June 23, 2004

Honorable Ann Veneman
US Department of Agriculture
14th and Independence Avenue SW
Washington, DC 20250

Dear Secretary Veneman:

As anti-hunger organizations, we recognize that the Food Stamp Program is our nation's first line of defense against hunger. We appreciate the work of your Department to promote access to Food Stamp Program benefits for eligible people, to expand eligibility for many legal immigrants, and to mainstream the transaction through nationwide Electronic Benefit Transfer (EBT) delivery implementation.

We are, however, deeply concerned about a pending request submitted to you by Florida, which seeks to turn over to yet-to-be identified private sector vendor(s) essentially the entire operation of this vital federal benefit program, and do so on a statewide basis. This radical experiment puts at risk benefits for a significant number of vulnerable people.

Currently, nearly 1.2 million people in Florida receive food stamp benefits. An estimated 1.2 million more people likely are eligible but not receiving benefits, especially many elderly people, working families, legal immigrants and citizen children residing in immigrant households.

We applaud USDA for approving Florida's separate request to streamline enrollment for SSI recipients. We expect that when Florida rolls out that project, there will be marked improvements in access and processing of benefits for many low-income seniors.

We had serious reservations about the 2002 waiver request that Florida submitted for a three-county pilot project for private contractors to handle food stamp benefits for households also receiving Temporary Assistance for Needy Families (TANF) benefits. While USDA approved that request, it did so for a project that was time-limited and targeted and that required evaluation.

We are especially concerned that Florida would pursue a new and radical request for a wholesale privatization experiment when the state has not even used the authority under the three-county pilot to test the effects on client access, payment accuracy, and efficiency. The current proposal calls for rapid state-wise implementation with virtually no testing and no fallback plan in the event that the contractor(s) fail to perform.

We also do not believe that the state has yet maximized all its opportunities under existing food stamp rules to improve program operations and potentially reduce costs in other ways. For example, it can make better use of outreach campaigns, waiver of face-to-face interviews and streamlined reporting. And it can do so without turning over eligibility determinations to private sector vendors less accountable to the community and its elected leaders.

At a minimum USDA should require much more specificity from the state in its waiver request. As submitted, the request leaves many open questions. It is unclear how many vendors will operate the program and in what areas. While vendors will be asked to describe their approach on a litany of issues, including dealing with language access barriers, the request does not explain what, if any, minimum standards vendors must meet to satisfy criteria. It is unclear, among other things: how client access, especially for hard-to-serve populations and those in rural areas, will be protected; how decisions on office locations and operations will be responsive and accountable to community residents and their representatives; how payment accuracy, confidentiality of recipient information, and program integrity will be adequately safeguarded; how continuity of operations will be ensured when the state abandons its role in favor of private companies that may change over time; what quality of work force will handle operations; how work currently performed by state employees will not be sent offshore; what time frame applies to the experiment; or what plans ensure a thorough and independent evaluation.

In the absence of such information, it is impossible to say that any rights clients have under federal and state law (and also under the Constitution) will be protected.

The vagueness of the state's request is obvious and has been conceded by state officials. Here is an excerpt from a recent news story:

"The invitations to negotiate also ask vendors to propose the very policies, rules and regulations for the state's welfare system. 'The concept is to give the marketplace the framework without prescribing the solution,' said Ben Harris, deputy secretary of operations and technology for the state Department of Children and Families. DFC will oversee the multi-agency mega contract. 'We don't want to act like we have the answer.'" (Source: "Senators worry needy will suffer," Florida Today, 6/2/04).

The Food Stamp Program is a federal entitlement, whose benefits are paid for 100 % by the federal government and whose administrative costs are split between the federal government and the state. The federal government has an important stake in ensuring that eligible people have access and that the program is run efficiently and with integrity. USDA should not be asked to approve a statewide venture that not only is untested and risky, but that is not even defined by the state. Approving a "framework" or a contract for a contract on a statewide basis is not what Congress had in mind when it provided USDA with waiver authority.

We urge you to reject the Florida waiver request.

Sincerely,

Food Research and Action Center
Center on Budget and Policy Priorities
America's Second Harvest
World Hunger Year
Bread for the World
Share Our Strength
RESULTS

Cc: Honorable Eric Bost