And I recognize their problem, because they have a very grave one. And we have gotten along quite well with these people.

We are simply trying to divide up the amount of available funds in the most equitable way possible without being able to give them all the funds that they would like to have.

Senator Cook. Well, I hope that you are correct.

I did get a feeling, from conversations with my colleagues, that in effect these regulations may be of such a stringent nature that even if supplemental appropriations were made, it would be difficult to utilize those supplemental appropriations in relation to the formula you have set up for the distribution of funds. Therefore, it would be very questionable in my mind that we could sit here and contend with any regulations that would not be broad enough to take into consideration supplemental funds, and the direct appropriation of those supplemental funds that Congress would make available to this program-if it saw fit, in its judgment, to make such a supplemental appropriation.

Mr. LYNG. I am sure, Senator, if there were additional funds, that the proposed regulations could accommodate them.

Senator Cook. Thank you, Mr. Chairman.

Senator MCGOVERN. Thank you. Mr. Secretary. We appreciate you and your colleagues being here before the committee today.

Our final witness is an important witness, Miss Josephine Martin, who is the chief consultant of the School Food Service program, Georgia State Department of Education, and Miss Martin is also chairman of the Legislative Committee of the American School Food Service Association.

I think every one on this committee and others recognize her as an expert with great experience in this whole school lunch field. So we are pleased to hear your testimony, Miss Martin.

STATEMENT OF MISS JOSEPHINE MARTIN, ADMINISTRATOR, SCHOOL FOOD SERVICE PROGRAM, GEORGIA DEPARTMENT OF EDUCATION; AND, CHAIRMAN, LEGISLATIVE COMMITTEE. AMERICAN SCHOOL FOOD SERVICE ASSOCIATION

Miss MARTIN. Thank you, Mr. Chairman.

Mr. Chairman, and members of the committee, in addition to my statement that I would like to file for the record today, I would like to file a statement from my State Superintendent Jack P. Nix. In addition to being State Superintendent of Schools in Georgia, Mr. Nix is Coordinator of the School Lunch Committee of the Counsel of Chief State School Officers. He was sorry that he could not be here today, but did wish to have his statement filed with the Committee.

Senator MCGOVERN. The statement will be made a part of the record.*

Miss MARTIN. Thank you, sir.

My name is Josephine Martin, and I am Administrator of the School Food Service program of the Georgia Department of Education. I am also Chairman of the Legislative Committee of American School Food Service Association.

*See Appendix 2, p. 1865.

In Georgia, we do serve 83 percent of all the children in school. Our number of lunches being served to economically needy children increased from 149,000 in September of 1970 to 290,000 in April of 1971. But I am not representing Georgia today.

Today I represent the American School Food Service Association, an organization of 50,000 professional school food service people; an organization dedicated to the concept of lunches for all children; an organization that perceived Public Law 91-248 as a mandate from the President and from Congress to provide lunches to all needy children in America's schools.

CRISIS DEVELOPED BY USDA'S REGULATIONS

We thank you for focusing attention on the problem today. Since Public Law 91-248 was signed by the President in May 1970, we have worked diligently to fulfill that mandate, but we now face a crisis a crisis developed by the USDA's proposed regulations for administering School Lunch programs. The regulations are restrictive, provide inadequate funds, and are not clear.

In my judgment this is the most serious crisis faced by School Lunch since the passage of the Act in 1946. The regulations if implemented will negate much of the progress made in the last 25 years. On Tuesday of last week, principals in one south Georgia county were saying, "We will have to close our lunchrooms; we cannot operate on the limited funds." And yet these are the principals along with hundreds of others with the same sentiment that brought lunches to children for the first time in the sixties.

They say it is a woman's privilege to change her mind, and for a moment I would like to depart from my statement and react to comments that Secretary Lyng made.

In his first paragraph, he indicated that there was confusion. And I will agree, maybe there is. If there is something that we do not understand, we would surely like to, because as practitioners in the school food service field, we know what it costs to put a meal on the table, and we know that we cannot do it for 35 cents in any State in this Nation. So we think there is some confusion. And if there is a magic way in which we could serve lunches for 35 cents, meet minimum wages, price freezes, and all of these things, we would surely welcome some practical suggestions on how to do this.

I also notice that in the Secretary's comments, that we have had approximately a 10 percent increase in the number of lunches that were served last year; and hopefully we would have another 10 percent this year. And yet, the amount of money that is added to the appropriation is a mere $78.8 million.

NEED $180 MILLION TO SUSTAIN 35-CENT RATE

Now a bit of quick calculation while the Secretary was talking indicated to me that there would need to be $180 million to sustain even the 35-cent rate of reimbursement. And we are already agreeing that that is not adequate.

Senator McGOVERN. Miss Martin, I wonder if I could interrupt you at this point, because I think you are really getting to the crux of the issue.

Last year when this matter was under debate on the Senate floor, Senator Hart and I cosponsored an effort to try to increase the funding of the program. We asked that the Section 4 funds be increased to $535 million, and that Section 11 funds be increased to $600 million. Now at that time, the Department of Agriculture said that they did not need additional funds, that we could continue an expanded program and reach all the needy children without that large an appropriation.

Does that not indicate to you that this whole matter of the new regulations is really an effort to try to squeeze the program into a budget that is too small?

Miss MARTIN. It certainly appears to me that that is the situation, Senator. And I think that Mr. Lyng made the statement-and I do not want to misquote him-but I think he said that they had attempted to devise a way to divide the funds available on an equitable basis, and by attempting this, 30+5, appears to be their definition of an equitable basis.

But our contention is not with the 30 and the five. Our contention is that the money is not adequate to do the job that Congress has mandated, and not only that Congress has mandated, but the thing that is right for the children of this country.

There are several other comments that I would like to make.

We appreciate the fact that the regulations do make an attempt for adjustments to be made midyear, and the Secretary indicated that they would avoid the midyear funding uncertainties with these regulations.

FUNDING UNCERTAINTIES ARE NOW-NOT MIDYEAR

Our reaction to that proposal is that problems will begin in September. We will not have the uncertainties all year long; they begin right now. We do not have the money to do the job now.

Another reaction that I would like to make to the Secretary's statement-he indicated that the State directors did react rather violently last year to the 12-cent rule, and this is true. But the reason that we reacted violently to the 12-cent rule was that it mandated that we pay 12 cents from Section 4 funds for all lunches. We wished to be able to pay a lower rate for paid lunches and a higher rate for free lunches. But we were not permitted to do that because the regulations required that we pay the same rate from Section 4 for all lunches and that we pay 12 cents for all lunches from Section 4 funds before we could pay above 30 cents.

So our reaction to the 12-cent rule was in the interest of providing lunches to economically needy children and not paying higher rates for the paying children.

Senator McGOVERN. Well, now, Miss Martin, in that connection, you have said that you were told by the Department to implement higher eligibility standards. In other words, to broaden the scope and effectiveness of the program. Did those instructions carry any indication on how you were going to support such expanded standards?

Miss MARTIN. No, sir. The Secretary's income poverty guideline was released to us in June, I believe, or maybe even late May of this

year, and for that, we were very grateful, because local school people need the income poverty guideline earlier.

As the Secretary's income poverty guideline did increase the standard for free and reduced-price lunches, most States were quick to respond to this. They got this information out to the local school districts, assuming that there would be sufficient moneys forthcoming to finance the additional free and reduced-price lunches. And probably we acted too hastily because we advised our school people in Georgia that this announcement should be made 2 weeks before school started. Thus we could start serving lunches the day children came to school.

OTHER SOURCES WITHDREW FUNDS

But unfortunately, after that announcement came out, we had these proposed regulations, which have really created trauma, a dilemma: The publicity surrounding the appropriations for the child nutrition programs indicated that there would be more money available. And many States and local school districts that had previously been getting funds from Title I, OEO, model cities, et cetera, to help finance the School Food Service Program, suddenly found these moneys had been withdrawn and they did not have that help.

The only help they will have this year is the 35 or 36 or 37 cents in lower-per-capita-income States to finance the program.

Now, if I may go back to my testimony-and I am not going to read some of it since I have inserted these remarks-much progress has been made in school food service in the past decade. We feel that we have the legislative framework now to do the job that Congress, the public, and the President has mandated that we do.

And we are grateful to the Congress for the sound legislation for school food service programs. It provides a framework for the States and local school systems to achieve the task so beautifully stated by President Nixon in May 1970, "To put an end to hunger in America's schoolrooms." Although we did not quite achieve the President's goal of having a lunch for every eligible child by Thanksgiving Day, 1970, tremendous gains were made.

We have had tremendous support from the Food and Nutrition Service of the Department of Agriculture. Mr. Hekman and his staff have given us every assurance of their intent to implement the program. State and local school systems geared up to fulfill the commitment of Congress and the President's desire. Surely with the momentum established by May 1971, we would meet that Thanksgiving Day promise by November 1971.

But, alas, something has happened. The proposed regulations released August 13, 1971, could only mean regression. Because of the lateness of the regulations, most States and local school districts had their plans made by August 1 to continue the program in September that was in effect June 30.

But, this is not to be if the proposed regulations become effective. The amount of funds available per meal has been reduced from 42 cents to 35 cents; spending restrictions will prohibit expansion, and yet we are told to "implement higher eligibility standards"; transfer authority between programs has been eliminated.

This is the big problem in Kentucky, where they are not able to use the Section 32 money for breakfast.

USDA MANDATES IMPOSSIBLE CONDITIONS

We are all aware of the national economic crises, and the need to reduce Federal spending. Our question as educators and school food service personnel is, "How do we resolve this dilemma?" We are mandated by USDA regulations to provide lunches to all eligible children, and by the proposed regulations we are allowed 35 cents per meal with which to fulfill that commitment.

When the Secretary was speaking earlier about program expansion, he indicated that we would be able to expand as long as we did it within the framework of the apportionment to the States and the amount of money apportioned to the States will be 30+5. It would appear to me, then, if we had a school district that had a very high food cost and, say, they fed 500 children and their food cost was 60 cents, it would be possible under these regulations for a State to pay 60 cents per meal. But by the same token, we would have to pay zero rates to 500 children over in another school district in order to pay 60 cents to one school district.

The national average cost of producing a meal is around 50 cents. The price freeze prohibits increases in sale prices to pick up any slack. These school administrators are perplexed.

The proposed regulations are being delivered at a time when local and State school boards are faced with mandates to reduce spending, when budgets are already approved for the 1972 school year, when Legislatures are not in session. The Congress has indicated its expectation of the States by including the State matching requirements in 91-248, and I believe that all States have conscientiously tried to meet the matching requirements of 91-248.

As I recall, during the hearings on 91-248, there was debate on the congressional floors indicating that Congress did not feel that if they were mandating free and reduced-price lunches to all economically needy children, that they could require States to pay part of the cost, and for that reason there were not matching requirements based on Section 11 funds; only the matching requirements which the Secretary referred to were placed on Section 4 funds.

USDA-ESTABLISHED BASE-UNREALISTIC

The proposed regulations provide for Section 32 funds to be used for Section 4 purposes in those States that earn less than 5 cents per meal by the formula provided in the National School Lunch Act. The regulations prohibit States with low-per-capita-income from receiving Section 32 funds for Section 4 purposes, that is until the earned apportionment has been paid at the rate of 5 cents per meal. USDA proposes to establish a base for paid meals and a base for free and reduced-price meals. States would have to exceed this base before Section 32 funds could be earned. States with high participation in 197071 would find it more difficult to reach the base and in many instances would never reach the base.