Press Briefing by Chief of Staff Leon Panetta; Secretary of Hhs Donna Shalala; Secretary of Education Richard Riley; and Assistant Secretary of Agriculture for Food and Consumer Services Ellen Haas

1:25 P.M. EST

MR. PANETTA: Today, Secretaries Shalala and Riley, Assistant Secretary of Agriculture for Food and Consumer Services Ellen Haas, and I want to discuss the Republican proposal that is now being considered in the committee on the House side to deal with child nutrition, or I should say, to gut the child nutrition programs in this country.

The legislation would abolish the school lunch program, the school breakfast, the WIC feeding program for pregnant women, infants and children, and other child nutrition programs, and replace them with block grants, and then would cut the funds available for those block grants. The President, as he indicated this morning, strongly opposes these proposals and will fight against them.

I'd like to give you some perspective of someone who worked in the Congress on these proposals and on these nutrition issues and the concern that I have in particular, having worked with many of these programs that really do serve the nutritional needs of kids in our country.

Let me be blunt. I've been through here a lot and seen a lot of proposals from the Reagan administration on; I think this proposal is one of the most mean-spirited, shortsighted and, I think, extreme proposals that I've seen debated in this town. It would really take food out of the mouths of millions of needy schoolchildren, toddlers, infants and mothers. And it would have a direct impact on their health and on their education. Moreover, it shifts cost to the states and local governments and the local school districts.

Back in the 1980s, the Republicans made deep cuts and proposed deep cuts in child nutrition programs that caused an estimated 1,000 schools to drop out of the school lunch program and impacted on literally hundreds of thousands of kids. By some estimates, two million to three million children at that time lost their school lunches. As someone at that time used to often say to the American people, "there they go again" -- and here the Republicans go again.

During the 1980s, having served as a member and as Chairman of the House Agriculture's Committee on -- the subcommittee on nutrition, a lot of us saw the impact of those cuts and fought against those cuts, and eventually were able to restore a lot of those programs with bipartisan support.

Let me just say that, if you look at the history of these programs, whether it's the school lunch program, or the school breakfast program, or the food stamp program, or the WIC program, that these were programs that were developed with a bipartisan consensus in the Congress. And the bipartisan support for nutrition programs to help kids runs the gamut from people like Senator Bob Dole, who I worked with a lot on the food stamp program, to people like Bill Emerson, who served with me on the subcommittee on agriculture, who supported many of these programs, to Gunderson, to people like Pat Roberts, who was on the AG committee -- this has always been a bipartisan issue in terms of support for these programs.

Why? I think it's pretty simple. These programs are right for this country, and they're right for the kids that are served by these programs. They are right morally because we are providing food to hungry kids in this country. They are right from a health point of view because they're helping improve the health of these kids. They are right from an education point of view because kids who are better fed learn better in school. That's a fact; everybody understands that. And very frankly, they're right from a cost point of view because if you're not willing to make this investment in kids, make no mistake about it, ultimately you're going to pay a higher price in terms of kids that are born disabled; kids that are born premature; the kind of costs of lost education because kids are not listen in school. I mean, there is a very heavy price to be paid if we don't make this investment. And it's for all of those reasons that these programs are right for America and they're right for our children.

In one fell swoop, the Republicans -- at least some of the Republicans, many of the Republicans, are now proposing that we literally throw these programs out the window.

What are the problems with the proposals that are now being considered by the Congress? Let me just list some of the concerns we have. First of all, the proposal would result in a cut of almost $5 billion to $7 billion in nutrition programs over the next five years. Those cuts are even deeper than those originally proposed in the Republican Contract. So they're actually proposing even deeper cuts -- $5 billion to $7 billion is the total amount of cuts that they're looking at. The cuts will be even larger because states would have the option under this proposal of shifting 20 percent of the amount they receive in these block grants to other block grants. And the other block grants would be seriously underfunded.

There would be a considerable incentive, basically, to shift money around, away from the programs that are supposed to serve children. So you've got a double hit here -- not only are they cutting the amount that goes to the states, but the states themselves can shift it around if they're shortchanged on some of these other block grants that they receive.

Secondly, the plan provides no safety net for children in a recession. The block grants would provide states with a fixed amount of resources each year. And when a state or the country is hit by a recession, as we saw during the '80s, unemployment goes up, obviously, and more kids then have to receive school lunches; have to receive school breakfast programs; try to receive the nutritional needs that they otherwise cannot afford.

During the last recession, 1.2 million more low-income kids received free school lunches, mainly because of the recession. You cut back on other education services for all of our kids. Is that what the states are going to have to do in order to meet the need? Are they going to raise taxes? Or when these kids come in are they simply going to say no to the kids as a result of the recession? So under this plan you really are looking at, as I said, an approach that ultimately, in a recession, is going to result in no safety net for kids.

Thirdly, the plan shifts federal funds from school food programs from poor states to the affluent ones, because the formula they're using in this proposal is not based on the number of needy school children, but on how many school meals are served in a state. So regardless of whether they are free meals for the poor or meals that non-poor children are able to purchase, they're basing their formula just on the number of meals served. So, clearly, the states that may need this money are the ones that could be impacted by this proposal.

And the last problem I want to mention is that school lunch -- the school nutrition block grant would drop the requirement that school lunches provide one-third of the recommended daily allowances for basic nutrients. One of the things we've been able to do through this program is actually improve the nutrition for kids. And that's been important. In other words, there will be no minimum standard for the quality of meals served. And when that happens, and everybody has got to basically operate on their own, the bottom line is you're going to see smaller meals served with low nutritional value to the kids involved.

As I said, this is wrong. And it's wrong for kids and wrong for the country. Back in the 1980s, they tried to make ketchup a vegetable. Now what they're trying to do is literally take away meals from kids. It isn't just simply saying that ketchup is a vegetable, they're basically saying we ought not to even provide ketchup for kids as well. That's what's happening here today, and I think everybody needs to understand that this is not something that I think the country supports. It's not something that I think, hopefully, many Republicans in the Congress would support. And it certainly is something that this administration intends to fight.

On the WIC program alone -- let me just mention on the WIC program, because this has been a program that, frankly, we all thought there was strong bipartisan support for. The WIC program provides nutritional foods to pregnant women, infants and children, as I said. Under their proposal, more than 100,000 low-income women, infants and children would likely have to be removed from the WIC program with the kind of cuts that they're proposing.

And finally, because of the way the program is drawn up, a number of states would probably be forced to cut back or eliminate the summer food service program for poor children, a program that effectively continues the school lunch program during the summer for millions of kids.

So again, I just want to stress how wrong we think this proposal is. There are a huge number of organizations, doctors, farm groups, religious organizations and others that oppose this proposal. We intend to propose it -- oppose it with every fiber that we have in terms of the administration's effort here. I, as you can see, feel very strongly about the importance of these programs, having worked on them for a number of years. And the President feels exactly the same way.

There is no soothing rhetoric here to justify the cuts that are being proposed by the Republicans in this area -- no soothing rhetoric. The reality is, these cuts are going to hurt kids, and they're going to hurt families in this country. And regardless of how one feels about how large or small government needs to be, government ought not to attack its own people. And this is a proposal that does exactly that. Children should not pay the price for the Republican Contract. And this proposal must be rejected.

Let me have Secretary Shalala speak.

SECRETARY SHALALA: Let me say quickly that what we're seeing here is a pattern of cruelty to American children, particularly to the most vulnerable and the poorest of our children. We can't abandon our national commitment to childhood nutrition. school lunches help kids learn. Nutrition standards protect children's health, and WIC works. And that's why it's had such bipartisan support.

This is not reform. And we see the pattern in welfare reform. This is not welfare reform. In fact, when you combine the Republicans' weak work requirements in their own welfare reform plan with the cuts that they're proposing today, it reminds me of a hit movie, Dumb and Dumber. The Republicans have it all wrong. In welfare reform, they're weak on work, and they're tough on kids. They're tough on kids with their nutrition programs, and they're tough on kids in their welfare programs, when it should be just the reverse. Weak work provisions would leave even fewer people working than under current law.

The Republican welfare proposals now have work requirements that are weaker than what Ronald Reagan proposed in 1988. The Republican proposals also punish children, as today's discussion of nutrition points out. In welfare, they're punishing children for the mistakes of their parents; no benefits for children of teen mothers, forever. They reduce assistance to abused kids, to neglected kids, to disabled kids and to abandoned kids. They hold -- they don't hold both parents responsible.

And we reported yesterday in our child support enforcement report that the federal government has the biggest increase in child support enforcement that its ever had. In the Republican bill, they still don't have child support enforcement; they still don't hold both parents responsible. In contrast, the President's proposal, from day one, has been that everybody prepared to work must work; that we must have job searches and education and training, and necessary supports like these child nutrition programs and child care. But after two years the President has insisted than anyone that can work must work.

We all agree on the need for reform, but we don't agree that we should hurt millions of children in the process. As the President likes to quote FDR: "A nation doesn't have to be cruel to be tough." These nutrition proposals of the Republicans are cruel, and they're absolutely outrageous.

SECRETARY RILEY: I think it's very clear that these proposals are hostile to children. The fact is that we can look at a lot of reasons for government reorganization and reform, and certainly dealing with the deficit and reducing cost of government is one of them. But when you talk about investment, investment when it comes to education is very productive. It is very counterproductive, then to reduce education and say you're dealing with the deficit and you're dealing with the deficit in the future.

This nation's governors and Congress have agreed, along with our President, to set national education goals. That's the policy of this country. One of those goals is that all children start school ready to learn. Another is that children will take in school challenging course work that will be to high academic standards. Both of these concepts, then, are affected negatively by a reduction in the school breakfast and lunch program.

I think it's absolutely critical. I think it's very clear -- any teacher will tell you, research itself is very clear -- study after study shows us that inadequate nutrition and, in fact, hunger have very negative effects on learning, especially if you're trying to learn to high standards. And young people are going to have to have more disciplined learning, learning to higher levels, and this is counter to that effort.

On the average, in 90,000 schools in this country, almost 25 million students eat a school lunch, and almost 14 million of them get their lunches free or at a reduced price. This new leadership proposal would jeopardize then the ability of states and communities and schools to reach the goal of high standards and ready to learn for all children in school every day by, as Leon pointed out very clearly, cutting the programs and then taking a percentage of the money and having it available for other purposes.

Children can't speak for themselves in terms of voting. Children are the most vulnerable among all of our age groups, and certainly, it's important for us to look at issues from the children's standpoint and from an educational standpoint. Common sense tells us that school meals should be available to children. This is not a bureaucratic government program, it's a realistic way to help children be able to learn.

ASSISTANT SECRETARY HAAS: It's been about 50 years that we've had a national school lunch program. And for these 50 years, both the school lunch program and our school breakfast programs have had a dramatic effect on the health of the nation's children. It's improved the health of our kids. The Republican bill that's being marked up this afternoon will jeopardize the nutrition and health outcome of the nation's children.

Because they work so well, as Leon has said, these programs have always had bipartisan support. Going back to 1969, the White House Conference on Nutrition, President Nixon spoke so clearly about the need for children to be fed in order to learn.

And going throughout this long -- decades of history, we have seen that there has been widespread support. And even this year, in the last Congress, when the Department of Agriculture proposed the school meals initiative for healthy children, which was the most significant improvement in the nation's history of the school lunch program, the Congress, on a bipartisan basis just this October, endorsed the administration's proposal and the school lunch, school breakfast and child nutrition programs.

But today, on the 50th day of the Contract with America, House Republicans are really proposing to eliminate the school lunch and school breakfast programs and the rest of our child nutrition programs, and replace them with a system that provides absolutely no guarantee that nutrition standards will be met or that needy children will be fed and, therefore, nourished.

Federal standards for our child nutrition programs have a 50-year history of successful health outcomes for children. What we've seen is that we've reduced growth stunting by 65 percent; we've reduced iron deficiency anemia; we've reduced low birth weights; we've reduced infant mortality. We've closed the gap between the consumption of nutrients with the general population in low-income children.

What we've really done is improve dramatically the nutritional status of low-income Americans because of these programs. All of that will be jeopardized by this block grant proposal because it has no requirements for national nutrition standards, and there's no compliance mechanism to ensure that the 50 different states' standards are ever going to be met.

As Leon Panetta -- and I almost said Congressman Panetta, because for two decades, I worked as a nutrition advocate on the Hill, and I remember 1981 when the Reagan administration made the mistake of proposing ketchup as a vegetable. Well, let me tell you, this block grant proposal is much worse than that proposal of ketchup as a vegetable. At least they knew that vegetables were important. Well, here we have no nutritional basis on really what's going to constitute a nutritional lunch.

We know today that there's an inextricable link between diet and health, and what children eat absolutely does matter. The Republican bill doesn't protect children from the economy, as well, which is very important. If there's a recession and demand increases for children to participate in this program as free or reduced students, then they won't be able to be -- their needs won't be able to be met. If we look at what happened between 1990 and 1994, school lunch participation of low-income children increased by 23 percent. If we had this block grant proposal, as the Republicans have presented, then what we would have seen would have been a 20-percent reduction in the resources, compared to today's funding.

The proposed block grant also cuts collectively, of all the child nutrition programs, more than $1.1 billion from those programs, and more than $7 billion over five years. And what's important is that it permits states to transfer up to 20 percent of its totals onto other programs. That means that 20 percent won't be used for food. It can be used for anything else, such as day care programs or any other non-food programs.

President Clinton has said that our nutrition programs are in the national interest. The Republican proposal jeopardizes the nutrition and health gains these programs have achieved for our nation's children over a long period of time and they give us all tremendous concern.

Q: Mr. Panetta, I know there will be many questions on this, but while we have you, could you please comment on the French government's announcement that they're asking several U.S. diplomats to leave, accused of espionage?

MR. PANETTA: My understanding is that the French are releasing a statement on that sometime within the hour, and that our State Department will release a statement on this later in the afternoon. I think I'm going to leave it to the State Department to respond.

Q: Could you characterize the nature of the U.S. French relationship right now as a result of this latest incident?

MR. PANETTA: I -- we are in discussions with the French and, as far as I know, I think our relationships still are sound. It's just -- it's obviously one of those things that we're going to leave the State Department to answer with regards to that specific issue.

Q: Mr. Panetta, when the President was a governor, can you tell us when he decided that governors were incapable of looking after their own people, and can you tell us which particular states or governors are most threatening to children, since there seems to be some concern about some states in particular not meeting standards?

MR. PANETTA: The President, as governor and as President, has always felt that what we need is a partnership in this country between federal government, state governments and local governments to deal with the needs of the people in this country; a partnership.

The nutrition programs have essentially been a partnership. We've worked with local school districts, we've worked with states in developing these nutrition programs. They have served the needs of people. As the President himself has said, and I think it's a very good point, conservatives in this country used to take the position that you don't have to fix what's not broken. These programs are not broken. These programs work well. As a matter of fact, even this morning on one of the programs, one of the advocates of this change basically said, I like these programs; they're good programs. They work. And if they do work, then there's no need to change them because people are being served by these programs.

So I think both in terms of the President's view of the relationship between Washington and the states, and more importantly, in view of the needs of people that have to be met, particularly the needs of the children that have to be met, the President views this as undercutting that traditional partnership that should serve people.

As far as the governors are concerned, I think the governors need to take a very close look at this proposal because ultimately, make no mistake about it, this is one big shift to the states in terms of responsibility, particularly if they're in a recession. And if this country's in a recession, if those states are in a recession, and they wind up having a lot of kids coming to school without food and they can't find the money to pay for it, then all of us are going to be in deep trouble, including those governors.

So, you know, again -- look, there are reforms that could be made. This President believes that there are reforms that can be made. This President believes that there is flexibility that can be provided to the states. But for goodness sakes, we don't have to punish kids in this process. And this is a proposal that punishes kids.

Q: Can we take it that there is no amount by which you believe the spending in these programs can be restrained or cut -- no amount?

MR. PANETTA: No, I think -- well, I mean, look, there isn't a program that obviously can't be reformed and can't improve in terms of its cost-effectiveness. I've never -- as budget director, as chairman of the Budget Committee, I've never taken the view that there isn't a program that couldn't be looked at in terms of improving its performance. But that isn't a meat axe approach. This is a meat axe approach, okay?

Q: What would be the administration's approach to reducing the cost of this program?

MR. PANETTA: I think we have always said that when it comes to reinventing government, reducing the number of bureaucrats here, reducing the number of people that have to oversee these programs here, that's something we're willing to look at and we're willing to propose. As a matter of fact, I think Ellen could probably point out some of the things we've done in reinventing government on these programs.

ASSISTANT SECRETARY HAAS: Last year in our proposal, we reduced paperwork significantly and administrative burdens on the states by taking away some of the requirements they have for checking. But it's important to note that the block grant proposal that the Republicans have does not make it any less complex for the state. In fact, in some areas, because there are some extra administrative work that has to take place because of aliens, they have additional administrative burdens so that you're not really going to have any kind of simpler programs for states.

In our reinventing government, we've also updated the standards so that we do not have the same standards that go back to 1946; they had never been updated before. So in that, what we're doing is saving health care costs because we know that too much fat in the diet is related to heart disease and cancer. So that's saving the government as a whole money because we're saving health care costs because we're increasing the nutrition of children.

Q: It sounds like you're using the nation's poor children to stick them in the path of this Republican steamroller. Is this going to be the issue that stops the Republicans from getting their way over the -- that begins that process in the next few days?

MR. PANETTA: Listen, let me make clear, we have not made this proposal. This is a proposal that's coming from the Republicans who are trying to push this Contract. But in pushing this Contract, they're trying to run over kids. And that, I think, is legitimate for us to point out.

The President has said, there are some elements of this Contract that he's willing to work with Republicans on. Whether it's dealing with unfunded mandates or dealing with line-item veto, or dealing with some of the issues that they've proposed, he's willing to work with them. But he is going to draw the line when it comes to hurting kids in this country. And that's what this proposal does. You know, that's not what we're about, that's not what we should be about. Yes, we can improve the way government does business. Yes, we can improve the way we provide services. But you don't hurt kids in the process. And that's what this does.

Q: Mr. Panetta, when you talk about the long bipartisan support for these programs, especially things like WIC, Senator Dole, for example -- what makes you think Senator Dole won't fight to protect these programs?

MR. PANETTA: I think -- my hope is that Senator Dole will fight to protect these programs. If I know Senator Dole, and his commitment to these programs, I think he will fight against this proposal. And I hope he does. I don't -- you know, we don't take this stand on a partisan basis, we take this stand on the hope that both Republicans and Democrats alike who have worked for these programs will stand up to defend them.

Q: Mr. Panetta, you, yourself, have said many times that these big deficits are unconscionable, and that they hurt the kids of tomorrow. The President told us two weeks ago, well, here's our budget, $200 billion in the deficit; if the Republicans want to cut it, let them have at it. But all their cuts, you say are unfair to children, immoral, cruel. Do you feel that this administration should have produced a more austere budget, and not left all of these targets to cut?

MR. PANETTA: Listen, listen, we did $500 billion in deficit reduction two years ago -- $500 billion in deficit reduction. We didn't have to cut school lunches. We didn't have to cut school breakfast programs. We didn't have to cut the food stamp program. We didn't have to cut programs that served poor kids in this country. As a matter of fact, although we cut $500 billion from the deficit, we, in fact, increased our investment to programs like this -- on WIC, and others. You know, it doesn't take --

Q: billion dollars deficit shouldn't have been cut at all, and these Republicans shouldn't cut it?

MR. PANETTA: Listen, in our proposal in the budget, we submitted $144 billion in spending cuts. None of those proposed spending cuts involve hurting kids. That's the point. We can reduce the deficit. We can find savings. We can reinvent government. But you do it in a compassionate way that has some sense of understanding about what this country is about.

Q: You don't want to cut the elderly either, so if you're not going --

MR. PANETTA: We did $500 billion in deficit reduction. It was a tough vote. People voted for that. We reduced the deficit by that amount. And we didn't have to hurt either the elderly or kids. That isn't a sin, believe me, and it shouldn't be viewed as a sin. The reality is that you can exercise good conscience in getting savings without hurting our own people.

Q: Where would you suggest that the Republicans look for -- if they shouldn't cut here, where else should they go for cuts other than what you laid out in your budget cuts?

MR. PANETTA: We have always said with great expectation that we await their proposals. We offered $500 billion in deficit reduction. We didn't get one Republican vote -- not one Republican vote. The Republicans are saying they want to balance the budget between now and the year 2002. I have yet to see any specific proposals. I mean, this is one of those out there. Yes, this is pretty specific, but it's an example of what we're talking about.

Q: But where else should they go, if not here? Where else should the go to cut if not here?

MR. PANETTA: There are areas in the proposal that we submitted in our budget that we would recommend to them for consideration. We've got $144 billion in very specific spending cuts as part of our budget. We introduced $500 billion in deficit reduction. There are areas where we can find savings that don't involve penalizing kids.

Q: Mr. Panetta, the House Appropriations Committee, as you know, is meeting this week to make a series of cuts. And they're going to be outlining a number of cuts this week that they're going make. Tonight they meet to cut back seriously on public broadcasting. The fact that you're zeroing in on these particular cuts, does that mean that you would accept the cuts in other areas, like the public broadcasting?

MR. PANETTA: There are going to be proposed cuts that they suggest that we may well indeed support in this process. I'm not taking a blanket approach here on all of their recommendations. And there are areas that, in fact, we will support that achieve savings.

But when it comes to these basic programs that affect kids in this country, particularly those that need nutrition and need these school breakfast programs and need the support of these programs like the WIC program, that's where we draw the line.

Q: Will you support the cuts in public broadcasting?

MR. PANETTA: I think the President has spoken to that issue.

THE PRESS: Thank you.

END1:55 P.M. EST