Letter on State Food Stamp Program Amendment

October 5, 2005

The Honorable Thad Cochran
Chairman, Senate Appropriations Committee
United States Senate
Washington, DC 20510

Dear Chairman Cochran:

As you engage in conference discussions on H.R. 2744, the FY 2006 Agriculture Appropriations bill, the US 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 strike Senate Section 746. The original section language prevented the Agriculture Department from improving the efficiency and cost-effectiveness of rural development and farm loan programs through competitive sourcing studies. Senate Amendment 1835 further exacerbated the section by modifying it to include a provision that would severely impair the ability of state agencies' Food Stamp Programs to provide timely, efficient services.

The amendment states that if a state agency's Food Stamp Program has 10% or more of itsadministrative 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 amendment 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.

Passing this amendment 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 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 section further accelerates this problem and disallows states to manage and plan accordingly.

The U.S. Chamber of Commerce strongly opposes Section 746 of the Senate FY 2006 Agriculture Appropriations bill and asks that you remove this language during conference negotiations.

Sincerely,

R. Bruce Josten

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