Food Stamp Act Amendments Statement on Signing H.R. 4057 Into Law.

I have signed into law amendments to the Food Stamp Act of 1977 which will allow us to continue program operations without cutting benefits for needy food stamp families and also will provide a series of new measures to reduce error and fraud. These amendments are needed chiefly because inflation in food prices has boosted program costs well above the ceiling on program spending contained in the 1977 act. The Congress has acted swiftly to raise the spending cap for this fiscal year and to appropriate the additional funding we need to avoid closing the program down entirely for the month of September. The legislation also includes measures to provide additional benefits for elderly and disabled households with high medical or shelter costs. I am also pleased that the Congress has included several antifraud provisions the administration has recommended.

The need for additional funding for the food stamp program is yet another signal that inflation of the price of food is increasing at an unacceptably high rate. When the Food Stamp Act of 1977 was passed, food prices were projected to increase at an annual rate of between 3 and 4 percent a year, and the ceiling on program expenditures was based on this assumption. But in the last 2 years, food prices have risen nearly 20 percent. This rate of inflation in so basic a sector of our economy not only boosts the entire cost of the food stamp program, but it also adds to the inflationary spiral that erodes the purchasing power of all consumers.

Recently, we have learned that while farm prices have fallen, the food industry may not be passing those savings on to consumers. I have met with representatives of the food industry to deal with this matter and will do everything I can to see that consumers benefit from lower farm prices in terms of lower prices in the supermarket.

Recent increases in the number of Americans participating in the food stamp program have raised costs as well. In recent years, the program has undergone sweeping reforms. Administration proposals enacted by Congress have tightened and simplified administration, imposed tough penalties for fraud, and reduced or terminated benefits for higher income households. At the same time the administration's proposal to eliminate the requirement that households buy their food stamps has brought several million new participants into the program who had previously been eligible for food stamps, but had simply been unable to afford them. Many of these people are the elderly and rural poor, whose participation rate has historically been very low.

It would be callous and shortsighted to cut food stamp benefits, which now average a modest 33¢ per person per meal, because the program is reaching larger numbers of the poorest households and because food prices have risen so alarmingly. While this administration is committed to controlling Federal expenditures, we will do so within a budget of compassion that recognizes the fundamental importance of food assistance to our Nation's poorest families.

There can be no question that these families are poor. More than half of the households receiving food stamps have gross annual incomes under $3,600. Because of the critical importance of continued food assistance to these households, I have asked Congress to lift the spending cap for future fiscal years, and to provide the funding that will be needed to avoid cutting benefits in fiscal years 1980 and 1981.

In the interest of tighter program administration, I have also asked the Congress to enact a number of measures to save food stamp funds by reducing error rates. Some of the most important of these provisions are still pending before Congress. I ask Congress to enact these provisions along with provisions to authorize adequate funding for 1980 and 1981.

Recently, teams of doctors sponsored by the Field Foundation revisited the poverty-stricken areas where they had found serious hunger and malnutrition 10 years ago. They reported the presence of "fewer grossly malnourished people in this country today than there were 10 years ago." The doctors concluded that the food stamp program "is making the most crucial difference in improving the quality of the lives of many poor people."

I intend to give this valuable program my full support, and I call upon Congress to do the same.