House Appropriations Committee Acts On WIC Funding, Floor Action Expected Next Week

Washington, DC, 6 June 2011 – The full House Appropriations Committee, Chaired by Rep. Hal Rogers, R-KY, met 31 May to markup a final version of the fiscal year 2012 Agriculture Appropriations bill passed the previous week for the Agriculture Appropriations Subcommittee, Chaired by Rep. Jack Kingston, R-GA, funding WIC at $5.901 billion.

During the markup, Republican appropriators accepted an amendment, passed by voice vote, offered by Rep. Rosa DeLauro, D-CT, increasing WIC funding by an additional $147 million over the Subcommittee’s mark, bringing the appropriation total to $6.048 billion. As this money was derived from an offset achieved by decreasing an equivalent amount of funding for the Brazil Cotton Institute, there is no guarantee that money will not be removed by amendment when the bill comes to the floor – likely next week.

NWA’s recommended funding level for Fiscal Year 2012 is $6.83 billion. Fiscal Year 2011 funding for WIC is set at $6.734 billion and the President’s 2012 budget request was $7.39 billion.

Additionally, the Committee voted to include $14 million in funding for infrastructure, $75 million for breastfeeding peer counselors and related activities (NWA proposed $80 million), $7.5 million for breastfeeding performance bonuses (NWA proposed $10 million), and $50 million for management information systems/EBT development (NWA proposed $60 million).

When one adds to the base funding approved by the full Committee of $6.048 billion, the $125 million in contingency funding, and the estimated fiscal year 2011 recoveries of roughly $476 million, it would appear that the total funding for the 2012 fiscal year ($6.649 billion) will still be inadequate to meet program needs, particularly should food cost inflation spike during the fiscal year as many economist anticipate.

Appropriators continue to suggest that USDA should look to SNAP contingency funds should the WIC Program find itself in need of additional resources during the 2012 fiscal year. NWA does not believe that to be an appropriate way to manage programmatic needs and potentially jeopardizes another nutrition program’s funding requirements. NWA will continue to advocate for $6.83 billion for the Program.

Several items in the Committee’s Report language are particularly troubling.

1. On the matter of Nutrition Services and Administrative funding, NSA, the Committee retained the Subcommittee’s Report which seems a misunderstanding of WIC NSA funding which averaged nationally in fiscal year 2009 at 21.42% pre-rebate and 27.90% post rebate vs. fiscal year 2010 at 23.35% pre-rebate and 29.56% post rebate. Moreover, the Committee accepts what appears to be the premise of the Subcommittee that nutrition services and other WIC set-asides are all considered administrative “overhead.” In the course of making their argument, the Committee also seemed to revisit without explicitly stating so, the arguments of the second half of the Bush Administration wherein efforts were made to cap NSA funding.

The Report reads:

WIC Services and Administrative Costs.— While the average participation in WIC has grown by 26 percent over the past 10 years, administrative costs for WIC have grown by 72 percent or $800 million dollars between 2001 and 2010. Keeping in mind that some of WIC’s program offerings (i.e., nutrition and smoking cessation programs) have expanded over the past 10 years and state salary and benefit costs have grown with inflation, administrative and service delivery costs as a percentage of the overall cost of the program are excessively high. By the Committee’s estimation, administrative costs of operating WIC are well above 40 percent. In contrast to other social service organizations, the model guidelines by the Federal Government’s Combined Federal Campaign require a justification from any local charity that has administrative costs exceeding 25 percent and the Better Business Bureau’s Wise Giving Alliance charity standards set a rate not to exceed 35 percent to cover administrative costs. FNS needs to achieve increased savings through greater use of benchmarking across states or achieve economies of scale whereby the agency and its state partners can decrease the delivery or program costs per participant. These costs pose the greatest threat to fully supporting the vital nutritional needs of all WIC participants. The Committee directs FNS to submit a plan by July 29, 2011, to reduce administrative costs.

2. The Committee also retained the Subcommittee’s Report on WIC Program eligibility and seemed to revisit the arguments of the second half of the Bush Administration wherein efforts were made to cap Medicaid adjunctive eligibility.

Categorical eligibility.—WIC provides nutritional support to some of the most vulnerable individuals in the U.S. population. However, due to the Nation’s overall financial crisis and the rapidly expanding needs of other Federal nutrition programs administered by FNS, the Committee recommends that the agency focus first on the nutritional needs of those originally envisioned in the creation of this program. While the Committee understands the need to seek efficiencies through the use of Categorical Eligibility, the Committee is concerned that USDA is expanding eligibility well beyond the neediest or hardest hit during the economic downturn. In particular, USDA has confirmed that the WIC program is now serving significant numbers of individuals with incomes above 185 percent of the U.S. Poverty Income Guidelines, including seven states that use income eligibility limits above 250 percent of poverty.

Finally, the Committee adopted the Subcommittee’s Report on electronic benefit transfer, EBT, and management information systems, MIS, applauding some of WIC’s successes and supporting NWA’s recommendation that states move expeditiously towards achieving the WIC EBT by 2020 goal, and allow a decoupling of requirements to meet MIS standards before implementing EBT to speed the process.

Electronic Benefit Transfer, EBT.---The Healthy, Hunger-Free Kids Act of 2010, P.L. 111–296 mandated that each state implement EBT for WIC no later than October 1, 2020. A few states are leading the way on WIC EBT implementation and should serve as models required by other states, including those state plans that take advantage of the states’ existing food stamp or SNAP EBT system. As a reminder, the SNAP program did not require states to fully develop Management Information Systems (MIS) or meet MIS standards before implementation of SNAP EBT, and the WIC program also should not make such a requirement. The Committee directs FNS to develop an implementation plan for a more accelerated schedule in order to take advantage of the benefits that WIC EBT would yield for both the Federal, state and private sector stakeholders. FNS should work with state WIC agencies to provide the Committee with the plan by December 31, 2011.

The House leadership hopes to move the legislation to the full House floor next week. The Senate Agriculture Appropriations Subcommittee has yet to markup a fiscal year 2012 Agriculture spending bill.

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