Child Nutrition Issues in the 105th Congress

Child Nutrition Issues in the 105th Congress

97-108 EPW
CRS Report for Congress
Received through the CRS Web
Child Nutrition Issues in the 105th Congress
Updated June 18, 1998
Joe Richardson
Specialist in Social Legislation
Education and Public Welfare Division
Congressional Research Service ˜ The Library of Congress

ABSTRACT
This report covers proposed and enacted legislative initiatives to change child nutrition
programs (including the WIC program) during 1997 and 1998. It will be updated as
congressional action warrants.

Child Nutrition Issues in the 105 Congress
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Summary
Reauthorization. Appropriations authority for several child nutrition programs
will expire by the end of the 105 Congress, prompting congressional action in 1998.
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Expiring authorities include those for: the Special Supplemental Nutrition Program
for Women, Infants, and Children (the WIC program), the Summer Food Service
program, State Administrative Expense (SAE) assistance, the commodity distribution
program, and a number of special-purpose projects. While other child nutrition
programs (such as the School Lunch and Breakfast programs) are permanently
authorized, significant changes in these programs also are being considered for
inclusion in the reauthorization legislation.

Legislation. On June 4, 1998, the House Committee on Education and the
Workforce ordered reported a substantially amended bipartisan version of H.R. 3874.
This bill, now entitled the Child Nutrition and WIC Reauthorization Amendments
of 1998, extends expiring program appropriations authorities through FY2003 and
revises the National School Lunch Act and the Child Nutrition Act for net federal
outlay savings estimated at approximately $70 million through FY2003. The major
spending item in the bill expands the availability of federal subsidies for snacks
served in after-school programs. The savings in the bill are derived from provisions
(1) requiring that, when federal children nutrition subsidies are indexed for inflation
each year, they all be rounded down to the nearest whole cent (not to the nearest
quarter cent) and (2) reducing federal funds set aside for audits in the Child and Adult
Care Food program. Additional amendments authorize a demonstration project
providing free breakfasts for elementary school children without regard to family
income, increase administrative flexibility for schools, states, and WIC agencies,
make it easier for private nonprofit sponsors to operate the Summer Food Service
program, change licensing and health/safety requirements on participating child
nutrition providers, add a number of provisions to protect the integrity of the WIC
program, and limit the degree to which WIC agencies can keep unused money and
spend it in the following year. Most of the provisions in the Administration’s child
nutrition reauthorization package (H.R. 3666/S.2166) are included in H.R. 3874 as
ordered reported.
Eight other bills are before Congress: H.R. 3086, H.R. 3405, H.R. 3871, H.R.
3872, H.R. 3873, S. 1396, S.1556, and S.1581. Major provisions in these bills that
are not contained in the bipartisan H.R. 3874 include those that would: mandate
federal subsidies for free breakfasts to all elementary schoolchildren in participating
schools (regardless of family income), restore money for start-up and expansion
grants for breakfast and summer programs, and expand participation by for-profit
child care providers in the Child and Adult Care Food program.
The House may take up H.R. 3874 during the week of June 22, 1998, and
consideration of child nutrition legislation by the Senate Agriculture, Nutrition, and
Forestry Committee also is expected the week of June 22.

Contents
Current Legislative Status . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Legislation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Child Nutrition Bills in the House . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
H.R. 3874, the Child Nutrition and WIC Reauthorization Amendments
of 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Other House Bills . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Child Nutrition Bills in the Senate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
S. 1396, the Meals for Achievement Act . . . . . . . . . . . . . . . . . . . . . . 5
S. 1556, the Child Nutrition Initiatives Act . . . . . . . . . . . . . . . . . . . . . 5
S. 1581, the Child Nutrition Reauthorization Act . . . . . . . . . . . . . . . . 7
Other Relevant Bills . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Enacted Legislation: 1997-1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
WIC Benefits for Overseas Military Personnel and Dependents . . . . . 7
Major Issues in Bills Before Congress . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
School Breakfast Initiatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
After-school and Child Care Initiatives . . . . . . . . . . . . . . . . . . . . . . . . 8
Summer Program Initiatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
WIC Initiatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Programs up for Reauthorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Additional Issues of Note . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
School Meal Standards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Program Consolidation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Assistance to Day Care Homes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Nutrition Education . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Additional ASFSA Proposals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
WIC Directors’ Concerns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Appropriations Committee Report on the WIC Program . . . . . . . . . . . . . 17

Child Nutrition Issues in the 105th Congress
Current Legislative Status
Appropriations authority for several child nutrition programs — the WIC
program, the Summer Food Service program, State Administrative Expense (SAE)
assistance, the commodity distribution program, and a number of special-purpose
projects — expires by the end of FY1998. As a result, most child nutrition
activities will be up for congressional review during 1998, including permanently
authorized programs like the School Lunch, School Breakfast, and Child and
Adult Care Food programs.
The House Education and the Workforce Committee has ordered reported a
bipartisan child nutrition bill to extend appropriations authorities and make
modest changes in child nutrition programs — H.R. 3874 (the Child Nutrition
and WIC Reauthorization Amendments of 1998) — and the House may take up
the bill the week of June 22, 1998. Major child nutrition initiatives in H.R. 3874
would expand the availability of federal subsidies for snacks served in after-school
programs, authorize a demonstration project providing free breakfasts to
elementary schoolchildren without regard to family income, and add provisions
to improve the integrity of the WIC program.
Discussions on a Senate measure are proceeding in the Senate Committee on
Agriculture, Nutrition, and Forestry, and the Committee is scheduled to mark up
a bill similar to the H.R. 3874 the week of June 22, 1998.

[Notes: This report covers 1997-1998 proposed and enacted legislative
initiatives to change child nutrition programs and the WIC program. For a
description of legislation in 1995 and 1996, including the 1996 welfare reform law,
see Child Nutrition Legislation in the 104 Congress
th
, CRS Report 96-987. For
background on how child nutrition programs work, appropriations, participation,
and spending, see Child Nutrition Programs: Background and Funding, CRS Report
98-25. For detailed information on the WIC program, see The WIC Program, CRS
Report 96-172.]

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Legislation
Child Nutrition Bills in the House
H.R. 3874, the Child Nutrition and WIC Reauthorization Amendments of
1998. On June 4, 1998, this bipartisan measure was ordered reported, with
substantial amendments, by the House Committee on Education and the Workforce.
It reauthorizes virtually all expiring child nutrition appropriations authorities through
FY2003. It also includes a number of modest changes in child nutrition progra
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operations and rules, primarily an initiative increasing the availability of federal
support for snacks served in after-school programs, and authority for a demonstration
project providing free breakfasts for elementary schoolchildren without regard to
family income. Many of the bill’s provisions are drawn from the Administration’s
reauthorization package (H.R. 3666/S. 2166). Savings provisions would (1) require
that, when federal child nutrition subsidies are indexed for inflation each year, they
all be rounded down to the nearest whole cent (not to the nearest quarter cent) and
(2) reduce federal funds set aside for audits in the Child and Adult Care Food
program.
Cost items in the bill (primarily provisions increasing federal support for after-
school programs) total to almost $130 million in outlays (over $130 million in budget
authority) through FY2003. Savings total to approximately $200 million in outlays
(some $250 million in budget authority). As a result, the net savings in federal
spending that would be produced by the bill add up to an estimated $70 million in
outlays (about $120 million in budget authority).
After-school Programs and the Child and Adult Care Food Program. The
major initiative in the House measure would expand the availability of federal
subsidies for snacks served in after-school programs. All schools operating after-
school programs would be eligible for federal payments through the School Lunch
program for snacks served to children through age 18. In addition, schools and
private nonprofit sponsors (e.g., boys and girls clubs) would be eligible for subsidies
through the Child and Adult Care Food program (CACFP) for free snacks served to
children through age 18 in after-school programs in low-income areas.
Other changes affecting “outside-of-school” program sponsors would allow
them to participate in the CACFP so long as they meet state or local health and safety
standards — unless state/local licensing or approval as a child care provider is
required of them — and would only require schools operating day care programs to
meet state or local child care licensing or approval standards if they are covered (i.e.,
alternate federal standards would not be applied to them). Finally, the bill makes
permanent a demonstration project, operating in Iowa and Kentucky, that expands the
availability of the CACFP to for-profit child care providers.
Summer Food Service Program. The House bill proposes to loosen limits on
the number of sites operated and children served by private nonprofit sponsors. This,

1 Left out are a few unused demonstration project authorizations and authority for activities
that the bill proposes to fold into larger program authorizations.

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and other proposed changes (e.g., allowing the use of private vendors), would make
it easier for private nonprofit organizations — particularly those in rural areas — to
participate in the Summer Food Service program. The bill also adjusts federal
subsidy rates in Alaska and Hawaii upward to conform to the practice in other child
nutrition programs and expands authority for schools running summer programs to
receive subsidies for meals when a child does not take an item offered (“offer vs.
serve” authority).
Flexibility for States and Schools. The House measure proposes to drop a
restriction that limits (to 10%) the degree to which states can transfer state
administrative expense (SAE) grant money among child nutrition program
operations. This would allow SAE funding (including the money derived from a
separate administrative grant related to the Summer Food Service program) to be
used as states see fit to help them administer child nutrition programs. The bill also
includes provisions easing the administrative burden on schools. Where a single
state agency administers multiple child nutrition programs, schools could operate
them under a single permanent agreement with the state (as opposed to separate
agreements for each program) and use a common claiming procedure to obtain their
federal subsidies (as opposed to separate procedures and forms for each program they
run).
Homeless Children Nutrition Programs. H.R. 3874 would merge separate,
limited nutrition programs for homeless children into the regular CACFP, thereby
expanding the availability of support for homeless children.
The WIC Program. The House bill contains a number of amendments relating
to the WIC program. In general, they would give state WIC agencies more
flexibility, limit agencies’ ability to retain unused funds for use in the next fiscal year,
add provisions aimed at protecting the program’s integrity, and revise provisions
related to the WIC farmers’ market nutrition program. The bill also requires a study
of cost containment efforts in the WIC program.
! Rules governing WIC agencies’ ability to “convert” funds provided for food
to spending on nutrition services and administration would be eased. And
agencies’ authority to spend unused WIC money for costs incurred in the prior
year would be expanded somewhat.
! WIC agencies would be allowed to used money provided for food to purchase
breast pumps.
! WIC agencies would be allowed to “spend forward” unused nutrition services
and administration funding in the following fiscal year only up to an amount
equal to 1% of their total grant. Unused food dollars could not be spent
forward.
! WIC agencies would be required to take into consideration the prices stores
charge for WIC foods when selecting vendors for participation.

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! To encourage states to pursue abuse in the program, the rules governing use
of any money they collect would be loosened to allow WIC agencies to use the
money even if they collect it well after it was originally mis-spent.
! The maximum fine for trafficking and other serious violations would be more
than doubled.
! WIC agencies would be required to permanently disqualify vendors convicted
of trafficking or other serious violations.
! WIC agencies would be required to design and implement systems to identify
recipients who might be participating at more than 1 site.
! WIC agencies would be required to identify “high-risk” vendors and follow
up with compliance investigations.
! Those involved in trafficking would face forfeiture of property associated with
the trafficking (as in the Food Stamp program).
! WIC participants would be required to have income documentation to support
their eligibility.
! Individuals would have to be physically present at each certification and
renewal of eligibility.
! The required state match in the WIC farmers’ market program would be
reduced, making it easier for states to enter and expand the program if federal
appropriations are available.
General Provisions. The House reauthorization bill would (1) require health
and safety inspections for schools in the school meal programs and (2) require that
schools, “whenever possible,” buy food products produced in the United States.
Offsetting Savings Provisions. The House bill’s major amendment providing
offsetting savings would require that, when federal child nutrition subsidies are
indexed for inflation each July, they all be rounded down to the nearest whole cent
— not to the nearest quarter cent. At present, this is the case for most subsidies for
meals and snacks provided to non-poor children. Additional savings would arise
from a provision reducing — from 2% to 1% — the funding set aside for state audits
of sponsors and providers under the CACFP program.2
Differences from the Administration’s Reauthorization Package. Most of the
provisions recommended by the Administration as part of their child nutrition
reauthorization proposal (H.R. 3666/S. 2166) are contained in the House-reported bill
H.R. 3874. However, the House bill expands on an Administration proposal to
2 Note: The CACFP is the only child nutrition program with a special set-aside of money
for state audits. SAE money may be used for this purpose and the House bill increases
states’ flexibility in using SAE dollars.

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extend federal support for after-school programs in low-income areas by adding
federal subsidies to schools for after-school snacks (without the low-income area
limitation). It also does not include Administration proposals to increase funding for
the Food Service Management Institute, eliminate the 2% set-aside for CACFP
audits, allow states to keep half of any claims they recoup from schools and other
providers through state-conducted reviews of child nutrition programs, set aside a
small amount of funding to provide technical and other assistance in the CACFP
program, and various amendments affecting commodity assistance.
Other House Bills. In addition to H.R. 3874 (and the Administration’s bill),
5 other bills have been introduced in the House. The extensions of appropriation
authority in H.R. 3871-3873 are included in H.R. 3874, as is expansion of support
for after-school programs contained in H.R. 3086. However, two major proposals
advanced in H.R. 3086 and H.R. 3405 are not. H.R. 3086 proposes to mandate
federal subsidies for free breakfasts in all participating elementary schools without
regard to family income (the House-reported bill authorizes a demonstration project
for this). H.R. 3405 would greatly ease the rules governing participation of for-profit
child care providers in the CACFP — along the lines of what is already allowed in
a demonstration project operating in Iowa and Kentucky.
Child Nutrition Bills in the Senate
S. 1396, the Meals for Achievement Act. This measure proposes to provide
federal subsidies for free breakfasts for all elementary school children in schools
participating in the School Breakfast program (as in H.R. 3086, noted earlier).
S. 1556, the Child Nutrition Initiatives Act. The major provisions of this
measure include amendments to restore (1) start-up and expansion grants for school
breakfast and summer programs and (2) subsidies for some additional meals/snacks
served in day care centers and summer programs. These 2 forms of federal support
were ended by the 1996 welfare reform law. They also would increase and extend
funding for an information clearinghouse, and expand support for the Summer Food
Service program, after-school programs, the Homeless Children Nutrition program,
the WIC Farmers’ Market Nutrition program, and the Nutrition Education and
Training (NET) program. This bill also extends a number of expiring authorizations
through FY2003, including unused authority for several pilot projects. Although
costs are likely to be substantial, no cost estimates are yet available.
Start-up and Expansion Grants for Breakfast and Summer Programs. For
a number of years, the Agriculture Department funded a program of competitively
bid grants to states for the purpose of helping to initiate or expand school breakfast
programs. And, in 1994, similar grants for summer programs were mandated. The
1996 welfare reform law terminated both start-up and expansion grant programs,
effective with FY1997. Under previous law, these grants were mandated funding of
$5-$7 million a year; however, they were estimated to increase total program costs
(including subsidies paid for additional meals served in programs expanded with the
grants or by new providers brought in with the grants) by about triple the grant
amounts themselves. S. 1556 would restore these grants — funded for a total of $5
million a year.

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Additional Meal/Snack Subsidies in Day Care Centers and Summer
Programs. The 1996 welfare law also ended subsidies for some meals/snacks served
in day care centers. Under prior law, child care centers could claim subsidies for a
daily maximum of three meals (breakfast, lunch, and supper) plus one snack, or two
meals and two snacks, for each child in the center’s care for 8 or more hours.
Federal subsidies for other children’s meals/snacks are limited to two meals and one
snack per day per child. The new law removed authority for subsidies for a “fourth”
meal or snack in day care centers; they may now claim subsidies for a daily
maximum of two meals and one snack for each child, regardless of how long the
child is in attendance. Moreover, the 1996 law eliminated federal subsidies for a
fourth meal service in summer camps serving lower-income children and institutions
primarily serving migrants — thereby limiting them to subsidies for either three
meals or two meals and a snack each day.
S. 1556 would restore subsidies for fourth meals/snacks in child care centers,
summer camps serving low-income children, and institutions serving migrant
children.
Information Clearinghouse. Required funding for an information
clearinghouse for nongovernmental groups that assist low-income persons and
communities with regard to food assistance and self-help initiatives expires
September 30, 1998; funding for the clearinghouse was $150,000 in FY1997 and is
set at $100,000 in FY1998. S. 1556 would increase FY1998 funding to $185,000
and extend mandatory federal support (at $185,000 a year) through FY2002.
Summer Food Service Program. S. 1556 would — (1) increase the subsidy
rate for lunches by about 10%, to $2.23 a lunch (effectively restoring most of the
summer program cutbacks made in the 1996 welfare reform law), (2) add a new
payment for summer sponsors in very rural areas to help cover the cost of
transporting children to program sites, (3) allow more sponsors to qualify for the
program by making eligible any area in which at least 40% of the children are lower
income (as opposed to the current 50% threshold), (4) allow more private nonprofit
organizations in rural areas to qualify for the program by raising the limit on the
number of sites they can operate from 20 to 25, (5) permit summer programs to offer
participating children limited “second helpings,” and (6) extend the appropriations
authorization through FY2003.
Child Care Programs. S. 1556 would — (1) allow many more schools to claim
subsidies for snacks served in after-school programs (as in H.R. 3086, noted earlier),
(2) extend (through FY2003) grants to help day care home sponsors and providers
meet new requirements imposed by the 1996 welfare reform law and increase the
minimum state grant amount, (3) extend (through FY2003) authority for projects in
Iowa and Kentucky that allow a greater number of for-profit child care centers to
qualify for federal meal subsidies, (4) extend (through FY2003) the automatic
eligibility of Even Start participants for child care food assistance, (5) significantly
increase funding for the Homeless Children Nutrition program, (6) extend (through
FY2003) authority for a project assisting “boarder babies” and allow the grant money
in this project to be used for salaries and expenses of support staff, and (7) extend
(through FY2003) a small project of grants for after-school programs for adolescents.

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The WIC Program. S. 1556 would extend necessary authorizations for the
WIC program through FY2003 and substantially increase, and make mandatory,
funding for the WIC farmers’ market program (support would go to $37 million in
FY2003, compared to $12 million in FY1998). It also includes a “sense of
Congress” statement supporting full funding of the WIC program (i.e., enough money
to serve all eligible persons who apply).
The Nutrition Education and Training Program. S. 1556 would make funding
for the Nutrition Education and Training program — at $10 million a year —
mandatory and permanent. It also would raise the minimum state grant.
Special Projects. S. 1556 would extend authority for 3 grants for projects that
integrate nutrition education into elementary school curricula through FY2001, make
funding for them mandatory, and significantly reduce the annual amounts provided.
S. 1581, the Child Nutrition Reauthorization Act. This measure would
reauthorize, through FY2003, all expiring provisions of child nutrition law (see later
discussion of programs up for reauthorization) — with no program or funding
changes.
Other Relevant Bills
In addition to the measures noted above, 3 other bills in the 105 Congress are
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relevant. As passed by the Senate in late 1997, S. 1150, an agricultural research
measure, would have spent over $100 million through FY2002 on child nutrition
initiatives (e.g., as in S.1556, it would have restored start-up and expansion grants
for breakfast and summer programs and additional meal/snack subsidies in day care
centers and summer programs). However, the conference agreement on this measure
dropped all child nutrition amendments. H.R. 3531 (the New Mothers’
Breastfeeding Promotion and Protection Act) includes a proposal to allow WIC
agencies to use funds provided for food (as opposed to nutrition services and
administration money) to support and promote breastfeeding, thereby giving WIC
agencies more flexibility in how they support breastfeeding. H.R. 1507 (the Hunger
Has a Cure Act) includes proposals to restore start-up and expansion grants and the
fourth meal/snack subsidy in child care centers, as well as a sense of Congress
statement supporting full funding for the WIC program (S. 1556 also incorporates
these initiatives).
Enacted Legislation: 1997-1998
Only one item of child nutrition legislation has so far been enacted in the 105th
Congress — other than appropriations measures discussed in Child Nutrition
Programs: Background and Funding, CRS Report 98-25.
WIC Benefits for Overseas Military Personnel and Dependents. Provisions
in the National Defense Authorization Act for FY1998 (P.L. 105-85) seek to provide
funds for WIC benefits for overseas military personnel and dependents.

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The National Defense Authorization Act for FY1998 includes an amendment
seeking to make funding available to carry out a 1994 provision of law calling for
extension of the WIC program to serve overseas military personnel and dependents.
The Defense Department estimates that about $5 million a year would be needed to
fund this program extension. However, it is unclear whether the amendment would
actually provide funds for an overseas WIC program without a separate, specific
appropriation for the purpose. The new law requires the Secretary of Defense to
submit to Congress a report regarding the Secretary’s intentions as to implementing
this extension of WIC services and any plans to do so.
Major Issues in Bills Before Congress
School Breakfast Initiatives. There are three initiatives affecting the School
Breakfast program in the measures now before Congress. One would authorize a
demonstration project providing free breakfasts to elementary schoolchildren without
regard to family income (H.R. 3874, as reported in the House). A second would
actually establish a program of free breakfasts in participating elementary schools
(H.R. 3086 and S. 1396). And a third would restore start-up and expansion grants
to schools wishing to establish or expand a breakfast program (S. 1556).
Although in excess of 70% of School Lunch program schools offer breakfast
programs, student participation in breakfast programs is low — 20% of children
enrolled in School Breakfast program schools vs. nearly 60% of enrolled children
participating in lunch programs. In order to increase participation (primarily by
removing the “stigma” associated with receiving free breakfasts while others pay and
reducing schools’ paperwork associated with means testing), program advocates have
advanced the idea of providing federal subsidies such that all elementary school
students in participating schools can be offered free breakfasts. Others argue tha
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the relatively low participation can be attributed to factors other than stigma, price,
and administrative burdens — e.g., timing of breakfast serving hours, bus schedules,
parental choice — and oppose a universal free breakfast program in elementary
schools that would subsidize free meals for middle- and upper-income children.
The House-reported bill (H.R. 3874) authorizes a pilot project to test the effects
of offering free breakfasts to elementary school children without regard to family
income on participation, academic achievement, tardiness, dietary intake, and
attendance. However, supporters of the “universal” free breakfast proposal continue
to argue for mandatory funding of this demonstration project to make sure the
concept is tested — using the “extra” savings generated in the House bill.
Observers credit the grant program (for infrastructure and other nonrecurring
costs) with helping to boost schools’ participation in the School Breakfast program
from under half those operating lunch programs to over 70% of School Lunch
program schools, and advocates argue for reinstituting it so that program coverage
would more closely approximate that of the School Lunch program (which operates
3 The School Breakfast program primarily serves elementary school students in relatively
low-income areas, and, even under current rules, the overwhelming majority of participating
children receive free breakfasts.

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in more than 90% of the country’s schools). Opponents contend that the grant
program has done its basic job and that reintroducing what they see as aggressive
federal support for further expansion is unwarranted.
After-school and Child Care Initiatives. With the Committee approval of
H.R. 3874, it appears that a consensus is developing to expand the availability of
federal payments for snacks served in after-school programs, particularly for
adolescents. The House reported bill includes both the Administration’s proposal to
expand support for private nonprofit sponsored after-school programs in low-income
areas and a separate proposal to expand support for school-run after-school programs.
In both cases, subsidies would be available for programs serving adolescents. The
only major opposition expressed was concern over paying for the cost of these
expansions.
At present, schools may get federal subsidies for after-school snacks only if (1)
they were getting them in May 1989 (only a few thousand schools qualify) or (2)
separately apply and qualify as a “child care center” (and assume the additional
administrative burden and meet child care center standards). Moreover, in neither
case are subsidies available for children over 12 in after-school programs. Privat
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e
nonprofit sponsors may only get subsidies as child care providers, but not for children
over age 12. Proponents argue that the lack of major support for after-school care
is a serious gap in existing child care efforts (especially for adolescents) and that
allowing schools to easily extend their regular school meal programs to after-school
settings would be an important contributor to filling the gap. They also argue that
private nonprofit sponsors should be able to receive support for after-school
programs they run for adolescents.
5
In addition to after-school program initiatives, there are two major proposals
dealing with the CACFP before Congress. One would restore subsidies for “fourth
meals/snacks” served in participating child care centers (S. 1556). Another would
open up participation in the CACFP to for-profit day care centers serving a
significant proportion of lower-income children (H.R. 3405).
Child care providers have asked for restoration of fourth meal/snack subsidies.
They view their elimination for child care centers as unfair to working families with
children in care for long periods of time. Supporters of the 1996 amendment
dropping these subsidies continue to point out that the child care food program is not
intended to cover all the food needs of participating children, that tracking food
service for children in care more than 8 hours a day is difficult and can lead to
unwarranted claims, and that greatly increased federal child care funding in 1996 and
1997 welfare reform and balanced budget legislation more than makes up for the
relatively small loss of fourth meal/snack subsidies.
4 There are two minor exceptions to this rule. Federal subsidies are available for migrant
children up to age 15 and children in a few demonstration projects for adolescents in after-
school programs.
5 In order to hold down costs, the H.R. 3874 would limit expansion of support for private
nonprofit after-school programs to those serving low-income areas.

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At present, federal assistance under the Child and Adult Care Food program
(CACFP) for for-profit child care providers is limited to (1) those who receive
compensation from programs under title XX of the Social Security Act (the Social
Services Block Grant) for not less than 25% of their enrolled eligible participants and
(2) providers participating in a demonstration project operating in Iowa and Kentucky
where at least 25% of the children have family income meeting the criteria for free
or reduced-price school meals (i.e., have family income below 185% of the federal
poverty income guidelines). Where the provider is a public or private nonprofit
provider, there are no such restrictions. As a result, very few for-profit providers
receive aid under the CACFP. For-profit providers are calling for opening up the
CACFP to for-profit providers — at least by allowing all for-profit providers to
participate in the CACFP under the terms of the Iowa-Kentucky pilot project. Others
are reluctant to expand federal assistance to for-profit providers, especially given the
cost.
Summer Program Initiatives. While participation in school meal programs
continues to grow (especially among low-income children), participation in the
Summer Food Service program is far below that in the school programs. Moreover,
the 1996 welfare reform law substantially reduced subsidies for meals and snacks
served in summer programs. One initiative (in S. 1556) would raise summer lunch
subsidies to encourage increased summer program participation (by sponsors and
children). However, opponents note that, even after the 1996 subsidy cut, summer
program subsidies remain somewhat higher than subsidies for free meals in other
programs (recognizing that there are some added costs to running a summer
program). S. 1556 also would, in effect, make in easier for sponsors to qualify (e.g.,
it would allow sites in areas with 40%, rather than 50%, lower-income children to
participate.
On the other hand, H.R. 3874 makes modest changes in the summer program
to open up participation to more private nonprofit sponsors (e.g., loosening limits on
the number of sites operated and children served by private nonprofit sponsors.
Finally, a coalition of summer program advocates have advanced a proposal to
restore start-up and expansion grants for the Summer Food Service program (as with
similar grants for breakfast programs, they were dropped in the 1996 welfare reform
law). Opposition has developed because of cost concerns and worries about undoing
welfare reform changes.
WIC Initiatives. There are three major issue areas relating to the WIC
program. WIC directors argue that they need more flexibility in managing WIC
funds — more authority to keep unspent money for use in the next fiscal year, more
authority to convert food dollars to spending on nutrition services and administration
— and are leery of being given added administrative tasks. The Administration, the
Appropriations Committees, and other are worried that WIC agencies have too much
authority to keep unspent money, rather than return it for reallocation to states that
might need additional funds. And, largely because of a recent House Appropriations
Committee report (see later discussion), Congress and the Administration are
concerned that the program is too vulnerable to abuse.

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H.R. 3874 attempts to strike a compromise by giving WIC agencies some more
flexibility in managing their funds, limiting their authority to retain funds for
spending in the next fiscal year (but not as much as proposed by the Administration
and the Appropriations Committees), and adding a number of provisions intended to
protect the program’s integrity. However, the National Association of WIC Directors
continues to maintain that they have not been given enough flexibility and that some
of the program integrity provisions will impose too great an administrative burden
on them. [Note: For more detail on WIC proposals and issues, see The WIC
Program, CRS Report 96-172.]
Programs up for Reauthorization
In addition to several unused authorizations (primarily for pilot projects),
authority to appropriate for, or carry out, four major child nutrition programs and a
number of other programs and activities expires during the 105 Congress. As
th
a
result, they will be under review by Congress during 1998, as will other child
nutrition programs, such as the School Lunch and Breakfast programs, that are
permanently authorized.
The WIC program’s appropriations authorization expires September 30, 1998
— as does the provision of law governing the formula allocation of WIC funding
among states, a requirement that $10 million a year from any unused WIC
“carryover” funds from the prior year be used for program infrastructure development
and special projects, and the appropriations authorization for the WIC “farmers’
market” program. The WIC program, administered by state/local health clinics,
provides nutritious foods to lower-income pregnant, postpartum, and breastfeeding
women, infants, and children who are judged to be at nutritional risk. In FY1997, it
provided support for a monthly average of 7.4 million women, infants, and children,
with estimated spending of about $3.9 billion. The $10 million infrastructure fund
is intended to help states develop better WIC management systems, improve their
services, increase their ability to reach eligible clients, and expand breastfeeding
efforts. The farmers’ market program operates in 31 states (with a small budget of
about $7 million a year in recent years, but $12 million for FY1998) and issues
special WIC vouchers to be used to purchase fresh foods through farmers’ markets.
The appropriations authorization for the Summer Food Service program
expires September 30, 1998. Under this program, local public and private nonprofit
sponsors receive federal support for food service during the summer months in
lower-income areas. The 1997 summer program had an average daily attendance of
2.3 million children, with a federal cost estimated at $258 million.
The appropriations authorization for state administrative expense assistance
(SAE) expires September 30, 1998. Formula grants are provided to states to help
cover administrative costs associated with their child nutrition operations — equal
to about 1.5% of total federal cash payments for institutional meal programs like the
School Lunch program. They totaled just over $100 million in FY1997.

CRS-12
The requirement to use additional Agriculture Department resources (e.g.,
permanently appropriated “section 32" funds) to purchase commodities sufficient to
maintain the “entitlement” levels of child nutrition commodity distribution called for
by law expires September 30, 1998. In recent years, purchasing under this authority
has been about $400 million annually, which represents the majority of federal
commodity acquisitions for child nutrition programs.
Several demonstration projects expire September 30, 1998. The requirement
to operate a two-state pilot allowing for increased participation by for-profit child
care centers in the Child and Adult Care Food program expires; it costs about $4
million a year, and the two states are Iowa and Kentucky. The requirement to
conduct a project for subsidized food and nutrition services for “boarder babies”
(abandoned infants) expires; the law provides $400,000 a year for this purpose. The
authorization to conduct a small number of demonstrations providing funds for
schools providing meals or snacks to adolescents in educational/recreational
programs outside of school hours expires; they have typically received funding
totaling well under $500,000 a year.
Required funding for an information clearinghouse for nongovernmental
groups that assist low-income persons and communities with regard to food
assistance and self-help activities expires September 30, 1998; funding for the
clearinghouse is $150,000 in FY1997 and $100,000 in FY1998. A provision
granting automatic eligibility for Child and Adult Care Food program benefits to pre-
kindergarten Even Start program participants expired September 30, 1997. And,
finally, the appropriations authorization for some nutrition education, training, and
technical support activities ends September 30, 1998.6
Additional Issues of Note
Agriculture Department actions with regard to school meal nutrition standards
and program consolidation also may prompt congressional consideration during the
reauthorization process, as may calls to revise 1996 changes in the Child and Adult
Care Food program’s component for day care homes. Moreover, there are calls for
increased support for, and coordination of, nutrition education efforts.
At present, school meal program advocates major support is for the school
breakfast and after-school program initiatives noted earlier in this report — in
addition to their backing for any proposal to consolidate, coordinate, or streamline
federal rules for meal programs operated by schools.7 However, in 1997 testimony
they presented a number of additional ideas for change.
School Meal Standards
6 These expiring authorities do not include those for the Nutrition Education and Training
(NET) program or the Food Service Management Institute (FSMI).
7 Advocates often refer to these proposals as initiatives to create a “seamless” set of child
nutrition programs operated by schools under one set of rules.

CRS-13
The 1996 Healthy Meals for Children Act (P.L. 104-149) permits schools to use
“any reasonable approach” (within federal guidelines) to ensure that their meals
comply with the Dietary Guidelines for Americans; unless a state waiver was
obtained, school meals had to meet the Guidelines with the beginning of the 1996-
1997 school year. Enactment of this law may have resolved a dispute between
schools and the Department as to the latitude schools have when planning menus and
preparing meals. However, the guidance issued by the Department in July 1996, after
the new law, gave schools four options (only one more than they had under
regulations issued prior to the new legislation), whereas schools’ representatives had
envisioned more. At present, schools may elect to use: (1) Nutrient Standard Menu
Planning (NuMenus) under which they conduct a nutrient analysis (generally a
computerized analysis) of the foods being prepared and make recipe/menu
adjustments as needed to meet the Dietary Guidelines, (2) a variant of NuMenus,
called Assisted NuMenus, under which the analysis and subsequent development of
recipes and menus are conducted by an outside party (e.g., the state, a consortium of
schools, an outside contractor), (3) the traditional “food-based” (as opposed to
“nutrient-based”) meal pattern approach as practiced in the 1995-1996 school year,
where they must provide minimum amounts of specific food components (e.g., meat
or meat alternates, bread or bread alternates, vegetables, fruit, milk), or (4) an
“enhanced” meal pattern approach that is based on the traditional food-based meal
pattern, but has increased amounts of fruits/vegetables and grains/breads.
Sometime in 1998, it is expected that the Department will promulgate
regulations further increasing the options schools have in meeting the Guidelines.
Depending on the extent to which the new regulations give schools greater latitude
than the four options noted above, Congress may again be asked to step in during the
reauthorization debate. Congress also may be called on to intervene if the regulations
are delayed much longer than the spring of 1998. Moreover, the American School
Food Service Association (ASFSA) has asked that an existing regulatory requirement
that weighted averages be used in menu analysis be legislatively prohibited (the
requirement is now temporarily waived).
The prospect of congressional action in a related matter appears to have been put
to rest with final regulations issued by the Department on March 6, 1997. These
regulations allow yogurt as a meat substitute in school meals. When proposed, this
policy was controversial, with schools and the dairy industry generally supporting it
and the meat industry in opposition. At odds were arguments for greater flexibility
for schools to offer lower-fat meals and respond to some students’ preferences
opposed to concerns about the different nutrients found in meat and yogurt.
Program Consolidation
The 1994 Healthy Meals for Healthy Americans Act (P.L. 103-448) called on
the Agriculture Department to develop and implement regulations to consolidate the
School Lunch and Breakfast programs into a “comprehensive meal program.” In
addition, the 1996 welfare reform requires the Department to develop proposed
regulatory changes for the School Lunch, School Breakfast, and Summer Food
Service programs in order to simplify them and coordinate them into a
comprehensive meal program — due by November 1, 1997.

CRS-14
The Department has not yet issued its response to the 1994 and 1996 calls for
rules regarding programs consolidation, coordination, and simplification. And the
content of these two Departmental regulatory proposals (when they come out) may
engender a push for legislative changes to facilitate them or go further.
In addition, the American School Food Service Association (ASFSA) continues
to call for legislative (and administrative) initiatives that would create a “seamless”
set of meal programs operated by schools. In effect, the ASFSA asks that rules be
changed so that schools can run the full range of child nutrition programs (including
school meal, child care, after-school, and summer programs) under a single set of
standards and subsidies — thereby reducing their administrative burden and
expanding the availability of the programs. However, no
8
specific plan has been
submitted. Fully implementing this type of initiative (e.g., uniform operating
standards and federal subsidies) could be costly, and the Administration (and others)
are hesitant to go forward. [Note: An expected series of program coordination
“policy guidances” may remove some criticism of burdens on schools desiring to
operate multiple child nutrition programs.]
H.R. 3874 responds to some of the calls for program coordination in its
amendments calling for a single agreement between state agencies and schools
running multiple programs and a common claiming procedure for these schools to
obtain their federal subsidies.
Assistance to Day Care Homes
The Child and Adult Care Food program (CACFP) provides federal subsidies
for meals and snacks served in participating family day care homes (in addition to aid
for day care centers). Day care home sponsoring organizations also receive separate
payments for administrative and oversight costs. In FY1997, an average of some
190,000 participating day care homes (with up to 1,100 sponsors) had an average
daily participation of 970,000 children. The total cost of the CACFP in FY1997 was
$1.6 billion, with over half going to support day care homes and their sponsors.
The major child nutrition revision in the 1996 welfare reform law restructured
the day care home component of the CACFP and greatly reduced federal subsidies
for meals and snacks served by participating homes not located in lower-income
areas or without a lower-income provider (so-called “tier II” homes), effective July
1997. Day care homes are small, typically serving 4-6 children. Under prior law,
inflation-indexed subsidy rates for the affected tier II day care homes would have
been an estimated $1.62 for each lunch/supper, 88 cents for each breakfast, and 48
cents a snack at the normal July 1997 update — these rates are only slightly lower
than those paid in other child nutrition programs for free meals/snacks to children
from lower-income families. Under the new law, they are 98 cents, 33 cents, and 13
cents, respectively (but will continue to be inflation-indexed in the future). [Note:
8 Separately, the State of Oregon is seeking approval of a demonstration project that would
allow the state to adjust program rules so that schools would operate child nutrition
programs under a uniform set of rules and subsidy rates, with federal funding provided as
a single annual grant adjusted for enrollment changes and inflation.

CRS-15
Tier II homes may claim higher “old-law” rates for individual children for whom
low-income documentation is obtained. These old-law rates (the higher rates noted
above) continue, with minor changes, for homes in lower-income areas or with
lower-income providers, so-called “tier I” homes.] On enactment, the CBO estimated
that the 1996 revision would save $2.4 billion in federal outlays for FY1997-
FY2002.
The new law was largely based on a recognition that many children in
participating homes are from families with an income above the level (185% of the
federal income poverty guidelines) that would qualify them for free or reduced-price
meals in schools or day care centers — coupled with a reluctance to require
individual means-testing in day care homes.
Tier II providers and their sponsors have expressed confusion over the new rules
issued under the 1996 welfare reform law, and serious concern that, at the very least,
subsidies were cut too sharply. With such a large subsidy reduction, they worry that
homes will drop out of the CACFP (or may not apply), and that others will raise the
fees they charge to make up for lost federal CACFP subsidies. This could have
negative effects in their eyes — reducing support for lower-income children in tier
II homes, increasing costs to lower-income working families, and lessening the
“licensing effect” of federal CACFP subsidies (i.e., homes must be licensed in order
to participate, and the prospect of substantial federal subsidies encourages day care
home providers to seek licenses). On the other hand, greatly increased federal
support for child care legislated in 1996 and 1997 may lessen the effect of the new
two-tier system in the CACFP, and preliminary reports indicate that the majority of
homes are continuing to receive higher tier I subsidy rates (contrary to expectations)
— although the total number of participating homes dipped in the last quarter of
FY1997 and the first quarter of FY1998.
Nutrition Education
Child nutrition education initiatives take several forms. The two most
prominent are the Nutrition Education and Training (NET) program and an
Agriculture Department initiative called “Team Nutrition” or the “school meals
initiative.” The NET program was historically mandated funding at $10 million a
year. However, the 1996 welfare reform law converted it to a “discretionary”
program, and federal funding has since dropped to $3.75 million a year. This
program makes grants directly to states to provide nutrition education services to
school food service administrators, teachers, and students. The Team Nutrition
program is an initiative established by the Agriculture Department which aims at
addressing specific school meal nutrition education problems with direct federal
grants; for FY1998 it is funded at $8 million. Both the Agriculture Department and
advocates appear to support some consolidation of federal child nutrition education
funding. In addition, nutrition education supporters would increase overall nutrition
education funding to something approximating pre-welfare reform levels and return
nutrition education support to “entitlement” status.
H.R. 3874 would remove the $10 million limit on authorized NET
appropriations, but would not make funding mandatory.

CRS-16
Additional ASFSA Proposals
The American School Food Service Association (ASFSA) supports the
proposals (discussed earlier) for free breakfasts for elementary school students,
restoration of start-up and expansion grants for school breakfast and summer
programs, and expanded support for after-school programs. These, together with its
call for rule changes allowing for “seamless” operation of child nutrition programs
by schools (noted above) and support for increased nutrition education funding, form
the focus of its legislative agenda. However, in March 1997 testimony in the Senate
and other venues, it has supported additional substantial changes along the following
lines. A number would increase child nutrition spending and are relatively
controversial.
! It maintains that the current system for auditing schools’ meal programs — the
Coordinated Review Effort (CRE) — is excessively burdensome, given the
amount of money that is reclaimed or at risk, and needs modification (e.g.,
increasing the threshold above which amounts are recouped from schools).
! It argues for reducing the present “3-tier” subsidy system to a “2-tier” system.
Under the 3-tier system, there are different federal subsidy rates for free,
reduced-price, and full-price school meals. The lowest participation is among
children eligible for reduced-price school meals (no more than 40 cents for a
lunch or 30 cents for a breakfast). They are from “near-poor” (or “working
poor”) families with income between 130% and 185% of the federal income
poverty guidelines (between about $20,000 and $29,000 a year for a 4-person
family). The ASFSA would like to eliminate or restructure the reduced-price
tier to increase participation by allowing more children to receive free meals
and to reduce some paperwork/administrative burdens.
! Schools have the option of claiming federal subsidies under 3 special
provisions of law (called provision 1, provision 2, and provision 3) that reduce
the amount of paperwork required of them and their administrative costs. If
opting schools meet certain requirements, these provisions allow them to
collect eligibility information less often than once every school year and avoid
separately counting free, reduced-price, and full-price meals in order to claim
their subsidies. The ASFSA calls for making it easier for schools to use these
options (e.g., by lengthening the time between required collection of eligibility
information if the school’s demographics have not changed).
! It asks for elimination of a rule requiring schools to offer a variety of milk
consistent with student preferences in the prior year (unless demand for a
particular variety was less than 1%of milk consumed at the school). In effect,
it argues that the rule requires offering varieties of milk with relatively limited
demand.
! It calls for elimination of what is seen as an administratively burdensome rule
requiring that certain schools running breakfast programs “account” for their
costs in order to receive their full federal subsidy (this is not the case for the
majority of schools and other child nutrition providers).

CRS-17
! It supports increasing what is now a relatively minimal state matching
requirement for receiving federal child nutrition funds.
! It asks that rules governing waivers from federal child nutrition requirements
be changed to make waivers easier to get.
WIC Directors’ Concerns
WIC agency directors are very concerned about the extent to which they are
facing substantial jumps in costs for nutrition services (including nutrition risk
assessments) and administration — as states shift more costs (like those for rent and
computer support) directly onto WIC agencies and support from Medicaid and other
child health programs is reduced. They feel that the funding they receive for these
costs through the WIC program is becoming increasingly inadequate and have called
for several measures to allow them to move money allocated for food costs to
nutrition services and administration (e.g., the ability to use some money obtained as
rebates from infant formula providers for nutrition services and administration).
However, the Administration and others are worried that these initiatives will lead
to reduced participation because less money will be available for food benefits and
oppose most of the WIC directors’ agenda in this regard. [Note: For more detail on
WIC issues, see The WIC Program, CRS Report 96-172.]
Appropriations Committee Report on the WIC Program
In March 1998, the Surveys and Investigations Staff of the House Committee
on Appropriations submitted a relatively critical report on the WIC program to the
Committee; it was released during the week of April 20, 1998. With regard to
program funding and WIC agencies’ caseload management practices, it (1)
questioned the “full-funding” participation figures used to measure the adequacy of
federal WIC appropriations, the value of outreach efforts, and whether WIC agencies
are effectively managing their caseloads to limit them to those most in need, (2)
noted that the level of unspent money carried over (or “spent forward”) between
fiscal years is above a “reasonable” level, and (3) reported that the full range of
effective controls on the cost of WIC food packages has not been implemented in
many states. As to program eligibility standards, the report pointed out the potential
for the issuance of significant benefits to ineligible persons — noting the lack of
income documentation in many cases and the lack of nationally uniform WIC
nutrition risk criteria. Finally, the report criticized the limited extent of investigative
oversight of WIC vendors and recipients to prevent trafficking and other abuses.
The Appropriations Committee report could influence the FY1999 appropriation
recommended by the Committee and a number of amendments included in H.R. 3874
address concerns raised by the report