However, I am pleased to be here to testify in regard to the three proposals submitted by the Department of Agriculture, and I would like to say that Missouri has made known to the Department of Agriculture how we feel about these proposals.

I have a prepared statement to provide you in detail with Missouri's positions on these proposals.

Therefore, I would like to summarize the major points outlined in the written material, and I will break these down by the proposals submitted.

Proposal No. 1 states a household's monthly coupon allotment will be computed on the basis of the age and sex of the members of the household.

This means that the certification worker will first determine the monthly coupon allotment for each member of the household, and then total these allotments, to arrive at the household's monthly coupon allotment; then the worker will compute the food stamp net income to determine eligibility; and then, if eligible, the worker will determine the purchase requirement.

The major effects of these proposals are:

EFFECTS OF USDA PROPOSALS

Point No. 1; the coupon allotment for thousands of people will be reduced or eliminated entirely.

This is particularly true of elderly women living alone, where their coupon allotments will be reduced from $50 to $44 per month, and elderly couples, where their coupon allotments will be reduced from $92 a month to $88 a month.

This will occur since the coupon allotment is based on the age and sex of the members of the household, and I would like to testify, I am in agreement with Mrs. Taylor, a woman needs just as much food each month as a man needs.

Point No. 2; the proposal also increases the purchasing requirement for 1- and 2-member households, providing the income for a 1-person household is $107 or more, and for a 2-person household providing it is $170 or more.

This will have a drastic effect on persons receiving supplemental security income, and those receiving both supplemental security income and social security.

Point No. 3; what this means is that elderly persons will receive less food stamps, and pay more for them than they are receiving and paying for at the present time.

It also means that many will become totally ineligible, because they will be required to pay more than the coupons are worth, and would therefore drop out of the program.

Point No. 4; in addition to this, it further complicates the administration of the food stamp program.

If anyone had told me 6 months ago that anything could be introduced to further complicate the administration of the food stamp program, I would not have believed them. However, this proposal would result in increased errors, and it will also result in the need for additional staff.

Obviously, the cost of administering the program will increase substantially.

Proposal No. 2 has the same drastic effect on the elderly, as proposal No. 1, with the exception of "grandfathering in" those persons receiving food stamps in December 1975, who continuously receive food stamps thereafter.

What this means is the monthly coupon allotment that is received in the month of December 1975 would not be reduced, providing they continually receive food stamps.

This proposal has the following additional major effects:

OTHER MAJOR EFFECTS

(1) Any single elderly person or elderly couple, "grandfathering," who ceases to participate in the program, even if it is just for 1 month, loses his "grandfathering" privilege.

This means that the worker would then automatically revert to proposal No. 1 to determine the coupon allotment and the purchase requirement.

(2) It will be necessary to compare the December 1975 coupon allotment, with the new calculated allotment, each time the food stamp recipient is recertified, to be certain that the recipient is not denied food stamps to which he is entitled. What is more important is that the cost-of-living increases will have no effect on the December 1975, coupon allotment.

That amount will always remain the same, however, the increase in the purchase requirement that will be applied for other recipients will be applied to that December 1975 coupon allotment.

Such a proposal will eventually become an administrative nightmare. It will also result in people having to pay more for the same amount of coupons than they have to pay in December 1975.

Proposal No. 3 is essentially the same as the system now in effect. It is not based on the age and sex of each member of the household. The major objective of proposal No. 3 is, as is true for Nos. 1 and 2, the coupon allotment is based on USDA's thrifty food plan.

We do not believe USDA's thrifty food plan provides an adequate nutritional diet which, of course, is the purpose of the food stamp program.

In conclusion, I would like to say that Missouri is strongly opposed to proposals Nos. 1 and 2.

Proposal No. 3 is the base of the three and would be an even better plan, if it were based on the Department of Agriculture's low-cost food plan.

Thank you.

[Prepared statement of Peggy McGuire follows:]

PREPARED STATEMENT OF PEGGY MCGUIRE

Mr. Chairman and members of the committee: I am Peggy McGuire, coordinator of program and staff development, Department of Social Services in the State of Missouri. Within the Department of Social Services is the Division of Family Services which is responsible for administering the food stamp program for the State of Missouri. I am pleased to be here today, to testify in relation to the three proposals submitted by the U.S. Department of Agriculture as a result of the court case, Rodway vs. USDA.

As you are aware, the court ordered the Department of Agriculture to establish a method of calculating food stamp allotments that will provide our recipients with an opportunity to purchase a nutritional adequate diet. As a result of this court order, the Department of Agriculture issued three alternative

proposals for coupon allotment regulations. I appreciate the opportunity to discuss each proposal with you and to make you aware of the effect each wil have, not only on the recipients we serve, but on the administration of the food stamp program.

The Department of Agriculture's first regulation will calculate a household's monthly coupon allotment on the basis of the age and sex of each member of that particular household. This proposal would require the administration of the food stamp program to become more complicated and more expensive than it is at the present time. The procedure would be as follows:

1. The certification worker will first determine each individual household member's monthly coupon allotment based on the age and sex of each member of the household.

2. After the household allotment is calculated, the certification workers will have to determine the household's net monthly food stamp income in the same manner as they have in the past. This includes totaling the various kinds of income available to the household and then subtracting the appropriate and various types of food stamp deductions.

3. After the household income is determined, the certification worker will determine the household's purchase price. Only at that point, will the certification worker know if the household is actually eligible for food stamps. (For instance, if the household's purchase price exceeds the coupon allotment, such household would be ineligible for benefits.) The determination of food stamp eligibility now is a complicated procedure. Due to the methods prescribed by USDA, for the present determination of eligibility, many errors result which in turn results in a higher quality control error rate. This particular proposal would further increase the error rate since changes in age, pregnancy, a nursing mother, and other changes in circumstances within the family would have a direct effect on the monthly coupon allotment and the cost to that household. If this proposal were adopted, it would require additional staff to handle the administration of the food stamp program. I do not believe, however, that even with such additional staff. provided the legislature would provide us this staff, we could calculate and redetermine food stamp monthly allotments on an accurate basis. Considering the increase in staff, the increase in errors, and the fiscal sanctions that could be applied, it does not appear to me that proposal No. 1 could even be considered as administratively sound.

The effect on proposal No. 1 on recipients would be to reduce the coupon allotment in a large number of cases. Some examples of cases in which the coupon allotment would be reduced are elderly women living alone, elderly couples, and families containing mothers with children under the age of nine (9). Not only will the monthly coupon allotment be reduced, but the cost of food stamps will, in many cases, be increased in these types of households. Most of these people are receiving supplemental security income, social security, and/or aid to dependent children. These persons are on a much lower income scale and cannot afford the reduction in the coupon allotment nor the increased cost of coupons. In addition to those persons receiving public assistance, low-income families, particularly nonwelfare mothers with children will also suffer from the restrictive eligibility standards. The eligibility standards are geared to the allotment levels of each household and this allotment level is determined by the age and sex of the individual household members. If such a household is determined to be eligible, the food stamp bonus would be so low that such households would not participate in the program.

ADEQUATE BENEFITS LACKING

I firmly believe that the drastic and harmful effect to recipients and the additional administrative costs that would be a result of proposal No. 1, will drastically restrict the ability of the food stamp program to provide adequate benefits to needy families. As a result, I believe that proposal No. 1 should not be adopted by USDA.

Proposal No. 2 is exactly the same as Proposal No. 1 with the exception that Proposal No. 2 guarantees that any household participating in the program as of December 31, 1975 will not receive a coupon allotment lower than the allotment it was receiving on the date for as long as the household remains continuously on the program after that date. In other words, proposal No. 2 has the same problems that I mentioned in proposal No. 1 but adds an additional problem of "grandfathering in" households participating in December 1975.

We have had experience with "grandfathering in" in the SSI program and in other programs. Such "grandfathering" complicates the administration of any program and complicates the administration of the food stamp program to an even greater degree than proposal No. 1. In addition to the complexities of proposal No. 1, should proposal No. 2 be adopted, it would require the certification worker to first calculate the coupon allotment in the same manner as proposal No. 1. The worker would then compare this figure with the December 1975, allotment. If the latter coupon allotment is higher, then the household's income and the purchase price must be calculated. By the same token, if the former coupon allotment is higher, then the household's income and the purchase price must be calculated. This procedure would continue for as long as such household continued to receive food stamps; however, if the household ceases to participate in the food stamp program, for even 1 month, it will lose the "grandfathering" protection and such case would then revert to the procedure used in proposal No. 1. Considering that many households continually receive Food Stamps over a period of time, the process of determining the monthly coupon allotment in comparison with the allotment received in December, 1975, would become an administrative nightmare.

The effect on households would be the same as the effect Proposal No. 1 would have on households with the exception of the "grandfathering in" provision. Proposal No. 2 would cause delay in processing food stamp eligibility, an increase in errors, and would result in the need for more staff thus resulting in a substantial increase in administrative cost. For these reasons, Missouri is also opposed to Proposal No. 2.

Proposal No. 3 is similar to the present food stamp coupon allotment system; in other words, it is not based on the age and sex of individual household members, thus, every household of the same size will receive the same coupon allotment. In addition, food stamp purchase prices will not be raised under proposal No. 3.

All three of these proposals are based on the Department of Agriculture's thrifty food plan which is considered inadequate for insuring a proper diet for food stamp recipients. Missouri would prefer that the coupon allotment be based on the low-cost food plan rather than the thrifty food plan. However, in considering the three proposals suggested by the U.S. Department of Agriculture, proposal No. 3 is the only proposal that will not be harmful to claimants and is administratively feasible.

To sum up my comments, Missouri strongly opposes proposal No. 1 and proposal No. 2. I believe that proposal No. 3 is the only proposal submitted that could even be considered in the administration of the food stamp program. Thank you very much.

Senator PELL. We will now hear from Paul R. Philbrook, commissioner, Department of Social Welfare, Vermont.

Senator Stafford has been detained in your home State of Vermont, and he has asked us to tell you that he regrets that he is unable to be present for your testimony.

STATEMENT OF PAUL R. PHILBROOK, COMMISSIONER, DEPARTMENT OF SOCIAL WELFARE, VERMONT

Mr. PHILBROOK. Thank you very much.

I appreciate the opportunity to appear before your committee this afternoon.

Vermont is a small, rural State with a population of approximately 460,000. Though not wealthy-the last per capita income figures I saw placed us 39th in the Nation-1973-our citizens have for years demonstrated their willingness to help their less fortunate neighbors to an extent more generous than the national average. While not complacent-we have far to go-I'm proud of that commitment by my fellow Vermonters.

Last month, October, 49,560 Vermonters were certified as eligible to participate in the food stamp program. In terms of the number of people served, it is the largest program the department of social welfare administers.

Senator PELL. How many was that figure again?

Mr. PHILBROOK. 49,560 Vermonters.

Senator, eligible Vermonters will pay $997,000 for their October food stamps and receive $2,004,000 worth of stamps in return-a bonus of $1,007,000. In addition to the obvious food purchasing benefit accruing to the program participants one should also note the million dollar shot in the arm provided each month to Vermont food retailers.

That's enough of a commercial. My real reason for appearing before you is to share my concerns as a welfare administrator regarding the USDA proposed new coupon allotments for the food stamp program.

NEW ELIGIBILITY REQUIREMENTS

USDA's first alternative, proposal No. 1, would calculate a household's monthly food stamp coupon allotment on the basis of the age and sex of each household member. The effect of this is to add a brandnew component to the eligibility determination process.

Today, when our eligibility worker finally gets gross income reduced to net income an overly complex process, by the way he knows whether or not the family is eligible for benefits. If eligible, he then plugs the net income figure against a purchase requirement table to determine the amount of the bonus benefit. However, a new step is added under proposal No. 1. Having gotten net income and the purchase requirement, the worker then has to compute this particular family's allotment, according to its age and sex composition, to find out whether it is more or less than the purchase requirement. Only then can a real determination of eligibility be made.

The additional eligibility work does not end upon initial certification. At each review of eligibility the process must be repeated, or at least reviewed, to be sure no family member has moved from one coupon allotment category to another.

It would seem to follow that these added certification complexities will add to administrative costs, since the number of certifications a worker can complete in a day will obviously decrease. I doubt, however, this would be the case in Vermont. Clearly the need for more certification staff could be there. It is not at all clear, however, that I would be given legislative authority and funding to add that staff. What, then, would be the real result? We already have serious staffing problems. Caseloads in this program run as high as 400 households per worker and there is a substantial number of cases in which the review date has passed. This additional workload would merely exacerbate the problem; the length of time between application and initial certification would increase, as would the number of cases overdue for review. The real losers, clearly, will be those the program is intended to assist.

Quality control and possible Federal fiscal sanctions are subjects much on the minds of welfare administrators across this country. One of the questions we constantly ask ourselves when considering program changes is: "Will this change increase our potential for error?"