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The President’s FY 2007 budget proposals fall far short of the investments required to meet the health, education and nutrition needs of America’s vulnerable families, children and elderly. Some proposals actually would worsen the situation for them.

In the nutrition program area, the budget takes one very positive step forward in allowing individuals and families to obtain food stamps even if they have retirement savings (a five-year $589 million program increase; about 100,000 people would be added to the program when fully implemented in FY 2008); but it takes several steps backward. In particular, it proposes nutrition program cuts that would: limit states’ ability to get food stamps to 300,000 people in working families with children which are low income but not receiving cash welfare; weaken the WIC program; eliminate the Commodity Supplemental Food Program (CSFP) that provides nutrition assistance to more than 400,000 low-income elderly people; and eliminate the Community Food and Nutrition Program (CFNP) that supports local efforts to help needy families obtain nutrition benefits.

Proposing these nutrition funding cuts—while making room for more tax cuts for the wealthiest Americans—sets the wrong priorities for the nation.

1. Food Stamps and Working Families With Children

The President proposes to cut $656 million in five-year spending on the Food Stamp Program by eliminating food stamps for approximately 300,000 people in low-income working families (when the cut is fully implemented). This also would cost 40,000 needy children access to free school meals reducing school meal spending by $50 million.

Congress last year rejected this proposal to change “categorical eligibility” rules. It should reject it again.

Under current federal law, states have the option to treat as categorically eligible for food stamps those families which are receiving Temporary Assistance for Needy Families (TANF) Program services. Although the families may have modest savings or “gross income” that slightly exceeds the Food Stamp Program's regular rules, if the state takes this option they may receive benefits. Their net income after expenses are deducted still has to meet the regular (strict) income test, and they still must complete the food stamp application process. The President would make these families ineligible for food stamps.

In addition, by eliminating their food stamp eligibility, the proposal would raise school lunch fees or keep from eligibility for free school meals many needy children in those families whose food stamp status now results in direct certification for the school meals.

Households in about 40 states that have taken the categorical eligibility state option would be affected. Hardest hit would be Delaware, Maine, Maryland, Massachusetts, Michigan, North Dakota, Oregon, South Carolina, Texas, Washington, and Wisconsin.

At a time when more than 38 million people live in families which are hungry or on the edge of hunger, the food stamp cuts go in the wrong direction. They eliminate meals for hundreds of thousands of vulnerable parents and children, undermine state flexibility to help families move toward self-sufficiency, increase administrative burdens on states, and shift costs to states, localities, charities and vulnerable families. Congress wisely rejected these cuts in 2005.

2. WIC

The funding ($5.2 billion in new budget authority) provided in the President's budget will not be enough to meet expected need in WIC, in large part because the proposal depends on savings from a 25 percent cap on expenses in the Nutrition and Administrative services funds. The Administration says its budget proposal is adequate to serve a monthly average of 8.2 million recipients, but that is true only if Nutrition and Administrative Services are reduced as it proposes, i.e., if recipients receive reduced services. Also, additional information will be needed to determine if the Administration’s growth projections for the WIC caseload are adequate.

The President also proposes to cap “adjunctive eligibility” (automatic eligibility) for WIC for Medicaid recipients, limiting it to those with income below 250 percent of the poverty level. This will have a negative impact on WIC participants in Minnesota, Missouri, New Hampshire, Vermont, and Rhode Island.

Lowering the spending limit for WIC’s Nutrition Services and Administrative Funding will have a negative impact on the quality of WIC nutrition education and on participant access by forcing reductions in WIC clinic hours and possibly clinic closings in rural and other hard-to-serve areas.

The Administration also has indicated it will seek legislation that will introduce a 20 percent State match for Federal nutrition services and administrative spending to begin in 2008. A State match would create a myriad of administrative and operational difficulties for WIC, and shift costs to the states.

The proposal includes up to $125 million to replenish the WIC contingency fund, if needed. The Administration continues to fund a WIC breast feeding support initiative ($15 million).

3. The Commodity Supplemental Food Program

The President’s budget proposes to eliminate all funding for the Commodity Supplemental Food Program (CSFP).  This would cut off nutritious commodities to more than 400,000 low-income seniors (aged 60 and older) and children in an average month. The program currently operates in 32 states, the District of Columbia and two Indian reservations. The President’s proposal includes a transitional food stamp benefit for seniors losing CSFP, but that will not fill the nutrition gap that would be widened by CSFP’s elimination.

Annually, CSFP provides more than 6.4 million food packages for mothers, infants, children and seniors. Most recipients are seniors. CSFP food packages do not provide a complete diet, but supplement needed sources of nutrients typically lacking in the diets of the target population.  While CSFP participants can also receive food stamps, they cannot also receive WIC. The typical CSFP food package includes items such as canned tuna fish, meat and poultry, peanut butter, formula, milk, juice, oats, rice, beans, cheese, cereal, and canned fruits and vegetables. 

To be eligible, seniors must have income at or below 130 percent of the Federal poverty line (currently about $12,400 a year for a single person and $16,700 for a couple). CSFP also provides food packages to low-income pregnant and post-partum women, infants, and children up to age six, generally up to 185 percent of the Federal poverty line. Some low-income post-partum mothers and six-year olds are eligible for CSFP but not for WIC.

Many of the local agencies distributing CSFP product are grassroots community-based non-profit organizations.  In addition to food distribution, these agencies provide nutrition education and referrals for additional assistance such as food stamps, Medicaid, emergency food, low income energy assistance and the Earned Income Tax Credit.

The Administration proposal to lessen the negative impact of eliminating CSFP by providing transitional food stamps (for up to six months at $20/month) is not sufficient to safeguard the needs of CSFP’s vulnerable beneficiaries. First, under current law, elderly people are eligible for both programs, a recognition that both are supplementary programs for low-income seniors. Second, the transitional benefit is lower than the value (in retail terms) of the CSFP package to its recipients. Third, some of the CSFP clients will not be able to meet the regular food stamp rules. Unlike CSFP, which is based only on income, the Food Stamp Program applies resource tests for household eligibility. While the transitional benefit plan is a recognition that eliminating CSFP will have consequences for its clients, it does not provide a long-term solution to the harm the cuts entail.

4. The Community Food and Nutrition Program

The President's FY2007 budget proposal would give no funding to the Community Food and Nutrition Program (CFNP).  CFNP is one of the primary sources of federal support for anti-hunger and nutrition advocacy groups at the local, state and national level. This small program provides critical seed money for a range of local and state projects to alleviate hunger and food insecurity.  Funds coordinate existing private and public food assistance efforts; assist low-income communities in identifying and recruiting sponsors for programs; and develop innovative approaches to meet the nutritional needs of low-income families.

In FY 2004 and FY 2005 CFNP received funding of $7.28 million and $7.23 million respectively. During the FY2006 appropriations budget cycle, CFNP funding was, for the first time in decades, eliminated.