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When a client is not permitted to waive the notice, the department must overissue stamps to a client who would prefer not to have them. And even when the client comes to the office to return them, we are prohibited from taking them back.

One more recommendation deserves special comment, and that is the recommendation that first-month benefits be prorated from the date of application rather than retroactive to the first of the month in which application is made.

As a Federal judge in Tennessee said, in a recent court suit, people cannot eat retroactively and the food stamp program was intended to provide benefits from the date of stated need. To provide a full month's benefits to an applicant who applies on the last day of the month as well as to one who had a need 30 days earlier produces an inequity that is hard to justify.

I recognize that some of these recommendations have already been incorporated in proposals that have been submitted here. I would urge this committee to study them and to incorporate them into the program once it is reauthorized.

Let me conclude this appeal for regulatory reform by sharing with you an experience that I had shortly after I became commissioner. To me it exemplifies the great need for regulatory reform. Last spring, an elderly woman came to my office in desperation because her food stamp allotment had been cut from $54 to $37 because of an increase in social security benefits. She was physically unable to supplement her income, yet there was no way we could increase her food stamp allotment to assist her with her needs.

Shortly after she left, into my office bounded a robust, husky man in his late thirties. He pounded on my secretary's desk, and demanded that we provide him some emergency food and get him food stamps within 3 days. He had quit his job several months earlier and was going to make it big in the country music field, he said.

In the meantime, while he was waiting for a recording company to buy his songs, he said he expected the Government to take care of him.

Senators, I don't think the food stamp program was conceived to support those who could find employment if they sought it. It was intended, I think, to take care of that little woman who came in desperation seeking more help.

I would like to see that country music aspirant come off the food stamp rolls so we could increase the allotment to the elderly woman who had no other options.

What I am calling for is reform that will enable us to target our assistance and to recognize regional differences in family income, in shelter deductions, and in utility costs.

The second reform we are calling for relates to administrative relief from excessive oversight and monitoring.

To illustrate my point, let me show you the Food Stamp Act you passed in 1977. It is 29 pages.

To implement this act, the USDA produced this volume of regulations [indicating].

USDA in fiscal 1979, sent us 629 letters to clarify those regula

Our workers use these volumes to apply and to implement both rules and regulations.

And here is our "fix-it" book, our corrective action plan to resolve all the problems that have gone wrong in the process of applying all of these rules and regulations.

Gentlemen, we need help.

Attached, you will also find a graphic illustration of the systems that impact on the food stamp program.

You will notice that it looks something like an octopus. It is obvious, I think, that this excessive oversight and monitoring has not produced an efficiently administered program, but instead has created a bureaucratic nightmare that produces tons and tons of paper and siphons off enormous amounts of time, energy, and money to comply with administrative directives. We must produce corrective action plans, management evaluation reviews, quality control samples, program reviews, et cetera, et cetera, et cetera. So all-encompassing have the checks on the program become that in March of last year, the Food and Nutrition Service published final regulations requiring States to establish an organizational entity within the State to coordinate the data generated by all audit and review activities. The data are to be analyzed and submitted to the Food and Nutrition Service for approval and monitoring as an open ended corrective action plan.

It is hard to believe that we have created a system to monitor other systems that evaluate the food stamp program.

While all of us applaud the emphasis on accountability at both the Federal and State levels, at some point excessive accountability becomes counterproductive.

In the process of reauthorizing this vital program, we have the opportunity to address this problem. Balance must be restored to the Federal-State relationship. To do this, however, will require a reversal of the recent trend of Federal agencies telling the States through regulations not only what to do but how to do it.

The extent to which the constant oversight, instead of bottom line accountability, is in effect, can again be illustrated by showing you very quickly a simple flyer that we proposed to send out in the State to remind food stamp recipients to report changes in their personal circumstances that would affect their food stamp allotment.

When I was showing this to the USDA's southeast administrator when he was visiting my office recently and was suggesting such a technique, I got a warning glance from a member of my staff to drop the subject.

After the meeting was over, the staff member came to explain why he suggested I not pursue our sending out this form.

He said, "We haven't gotten that drawing approved by USDA in Atlanta yet."

I was stunned to think that we could not of our own volition send out a simple reminder without getting clearance from Atlanta and sending the regional office 12 copies of it.

A small thing?

Yes. But all of these small things add up to a paternalistic attitude toward States. Every food stamp policy memorandum and bulletin must be individually approved by USDA. Because of the

frequency of regulatory changes, and the cumbersome approval process, many releases actually reach the field staff weeks after their intended effective date.

The administrative burden that we labor under was questioned last week by the head of the Tennessee General Assembly's Finance, Ways and Means Committee, when the chairman asked why the administrative costs in the food stamp program had increased 234 percent over the last 5 years, while the amount of food stamps issued had increased only 88 percent.

I answered his question by showing him these manuals of regulations. I really also should have added copies of the 375 reports that we sent to USDA last year.

Finally, while we are in the process of bringing about regulatory reform and administrative relief, I urge Federal officials to coordinate food stamp regulations with other aid programs. Since the same worker interviews applicants for both food stamps and aid to families with dependent children, he or she must know, and properly apply, two totally separate bodies of policy. Each program has its own income and assets limits.

Each program treats deductions in its own way. And each has its own work registration.

Establishing standardized deductions and income disregard for all related programs also would reduce client confusion, and certainly lower error rates.

So long as we treat the same resources in different ways, for different types of assistance, we can expect a percentage of benefit dollars to be allocated incorrectly.

The food stamp program has become the largest single assistance program in Tennessee. I thought it was the largest in the Nation at the time I prepared this, but the figures released by the Bureau of the Census suggest that medicaid is slightly ahead in number of recipients.

But if those census figures don't include Puerto Rico, it may still be the largest program in the Nation in number of recipients. And yet, it is not directed by the Department that is charged with meeting human needs.

While it would be certainly unpopular for me to suggest that the food stamp program ought to be transferred to Health and Human Services, I do believe that it should be coordinated with other public assistance programs. I believe that it can be coordinated, without a structural change, if the two departments are committed to this goal.

I strongly urge that such coordination be a mutual commitment of the two agencies.

Finally, I want to concur with those who have called for stability in the food stamp program, but only after the program has been reformed to make changes that are so critical if it is to continue to serve vital human needs.

To plead for stability of the program in its present form reflects a lack of knowledge of the problems that confront those who administer the program.

The reauthorization process affords the opportunity to incorporate into the program the features that have proven effective

through the years and to exclude or revise those features that have led to abuse and dishonesty.

Over the past year, I have asked the Tennessee food stamp staff to do more work and to do it more accurately and more timely than ever before. I am proud to say that they have responded in a magnificent way.

In return for their increased effort, I pledged to do everything within my power to bring about reforms in this program, not only to remove the frustrations that workers confront daily, but to enhance service to needy Tennesseans. That pledge to Tennessee workers is the reason for my presence here today.

If, during my public service, I can help to convince Federal officials to make these obviously needed changes, then I will have made a significant contribution to improving the quality of services to the needy of this country and to improving the efficiency and effectiveness with which those services are rendered.

Thank you.

The CHAIRMAN. Thank you for a very excellent statement.

Mr. Fredericks, I noticed your reaction to some of the things the lady was saying. I would judge you have a nodding acquaintance with her, because she was speaking and you were nodding. So would you proceed, sir?

STATEMENT OF JOHN FREDERICKS, ASSISTANT COMMISSION-
ER, FOOD STAMP DIVISION, NEW YORK DEPARTMENT OF
SOCIAL SERVICES, ALBANY, N.Y., ACCOMPANIED BY JOHN
HARWICK, FOOD STAMP DIRECTOR, STATE OF NEW YORK
Mr. FREDERICKS. Thank you.

Mr. Chairman and Senators and ladies and gentlemen, as assistant commissioner in the Department of Social Services in New York, I am able to observe the operation and effectiveness of the food stamp program firsthand. I am here today to share some of my observations with you and to give you my department's perspective on some of the modifications to the program which you might be considering.

First, let me assure you that we in New York are realistically aware of the need to eliminate fraud and abuse from all Government programs.

The state of the economy calls for, really demands, close scrutiny of the cost effectiveness of all programs.

In New York, we support any approach which will eliminate waste and fraud in our social programs. And, despite the proven success of the food stamp program in administering to the needs of hungry Americans, we are very aware that program modifications for fiscal year 1982 are inevitable. It is our expectation that Congress, in considering current proposals which might adversely impact on low-income households, the elderly, disabled, and the unemployed, will also do so with a continued sensitivity to human needs which it has demonstrated in the past.

Living in one of the wealthiest of nations, it is pretty hard to believe that hunger is a daily condition for millions of Americans. But in 1967, a study of hunger in America, conducted by the Field Foundation reveled beyond question that widespread hunger leading to malnutrition existed in certain economically depressed com

munities in the United States and in New York State. They didn't study it in New York State, but it is there.

Congressional response to these 1967 findings led to the enactment of numerous food assistance programs and an increased annual appropriation for the food stamp program. That food stamp program appropriation by 1980 amounted to over $9 billion.

To measure the effectiveness of this battle against hunger, a followup study was done in 1977 by the Field Foundation, and four of the doctors who participated in the first study then also participated in this one.

From May to September 1977, the team revisited the same depressed areas that they had visited in 1967. The effectiveness of the food assistance programs during the intervening years was highly evident and lead to positive conclusions in full support of the food stamp program, as well as Head Start breakfast and lunch programs, and the women, infant, and children program, known as WIC. Overall findings of the followup study led to two principal conclusions:

No. 1, while poverty remains evident, and unemployment, bad housing, and medical needs are persistent problems, the food stamp program is working and is an essential factor in keeping people from going hungry.

Significantly, the followup study uncovered far fewer examples of gross malnutrition than found 10 years previously.

The study credited the food stamp program and the other food assistance programs for this reversal.

In contrast to this positive finding-and this is No. 2-the study team also concluded that these efforts are still inadequate. Too many Americans still go hungry; no single assistance program can cope with the complexities of poverty.

Nevertheless, the 1977 report concluded that the food stamp program has become one of the most accepted and effective of the national entitlement programs and remains of critical importance to millions of Americans.

Despite the acknowledged importance of this program, a reduction in food stamp benefits is inevitable. The decisions made by this Congress will determine the future direction of this essential program and its impact on the nutritional well-being of over 21 million Americans. Congressional action to modify the program deserves careful consideration. Legislative action could adversely impact the one area where significant progress has been made: The entitlement of all Americans to a satisfactory level of nutritional well-being, and certainly if the cuts were not appropriate, it would be contrary to the public interest.

Without careful planning, cost savings obtained by reductions in this program may prove miniscule when offset by major health expenditures in the long run.

All available evidence indicates that food stamp benefits are effective in meeting the nutritional needs of households and are a preventive force against hunger and malnutrition.

This is particularly true in those areas which are hardest hit by unemployment and recession. But the food stamp program also exerts important pressure on the economics of these same areas by boosting retail food sales, farm income, and employment.

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