Letter on State Agency Food Stamp Programs

October 19, 2005

The Honorable Jerry Lewis
Chairman, House Appropriations Committee
United States Senate
Washington, DC 20510

Dear Chairman Lewis:

The U.S. Chamber of Commerce, the world's largest business federation representing more than three million businesses and organizations of every size, sector, and region, urges you to oppose Representative Rosa DeLauro's (D-CT) motion to instruct conferees to H.R. 2744, the FY06 Agriculture Appropriations bill on state agency Food Stamp Programs. The motion to instruct conferees is intended to support language added to the Senate version of the bill that severely impairs the ability of state agencies' Food Stamp Programs to provide timely, efficient services for their public customers.

The language added in the Senate declares that if a state agency's Food Stamp Program has 10% or more of its administrative costs under contract, the federal government will not reimburse them at the rate of 50% as currently mandated by the Food Stamp Act of 1977. This language would increase the cost to states (and therefore the Federal government), reduce utilization of innovative solutions from the private sector, and diminish the probability of integrating multiple state services for efficiency and ease of use by public customers.

This language would have the effect of forcing some states into instantaneous violation, and to retain Federal reimbursement states would be forced to in-source administrative work. Contracting out administrative activities at state Food Stamp Programs has been shown to save states millions of dollars a year through a reduction in direct costs as well as increases in efficiency of the services. State workforces, similar to the federal workforce, are already bracing for a wave of retirements and the loss of significant human capital and institutional knowledge. This provision further accelerates this problem and disallows states to manage and plan accordingly.

The U.S. Chamber of Commerce strongly opposes the DeLauro motion to instruct conferees to H.R. 2744, the FY06 Agriculture Appropriations bill and urges that the underlying language be dropped in conference.

Sincerely,

R. Bruce Josten

Executive Vice President, Government Affairs
U.S. Chamber of Commerce