ma 0. Iltltliiiilflliij I _ ,_ ,gAf 1‘uflIw1fl;1i1E@ij[i1Ii1fj;fl1;1i[ufliflw llll C SCHOOL LUNCH AND RELATED CHILD NUTRITION PROGRAMS: PROGRAM CHANGES AND REDUCTIONS IN FUNDING ' ISSUE BRIEF NUMBER IB8lO45 AUTHOR: Jones, Jean Yavis Education and Public Welfare DiViSiOI'l THE LIBRARY OF CONGRESS CONGRESSIONAL RESEARCH SERVICE MAJOR ISSUES SYSTEM DATE ORIGINATED O3/I6/8l DATE UPDATED Ol/O6/82 (; FOR ADDITIONAL INFORMATION CALL 287-5700 OlO7 IB8lO45 UPDATE-Ol/O6/82 ISSUE DEFINITION the fOf l0, l98l, the Reagan Administration presented its revision of Administration budget. This budget included proposals and other child nutrition programs that would have approximately $2.1 billion (or 40%) below the ($5.26 billion). Child nutrition programs include the school lunch, breakfast, commodity assistance, child care food, summer food service, food service equipment assistance, and nutrition education and training programs (NET). Also included are the special supplemental food program for women, infants and children (WIC) and the special milk program (SMP). As a consequence of provisions enacted under the Omnibus Budget Reconciliation Act of l98l-OBRA (P.L. 97-35) funding for these programs will be reduced by approximately $1.5 billion below the FY82 policy base level. The majority of these cutbacks (approximately $1 billion) will occur as a result of changes in the school lunch program, which is the largest of the federally supported child nutrition programs. In September, l98l, the Administration presented revised FY82 budget requests to Congress, requesting cuts in FY82 appropriations, along with the cuts already enacted under P.L. 97-35 (OBRA). Among these was a proposed reduction of $310 million below the amount of funds available for the WIC program in FY81 and zero funding for the NET program. No further cuts for FY82 were proposed in full FY82 appropriations On Mar. FY82 Carter changes in school lunch reduced FY82 spending by projected FY82 policy base level other child nutrition programs. As finally enacted, (H.R. 4119-P.L. 97-103) provided $904.3 million for the WIC program, and $5 million for the NET program. Except for the WIC program, the FY82 appropriations levels for child nutrition programs were the same as estimated under the OBRA (P.L. 97-35). BACKGROUND AND POLICY ANALYSIS CHILD NUTRITION AND THE BUDGET PROCESS and sets years l982 which revises the FY81 budget spending for fiscal years On May 21, l98l, H.Con.Res. ll5, overall budget levels for Federal through 1984, was approved by the House and the Senate. This resolution included reconciliation directives to the authorizing committees to make program changes, and/or reduce authorizations in programs under their jurisdictions to accommodate the budget target levels set for each .of these years. Included in the FY82 overall budget target level and reconciliation directives to authorizing committees were assumptions just Yunder $1.5 billion in reductions below the FY82 policy base level child nutrition programs . of for Child nutrition legislation is under the jurisdiction of the Education and Labor Committee in the House, and the Agriculture, Nutrition and Forestry Committee in the Senate. In accomplishing the total amount of cutbacks required by reconciliation, the authorizing committees were free to make cutbacks in whatever program they chose, as long as the total target level for reductions by the committee was accomplished. The target level governed both direct spending (i.e., spending for so-called entitlement programs for which changes in legislative language are required) and authorizations (i.e., programs for which spending is set by appropriations within the confines of a maximum authorization level, which can be lowered to reduce funding). CRS- 2 IB81045 UPDATE-O1/O5/82 Reconciliation directives to the House Education and Labor Committee required this committee to reduce FY82 current policy base spending by a total of approximately $12.1 billion in programs under its jurisdiction. This total reflected a directive for reductions of $2.1 billion in direct spending and $10.1 billion in programs requiring authorizations. Child nutrition programs were considered under the category of direct spending. Out of the total $2.11 billion in direct spending cuts required by reconciliation and reported out by the Education and Labor Committee, approximately $1.1 billion were accomplished by cutting child nutrition programs below their FY82 policy base level. The changes in law to accommodate these cutbacks were to be effective only through FY84. The provisions affecting these changes were incorporated into an Omnibus Reconciliation bill (H.R. 3982) which was sent to the full House for consideration on June 19, 1981. In place of this bill, a substitute was passed by the House on June 26, 1981. The amended bill provided for permanent changes accounting for $1.58 billion in funding reductions below the FY82 policy base for child nutrition programs. Nutrition and Forestry Committee was directed to The Senate Agriculture, reduce spending by a total of $3.667 billion from the FY82 policy base in programs under its jurisdiction. Unlike the House reconciliation directive, child nutrition programs (except for the special milk and summer food service programs) were included under the category of authorized programs. Over $1.3 billion of the $3.2 billion required cuts in this authorization category were accomplished through permanent changes in child nutrition programs. Out of the $474 million in direct spending cuts required to be made by this committee for FY82, $242 million was accomplished through permanent cuts in the special milk program, and elimination of the summer food service program. The permanent changes in child nutrition programs to accommodate total FY82 cutbacks of approximatelyi $1.55 billion recommended by this Senate committee were incorporated into an Omnibus Reconciliation bill (S. 1377) which was passed with amendments by the Senate on June 25, 1981. An amendment was included allowing limited operation of the summer food service program in FY82 only. House and Senate conferees met on July 10 to resolve the differences between the child nutrition provisions in H.R. 3982 and S. 1377. Conference resolution of differences, providing for CBO—estimated funding reductions of just under $1.5 billion in FY82, was incorporated into the conference report on the Omnibus Budget Reconciliation Act of 1981 which was approved by both the House and Senate on July 31, 1981 and signed into law by the President on Aug. 13, 1981 (P.L. 97-35). The following table provides FY82 funding levels estimated by the USDA for each of the child nutrition programs under old law and new laws and as passed by the House and Senate on Dec. 15, 1981 for FY82 agricultural appropriations (H.R. 4119). Y CRS- 3 IB8lO45 UPDATE-Ol/O6/82 TABLE 1. FY82 child nutrition and related program funding (in millions) FY82 Old law appropriation H.R. 4119 (FY82 Omnibus Budget H.R. 4119 appropriation policy Reconciliation (as passed ' reduction base Act-P.L. 97-35 by House below old Programs (USDA)) (USDA) and Senate) law base (a) (a) (a) Child Nutrition Act: _1. School lunch total-cash $2,738.5 2,045.3 2,045.3 -693.2 Breakdown: sec. 4 (Basic) 890.8 425.0 425.0 -465.8 Sec. 11 (Special) 1,847.7 1,620.3 1,620.3 -227.4 2. School breakfast 413.2 335.0 335.0 — 78.2. 3. Commodities(a) 395.5 75.7 75.7 -319.8 4. Summer food 132.1 61.1 61.1 — 71.0 5. Child care food 391.0 276.9 276.9 —ll4.l 6. Equipment . assistance 15.0 0 0 - 15.0 7. State admin. » , expenses 44.5 44.5 44.5 no change 8. Nutrition studies 3.3 3.3 3 3 no change 9. Nutrition ” education 15.0 5.0(b) 5.0 -10.0 TOTAL child A ‘ nutrition $4,l48.l 2,846.8 2,846.8 -1,301.3 Related nutrition programs: 1. Special milk 121.9 28.1 28.1 - 93.8 2. Supplemental food (WIC and CSFP)(c) 998.0 1,017.0 934.1 - 63.9 GRAND TOTAL §5,25s.o 3,891.9 3,809.0 -1,459.0 (child nutrition and related) (a) (D) (C) Does not include $365.4 million in commodities expected to be) provided for the school lunch program to meet mandated commodity support level. These commodities are purchased with funds from the section 32 permanent appropriation which sets aside 30% of the gross customs receipts to be used for agricultural support activities such as surplus removal and food distribution. This level represents the amount of funds authorized for FY82 under P.L. 97-35. The Administration revised budget (September 1981) requested no funds for this program in FY82. The Administration has thus far provided no funding for this program. The $1.017 billion level represents the amount of funds authorized for FY82 under P.L. 97-35 for the WIC program. There is no authorization level for the commodity supplemental food program. The Administration revised budget (September 1981) requested $652.6 million for both supplemental fund (WIC) and commodity supplemental program for FY82. FY82 agriculture appropriations provided $904.3 million for WIC and $29.8 the special food (csrp) (P.L. 97-103) CRS- 4 IB8lO45 UPDATE-Ol/O6/82 million for CSFP. The total for these programs represents a 4% reduction from the amount agreed to by House and Senate conferees under an earlier conference agreement. The levels shown are the same as those provided for under the continuing appropriations resolution (H.J.Res. 370-P.L. 97-92) which pauthorizes funding through Mar. 3l, 1982, or until the enactment of full-year appropriations (Dec. 23, 1981). CRS- 5 IB8lO45 UPDATE+Ol/O6/82 SUMMARY OF MAJOR CHANGES BY PROGRAM School Lunch Program 1. Federal Meal Reimbursements Previous Law. Under both current and previous law, Federal subsidies for school lunches are provided in the form of cash reimbursement rates for each lunch. These are set by law and after FY81 were to be adjusted each Jan. 1 and July 1 to reflect increases in the consumer price index, series for food away from home. The amount of the reimbursement varies according to the family income of the participating child, although all lunches receive at least some basic reimbursement regardless of the child's family income. Under the provisions of P.L. 96-499 (Omnibus Reconciliation Act of 1980), the rate for lunches financed through Section 4, basic assistance, was set at 17.75 cents for each lunch, except in school districts where 60% or more of the lunches are served free and at reduced price. In such districts, a rate of 20.25 cents was provided for each such lunch. Beginning Oct. 1, 1981, if there had been no change in law, the provisions of P.L. 96-499 would no longer be operative, and the projected basic (or Section 4) reimbursement for all school lunches would have been 20.25 cents per lunch. Under section 11 of the National School Lunch Act, additional reimbursement is provided for free and reduced price lunches served to needy children. This rate was formerly set at 91.5 cents for each free lunch, and at 20 cents less -(71.5 cents) for each reduced price lunch. Under previous law, children from families with incomes at or below 125% of the poverty level ($11,375 family of four under current projections for FY82) were eligible to receive free lunches. Reduced price lunches were available to children from families with incomes between 125% and 195% (up to $17,745 for a family of four in FY82) of the poverty level. No meal charge is permitted for free lunches and a maximum of 20 cents could .be charged for reduced price lunches under previous law. served, required. child In addition to the cash assistance provided for each lunch commodity assistance, set at a mandated cash value per. lunch, is This assistance is provided without regard to the family income of the participating. Beginning Oct. 1, 1981, with no change in law, the value of commodity assistance would have beeni 15.75 cents per lunch. Under the provisions of P.L. 96-499, the rate for commodity assistance was set at 14.75 cents for the period July l-Sept. 30, 1981. commodity of the and 185% The Administration recommended that all Federal basic cash assistance for meals served to children lwith incomes above poverty level be eliminated. not The the with P.L. 97-35 provides for significant reductions in, but basic assistance for meals served to non-poor children. overall substantially lower P.L. 97-35. elimination of, new law sets new reimbursement rates that Federal subsidy provided for meals served to children from families incomes above 125% of the poverty level. In addition, reimbursement rates will be adjusted annually each July 1 beginning July 1, 1982, instead of semi-annually each Jan. 1 and July 1 as under previous law. Beginning Sept. 1, 1981 through June 30, 1982, the Section 4 basic assistance rate for all lunches is to be set at 10.5 cents for each lunch in school districts where for a. CRS- 6 IB8lO45 UPDATE-Ol/O6/82 less than 60% of the lunches are served free and at reduced price. An additional 2 cents will be added to the Section 4 rate for lunches served in school districts where 60% or more of the lunches are served free and atv reduced price. Section ll special assistance will provide an additional 98.75 cents, adjusted each July 1 beginning July 1,‘ l982, for each free lunch. The special assistance rate for reduced price lunches will be set at 40 cents less than the free rate, and the maximum meal charge allowed for reduced price lunches is raised from 20 to 40 cents. ‘ i Beginning July l, l98l, the commodity assistance rate will be set at ll cents for each lunch served, and this rate will be effective through June 30, l982, after which it will be adjusted for inflation annually each July l. The following table provides a comparison of the rates that will be provided under P.L. 97-35, with the rates under previous law. Previous law, is shown in twolcolumns because the provisions of P.L. 96-499 required a 2.5 cent cash reduction in the Section 4 basic assistance rate during FY81 (i.e., through Sept. 30, l98l). This reduction applies only in school districts in which less than 60% of the lunches were served free and at reduced price. P.L. 96-499 also mandated a 2-cent reduction in the commodity assistance rate through FY81. Beginning Oct. 1, l98l, if there had been no change in law, the 2.5-cent cash and 2-cent commodity reductions would have been restored. In the absence of new legislation, the cash rates shown effective for Oct. 1, l98l would have been operative through Dec. 31, l98l, iwhen the Jan. l inflation adjustment would have been made. The rates shown under P.L. 97-35 are effective through June 30, l982 (i.e., there ,is no January inflation adjustment). These rates will be adjusted for inflation July l, l982 and each July l thereafter. C; would be 2.5 cents higher, as shown in parens. CRS— 7 IB8lO45 UPDATE-Ol/O5/82 TABLE 2. Federal cash and commodity assistance rates for school lunches under previous law and P.L. 97-35 (amounts shown in cents per lunch) Previous law P.L. 97-35 P.L. 499 Previous law July l—Sept. Oct. l—Dec. =30, 1981 a/ 31, 1981 Type of assistance school year ending June 30, 1982 b/ Cash assistance a. Basic (Section 4) all lunches 17.75(2o.25) 20.25 1o.5(12.5) b. Special (Section 11) Free 91.5 91.5 98.75 Reduced price 71.5 71.5 58.75 c. Cash total Paid c/. 17.75(20.25) 20.25 lO.5(l2.5) Free _ 1o9.25(111.75) 111.75 1o9.25(111.25) Reduced price 89.25(91.75) 91.75 69.25(7l.25) Commodity assistance All lunches 14.75 16.75 ll.O Total cash and commodity assistance Paid c/ 32.5(35.0) 37.0 2l.5(23.5) Free 124.0(l26.5) 128.5 l20.25(l22.25) Reduced price 104.0(lO6.5) 108.5 80.25(82.25) a/ In school districts where 60% or more of the lunches are served free and at reduced price the P.L. 96-499 2.5 cent—reduction in Section 4 assistance does not apply. Thus, for those school districts, the rates shown for basic assistance, as well as the totals shown for cash assistance and cash and commodity assistance, These rates will be effective on the first day of month following enactment, or Sept. 1, l98l, whichever comes first. b/ In school districts where 60% or more of the lunches are served free and at reduced price, the Section 4 basic rate is increased by 2 cents. Thus, for those school districts, the rates shown for Section 4 and the totals for cash assistance and cash and commodity assistance would be 2 cents higher, as shown in parens. c/ "Paid" lunches are available to all children without regard to income. CRS- 8 IB8lO45 UPDATE-Ol/O6/82 2. Income Eligibility Changes Previous Law. Under previous law in FY82 and thereafter, the OMB guidelines, adjusted each year for inflation, would have been further updated through March for use by the Department of Agriculture in setting income criteria for free and reduced price meals. This March update provided that each July 1 the OMB guidelines be updated to reflect the increase in the consumer price index between the average of the previous calendar year and March of the year in which they are used.~ NOTE: Under the Omnibus Reconciliation Act of 1980 the March update of the guidelines for FY81 only was eliminated. ~ For FY82, the projected poverty level for a family of four, with the March update, would have been $9,100. Set by previous law at 125% of the poverty guideline, the income eligibility cutoff level for free lunches for a family, of four would have been $11,380, for the period Oct. 1, 1981-June 30, 1982- Reduced price lunch eligibility under previous law was set at l95% of the poverty guideline, or $17,740 for a family of four for the same period- Special hardship deductions for families with extraordinary medical, housing, and education expenses were allowed. The Administration proposed elimination of the March update of the poverty guidelines and the allowance for special hardship deductions. of the lower poverty guideline, with a standard income deduction (equal. to $85 per month or $1020 in FY82), adjusted for inflation. Eligibility for reduced price meals was to be lowered to 185% of the lower poverty level, with no provision for a standard deduction. P.L. 97-35. Under P.L. 97-35, the March update of the OMB income poverty guideline is permanently eliminated, as was proposed by the Administration.) This lowers the previous law poverty guideline for FY82 from approximately $9,100 with the March update to $8,450 without the March update, for a family of four. Rather than providing for a standard deduction to somewhat offset the impact of the lower poverty.guideline as proposed by the Administration, the House- and Senate—passed bills set eligibility criteria for free lunches at 130% instead of 125% of the poverty guideline (or $10,980 instead of $11,580 for a family of four) as proposed by the Administration. This is the ,same income level as the gross income level for food stamp eligibility agreed to by conferees in the House— and Senate-passed Food Stamp Reconciliation Conference. Beginning July 1, 1983, the income eligibility level for free lunches will be permanently set at the ‘same level as the gross income eligibility level for food stamps. ‘As recommended by the Administration, and by both the House- and Senate-passed bills, eligibility for reduced price lunches will be lowered by setting the criteria at 185% of the poverty guideline (without the March update) instead of 195% of the poverty guideline (with the March update). This will lower the FY82 income eligibility cutoff level for reduced price lunches from $17,740 under previous law to $15,630 for a family of four. In addition to changes in income eligibility criteria, there will also be changes in procedures for determining and verifying income. Income reported on applications will have to reflect current income, projected for the year in which benefits are provided. In addition, local officials will be required to verify income contained in the application as prescribed by the Secretary, and, as a condition of eligibility, the social security numbers ofW all adult members of a household applying for lunches will have to be furnished as part of the application. The income eligibility established for Eligibility for free meals was to be maintained at 125%. ‘discourage CRS— 9 IB8lO45 UPDATE-Ol/O6/82 However, would be by school the applications. for free lunches, reduced price lunches will have to be shown on the disclosure of the income eligibility level prohibited on any applications or descriptive material provided officials to families applying‘ for free or reduced price lunches to false income reporting. Regulations under previous law require that the income eligibility levels for both free and reduced price eligibility be included on the application or with ‘descriptive material provided to applicants. In addition, the Secretary will be specifically required to prescribe appropriate documentation of income that would have to be submitted with all applications, and the Department will be required to conduct a pilot study on income verification. eligibility those set The following table compares poverty guidelines and income levels for free and reduced price lunches under previous law with under P.L. 97-35. CRS—10 IB81045 UPDATE-01/06/82 TABLE 3. Projected poverty guidelines and income eligibility — previous and P.L. 97-35 for 1981-82 school year 3 . Poverty guidelines Family size Previous (harch update) P.L. 97-35 (No March update) 1 4,660 4,310 2 6,140 5,690 3 7,620 7,070 4 9,100 8,450 5 10,580 9,830 6 12,060 11,210 7 13,490 12,590, 8 14,970 13,970 Income Eligibility Criteria Free Reduced Price Family Previous(a) .L. 97-35(b) Previous(a) P.L. 97—35(b) 1 5,830 5,600 9,090 7,970 2 7,680 '7,400 113970 10,530 3 9,530 9,190 14,860 13,080 4 11,380 10,990- 17,740 15,630 5 13,230 12,780 20,630 18,190 6 15,080 14,570 23,520 20,740 7 16,860 16,370 26,310 23,290 8 18,710 18,160 29,190 25,840 a/ Previous = Projected FY82 OMB guidelines plus March update X 125% for free and X 195% pl P.L. for reduced price. 97-35 = Projected FY82 OMB guidelines for free and x 185% for reduced price. (no March update) x 130% CRS-ll IB8lO45 UPDATE-Ol/O6/82 3. Sponsor Limitations Previous Law. Under previous law all public and private nonprofit schools and residential child care institutions meeting the nutritional requirements and other requirements of the Act were eligible to receive federally mandated cash and commodity assistance. The Administration’ proposed that. private schools charging tuition in excess of $1,500 be excluded from, participation. Under previous law, commodities were available to schools not participating in the regular school lunch program at a level set by the Department of Agriculture, but were not mandated and no cash was available to these so—called "commodity only" schools. Requirements for receipt of commodities for such schools were less stringent than those for the regular school .lunch rprogram. private iln by and P.L. 97+35. As provided under P.L. 97-35, participation by schools charging annual tuition in excess of $1,500 would be prohibited- addition, P.L. 97-35 expands support for "commodity only" schools mandating commodities valued at the equivalents basic assistance cash commodity support rates for lunches served through the regular school lunch program and allows up to 5 cents of this value to be provided in’ cash for processing costs. "Commodity—only" schools will also be eligible to receive special assistance cash support for free and reduced price lunches. Such schools will, however, have to meet_ all of the nutritional, income eligibility and other requirements mandated for participation’ in regular school lunch programs. School Breakfast Program \ Previous Law. Under previous and new law, a basic Federal payment is provided for each breakfast served through this program regardless of the income of the child. An additional payment is provided for breakfasts served free and at reduced price to children from families meeting the income criteria for free and reduced price school lunches. rThe rates for such breakfast payments are set by law and under previous law were to be adjusted semiannually for inflation. Beginning July l, 1981, under previous law, the projected rates for breakfasts would have been as follows: 16.25 cents in basic assistance for all breakfasts and an additional 40.75 cents in special (for a total of 57.0 cents) and 30.25 cents in special assistance for reduced price breakfasts (for a total of 46.5 cents). For schools determined by State agencies to be in severe need a higher "severe need rate" is provided for free and reduced price breakfasts. Under previous law this rate would have been 69.25 cents for each free breakfast and 5 cents less for each reduced price breakfast, beginning July l, 1981. Income eligibility for free and reduced price breakfasts is the same as that set for the school lunch program. Under previous law eligibility for severe need reimbursements was to be determined by the State education agency and was to include, at least, those schools in a State where a breakfast program is mandated by State law and where 40% or more of the school lunches are served free and at reduced price. The Administration proposed elimination of assistance for free breakfasts ,all Federal subsidies for breakfasts served to children from families with incomes above l85% of the poverty line. P.L. 97-35. The provisions in P.L. 97-35 will divide breakfast reimbursements into three separate categories - paid, free and reduced price. CRS—l2 IB8lO45 UPDATE-Ol/O6/82 The paid rate will be set at 8.25 cents, approximately hal the rate provided under pre’ious law. Total ass stance for free breakfasts ill be maintained at the same rate as under previous law (57.0 cents) and reduced price assistance will be lowered from the previous law total of 46.5 cents per breakfast to the greater of either one-half the free rate (28.5 cents) or 30 cents less than the free rate. The maximum meal charge allowed for a reduced price breakfast will be set at 30 cents. In addition, severe need assistance will be restricted to schools in which 40% or more of school lunches are served free and at reduced price. Schools qualifying for severe need reimbursements because of a State law requiring a breakfast‘ program will continue to qualify for such reimbursements through June 30, 1983, unless the State legislature meets biennially, in which case such schools will continue to qualify through June 30, l984. Also, the severe need rate of reimbursement for reduced price breakfasts will be set at 30 cents less than the free rate (i.e., 38.5 cents) instead of 5 cents less than the free rate (i.e., 53.5 cents) as provided under previous law. All rates will be adjusted annually instead of seminannually for inflation, and changes affecting school lunch program income eligibility for free and reduced price meals will also apply to eligibility for free and reduced price breakfasts. CRS-l3 IB8lO45 UPDATE-Ol/O6/82‘ TABLE 4. School breakfast cash reimbursements (in cents) 1981-1982 school year previous and new law effective July 1, l98l~June 30, 1982 Regular Severe need Previous P.L. 97-35 2/ Previous 1/ P.L. 97-35 2/ Paid 16.25 8.25 16.25 8.25 Free 57.0 57.0 68.5 68.5 Reduced 46.5 28.50 63.5 38.5 11 Previous = rates that would be effective July 1, 1981 through Dec. 31, 1981. 21 P.L. 97-35 = rates that will be effective on Sept. 1, 1981. /——-§. CRS-l4 IB8lO45 UPDATE-Ol/O6/82 Child Care Food Program Previous Law. Under the child care food program, Federal payments are provided to assist in the cost of serving breakfasts, lunches, supper and meal supplements (or snacks) to children in child care centers and family and group day care homes. Centers eligible to receive Federal meal reimbursements include public and private nonprofit organizations and for—profit organizations that receive day care funds under title XX of the Social Security Act. For child care centers, payments for breakfasts and lunches (or suppers) are the same as those provided under the school breakfast and lunch programs. A separate meal payment rate is set for snacks. Payments are divided into basic and free and reduced, as is the case with the school lunch and breakfast programs. Under previous law, the type of payment varies either by the individual family, incomes of the children participating, or in most cases (at the option of the center) according to the percentage of children in each center with incomes at or below 195% of poverty. This latter (tiering) system provided the total free rate (i.e., basic plus free rates) for all meals served in centers in which two—thirds or more of the children are from families with incomes below l95% of poverty; the total reduced price rate for all meals served in centers in which between one-third and two—thirds of the children are from families below that income level and the basic rate for all meals served in centers where less than one-third of the children are from families with incomes below l95% of poverty. In addition to the regular reimbursement rate system, there is also a special reimbursement rate and administrative payment provided for family and group day care homes. Under previous law the per meal reimbursement rate for meals served in family and group homes is approximately the same as the free rate for meals served in child care centers, with no variance for group or individual family incomes. Beginning July l, 1981, the reimbursement rate for snacks in child care centers was projected at 5.5 cents for paid snacks, 22.5 cents for reduced price snacks and 30.25 cents for free snacks under previous law. (NOTE: These rates reflect a permanent 3—cent reduction in the adjusted rates effected under P.L. 96-499, the Omnibus Reconciliation Act of l980). The projected reimbursement rates for meals served in family and group day care under previous law were as follows: breakfasts; 54.75 cents; lunches and suppers: lO8.25 cents; supplements: 32.75 cents. The Administration proposed eliminating all Federal assistance) for supplements (i.e., snacks) served through the child care food program. P.L. 97-35. The new law eliminates the current provision allowing a three-tier system of group eligibility for meal reimbursements in child care centers. All reimbursements would be based on the family income of the individual child receiving the meal. In addition, meal reimbursement will be limited to meals served to children age l2 and under with an exception for handicapped children of all ages, and migrant children up to age l5. Fates set for lunches and breakfasts will be reimbursed at the same lowered rates as set for these meals for school food programs. The subsidy for snacks will be lowered from a projected rate of 5.5 cents to 2.75 cents for paid snacks; from 30.25 cents to 30.0 cents for free snacks and from 22.5 cents to l5.0 CR8-l5 lB8lO45 UPDATE—Ol/O6/82 cents for reduced price snacks. No meal or supplement reimbursement will be available to the children of family or group home day care providers, if their family income exceeds l85% of poverty. Special meal and supplement reimbursements and administrative payments for family and group day care homes will be lowered by lO% below the level existing at the time of implementation of the provisions. In reducing administrative payments for such homes by lO%, the Secretary will be permitted to reduce payments made to agencies with large numbers of programs to a greater degree than for agencies with smaller numbers of programs. In addition, a provision was added that will restrict child care food program participation by for-profit organizations receiving funds under Title XX of the Social Security Act. Under this restriction, for—profit programs will only be able to participate in the child care food program if Title XX funds are received for at least 25% of the children. The income eligibility changes for school lunches will apply to child care food program eligibility. CRS-16 IB81045 UPDATE-Ol/06/82 TABLE 5. Child care reimbursement rates under current law and H.R. 3982, as agreed to in pconference (in cents) Previous P.L. 97-35 (7/1/81-12/31/81) (through June 30, 1982) Breakfasts Paid 16.25 8.25 Free 57.0 57.0 Reduced 46.5 28.25 Lunch or Supper (cash) a/ Paid 20.25 10.5 Free . 7 111.75 109.25 Reduced 91.75 69.25 =Commodity assist. 14.75 b/ 11.0 Snacks 1 Paid 5.5 2.75 Free 30.25 30.0 Reduced 22.5 15.0 a/ Temporary reductions in cash assistance for school lunches effected under P.L. 96-499 did not apply to the child care food program. b/ The commodity reduction in P.L. 96-499 was applied to the child care food program. The rate shown is only applicable through Sept. 30, 1981, after which it would be increased to 16.75 if no further change in law were implemented. CRS-l7 ‘IB8lO45 UPDATE-Ol/O6/82» Summer Food Service Program Previous Law. The summer food service program provides Federal funds for meals served during the summer months to children through schools or public and private nonprofit service institutions (including residential summer camps) located in "areas in which poor economic conditions exist." Under previous law these areas were defined by law to be areas in which at least one—third of the children are eligible to receive free or reduced price lunches. Meals are served free to all participants and, except for summer camps and migrant programs, are limited to two meals a day (lunch and either breakfast or a snack). Summer camps and migrant programs may serve up to four meals a day if they have the administrative capacity and meal services do not coincide or overlap. Special payment rates are set for meals served through the summer food program, and these are adjusted each January for inflation. For the summer of 1981 the reimbursement rates are as follows: l24.25 cents for lunches and suppers; 69.25 cents for breakfasts; and 32.5 cents for snacks. Both the Administration and the Senate—passed legislation would have.terminated the summer food service program although the Senate proposed termination after FY82. ' P.L. 97-35. As agreed to by the conferees, P.L. 97-35 will continue the program, but restrict sponsorship to public and private nonprofit school food authorities, local municipal or county governments and public .and private nonprofit residential summer camps serving areas in which at least one—half of the children are income—eligible to receive free or reduced price lunches. In addition, it specifies that local, municipal or county governments would be eligible for Federal payments only if the programs are operated directly by such governments. Special Milk Program Previous Law. Under previous law the special milk program, provided Federal funds to public and private nonprofit school and child care institutions to offset the cost of milk served to children that was separate from, or in addition to, that which was included as part of federally subsidized school lunches or breakfasts. Federal payments for regularly priced milk are provided in the form of reimbursements for each half-pint of milk served and vary according to whether the participating outlet has a school lunch or breakfast program. In addition, free milk is available to children if the family income of the child is at or below the income eligibility level established for free lunches, and the school chooses to offer free milk. Under previous law the reimbursement rate for regular priced milk in schools that have Federal meal service programs was set at a flat rate of 5 cents per half pint. For schools that do not have a federally subsidized meal service program, regularly priced milk is reimbursed at a set rate that is annually adjusted for inflation. For FY82, the projected rate of reimbursement for such milk is 9.5 cents per half pint. Under previous law free milk is reimbursed at the full net daily cost in all participating schools, regardless of whether or not there is a federally subsidized meal program. The Administration, as well as the House and Senate, proposed that this program be limited to schools which do not have federally subsidized CRS-l8 IB8l045 UPDATE-01/06/82 meal programs. P.L. 97-35. The newp law eliminates Federal special milk program‘ reimbursement for milk served in schools or institutions with federally‘ subsidized meal programs, as was recommended. This change effectively eliminates participation in the special milk program by approximately 90% of schools and institutions participating in FY81. Special Supplemental Food Program for Women, Infants and Children (WIC) Previous Law. The WIC program provides Federal funding for specified nutritious supplemental foods for pregnant, postpartum and breastfeeding women and infants and children up their fifth birthday, who are determined to be at nutritional risk because of inadequate nutrition and income. Foods are provided in the form of food packages or vouchers for specified food items purchased through local retail outlets. Income eligibility for participation is determined by the Secretary, and made in conjunction with nutritional risk criteria. However, under the law, no persons with incomes exceeding the income level for reduced price school lunch eligibility (previously 195% of the poverty level) may receive benefits under this program. Under previous law program funding is subject to an authorization that provided for such sums as may be necessary through FY84, but which is limited to the~ amount appropriated, regardless of the number of eligible participants. (This is unlike the other . major child nutrition programs which authorize appropriations in the amount necessary to serve meals to all those eligible to participate.) For FY81, approximately $944 million was available for the WIC program (this included approximately $44 million of unspent funds from FY80). In March 1981, the Administration proposed $720 million in appropriations for this program for FY82, which would have reduced participation by approximately 675,000 women, infants and children. P.L. 97-35. P.L. 97-35 eliminates the open-ended authorization for "such sums as may be necessary" and provides for an authorization level of $1.017 billion for FY82, $1.060 billion for FY83 and $1.126 billion for FY84. In addition, due to the change in the income cutoff level for reduced price school lunch eligibility, the WIC income eligibility cutoff level is lowered ‘to 185% of the OMB poverty level ($15,630 for a family of four). Continuing appropriations for FY82 (H.J.Res. 370-P.L. 97-92) set WIC spending at $904.3 million and CSFP spending at $29.8 million. This continuing resolution is effective through Mar. 31, 1982 unless permanent appropriations legislation (H.R. 4119) is enacted. H.R. 4119, as passed by the House and Senate on Dec. l5,‘l98l, provides these same amounts for FY82. This bill is awaiting the President's signature. These amounts represent a 4% (or $38.9 million) reduction from the spending levels originally agreed to by House and Senate conferees on H.R. 4119, to maintain a participation rate of 2.1 million recipients. In September 1981, the Administration recommended revised appropriations for the WIC program set at 12% below the level recommended in March 1981- The $633.6 million request for appropriations for WIC would have reduced funding for the program by over $310 million below the FY81 program level. The Administration estimated that approximately 800,000 of the current 2.2 million participants would have been dropped from the program at their requested funding level. Full year appropriations (P.L- 97-103) provided $904.3 million in new appropriations for the WIC program for FY82. with USDA estimated unspent FY81 funding of $41 million also available for FY82, this CRS-19 IB8lO45 UPDATE-Ol/O6/82 would bring the full FY82 funding level for WIC to $948.3 million. This level is expected to provide an average participant level of approximately 2 million women, infants and children Nutrition Education and Training Previous Law. This program provides grants to State educational agencies for comprehensive nutrition education and training programs. The programs are to teach children about the nutritional value of foods and the relationship between food and health. The programs are also to provide nutrition education and training for teachers and food service personnel. Under previous law the authorization for this program was set at $15 million for each year through FY84. P.L. 97-35. The new law lowers the authorization for this program from $15 million to $5 million for each of fiscal years 1982 through 1984. Revised Administration Request; September 1981. The Administration requested that no funds be appropriated for the Nutrition Education and Training program in FY82. In response to continuing appropriations which had provided $5 million for the program, the Administration requested a deferral of all spending for this program through the period of any continuing appropriations resolution. As of Jan. 5, 1982, no funds had been provided to the States for nutrition education and training. Full year appropriations (P.L. 97-103), enacted Dec. 23, 1981, provided $5 million for the NET program for FY82. if the Administration does not wish to spend these funds, some Administration notice of this will be required for congressional consideration. As of this date, the USDA request for NET funds, for distribution of NET funds to the States, is being considered by OMB. Equipment Assistance Previous Law. Under the food service equipment assistance program, grants were made to States to supply schools with equipment for storing, preparing, transporting and serving food. Authorizations for this program were set at $30 million for FY82, $35 million for FY83, and $40 million for each succeeding fiscal year. In addition, the Secretary was required to make up to $4 million available for equipment assistance for child care food programs. The Administration proposed elimination of food equipment assistance as did the House— and Senate-passed bills. P.L. 97-35. The new law eliminates all Federal funding for equipment assistance, including equipment assistance for child care food programs and no appropriations have been provided for these purposes. LEGISLATI9N P.L. 97-35, H.R. 3982 Omnibus Budget Reconciliation Act of 1981. Provides reconciliation pursuant to section 301 of the First Concurrent Resolution on the Budget for FY82 (H.Con.Res. 115). Includes permanent changes in law that would reduce funding for child nutrition programs by approximately $1.58 billion in FY82. cRs—2o. IB8l045 UPDATE—Ol/06/82 Reported to the House from the Committee on the Budget (H.Rept. 97-158) June 19, 1981. Called up by special rule June 25, 1981. Motion to recommit to Committee on Budget rejected in House June 26, 1981. Passed House, amended (substitute text of H.R. 3964) on June 26, 1981. House and Senate conferees agreed on child nutrition provisions in this bill at a mini-conference held on the child nutrition portion of reconciliation on July 10, 1981. Conference agreement approved by the House and Senate on July 31, 1981. Bill signed into law on Aug. 13, 1981 (P.L. 97-35). ‘ P.L. 97-51, H.J.Res. 325 . Provides continuing appropriations for FY82 which includes extension of funding for child nutrition and related food programs through Nov. 20, 1981. Introduced Sept. 11, 1981; referred to Committee on Appropritations. Reported Sept. 14, 1981 (H.Rept. 97-223). Passed House Sept. 16, 1981. Reported, amended, by Senate Committee on Appropriations Sept. 23, 1981. Passed Senate, amended, Sept. 25, 1981. Conference report 97-260 filed in House Sept. 30, 1981. Signed into law Oct. 1, 1981. P.L. 97-92, H.J.Res. 370 L . Provides continuing appropriations for FY82 through Mar. 31, 1982. Passed Senate Dec. 11, 1981. Passed House Dec. 10, 1981 (H.Rept. 97-372). Signed by President Dec. 15, 1981. P.L. 97-103, H.R. 4119 Makes appropriations for Agriculture programs including child nutrition and related food assistance programs. Introduced July 9, 1981; referred to Committee on Appropriations. Reported July 9, 1981 (H.Rept. 97-170 and H.Rept. 97-172). Passed the House, amended, July 27, 1981. Reported from Committee on Appropriations with amendments on Oct. 23, 1981 (s.Rept. 97-248). Passed Senate, amended, Oct. 30, 1981. Conference agreement reached Nov. 4, 1981. 1981. Signed by the President on Dec. 23, 1981. H.Con.Res. 115 (Jones, J.) Revises the FY81 congressional budget and sets forth the budget for fiscal years 1982, 1983 and 1984. Includes reconciliation directives and recommendations to authorizing committees that assume reductions of $1.5 billion in budget authority and outlays in FY82. Introduced Feb. 24, 1981; referred-to Committee on Budget. Reported to House from Committee on the Budget, (H.Rept. 97-23) on Apr. 16, 1981. Considered in the House Apr. 30, May 1, May 4-6. Passed House May 7, amended (Gramm-Latta substitute). Considered and passed with amendment by Senate May 12, 1981. Conference reports filed in House and Senate May 15, 1981 (H.Rept. 97-46 and S.Rept. 97-86). House receded and concurred in certain Senate amendments with an amendment May 20, 1981. Senate agreed to House amendment May 21, 1981. S. 926 (Helms, by request of the Administration) Provides for elimination of Federal cash and commodity reimbursements for meals served to children paying the regular price; cuts reduced price reimbursements by one-half; reduces the cash reimbursements for free meals in school districts serving less than 60% of their meals free or at reduced price by 2.5 cents; reduces commodity assistance for free meals by 2 cents per meal; lowers eligibility for reduced price meals; substitutes annual for semiannual adjustments of reimbursement rates; eliminates snack reimbursements under the child care food program; eliminates the summer foodg service program; eliminates Federal assistance for food service equipment_and nutrition education and training; restricts the special ‘milk program to schools without federally subsidized meal programs; and lowers the Passed House and Senate, with amendments on Dec. 15,. IB8lO45 CRS-21 UPDATE-Ol/O6/82 million to $200 referred approximately 1981; authorization for funding of the WIC program by below the level appropriated for FY81. Introduced Apr. 8, Committee on Agriculture, Nutrition and Forestry. S. 1377 (Domenici) Omnibus Budget Reconciliation Act of 1981. Provides reconciliation pursuant to Title III of the First Concurrent Resolution on the Budget for FY82 (H.Con.Res. 115). Includes permanent changes in the National School Lunch and Child Nutrition Act that would reduce funding for child nutrition programs by approximately $1.55 billion in FY82. These changes were included in S. 1254 which was reported favorably by this committeeg and was incorporated into the Senate Budget Committee reconciliation bill. Reported to Senate from Committee on the Budget (S.Rept. 97-139) June 17, 1981. Considered in Senate June 22 through June 25, 1981.. Passed Senate with amendments June 25, 1981. House and Senate conferees agreed on the child nutrition provisions in this bill and H.R. 3982 on July 10, 1981. Conference agreement approved by House and Senate on July 31, 1981 and bill signed into law (P.L. 97-35) on Aug. 13, 1981. CHRONOLOGY or EVENTS 12/23/81 -+ H.R. 4119 signed by President (P.L. 97-103). 12/15/81 —- House and Senate agreed to amended FY82 Agriculture, Forestry and related agency appropriations (H.R. 4119). 12/15/81 —— H.J.Res. 370 signed by President (P.L. 97-92). -- House and Senate passed H.R. 4119, with amendments. 12/ll/81 —- H.J.Res. 370 passed House and Senate and enrolled. l1/O4/81 —— House and Senate.conferees reached agreement on H.R. 4119. 10/30/81 -— H.R. 4119 (FY82 Agriculture Appropriations) passed with Senate amendments. 10/23/81 -— H.R. 4119 (FY82 Agriculture Appropriations) reported to Senate from senate Committee on Appropriations, amended (S.Rept. 97-248). - H 10/Ol/81 -- H.J.Res. 325 presented to the President-P.L. 97-51. O9/30/81 —— House and Senate agreed to amendments to H.J.Res. 325. 09/25/81 -- H.J.Res. 325 referred to Senate and passed, amended. 09/16/81 -— H.J.Res. 325 passed House. 09/14/81 —— Continuing FY82 appropriations bill (H.J.Res. 325) reported to House by Committee on Appropriations. O8/13/81 —— President signed Omnibus Reconciliation Act of 1981, enacting permanent cutbacks in child nutrition programs estimated at $1.5 billion in FY82. O7/31/81 Q7/27/81 07/10/81 01/09/81 06/26/81 05/25/81 06/25/81 05/19/81 06/17/81 05/21/81 05/20/81 05/15/81 05/12/81 05/07/81 04/16/81 U.S. Congressional Budget Office. child nutrition policies in the 19808. Washington U.S. Library of Congress. summaries and legislative histories of: CRS—22 IB8lO45 UPDATE-01/05/82 -House and Senate voted to approve the conference report on the Omnibus Reconciliation Act of 1981. H.R. 4119 passed House, amended. House and Senate conferees agreed to resolve differences in child nutrition legislation included in H.R. 3982, as passed by the House, and S. 1377, as passed by the Senate. House Committee on Appropriations reported appropriations bill for Agriculture, Rural Development and Related Agencies (H.R. 4119), H.Rept. 97-172. H.R. 3982 passed House, amended. Motion to recommit H.R. 3982 to Committee on the Budget with instructions rejected. H.R. 3982 called up to House by special rule. S. 1377 passed Senate, amended. H.R. 3982 (reconciliation bill) reported to House from Committee on the Budget. S. 1377 (reconciliation bill) reported to Senate tfrom Committee on the Budget. Senate agreed to House amendment on H.Con.Res. 115. House agreed to Conference report on H.Con.Res. 115, and receded and concurred in certain Senate amendments With an amendment . Conference reports on H.Con.Res. 115 filed by House and Senate. H.Con.Res. 115 passed by the Senate, amended. H.Con.Res. 115 passed House, amended. ‘H.Con.Res. 115 reported to House from Committee on the Budget. ADDITIONAL REFERENCE SOURCES Feeding children: Federal Budget Issue Paper. May 1980. icongressional Research Service. .Brief school lunch program, school breakfast program, special supplemental food program (WIC), child care food program, summer food service program, nutrition education and training, and special milk program. CR8-23 IB8lO45 UPDATE-O1/O6/82 Typed reports of legislation in the Washington, Feb. 5, Child nutrition programs. Summary 96th Congress by Jean Yavis Jones. 1981. CR8 Report’81~41 Reagan Administration proposed reductions in funding for child nutrition programs by Jean Yavis Jones Washington Mar. 13, 1981. Typed report Special Supplemental Food Program for Women, Infants and Children (WIC) by Jean Yavis Jones. Washington June 19, 1981, updated Oct. 13, 1981. Typed report. description, history and issues ‘2, 1981. .4. Milk Program: Mar. 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