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INTRODUCTION TO SUBCOMMITTEE REPORT ON FOOD

STAMP PROGRAM EFFICIENCY

This report represents the final product resulting from 3 days of oversight hearings on Food Stamp Program efficiency held by the Federal Spending Practices, Efficiency, and Open Government Subcommittee on April 28, 29, and May 2.

The main concern of the subcommittee in initiating the oversight hearings was that the present Food Stamp Program administration hampered its efficiency and effective implementation of the congressional mandate of the Food Stamp Act. It was the specific intent of Congress through the Act to establish a nationwide policy to "safeguard the health and well-being of the Nation's population and raise levels of nutrition among low-income households."

More recent concerns of the recession and the plight of the newly unemployed have only served to heighten the subcommittee's suspicions that program objectives are not being achieved due to chaotic administrative morass. The recent phenomenal skyrocketing growth of the Food Stamp Program from 15.5 million participants in March 1974 to the most recent figure of 19.2 million in March 1975, further illustrate a definite need for congressional reevaluation of present statutes and regulations that perpetuate a complex and fragmented system.

The subcommittee finds no fault, and actually started with the premise, that the basic intent of the Food Stamp Program to help low-income households obtain a nutritionally adequate diet by supplementing their food budgets is certainly sound and worthwhile. Closer scrutiny of the mechanics for food stamp program administration, however, showed a system that did not work administratively, so, consequently, the intended benefits were not passed on to the people with the need.

The program, as illustrated by USDA quality control figures and a recent ĞAO study, has omitted many needy people, provided excess benefits to some recipients, and did not provide adequate benefits to others. How many eligible recipients forego attempts to become certified because of the "stigma” attached to the Food Stamp Program as just another "welfare handout” cannot be calculated. For other potentially eligible recipients, it is either not worth their while to attempt to participate in the program or they simply cannot afford the few dollars required to pay for their stamp allotment. The administrative roadblocks thrown up in front of potential recipients multiply the costs that hamper efficient implementation of the program.

In an attempt to remedy the administrative morass causing many roadblocks in the application process, the subcommittee found three glaring disincentive factors preventing many potentially eligible recipients from taking advantage of the program:

(1) Administrative problems cause delays from the time food stamp applicants initially request food stamp assistance and the time they actually receive such benefits;

(2) The process of applying to participate in the food stamp program causes many to not even bother applying since it is not worth their time or trouble; and,

(3) Administrative morass can be linked to the poor jobs the States are doing in executing the Outreach aspects of the program which insure that potential and eligible recipients are made

aware of and are encouraged to participate in the program. For a program designed as a valuable mechanism for preventing malnutrition among the poor and the elderly, the price of administrative costs due to inefficiency and errors has risen alarmingly. USDA figures show an overall nationwide error rate for program requirement areas of 18 percent for the 6-month period ending June 30, 1974. Further statistics relate that for the same period 11 percent of eligible recipients were overcharged for their stamps and 26 percent were undercharged. A total of 7 percent of all recipients were found to have been improperly denied benefits. Clearly the waste and redtape spawned by inefficient administration not only detracts from the program in the eyes of the taxpayer, but, more importantly, the big loser is the recipient.

A quick look at the program shows that Congress legislatively mandates the program, Agriculture (USDA) sets the regulations to conform to the legislative intent, and the actual implementation of the program is left in the hands of State welfare agencies to carry the program out on the local level. State agencies many times are left alone to interpret, digest, and enforce a never-ending stream of regulations and court decisions.

The end result is that the Food Stamp Program is plagued by fragmented and inconsistent regulations that cause program duplication and complexity. The duplication contributes to waste and an errorridden program that neither helps the recipient nor is conducive to efficient administration.

The subcommittee had to tread a thin line in probing the issue of food stamp administrative practices. While, hopefully, we would come up with recommendations making program administration more efficient, we were wary that in the process we did not sacrifice the benefits and rights of recipients. Perhaps a portion of the testimony from Marilyn Katz explains the subcommittee position best:

I do believe that if we streamline, we not only save money for the department, which in a sense is not my primary goal. My primary goal is to see that all of those who are eligible receive their proper entitlement. But I think the secondary goal of saving money by administering the program more efficiently within the State, in a sense, serves my goal, because it will not get this type of criticism that the Food Stamp Program now gets. It all boils down to providing benefits to the people who need them.

The subcommittee's report examining Food Stamp Program efficiency is the result of a new mandate established by the 94th Congress to "investigate the efficiency and economy of federal spending practices as applied to meet agency statutory charter and program objectives.” Jeff Kirsch of Food and Research Action Center said of the subcommittee's efforts that "the Food Stamp Program needs a fresh perspective. It needs to be looked at through different eyes. I think

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