I would conclude that it is not going to be changed. There is nothing in this bill that would change, and, therefore, the language would still stand as in the basic law. I think that is the chairman's point.

The CHAIRMAN. All of this would come from the Treasury and not from any earmarked funds. As you know, some are earmarked to be used for certain purposes designated by the Congress, and here it is specifically stated that the authorization will come from the general funds.

Secretary FREEMAN. This is in the basic law as Senator Holland has made clear has not been so interpreted, and the current budget proposals would finance part of the school milk program from section 32 funds and that usually is before the Appropriations Committee. I do not think that it is before this committee, Senator Holland, because I think that language stands, and I do not think that S. 3467 will change it.

The CHAIRMAN. Now, Mr. Secretary-Are you through, Senator Holland?

I think that when you were here the other day, you discussed the pilot program?

Secretary FREEMAN. Yes, sir.

The CHAIRMAN. And that (1) $1 million would be appropriated as additional to the Department for administrative expenses, and (2) $6 million per year for the pilot breakfeast program for the schools within poor economic areas and those who must travel long distances, which would be for fiscal years 1967, 1968, 1969, and (3) $12 million for a permanent program for nonfood assistance to schools drawing attendance from areas in which poor economic conditions existed, and (4) $3.7 million for general administration, including provisions for use of up to 12 percent of the funds appropriated for the various programs for administrative expenses of State and agencies. You recollect this?

Secretary FREEMAN. Yes.

The CHAIRMAN. I did not hear you mention it in your statement. Secretary FREEMAN. It will be. I have not quite finished my testimony.

The CHAIRMAN. All right. I am sorry. I am sorry. Proceed, please. Secretary FREEMAN. Going now to page 9. 5. Extension of the school-feeding program to preschool activities which are operated as part of the school system

New authority to provide low-priced lunches will not be required, for section 11 of the present act is adequate for this purpose. However, if we are to reach the 1.5 million youngsters who can benefit from this program, new appropriations will be needed.

Senator HOLLAND. Would that be new appropriations from general revenues or from section 32 funds?

Secretary FREEMAN. In this case, in this paragraph, I did not have in mind any reference to either. Under this provision, we would be seeking appropriations regardless of whether they came from the general revenues or section 32 funds.

Senator HOLLAND. And this is a welfare section, of course.
Secretary FREEMAN. Yes, sir.

Senator HOLLAND. And how would you figure it comes under section 32 when it is for welfare purposes, not an agricultural purpose?

Secretary FREEMAN. I would say, Senator Holland, that if we have adequate funds in section 32 to meet all possible contingencies that then we may very well wish to use additional funds available for this purpose and not restrict ourselves to just the general revenue funds at all times.

Senator HOLLAND. Well, again, I will just say that we are dealing with a welfare purpose, a social service purpose, and I understand that section 11 does just do that. My understanding is that that would have to come out of the general revenues. It is not dealing with surplus disposal programs or price-support programs at all. It has nothing to do with that. Please proceed.

Secretary FREEMAN. Thank you.

President Johnson, who shares our deep concern for the nutritional needs of America's youth, has authorized me to say that he intends to request a special $50 million child nutrition supplemental appropriation which will include a substantial portion to finance a low-priced lunch program in schools serving needy areas.

The supplemental request also would cover appropriations for the breakfast program, the lunch equipment program, and the lunches for child activity programs.

Might I add at this point, that being the case it would appear that the question of section 32 is largely academic and given the provision of the basic law which now stands, it would appear to me that that issue was not necessarily before us in connection with this special school lunch program.

Senator HOLLAND. In other words, it is your understanding that this supplemental $50 million appropriation will come out of the general revenues?

Secretary FREEMAN. Yes, sir.

Senator HOLLAND. And not out of the section 32 funds?
Secretary FREEMAN. Yes, sir.

The CHAIRMAN. You gave us a figure of $22.7 million before. Now, it is $50 million.

Secretary FREEMAN. I think the figure that I gave you-I want to be sure that I get the record straight on that was that there would be for the special assistance $19.3 million, and then for the breakfast program $6 million. We have now deleted the other group feeding. I stand corrected-that is $8 million. For reasons we discussed earlier, $12 million for equipment; $1 million for administrative expenses. It will be $42 million as initially submitted, because the $8 million for other group feeding is not now before us. So, may I please correct the record and say $42 million? I have not changed the figures here.

The CHAIRMAN. You specifically stated before that the figures were as I have indicated to you. You are now saying that you left something out?

Secretary FREEMAN. No, sir. I think that the confusion is because the $19 million figure would be a supplemental appropriation running to section 11, for which there is no legislation now before this committee, because it is not now necessary. It might very well be that the other items were stated before, because section 11 is not in this bill, and, therefore, that was not put into that question. But the total package would include the additional funds to the extent of $19.3 million for actually feeding the needy children under section 11.

The CHAIRMAN. You say that the supplemental request also would cover appropriations for the breakfast program, the lunch equipment program, and the lunches for child activity programs?

Secretary FREEMAN. Yes, sir.

The CHAIRMAN. What is that?

Secretary FREEMAN. The lunches would be made available under section 11. The resources to reach the 1.5 million children that currently we are not reaching with free or reduced-cost lunches. The CHAIRMAN. But in school?

Secretary FREEMAN. But in school; yes, sir.

The CHAIRMAN. What do you mean by "child activity programs"? Secretary FREEMAN. I do not use that wording. We had other group-feeding programs, and that now is not before the committee. Senator HOLLAND. You do use that.

The CHAIRMAN. You do it here on page 10.

Senator HOLLAND. On page 10 of your statement.

The CHAIRMAN. You use it on page 10 of your statement.

Secretary FREEMAN. May I delete that, because by this "child activity program" is what I had on this other called group-feeding program. Senator TALMADGE. Is that not the day-camp proposition? Secretary FREEMAN. That is the day-camp proposition. The CHAIRMAN. That is why we struck this out.

are

Secretary FREEMAN. I struck it out in a number of other places. The CHAIRMAN. In other words, as I understand what we talking about here is to provide funds to be spent strictly in school. Secretary FREEMAN. That is correct.

The CHAIRMAN. And not outside activities.

Secretary FREEMAN. That is correct.

The CHAIRMAN. We will see to it that is tightened up some.

Secretary FREEMAN. May I show it on the record? Again, I apologize for the fact that in going through this testimony, I tried to get it out at the last moment, because it did not come to my attention until this morning.

The CHAIRMAN. I am not blaming you, because this is your original statement that you contemplated making when all of these other activities were to be incorporated in the law.

Secretary FREEMAN. I thought that it was being deleted, and I have discovered that it was not. Returning to my statement

With this new authority and the funds adequate to finance them, this country can take a giant step toward closing the child-nutrition gap before it grows even more serious.

I believe the school lunch program has demonstrated our willingness to invest in the future of our Nation by insuring that food will be no barrier to the learning process.

Our success in this effort is convincing evidence that we should go the rest of the way-that we should insure that the lack of income will be no barrier to the less fortunate children for whom education is the one chance they have to escape the poverty of their childhood.

The CHAIRMAN. What you might do is to go back over your statement again and make such corrections as you desire, to indicate that the school lunch program that we are now considering would be for in-school programs and not out-school programs.

Secretary FREEMAN. Yes, sir, we will do that.

The CHAIRMAN. I wonder if we could have you provide for the record the approximate amount that is used in your regular school lunch program to purchase milk and dairy products? Secretary FREEMAN. Yes, sir.

(The information is as follows:)

Estimated cost of fluid milk and dairy products consumed in schools 1

I. Cost of fluid milk consumed in national school lunch program.
II. Cost of dairy products distributed to schools.

Total

Million

$180. S

73. 4

254. 2

Cost of fluid milk purchased by schools is based on average cost of 6 cents per 1⁄2 pint. Cost of dairy products is based on total cost to the Federal Government.

The CHAIRMAN. And as I understand it, the additional program that we are adding is just a renewing of the present special milk program?

Secretary FREEMAN. Yes, sir.

The CHAIRMAN. With little or no difference?
Secretary FREEMAN. No difference.

The CHAIRMAN. From what the law now is.

Secretary FREEMAN. No difference. As I said earlier S. 3467 has some differences by having a terminal date and by a limit on appropriations. Otherwise, it is the same as the basic law.

The CHAIRMAN. All right.

The CHAIRMAN. Are there any further questions?

Senator TALMADGE. I have just one or two questions.

Mr. Secretary, what are we spending now on the school milk program?

Secretary FREEMAN. $100 million will be spent in this fiscal year. Senator TALMADGE. And this bill envisions spending the same amount?

Secretary FREEMAN. Yes, sir.

Senator TALMADGE. So that there is no change?

Secretary FREEMAN. No change in that.

Senator TALMADGE. What are we now spending on the school lunch program?

Secretary FREEMAN. We are spending a total of about $325 million. Senator TALMADGE. $325 million. And what does this bill provide? Secretary FREEMAN. It does not provide any amount in that connection..

Senator TALMADGE. No ceiling in the bill?

Secretary FREEMAN. No ceiling in the overall school lunch program. Senator TALMADGE. In other words, the authorization would be open-ended, to be determined by the Appropriations Committees? Secretary FREEMAN. Yes, sir.

Senator TALMADGE. What change is made in the existing law by this bill, S. 3467? As I understand it, you want to start a pilot program for breakfast feeding, in addition to lunches?

Secretary FREEMAN. That is correct.

Senator TALMADGE. What in the way of cost do you envision for that program?

Secretary FREEMAN. $6 million.

Senator TALMADGE. $6 million a year, and that is a new sum that is not now being provided?

Secretary FREEMAN. That is correct.

Senator TALMADGE. You also want in the new bill to provide some funds for equipment. Is that not correct?

Secretary FREEMAN. Correct.

Senator TALMADGE. That is not now provided under the existing law?

Secretary FREEMAN. No, sir.

The CHAIRMAN. There is authority for it.

Senator TALMADGE. Authority for it, but no expenditures; is that correct?

The CHAIRMAN. No appropriations.

Senator TALMADGE. No appropriations.

What do you intend spending on equipment?
Secretary FREEMAN. $12 million.

Senator TALMADGE. $12 million. What other changes are there in the new bill over and above existing law?

Secretary FREEMAN. A provision for authorization for some funds for State administration purposes, matching funds for State administrative purposes, and a provision for authorizing some additional funds for our own administration of this expanded program.

Senator TALMADGE. How much is involved there?

Secretary FREEMAN. $3.7 million for State administration assistance, and $1 million to provide administrative resources to the Department itself.

Senator TALMADGE. That covers all of the new authority in the new bill?

Secretary FREEMAN. Yes, sir.

Senator TALMADGE. Thank you.

Senator MONTOYA. With respect to the administrative expenses on a matching basis with the States, is it your intention that the State will put up an equal amount? Or what is the ratio of matching?

Secretary FREEMAN. The bill does not specify the ratio of matching. And, very frankly, we have not made a final decision on that. What is the current thinking on that, Mr. Davis?

Mr. DAVIS. This money would be in addition to what the States are already spending.

Secretary FREEMAN. The question was: The matching provision will be how much, 25-75, 50-50?

Mr. DAVIS. Since the States are putting in considerable administrative moneys, we had not contemplated a specific matching requirement, rather that this money be used in addition to what they are already spending for the total administration of the school lunch and special milk programs.

The CHAIRMAN. Is that because of the expanded program?

Mr. DAVIS. Yes.

The CHAIRMAN. That is, primarily to areas in school districts that are too poor to provide facilities, to provide school lunch programs, in addition to the facilities in the schools, and you are going to furnish administrative costs?

Mr. DAVIS. This provision for administrative costs is for State administration only. This would not run down to the local school district.

The CHAIRMAN. I do not quite get that.