This method of calculating reimbursements would cripple the program for a number of reasons. First, it is highly doubtful that schools, which are struggling to operate breakfast programs under the current inadequate reimbursement, will continue to operate programs when their reimbursement is cut back.

Second, assuming those schools currently in the School Breakfast Program stay in, any additional schools would simply force the reimbursement rates lower, since States would only be able to adjust their reimbursement rates downward when participation increased, rather than receive additional breakfast funds. Hence, State officials will be very reluctant to accept new schools at the expense of all those already in the program.

Third, this method of figuring statewide reimbursements guarantees that 100-percent funding will never be used. If a State gave a school 25 cents per meal, this would lower the balance of the apportionment available to the rest of the schools considerably, especially if the needy school getting full-cost funding served a large number of children.

USDA REGULATIONS STIFLE PROGRAM

I might add that these regulations would put a lid on the number of schools in the program and the money spent. States would get their initial apportionment and then would have to keep dividing within that. They could get no more money. No Section 32 money would be expended for breakfast programs. In essence, what it does is put a clamp on the money; and, in doing so, end all expansion of the breakfast program-if not cut it back severely.

Our book and our testimony have explained the changes that must be made in the Child Nutrition Act if the School Breakfast Program is to meet the pressing nutritional needs of America's schoolchildren. The proposed regulations make clear why these changes must be made immediately.

Senator HART. Mr. Pollack, you and your associates have described the inadequacies and weaknesses of the system. You have made some recommendations and you identify seven as essential. This is an unfair question; but, given the way Congress operates, it is sometimes helpful for us even for those who want to have all seven accomplished to get some further order of priority. I hope I am not describing fact, but what if Congress does only one thing to further the change of the School Breakfast Program, What should that one thing be?

Mr. POLACK. Well, if we had to choose one from the various recommendations that are being made by us today, I would choose one that I did not list among my seven-one that encompasses what Mr. Irvings completed testimony on-that the fiscal structure of the program must be substantially altered.

BASE REIMBURSEMENT OF 30 CENTS PER MEAL

Without that, there is not a chance in a hundred that this program is ever going to expand to the kinds of schools that we have listed on the board. In State after State, State directors are telling

ready been provided as revenues by the children. What I mean by that is that most of the children who will participate in the program, as in the lunch program, are children who do not receive the meal for free. They pay for the meal. Consequently, the overwhelming majority of the children who receive these breakfasts are children who will be paying for it rather than there being a reimbursement from the Federal Government.

I would suggest that-in terms of the expansion that the State directors are telling us is necessary for the next fiscal year-the appropriation level should be approximately $150 million. That is a six-fold increase from what has been appropriated this year, but I think it is a realistic one.

Currently, the expenditures for the School Lunch Program is approximately $800 to $900 million. Now, the breakfast program is not going to increase to the size of the lunch program. It is going to increase and it should increase, but the lunches are far more expensive than the breakfasts. Lunches average now approximately 60 cents per meal. As I said, the breakfasts average now 27.5 cents a meal.

Senator BELLMON. Now, that average includes the bad breakfast and the desirable breakfast. What would the desirable breakfast cost on the average?

Mr. POLLACK. Well, I am not sure it is easy to estimate that, but I would think it would be in the vicinity of 35 cents per meal.

Senator BELLMON. It seems to me, if we are going to provide a nutritious meal, we need to have some definite idea of how much money is needed.

Mr. POLLACK. Now, that 27.5 cents is the average under the presently prescribed regulations by USDA which, as I indicated previously, there are many districts throughout the country that do not even provide that. I would think that the average reimbursement would level off at about 35 cents per meal and the $1.2 billion, I think, is a substantially inflated figure. I think it would be considerably less, perhaps about one-tenth of that figure.

Senator BELLMON. Mr. Chairman, I have no further questions. Senator HART. I am glad Senator Bellmon raised some of those questions because the more precise our analysis of the raw figures can be the greater opportunity we will have in persuading Congress to approve it. I think all of us appreciate the excellent work that is reflected in your testimony this morning; and, additionally, the book that you made available, I believe, to all Members of Congress, not just the committee members?

Mr. POLLACK. Yes. It was made available to all Members of Congress.

CAN ELIMINATE HUNGER FROM AMERICAN SCHOOLCHILDREN

Senator HART. It enables many of our colleagues who are not members of the committee to develop an understanding of where we are. Also, how long the road is ahead of us before we can, in fact, say that we are doing all that is within our capacity to eliminate from our schools American children who are hungry. That seems to be a technically achievable goal. That is something we can do. We can make categorical decisions to eliminate that aspect of hurt from our

people. As I say, you cannot categorically decide that you will eliminate occasional improper or unwise decisions by Congress or Executive Departments, but you can indeed take the position that we have the resources-we have the means, and we have in that sense the capacity to eliminate this aspect of life.

I repeat what I said earlier, I would think people should be more outraged at our failure to do that which we can do in this area than at detective stories about who wrote what memorandum or why. You are never going to eliminate that kind of thing, whether you are Republicans or Democrats. The appearance of that kind of thing will always be with us. No categorical decision is ever going to elimi

nate it.

As I said to Senator Case, I think if you prohibited private money being given to politicians you would eliminate some of the appearance that makes everybody uneasy. However, it is this discussion which should create greater concern and excite people more. It should make them question the system to a far greater degree than the periodic disclosures of real or apparent impropriety in specific decisions.

If we do eliminate poverty, I am sure that Food Research and Action Center will have contributed an important part.

Mr. POLLACK. Thank you, Senator Hart. Thank you, Senator Bellmon.

Senator HART. Thank you.

I know it is early in the afternoon, but I am sure that Secretary Lyng has 9,000 other things to do after lunch, so if he is game, we are game, and I suggest we go right through.

STATEMENT OF HON. RICHARD LYNG, ASSISTANT SECRETARY, USDA; ACCOMPANIED BY HOWARD P. DAVIS, DEPUTY ADMINISTRATOR, FOOD AND NUTRITION SERVICE

Mr. LYNG. Thank you, Mr. Chairman. I do appreciate the chance to testify because Secretary Butz is out of the country, in Moscow, and there are some pressing things back in the Department.

I am pleased to have this opportunity to discuss the present status of the School Breakfast Program.

Federal assistance for school breakfasts was first authorized by the Child Nutrition Act of 1966. That act also authorized other special programs which the Congress felt could help needy youngsters beyond that provided under the National School Lunch Program.

Initiated as a pilot program, the 1966 legislation contained appropriation authorizations of $7.5 million for fiscal 1967 and $10 million for 1968. The Congress actually appropriated $2 million and $3.5 million, respectively. Meanwhile, the States were able to use only about $0.5 million in the first year of operation, but spent $2 million for school breakfasts in fiscal 1968-which was in reality the first full year of operation.

Expenditures for the program about doubled in each of the following 3 years-from $5.5 million in 1969 to $10.8 million in 1970, and to $20.1 million in 1971. Those expenditures were, in fact, greater

than the amounts Congress directly appropriated for the breakfast program, because the States were able to supplement their breakfast apportionments from their share of the special Section 32 money made available for child feeding programs.

Through these years the States and local school officials developed breakfast programs to complement and supplement the School Lunch Program in accordance with the Congressional mandate to "give first consideration to those schools drawing attendance from areas in which poor economic conditions exist and to those schools to which a substantial proportion of the children enrolled must travel long distances daily."

School officials, school food service directors, and the general public have relied upon the National School Lunch Program as the essential, primary vehicle for feeding children at school. The Congress set maximum authorizations and priorities that prescribe school breakfasts for special needs in special circumstances.

Unlike the goal of making the School Lunch Program available in all schools, therefore, it was not contemplated that breakfasts were needed or desired in all schools. The law requires State agencies to include in their annual State plans of operation their plans for using the Federal funds made available-and funds from sources within the States-to reach needy children with a breakfast program. This is in contrast with the provisions which direct State agencies to include in their Plans of Operation, the plans they have to use Federal, State and local funds to extend the School Lunch Program to every school within the State. Moreover, unlike the lunch program, the breakfast program legislation sets up classes of schools deemed to have a special need for breakfast programs by assigning them "first consideration" for available funds.

SECTION 32 FUND STIMULI

It is appropriate to call your attention to the special stimulus that was given to the breakfast program with Section 32 funds in the 1971 fiscal year which spanned the 1970-71 school year. Throughout the year, there was an "open door" for the breakfast program, with money available to the States to use almost without limits if they saw fit. It is also appropriate to point out that money was no constraint in prior years, either. But even under the special stimulus of 1971, local communities chose to start breakfasts in less than 2,200 schools between May of 1970 and May of 1971, whereas close to 4,200 schools were added to the lunch program in that same period.

The latest national estimates we have for the child nutrition programs are for February 1972, and I would like to report those to show some relationship between breakfast and lunch activities. In February, there were some 82,400 schools in the National School Lunch Program with participation totaling almost 25 million children. Of those, 8.1 million needy children-nearly one-third of the total participation-were reached with free and reduced-price lunches. At the same time, there were some 7,200 schools serving breakfasts to slightly more than 1 million children. Over threequarters of the breakfasts-77.8 percent-were free or at a reduced price.

As we moved into the current fiscal year, the 1972 Appropriation Act provided a total of $28 million for the School Breakfast Program. The act provided $25 million in a direct appropriation, but it directed that $6.5 million be placed in a reserve to be released on a demonstration of need. The act also provided for the use of $3 million from Section 32 funds. We immediately apportioned a total of $18.5 million to the States under the statutory apportionment formula-which does not take actual program participation into account. This left $9.5 million available for distribution on a demonstrated need basis.

Because growth of the breakfast program among the States is not reflected in the apportionment formula, we found that out of their share of the $18.5 million:

A total of 16 State agencies had enough money to at least double their April 1971 expenditure rate in 1972;

Another 14 State agencies could increase their April 1971 rate by between 17 and 99 percent in 1972;

Another 23 State agencies did not have sufficient funds to maintain their April 1971 rate of expenditure in 1972 and two State agencies could just about maintain their April rate.

We told this latter group of 25 States that they would have first call on the available $9.5 million so that they would not have to cutback from their fiscal 1971 level in 1972. We calculated that virtually all of the $9.5 million would be needed to meet that commitment.

Despite the necessary "hold" on expansion in those 25 States, the breakfast program has expanded this year. The preliminary figures for February show:

7,234 schools were participating, up more than 10 percent from the April peak of the last school year; and,

Just over 1 million children were being reached, an increase of 7 percent over April 1971.

It appears, too, that additional expansion could have been made. For 24 State agencies, their January rate of expenditure, annualized, was considerably less than could be financed from their share of the $18.5 million that was initially apportioned.

The Joint Resolution of the Congress which became Public Law 92-153 on November 5, 1971, in Section 3 directed the Secretary of Agriculture to "immediately determine and report to Congress" the needs for additional funds in 1972 which would permit expansion of breakfasts to all schools "desiring such programs as rapidly as practicable."

In response to that directive, we surveyed States about pending program applications-to find out how much money would be needed to bring programs to those schools this fiscal year.

INTERPRETATION OF LANGUAGE OF P.L. 92-153

It was our view that the intent of Section 3 was to permit needy schools those that are accorded first priority in the enabling legislation-that were ready to inaugurate a School Breakfast Program to do so as soon as practicable this school year. For the purpose of