal organizations that would lose money under the new allocation method. Others have called for a major increase in funding for FDPIR administrative and distribution expenses. In addition, some consideration is being given to boosting support for federal spending on the commodities provided through the FDPIR, and program advocates would like to see a thorough review of the adequacy and quality of FDPIR food packages and attention given to purchase of tribally produced foods. The enacted farm bill incorporates minor changes with regard to the FDPIR and calls for a review of the FDPIR food package.

The Emergency Food Assistance Program (TEFAP)24

TEFAP was begun in 1981-1982 as a temporary expedient designed, at least initially, to dispose of huge stocks of government-held food commodities. It also occurred in the aftermath of noticeable reductions in the coverage of and benefits provided by food assistance programs like food stamps and school meal programs legislated in 1981-1982, and in the midst of an economic recession and concern over "hunger" and homelessness among the needy. In 1983, the Emergency Food Assistance Act gave the program official status and authorized funding for administrative and distribution costs.

In the early years (through FY1988), the only significant federal expenditures involved were appropriations for administrative and distribution costs. The commodities were so-called "bonus" commodities, those acquired for farm-support reasons and held in excess of what was needed to fulfill other federal commitments (e.g., to school meal programs). The establishment of TEFAP helped reduce federal commodity stocks (and storage costs associated with them), provided an alternative source of food assistance for the needy, and was instrumental in supporting and expanding a network of emergency food aid providers that also drew food and other resources from many non-governmental sources.

In 1988, after the Administration indicated plans to phase out the program because of the lack of bonus commodity inventories, Congress began the practice of mandating funding for TEFAP commodities, thereby creating a minimum "entitlement" to a certain level of commodity assistance. This entitlement component was ensconced in permanent law by the 1996 welfare reform act (P.L. 104-193), which guaranteed the program $100 million a year. Additional bonus commodities continued to be made available—differing each year according to USDA acquisitions. This guarantee was increased to $140 million a year in the 2002 farm bill.

Under TEFAP, the federal government provides food commodities to states. This assistance supplements other sources of food aid for needy persons and often is provided in concert with food bank and homeless shelter projects, either as food packages or meals. Eligibility decisions for TEFAP assistance are made by states, and they choose local administering agencies. National emergency provider and food bank networks (like America's Second Harvest) also are heavily involved.

In addition to state allocations of the $140 million in entitlement commodities, each state receives a share of the $50 million a year appropriated as discretionary money to fund expenses associated with administration and distribution (storage, transportation) of the commodities, and states may divert some of the $140 million to administration and distribution costs.25 Moreover, state entitlements to TEFAP commodities are supplemented with bonus commodities (about $150 million in FY2005) that the USDA has acquired in its agriculture support programs.

Issues and Proposals

The 2002 farm bill extended TEFAP authorities through FY2007 and increased the level of entitlement commodities from $100 million to $140 million a year. Since the 2002 farm bill, bonus commodity donations from USDA stocks to TEFAP have dropped dramatically—from over $240 million in FY2003 to about $150 million in FY2005, with estimates of less than $100 million for FY2006 and perhaps FY2007 and FY2008. Because USDA commodities provide an important underpinning to emergency food assistance providers' activities and they have come to rely on them, there are several proposals for the 2007 farm bill to substantially increase the level of entitlement commodity assistance above the current $140 million a year. The enacted farm bill greatly boosts the guaranteed level of TEFAP commodities.

Commodity Supplemental Food Program (CSFP)26

The CSFP was originally established in the late 1960s, under the authority of a series of appropriations laws, to provide aid to low-income women (pregnant and postpartum), infants, and children, who at that time had no other food assistance program to turn to for aid specific to their needs. Since then, the WIC program has largely taken over this role. However, the CSFP continues to operate and now serves mostly elderly low-income individuals who either need extra help beyond food stamp benefits or are reluctant to apply for food stamps. Projects supported by the CSFP typically provide a range of other services to their communities.

The CSFP provides supplemental foods to low-income elderly persons and low-income pregnant, postpartum, and breastfeeding women, infants, and children through over 140 projects in 32 states, the District of Columbia, and on two Indian reservations. For elderly participants, eligibility is limited to those with income below 130% of the federal poverty income guidelines (e.g., about $13,000 a year for 1 person); for households composed of women, infants, and children, the income ceiling is higher (185% of the poverty guidelines). The foods are purchased by the USDA and distributed to grantees, and food packages received and distributed by CSFP projects are designed with the specific nutritional needs of the elderly and women, infants, and children in mind. CSFP grantees also receive significant funding for administrative costs. The program is a discretionary program depending on annual appropriations decisions, and commodities and administrative funding generally are apportioned by the number of persons served in the prior year; if new money is appropriated or allocated "slots" are not used, new projects can be added. The commodities provided by the USDA are of two types: (1) "entitlement" commodities bought with annually appropriated funds and included in the food packages and (2) "bonus" commodities donated from USDA stocks and provided in addition to, or as part of, food packages.

In FY2005, the CSFP served some 500,000 persons a month, 90% of whom were elderly. Some $82 million in entitlement commodities and $38 million worth of bonus commodities were distributed; food packages were valued at between $18 and $21 per person per month. Administrative cost support was $29 million.

Issues and Proposals

The 2002 farm bill extended the authorization for the CSFP through FY2007 and increased the proportion of appropriations earmarked for administrative costs. In recent appropriations requests, the Administration has proposed terminating the CSFP, as duplicative of other programs (the WIC program and food stamps). However, neither House nor Senate Agriculture appropriations measures have adopted this position.27 CSFP advocates have, for a number of years, called for a change in rules that would boost the income eligibility limit for the elderly from 130% of the federal poverty guidelines to 185% (the same as that applied to households with women, infants, and children). The enacted farm bill makes no significant changes to the CSFP.

Community Food Projects

In the 1996 farm bill, Congress established, as Section 25 of the Food Stamp Act (7 U.S.C. 2034), a program of assistance for community food projects, intended to promote innovative local self-help initiatives to meet nutrition and farm needs.

Community food projects are funded at a total of $5 million a year—a sum set aside from each year's Food Stamp Act appropriation. The program consists of competitive grants administered through the USDA's Cooperative State Research, Education, and Extension Service (CSREES), and requiring a 50% match.

Project grants provide one-time infusions of federal dollars for local projects designed to increase the food self-reliance of communities; promote comprehensive responses to local food, farm, and nutrition issues; develop innovative linkages among the public, for-profit, and nonprofit food sectors; encourage long-term planning and multi-agency approaches; or improve the availability of locally or regionally produced foods to low-income people. In addition, one special grant is mandated—to a non-governmental entity that coordinates and disseminates recommendations garnered from the various local projects.

Issues and Proposals

With little debate, the 2002 farm bill extended funding for community food projects through FY2007. Several measures before the 110th Congress would substantially increase funding for Community Food Projects, raise the federal share of projects' costs, expand the projects' scope, and raise the time limit on project grants. The enacted farm bill makes no major changes affecting community food projects.

Farmers' Market Nutrition Programs

Two farmer's market nutrition programs receive federal funding. The nutrition title of the 2002 farm bill provided statutory authority and mandatory funding (at $15 million a year through FY2007) for a new Senior Farmers' Market Nutrition program (SFMNP), under which low-income seniors receive vouchers that they may redeem at farmers' markets and roadside stands for fresh produce. The SFMNP was set up to give low-income elderly the same help that women, infants, and children (WIC recipients) receive through WIC farmers' market vouchers. Separately, the WIC farmers' market nutrition program (authorized in child nutrition law and typically not part of the farm bill) provides vouchers for WIC recipients, with the level of support set by annual appropriations (typically about $20 million a year).

Issues and Proposals

Several legislative proposals would increase mandatory funding for the SFMNP and, for its WIC counterpart, increase funding and make it mandatory. The Administration proposed to (1) require that the value of SFMNP vouchers be disregarded in judging eligibility and benefits for federal and state means-tested aid and (2) prohibit states from participating in the SFMNP if state or local sales taxes are charged on the food purchased with SFMNP vouchers (as is already the case for the WIC farmers' market nutrition program). The enacted farm bill increases mandatory funding for the SFMNP and accepts the Administration's recommendations.

Finally, food stamp benefits can be used in approved farmers' markets, and several proposals for grants to help increase the number of participating farmers' markets (through technical assistance, infrastructure improvement, and training) have been advanced. These are primarily aimed at facilitating and expanding the use of food stamp electronic benefit transfer (EBT) cards at farmers' markets. The enacted farm bill includes funding for expansion of the use of food stamp electronic benefit transfer cards in farmers' markets.

Fruits and Vegetables

The nutrition title of the 2002 farm bill addressed, for the first time, the availability of fresh fruits and vegetables in schools—because of growing concerns over childhood obesity and the quality and types of foods offered through school meal programs. It established a pilot project under which a small number of elementary and secondary schools in a limited number of states and Indian reservations receive funding to offer free fresh fruit and vegetables to students.28 The project was expanded, given mandatory annual funding, made permanent through the 2004 child nutrition reauthorization law (P.L. 108-265), and further expanded and given added money in P.L. 109-97. In FY2006-FY2007, about 400 schools in 14 states and 3 Indian reservations received support for this project, supported by funding totaling $15 million; this funding was used for activities covering both FY2006 and FY2007.

Separate from its nutrition title, the 2002 farm bill (in Section 10603) required that a minimum of $200 million a year in Section 32 funds be used to purchase "specialty crops" (like fruits and vegetables) and that $50 million a year of this amount be used for fresh fruit and vegetables acquired for school meal programs through the Defense Department procurement system, known as the DOD Fresh program.

Issues and Proposals 29

Given concerns over obesity and the quality of government-provided commodities and school meals, there have been many initiatives relating to fruits and vegetables. The fresh fruit and vegetable program set up by the 2002 farm bill has proved popular; for example, both the House and Senate appropriations bills for FY2007 included an expansion in funding and the number of states covered. And the Administration's farm bill package, as well as several bills before Congress, would greatly expand the federal commitment to making more fruits and vegetables available through federally supported nutrition programs.

A number of bills would boost funding for the fresh fruit and vegetable program so that it could operate in all states (although not all schools). Some of the same bills would up the minimum required spending on fruits and vegetables (from Section 32 funds) to at least $400 million a year and increase the set-aside for the DOD Fresh program; most of these purchases would go to schools. The Administration proposed to provide new money, $50 million a year, for the purchase of fruits and vegetables specifically for the School Lunch program (above acquisitions under any other authority). It also supported increasing purchases of fruits and vegetables using Section 32 money by an escalating amount starting at $200 million a year and totaling $2.75 billion over 10 years.

Other initiatives include new funding for a fruit and vegetable promotion program, pilot projects offering financial incentives for food stamp recipients to purchase fruits and vegetables, grants to facilitate the procurement and transportation of highly perishable healthy foods for low-income persons, a proposal to require the Agriculture Department to establish its own program for acquiring fruits and vegetables for schools and allowing schools to divert a significant portion of their federal commodity "allowance" to purchase fruits and vegetables through the Department's program, and grants to community-based organizations and other local agencies to promote greater consumption of fresh fruits, vegetables, and other healthy foods in low-income communities.

The enacted 2008 farm bill incorporates a very substantial increase in funding for the program of free fresh fruits and vegetables in schools, so that it can operate nationally (although not in all schools). In addition, the FY2008 Agriculture Department Appropriations measure includes a small ($10 million) increase in funding for this program.

Other Domestic Food Assistance Issues and Proposals

A number of proposals outside the scope of traditional farm bills also are before Congress, and many have been addressed in the 2008 farm bill (discussed later). In addition, one bill relating to nutrition support has been enacted (P.L. 110-19); this law makes clear that nutrition programs for the elderly operated under the authority of the Older Americans Act (home-delivered meals and congregate meal projects) may use their Older Americans Act funding to obtain food commodities for meals they serve through the Department of Agriculture.

The Administration has proposed a pilot obesity initiative that calls for competitive grants ($20 million a year over five years) to develop and test ways of addressing obesity in the low-income population, with evaluations of the results. According to the Department of Agriculture, ideas that might be tested include point-of-sale incentives for the purchase of fruits and vegetables by food stamp recipients, grants to connect food stamp shoppers with farmers' markets, and integrated communication and education programs to promote healthy diets and physical activity. Moreover, several bills call for similar projects. The 2008 farm bill (discussed later) includes provisions addressing projects similar to those proposed by the Administration.

Several bills, and the 2008 farm bill (discussed later) would encourage the purchase of locally produced foods by the Agriculture Department, the Defense Department, and nutrition program providers (e.g., schools). They would effectively override current rules that limit the extent to which the Departments, schools, and other providers can specify a geographic (e.g. local) preference when procuring food for donation or meals. Others would provide grants to support the work of food banks and similar nonprofit emergency feeding organizations related to obtaining, handling, storing, and distributing locally produced food.

A number of proposals include authorization for grants to community-based organizations for activities bolstering food security in their communities, as well as grants to national and regional groups to provide training and technical assistance. The 2008 farm bill (discussed later) contains similar authority.

Child nutrition program initiatives include the following:

Of the above-noted child nutrition proposals, only the initiatives making simplified summer food service rules nationally applicable and expanding subsidies for dinners in after-school programs to additional states have been acted on; the Agriculture Department's FY2008 appropriation (included in the FY2008 Consolidated Appropriations Act; P.L. 110-161) amends the Richard B. Russell National School Lunch Act to carry out these proposals.

Finally, a new issue arose during the farm bill debate in 2008, but has not yet been addressed in proposed or enacted legislation. Food assistance program benefits, whether they be meal subsidies for child nutrition programs or food stamp benefits, are indexed annually for food price inflation. However, with food prices rising rapidly, some argue that the existing annual indexing rule does not keep pace with the costs that schools and food stamp recipients face. This has led to calls for changes in food assistance program inflation indexing rules to more quickly reflect food price changes (although no legislation has yet been introduced).

Proposed Legislation

As discussed earlier, the Administration announced its nutrition program (and other) proposals for the farm bill early in 2007 and included a few of them in its FY2008 appropriations request for food stamps. These were not formally introduced in legislative form; however as noted below, several bills include food stamp amendments close to some of the Administration's proposals. In addition, the House and Senate farm bills and the enacted farm bill (discussed later) include a few of its recommendations.

To date, the federal nutrition-assistance-related bills listed below have been introduced.

[Note: Provisions in the following bills that are addressed (although not necessarily in the same way) in either the House, Senate, or enacted versions of the farm bill are italicized.]

H.R. 45, Healthy Foods for Healthy Living Act

Authorizes grants to community-based organizations and other local agencies to promote greater consumption of fresh fruits, vegetables, and other healthy foods in low-income communities. Also covers services related to obesity prevention and treatment under Medicare and Medicaid.

H.R. 206, Anti-Hunger Empowerment Act of 2007

Raises federal cost sharing for state administrative expenses related to new activities increasing access to food stamps, requires reports on steps to improve access, and authorizes a pilot project providing "Beyond the Soup Kitchen" grants to community-based groups for activities bolstering food security and technical assistance grants to community-based nonprofit feeding and anti-hunger groups.

H.R. 208

Expands the existing free fresh fruit and vegetable program in schools to include schools in New York state and selected Head Start programs in participating states.

H.R. 1344

H.R. 1551 and S. 919, Healthy Farms, Fuels, and Foods Act of 2007

Title III—Healthy Food Choices

H.R. 1600, EAT Healthy America Act

Title V—Nutrition

H.R. 2129, Feeding America's Families Act of 2007

Food Stamps

Other Provisions

H.R. 2144, Farm, Nutrition, and Community Investment Act of 2007

Title IV—Healthy Diets

Title VI—Food Stamp Program and Other Nutrition Programs

H.R. 2364, Local Food and Farm Support Act

H.R. 2392, Family and Workplace Balancing Act of 2007

H.R. 2401, Nutrition and Opportunities for the Underserved and Rural Incentives to Secure the Heartland (NOURISH) Act of 2007

Title VI—Healthy Food Choices

Title IX—Nutrition

H.R. 2419, Farm, Nutrition, and Bioenergy Act of 2007

As approved by the House on July 27, 2007, includes substantial amendments affecting nutrition programs (Title IV). Senate version (the Food and Energy Security Act of 2007) was approved on December 14, 2007. See the discussion of Congressional Action at the end of this report.

H.R. 2667, Disabled Farmers' Market Nutrition Pilot Program of 2007

Provides mandatory funding for pilot program to expand disabled individuals' access to farmers' markets.

H.R. 2720, Food and Agriculture Risk Management for the 21st Century Act of 2007 (FARM21 Act of 2007)

Title IIB—Healthy Foods

Title IIF—Nutrition

H.R. 3030, Summer Food Service Improvement Act of 2007

H.R. 4000

Allows food stamp eligibility for citizens of the Freely Associated States of Micronesia, the Marshall Islands, and Palau who are resident in the United States.

S. 100, Healthy Students Act of 200731

S. 541, Rural Opportunities Act of 2007

Overrides current rules that limit the extent to which schools and farm-to-school programs can specify a geographic preference (e.g., for locally produced food) when procuring food for the meals they serve.

S. 591, Food Stamp Personal Savings and Investment Act of 2007

Increases the degree to which liquid assets are disregarded when judging food stamp eligibility by (1) indexing the dollar limit on disregarded assets, (2) requiring the disregard of all retirement savings (as in the Administration's proposal), and (3) requiring the disregard of savings for education (as in the Administration's proposal).

S. 770, Food Stamp Vitamin and Mineral Improvement Act of 2007

Allows food stamp benefits to be used to purchase nutritional supplements.

S. 771/ H.R. 1363, Child Nutrition Promotion and School Lunch Protection Act of 2007

S. 790/H.R. 1740

Makes simplified summer food service program rules nationally applicable. These rules are intended to encourage expansion of the summer program by freeing summer program sponsors from a requirement that they provide detailed documentation of their expenses.

S. 1031, School Food Fresh Act of 2007

S. 1090, Senior Nutrition Act of 2007

Increases the income eligibility limit for elderly persons in the Commodity Supplemental Food Program (CSFP) from 130% to 185% of the federal poverty income guidelines.

S. 1160, Specialty Crop Competition Act of 2007

Title VI—Nutrition

S. 1172, Hunger-Free Communities Act of 2007 32

S. 1422/H.R. 2720, Farm Risk Management Act for the 21st Century

Title IV—Nutrition Programs

S. 1424, Farm, Nutrition, and Community Investment Act of 2007

Title IV—Nutrition Programs

Title VIII—Healthy Diets

S. 1432, Food Outreach and Opportunity Development for a Healthy America Act of 2007

Title I—Food Stamp Program

Title II—National School Lunch Program

Title IV—Miscellaneous

S. 1529, Food Stamp Fairness and Benefit Restoration Act of 2007

Food Stamps

The Emergency Food Assistance Program (TEFAP)

S. 1575, Food Employment Empowerment and Development Program Act of 2007 (the FEED Act of 2007)

Authorizes grants to public agencies and private nonprofit organizations for the purposes of (1) recovering donated food from food service businesses (e.g., restaurants) and farms, (2) distributing meals or recovered food to entities feeding vulnerable populations, (3) training unemployed or underemployed adults in food service careers, and (4) carrying out "welfare-to-work" programs in combination with the production of school and after-school meal programs.

S. 1755/H.R. 2968, Summer Food Service Rural Expansion Act

Makes nationally applicable rules (now used in a pilot project in Pennsylvania) that ease participation by summer program sponsors in rural areas.

S. 2066, Back to School: Improving Standards for Nutrition and Physical Education in Schools Act of 2007

Requires that new, expanded regulations governing the offering of "foods of minimal nutritional value" in schools that are consistent with standards established by the National Academy of Sciences' Institute of Medicine. These standards would cover schools participating in federally subsidized school meal programs and be applied to all foods and beverages sold on school campuses at any time. Requires standards for physical activity in all schools receiving federal funds.

S. 2143/H.R. 3978, Student Breakfast and Education Improvement Act of 2007

Authorizes competitive grants to schools to help establish, promote, or expand school breakfast programs and for related purposes (e.g., to increase local or fresh foods available in school breakfast programs, extend breakfast periods, and increase participation in breakfast programs).

S. 2228, Farm, Ranch, Equity, Stewardship, and Health Act of 2007 (FRESH Act)

Title III, Subtitle C—Nutrition

Title V—Nutrition; Subtitle A—Food Stamp Program

Title V—Nutrition; Subtitle B—Food Service Industry Job Training for Low-Income Adults

Title V—Nutrition; Subtitle C—Other Programs

S. 2302, Food and Energy Security Act of 2007

As reported by the Senate Committee on Agriculture, Nutrition, and Forestry on November 2, 2007 (S.Rept. 110-220), includes substantial amendments affecting nutrition programs (Title IV). Adopted by the Senate, with substantial amendments, as its version of H.R. 2419, on December 14, 2007. See discussion of congressional action below.

S. 2726, Bonus TEFAP Assistance Act of 2008

Provides mandatory funding to states for transportation, storage, and distribution costs associated with "bonus" commodities donated through The Emergency Food Assistance Program (TEFAP).

S. 2745/H.R. 5578, P.L. 110-196 (enacted March 14, 2008)

Extends expired authorities for most programs covered by the nutrition title (and other titles) of the pending farm bill until April 18, 2008.

Congressional Action

In addition to making FY2008 Agriculture Department appropriations covering all the nutrition assistance programs (P.L. 110-161; 2008 Consolidated Appropriations Act), Congress has acted legislatively in four areas related to domestic food assistance.33

Older Americans Act Nutrition Programs

On April 23, 2007, P.L. 110-19 was enacted. This law makes clear that nutrition programs for the elderly operated under the authority of the Older Americans Act (home-delivered meals and congregate meal projects) may use their Older Americans Act funding to obtain food commodities through the Agriculture Department for meals they serve.

Simplified Summer Food Service Rules

As noted earlier in the discussion of other domestic food assistance issues and proposals, P.L. 110-161 includes an amendment to the Richard B. Russell National School Lunch Act that makes "simplified summer food service rules" applicable nationwide. These rules (allowed to be used in 26 states and Puerto Rico) are intended to encourage expansion of the Summer Food Service program by freeing project sponsors from a requirement that they provided detailed documentation of their expenses in order to receive standard program per-meal subsidy rates; this matches rules for the regular School Lunch program.34

Suppers in After-School Programs

As discussed earlier in the section on other domestic food aid issues and proposals, P.L. 110-161 incorporates an amendment to the Richard B. Russell National School Lunch Act that extends federal subsidies for suppers served in after-school programs to one additional state—West Virginia—bringing the total number of states in which this assistance is offered to eight.

Expiring Authorities35

At the end of FY2007 (and with no enacted farm bill to extend them), a number of authorities in domestic food assistance (and other farm-bill-related) laws expired. They were effectively extended by a series of appropriations actions, beginning with P.L. 110-161, the 2008 Consolidated Appropriations Act, and ending with P.L. 110-231. These laws provided continued funding for all domestic food assistance programs and kept in force certain legislative authorities in domestic food assistance laws that also expired with FY2007.

2008 Farm Bill

House Bill Provisions

On June 15, 2007, the House Agriculture Committee's Subcommittee on Departmental Operations Oversight, Nutrition, and Forestry forwarded its recommendations for the nutrition title of the farm bill to the full committee. On July 19, 2007, the House Agriculture Committee approved its version of the farm bill (H.R. 2419; H.Rept. 110-256), accepting the subcommittee's proposals with minor amendments. On July 27, 2007, the House adopted H.R. 2419, with amendments.

The House bill's nutrition title (Title IV) incorporated the significant changes to law noted below. Most of the amendments in the House bill did not directly affect nutrition program costs. However, a number of important provisions did, and the required new funding (generally from tax law changes) was provided in the bill. The Congressional Budget Office estimate of the cost of the provisions of the nutrition title (using its March 2007 "baseline" assumptions) projected that they would add some $4.2 billion in federal spending (budget authority and outlays) over the next five years (the "life" of the farm bill).36 Six provisions of Title IV accounted for virtually all of its cost in the first five years: increasing food stamp benefits by raising the "standard deduction" disregard of income (52%), boosting food stamp benefits by eliminating limits on income disregards tied to dependent care expenses (6%), raising minimum food stamp benefits (6%), increasing food stamp dollar limits on allowable liquid assets and disregarding retirement savings/plans and education savings as countable assets when judging food stamp eligibility (15%), increasing mandatory spending on TEFAP commodities (14%), and expanding support for the fresh fruit and vegetable program in schools (7%). As can be seen, the large majority of new spending generated in the House bill was tied to changes in food stamp law—that is, $3.3 billion over the next five years.

Over the next ten years, changes made by the House bill were expected to cost a total of $11.5 billion (using March 2007 "baseline" assumptions), because its revisions were made part of permanent law, unlike the Senate's measure.

Food Stamps

General Provisions

Benefit Levels and Eligibility 37

Asset Eligibility Standards

Program Administration and Nutrition Education

Retailers

Other Provisions and Programs

Reauthorization

The Emergency Food Assistance Program (TEFAP)

Fruits and Vegetables

Commodity Supplemental Food Program (CSFP)

Community Food Projects

Food Distribution Program on Indian Reservations (FDPIR)

Senior Farmers' Market Nutrition Program (SFMNP)

Geographic Preference and Buy American Rules

Puerto Rico

Obesity Initiative

Bill Emerson and Mickey Leland Hunger Fellowship Program

Nutrition Monitoring

Sense of Congress: Juvenile Obesity

Senate Bill Provisions

On December 14, 2007, the Senate adopted its version of the farm bill, a substitute for H.R. 2419, based on S. 2302 (S.Rept. 110-220) as amended on the Senate floor.

As passed, the Senate bill's nutrition title (Title IV) incorporated the significant changes to law noted below. As with the House bill, most of its amendments did not directly affect nutrition program costs. But a number of important provisions did, and the required offsetting funding—from savings in other (agriculture) programs and titles in the bill—was provided. Estimates from the Congressional Budget Office (using its March 2007 "baseline" assumptions) placed the overall five-year cost (new budget authority) at $5.4 billion, or $5.3 billion in new outlays.44 Changes to the Food Stamp program and TEFAP and expansion of the fresh fruit and vegetable program in schools accounted for 97% of the new spending in the Senate bill. Food stamp amendments alone represented 66% of the new spending ($3.5 billion); the four most expensive of these revisions were an increase in the "standard deduction" disregard of income, loosened asset eligibility rules, a higher minimum monthly benefit, and removal of dollar limits on income disregards tied to dependent care expenses. New TEFAP spending accounted for 10% of the added spending ($550 million). And additional money for the fruit and vegetable program represented 21% ($1.1 billion). As can be seen, in a major difference from the House bill, the Senate's version placed substantially more emphasis on support for the fresh fruit and vegetable program, both in absolute dollar terms and as a proportion of total spending under the nutrition title.

In another large difference from the House bill, the Senate's measure was expected to cost only $5.6 billion over the next ten years (as opposed to the House's $11.5 billion), because most of its major revisions were terminated after FY2012 (not made permanent) for budgetary reasons.

Food Stamps

General Provisions

Benefit Levels and Eligibility 45

Asset Eligibility Standards

Program Administration and Nutrition Education

Retailers and Use of Benefits

Other Provisions and Programs

Reauthorization

The Emergency Food Assistance Program (TEFAP)

Fruits and Vegetables

Commodity Supplemental Food Program (CSFP)

Community Food Projects

Food Distribution Program on Indian Reservations (FDPIR)

Senior Farmers' Market Nutrition Program (SFMNP)

Farmers' Markets and EBT Cards

Geographic Preference and Buy American Rules

Puerto Rico

Health and Nutrition Promotion Projects

Hunger-Free Communities: Studies and Grants 48

Bill Emerson and Mickey Leland Hunger Fellows

Enrolling Children for Free School Meals

Periodic Surveys

Nutrition Monitoring

Team Nutrition Network

Agriculture Policy and Public Health

Whole Grain Pilot Project

Report on Federal Hunger Programs

Food Employment Empowerment and Development Program 49

Infrastructure and Transportation Grants

The Enacted 2008 Farm Bill

After two vetoes (overridden by Congress), the farm bill, entitled the Food, Conservation, and Energy Act of 2008, became law, as P.L. 110-246, on June 18, 2008.50 The new Act's nutrition title (Title IV) covers (extends or amends) the Food Stamp program, The Emergency Food Assistance Program (TEFAP), the fresh fruit and vegetable program in schools, the Senior Farmers' Market program, programs in lieu of food stamps in Puerto Rico and American Samoa and on Indian reservations, the Commodity Supplemental Food Program, rules governing procurement of food for school meal programs, congressional hunger fellowships, and various special nutrition projects. It includes the extensions of authority for and changes in domestic nutrition assistance laws noted below.51

While, as with the House and Senate bills, many provisions do not have a direct cost effect, several important revisions do. The Congressional Budget Office (the CBO) estimate of the total new spending expected from Title IV initiatives varies according to which "baseline" (i.e., costs with no changes in law) assumptions are used and the time period over which costs are projected. Spending figures also differ depending on whether offsetting reductions are taken into account.

Under pre-2008 law, the programs covered by Title IV were anticipated to cost (in outlays) approximately $186 billion over FY2008-FY2012 (the 5-year "life" of the 2008 farm bill) and almost $400 billion over the 10-year span from FY2008 to FY2017, using the CBO March 2007 baseline. Projecting from the CBO March 2008 baseline, Title IV programs were expected to cost about $206 billion over FY2008-FY2012 and just over $430 billion over FY2008-FY2017. Taken as a percentage increase over these baseline amounts, Title IV provisions are expected to add between 1% and 2% in new spending (outlays) over 5 years and just over 2% over 10 years (see below).

Using the March 2007 CBO baseline—this baseline was employed by Congress in making decisions as to the provisions to be included in Title IV, and estimates using it are those most often cited in describing the effects of the farm bill—the CBO estimates project total net Title IV costs (outlays) at $2.897 billion over FY2008-FY2012 and $9.218 billion over FY2008-FY2017. On the other hand, if the March 2008 baseline is used, total net Title IV costs increase to $3.11 billion over FY2008-FY2012 and $9.66 billion over FY2008-FY2017. These net cost estimates (under both baseline assumptions) do not include new spending for the Fresh Fruit and Vegetable program (see below) that are effectively offset with money from permanent "Section 32"52 appropriations provided through an amendment (Section 14222) in Title XIV of the new law—that is, $274 million (FY2008-FY2012) and $1.02 billion (FY2008-FY2017).

Six provisions of the enacted law account for virtually all of the cost of the provisions of Title IV: (1) increasing food stamp benefits by raising the "standard deduction" disregard of income, (2) boosting food stamp benefits by eliminating limits on income disregards tied to dependent care expenses, (3) raising minimum food stamp benefits, (4) increasing food stamp dollar limits on allowable liquid assets and disregarding retirement savings/plans and education savings as countable assets when judging food stamp eligibility, (5) increasing mandatory spending on TEFAP commodities, and (6) expanding support for the fresh fruit and vegetable program in schools. The large majority of new spending generated by the changes incorporated in Title IV is tied to changes in food stamp law.

The nutrition title of the enacted farm bill responds to the overwhelming majority of proposals for change put forward in bills pending before Congress and supported by the advocacy community (all of which call for various program expansions and new initiatives). It includes no program cutbacks and very few of the Administration's recommendations. Only three significant pieces of the Administration's nutrition title package are accepted: the disregard of retirement plans/savings and education savings when judging food stamp eligibility, lifting limits on dependent-care cost disregards, and changing rules governing the treatment of retailers violating food stamp rules. However, while the nutrition title includes most of the provisions for added benefits, loosened eligibility standards, and new or expanded nutrition program initiatives, it does not necessarily adopt the most expansive approaches to these changes—primarily because of cost concerns.

Food Stamps

General Provisions

Benefit Levels and Eligibility

Asset Eligibility Standards

Program Administration

Retailers

Other Provisions and Programs

Reauthorization

The Emergency Food Assistance Program (TEFAP)

Fruits and Vegetables

Commodity Supplemental Food Program (CSFP)

Food Distribution Program on Indian Reservations (FDPIR)

Senior Farmers' Market Nutrition Program (SFMNP)

Farmers' Markets and EBT Cards

Community Food Projects

Geographic Preference (Purchase of Locally Produced Foods)

Puerto Rico

Health and Nutrition Promotion Projects

Hunger-Free Communities Grants

Foods Purchased by Schools

Whole Grain Pilot Project

Enrolling Children for Free School Meals

Bill Emerson and Mickey Leland Congressional Hunger Fellowships


Acknowledgments

This report was originally authored by [author name scrubbed], retired CRS Specialist in Social Policy.

Footnotes

1.

For a look at the farm bill as a whole, see CRS Report RL34696, The 2008 Farm Bill: Major Provisions and Legislative Action, coordinated by [author name scrubbed].

2.

Normally, the only child-nutrition or WIC-related provisions that might appear in a farm bill are those relating to commodity assistance to schools or initiatives like fresh fruit and vegetable projects, discussed later in this report. However, past farm bills have, in some cases, included relatively minor revisions affecting child nutrition and WIC program operations. Child nutrition and WIC programs were last subject to a comprehensive review and reauthorization in the 2004 Child Nutrition and WIC Reauthorization Act (P.L. 108-265). Unlike in the Senate, where they (along with most other food assistance programs) are under the jurisdiction of the Senate Committee on Agriculture, Nutrition, and Forestry, child nutrition and WIC programs are in the jurisdiction of the Education and Labor Committee in the House.

3.

Major exceptions are funding levels for the Commodity Supplemental Food Program (the CSFP) and the Food Distribution Program on Indian Reservations (the FDPIR)—both set in the annual appropriations process. In addition, Agriculture Department appropriations bills sometimes include legislative changes; for those being considered in the FY2008 appropriations process, see CRS Report RL34132, Agriculture and Related Agencies: FY2008 Appropriations, by [author name scrubbed].

4.

For domestic food assistance in the USDA budget, see CRS Report RL34132, Agriculture and Related Agencies: FY2008 Appropriations, by [author name scrubbed].

5.

Nutrition programs for the elderly (authorized under the Older Americans Act and administered through the Department of Health and Human Services) are the only domestic nutrition assistance programs outside the USDA. They are typically funded at about $700 million a year in the appropriations measure for the Department of Health and Human Services.

6.

For a detailed discussion of nutrition assistance program changes made and considered in the 2002 farm bill, see archived CRS Report RL33690, Food Stamps and Nutrition Programs in the 2002 Farm Bill, by [author name scrubbed].

7.

Authorized under the Food Stamp Act; 7 U.S.C. 2011 et seq.

8.

A dollar in food stamp benefits is estimated to result in new food spending of 17-47 cents, depending on household income and type, versus 5-10 cents in the case of a dollar of cash. Although food stamp aid itself must be spent on food, a dollar in food stamps does not lead to a full dollar of additional food spending because cash previously spent on food is freed up and can be used for nonfood expenses that, for the recipient, may be more pressing.

9.

This second category was denominated as "food insecure with hunger" in reports for earlier years. Households classified as "food insecure" were grouped into two categories. Those classified as having "low food security" (7.1%) reported multiple indications of food access problems, but typically reported few, if any, indications of reduced food intake. Those classified as having "very low food security" (3.9%) reported multiple indications of reduced food intake and disrupted eating patterns due to inadequate resources for food.

10.

Alaska and Hawaii, along with the Virgin Islands and Guam to a lesser extent, are special exceptions to this general rule.

11.

To put these participation figures into perspective, it should be noted that the all-time high in food stamp participation was reached shortly before enactment of the 1996 welfare reform law—27.5 million persons a month in FY1994. The all-time low for the modern program was in FY2000—17.2 million persons a month.

12.

Information on error rates and fraud ("trafficking" in food stamp benefits) can be found in two recent Government Accountability Office (GAO) reports: Food Stamp Program: States Have Made Progress Reducing Payment Errors, and Further Challenges Remain (GAO-05-245; May 2005) and Food Stamp Trafficking: FNS Could Enhance Program Integrity by Better Targeting Stores Likely to Traffic and Increasing Penalties (GAO-07-53; October 2006).

13.

Information on state options can be found in a 2004 GAO report—Food Stamp Program: Farm Bill Options Ease Administrative Burdens, but Opportunities Exist to Streamline Participant Reporting Rules among Programs (GAO-04-916; September 2004); available at http://www.gao.gov/new.items/d04916.pdf. Coverage of the current status of state options is on the USDA website at http://www.fns.usda.gov/fsp/rules/Memo/Support/State_Options/7-State_Options.pdf. And information about states' use of their options as to how to count the value of vehicles when determining food stamp eligibility can be found in a report by the Center on Budget and Policy Priorities—State Vehicle Asset Policies in the Food Stamp Program (revised November 6, 2006)—available through the Center's website: http://www.cbpp.org.

14.

A fuller discussion can be found in a report—Administration Proposal Would Cut Over 300,000 People Off Food Stamps—from the Center on Budget and Policy Priorities, available at the Center's website: http://www.cbpp.org.

15.

A fuller discussion can be found in a report—Families' Food Stamp Benefits Purchase Less Food Each Year—from the Center on Budget and Policy Priorities, available at the Center's website: http://www.cbpp.org.

16.

Florida's project is effectively fully implemented; Indiana is in the process of implementing its initiative; Texas has, for the time-being, put a stop to its project.

17.

A more extensive discussion of the Administration's proposals is available in CRS Report RL33916, The USDA 2007 Farm Bill Proposal: Possible Questions, coordinated by [author name scrubbed].

18.

At present, states are only penalized for high rates of error in overpaying or underpaying benefits.

19.

It would also "de-obligate" the few food stamp coupons still in circulation, making them no longer usable (redeemable).

20.

Nutrition education activities are already eligible for 50% federal funding as a state administrative expense.

21.

Authorized under Section 19 of the Food Stamp Act; 7 U.S.C. 2028.

22.

Authorized under Section 4(b) of the Food Stamp Act; 7 U.S.C. 2013(b).

23.

No extension was necessary for the Northern Marianas grant because it operates under a separate permanent authorization.

24.

Authorized under (1) Section 27 of the Food Stamp Act (7 U.S.C. 2036) and (2) the Emergency Food Assistance Act (7 U.S.C. 7501-7516).

25.

Typically $10-$20 million a year.

26.

Authorized under Sections 4 and 5 of the Agriculture and Consumer Protection Act of 1973; 7 U.S.C. 612c note.

27.

For FY2008, the Agriculture Department appropriations law actually includes a significant increase in CSFP appropriations.

28.

In Section 4402 of the 2002 farm bill.

29.

A more extensive discussion of the Administration's proposals for fruit and vegetable purchase policies is available in CRS Report RL33916, The USDA 2007 Farm Bill Proposal: Possible Questions, coordinated by [author name scrubbed].

30.

These rules are intended to encourage expansion of the summer program by freeing program sponsors from a requirement that they provide detailed documentation of their expenses.

31.

This bill also includes related provisions that are outside the typical purview of child nutrition laws. They authorize a pilot program of grants to schools to increase the length of school days for physical activity and other initiatives.

32.

A similar measure was approved by the Senate on December 8, 2006.

33.

For information on the FY2008 appropriation , see CRS Report RL34132, Agriculture and Related Agencies: FY2008 Appropriations, by [author name scrubbed].

34.

See S. 790/H.R. 1740.

35.

For a longer discussion of extensions of expiring authorities and the farm bill, see CRS Report RL34696, The 2008 Farm Bill: Major Provisions and Legislative Action, coordinated by [author name scrubbed].

36.

This represents a 2.2% increase over the most current (March 2007) Congressional Budget Office "baseline" estimate of spending under current law for programs under the nutrition title over the next five years ($192.2 billion).

37.

Note: Income disregard provisions primarily affect benefit calculations. However, they can affect a household's income eligibility. Most households are subject to both a "gross" income test—their total income, before disregards (deductions), must be below 130% of the federal poverty income guidelines—and a "net" income test—their income, after disregards (deductions), must be below the poverty guidelines themselves. In the overwhelming majority of situations, meeting the gross income test is the more important requirement. But boosting or establishing an income disregard also decreases a household's net income and can make their income eligibility more likely. Elderly or disabled households are subject only to a net income test.

38.

Current limits are $200 a month for children under age 2 and $175 a month for all other dependents. This proposal also was put forward by the Administration, among others.

39.

This proposal also was put forward by the Administration, among others, and is included in the FY2008 Agriculture Department appropriations measure.

40.

Asset limits are now set at $2,000, or $3,000 for households with an elderly or disabled member.

41.

This proposal was put forward by the Administration, among others.

42.

See the discussion of the Senate bill for more detail.

43.

Current provisions have not been implemented. Instead, the hunger fellowship program continues to receive annual appropriations ($2.5 million in FY2006 and proposed for FY2008) from Congress, without any specific legislative guidance as to their use.

44.

This represents a 2.8% increase over the Congressional Budget Office "baseline" estimate of spending under current law for programs under the nutrition title over the next five years ($192.2 billion).

45.

Note: Income disregard provisions primarily affect benefit calculations. However, they also can affect a household's income eligibility to some extent. See footnote 38 for a fuller discussion.

46.

Current limits are $200 a month for children under age 2 and $175 a month for all other dependents. This proposal was put forward by the Administration, among others.

47.

This proposal also was put forward by the Administration, among others. It is included in the FY2008 Agriculture Department appropriations measure.

48.

Also see S. 1172, entitled the Hunger-Free Communities Act.

49.

See S. 1575.

50.

See CRS Report RL34696, The 2008 Farm Bill: Major Provisions and Legislative Action, coordinated by [author name scrubbed], for details on House and Senate action on the conference agreement (H.Rept. 110-627), the Presidential vetoes, and various extensions of expiring authorities pending the Farm Bill's enactment.

51.

For additional details on the enacted farm bill's Title IV, see the website of the Center on Budget and Policy Priorities at http://www.cbpp.org.

52.

For information on Section 32, see CRS Report RL34081, Farm and Food Support Under USDA's Section 32 Program, by [author name scrubbed] and [author name scrubbed].