FRAC - Nutrition Programs and Refundable Tax Credits in President Obama’s FY 2010 Budget

FRAC Analysis: Nutrition Programs and Refundable Tax Credits in President Obama’s FY 2010 Budget

May 15, 2009 – President Obama’s FY 2010 budget proposal makes important new investments in federal programs that support food security and income security. In light of the economy and growing need for nutrition program supports, it anticipates substantial continued caseload growth for SNAP/Food Stamps, school meals, and the Women, Infants, and Children (WIC) program.

It also continues the investments made in the American Reinvestment and Recovery Act to temporarily boost SNAP/Food Stamp benefits, provide administrative support to states in SNAP, and make improvements to the Child Tax Credit and Earned Income Tax Credit.

The budget also provides $10 billion over the next ten years for Child Nutrition Reauthorization and acknowledges that reauthorization will play an important role in meeting the President’s goal of ending childhood hunger by 2015.

BUDGET BREAKDOWN OF KEY PROVISIONS

Child Nutrition Reauthorization

For Child Nutrition and WIC Reauthorization, the President’s budget proposes $10 billion over ten years (subject to “paygo” rules) in additional funding. According to the budget, the additional investments will be aimed at ending childhood hunger, reducing childhood obesity and improving the diets of children, and raising program performance to better serve our children.

SNAP/Food Stamps

The President’s budget anticipates record levels of participation in the program—35 million people in an average month in FY 2010, about 2.4 million participants more than in the average month in FY 2009.
It includes $61.4 billion for FY 2010 (compares to $54 billion in FY 2009), with a $3 billion contingency reserve in case the program exceeds budget estimates.
It continues to support the nutrition provisions incorporated in the American Recovery and Reinvestment Act, including a temporary increase in SNAP/Food Stamp benefits and administrative support.
The budget proposes a pilot initiative (funded at $11 million) to increase SNAP/Food Stamp participation among low-income seniors, a group that traditionally has very low participation.
It also promises to review asset tests for this and other means-tested programs, a move that could improve or eliminate outdated and counterproductive barriers to eligibility.

School Nutrition Programs

The budget is funded at a level to support anticipated growth in participation in the programs by school-aged children.
It anticipates that 32.1 million children will participate in the National School Lunch Program in FY 2010, with 17 million of those children qualifying for free lunch.
It anticipates that 11.3 million children will participate in the School Breakfast Program, with 8.2 million of those children qualifying for free breakfast.

Women, Infants, and Children (WIC)

The President proposes $7.8 billion for the WIC program to serve 9.8 million women, infants, and children. This is based on the U.S. Department of Agriculture’s estimate that approximately half a million additional WIC participants will be served each month next year compared to FY 2009.
This budget proposal restores the WIC contingency funds to $125 million and places $225 million in reserve to provide additional resources to help bridge the gap should participation or food costs be higher than anticipated.

Farmers’ Market Nutrition Programs

The Seniors Farmers’ Market Nutrition Program is at funded at $21 million, the same level as FY 2009.
The Farmers’ Market Nutrition Program is funded at the same level as FY 2009: $20 million.

Other Nutrition Programs

After years of being “zeroed” out, the Commodity Supplemental Food Program is included in the President’s budget, with $163 million to serve existing caseload. The program was funded at $160 million in FY 2009.
The President included $200 million for the McGovern/Dole International Food for Education program. In FY 2009, the program was funded at $184 million.
The President’s budget provides a total of $75 million for The Emergency Food Assistance Program (TEFAP) transportation and distribution costs, including $25 million that was provided through the American Reinvestment and Recovery Act. The budget allows states to transfer 10 percent of commodity purchases (authorized at $25 million) to supplement transportation and distribution costs, but this would result in fewer commodities for emergency feeding agencies.
The budget provides $5 million for Hunger-Free Community Grants. According to the budget, these grants will focus on promotion, outreach, demonstration projects and technical assistance to support communities in exploring broad local strategies to prevent hunger, especially among young children.
The President’s budget does not fund the Congressional Hunger Center Fellowship program.

Anti-Obesity and Wellness Programs

An additional $0.7 million is requested to expand USDA’s HealthierUS School Challenge that encourages elementary schools to take a leadership role in helping students learn, at an early age, to make healthier eating and lifestyle choices.
The President highlighted efforts being made to ensure the quality of meals served in the school meals programs and the Child and Adult Care Food Program, including a USDA-commissioned Institute of Medicine study to develop comprehensive recommendations for updating and revising the nutrition standards and meal requirements.
The budget provides $650 million to the Department of Health and Human Services for a Prevention and Wellness Fund. This funding was originally included in the American Reinvestment and Recovery Act, and will be used by HHS to develop an investment strategy for evidence-based clinical and community interventions to reduce chronic disease rates which could be used for obesity prevention.
In the Department of Health and Human Services budget, the Centers of Disease Control's Division of Nutrition, Physical Activity and Obesity, was basically level funded at $44.4 million (FY 2009 funding was $44.3 million.)

Refundable Tax Credits

The budget would make permanent the recent improvements in the refundable Child Tax Credit and the Earned Income Tax Credit, and the extension of the Making Work Pay tax cut. These tax provisions will provide crucial income support to millions of moderate income and working poor families with children. One of the many positive outcomes of that will be increased food security.

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