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The Supplemental Nutrition Program for Women, Infants, and Children

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Commission to Study Capital Budgetting
Staff Paper Prepared for the President's Commission to Study Capital Budgeting

June 24, 1998

I. Description of Investment

Established in 1972, WIC provides federal grants to states for supplemental foods, health care referrals, and nutrition education for low-income, pregnant, breast-feeding, and postpartum women, infants, and children up to age 5 who are at nutritional risk. Nutrition assistance is generally provided to recipients in the form of vouchers for specific, nutritious food items which may be redeemed by recipients at certified, participating retail and other food stores. To qualify for the program, WIC applicants must show evidence of health or nutritional risk that is medically verified by a health professional. In addition, participants must have incomes at or below 185 percent of the poverty level. WIC operates in the 50 states, 33 Indian Tribal Organizations, the District of Columbia, Guam, the U.S. Virgin Islands, American Samoa, and the Commonwealth of Puerto Rico. By providing nutritious foods, health care, and nutrition education to this vulnerable population, WIC achieves positive health impacts that will benefit its participants throughout their life.

II. Decisionmaking Process

WIC Funding. The WIC Program is a grant program funded by federal appropriations, with some states supplementing their federal grant with their own funds. Grants are made to State Health Departments and Indian Tribes which operate the program in local health clinics. In Fiscal Year (FY) 1998, the WIC appropriation was $3.924 billion. In FY 1997, average monthly participation was about 7.4 million, with projections for year-end FY 1998 participation reaching approximately 7.5 million.

Planning and Budgeting. The budget request for the WIC Program is determined based on the amount of funds necessary to achieve and maintain full participation, determined currently to be 7.5 million average monthly participants, based on eligible population and estimated take-up rates. Factors considered include estimated number of WIC eligible persons, current participation levels, food package costs, inflation rates, and prior-year carry-over funding.

Once funds are appropriated, the initial allocation of funds to States and Indian Tribes is designed to ensure that each grantee has enough funds to continue supporting the numbers of participants on the program in their area in the previous year. Any additional funds are then made available for growth in a pattern designed to allow those States and Indian Tribes which serve the lowest share of their eligible population to raise that share as compared to the shares other States and Indian Tribes serve.

Management and State Relations. States and Indian Tribes manage the program on behalf of the Federal Government and recipients. States manage local clinics which determine eligibility and certify applicants for participation. Nutrition education and anti-drug abuse awareness classes are conducted at the clinic. States are responsible for certifying vendors to participate in the program by being allowed to receive WIC vouchers as payment for food. In an effort to use their grants more efficiently, all geographic WIC State agencies and most Indian Tribal State agencies have implemented cost containment activities. Savings generated by competitive bidding, rebates, least-cost brands, use of economical package sizes, etc., as well as home delivery or direct distribution systems allow State agencies to provide benefits to more participants at no additional food cost.

General Health Impact of the WIC Program. Over the past 26 years, the WIC Program has earned the reputation of being one of the most successful Federally-funded nutrition programs in the United States. Collective findings of studies, reviews and reports demonstrate that the WIC Program is cost effective in protecting or improving the health/nutritional status of low-income women and children.

Improved Birth Outcomes and Savings in Health Care Costs. Infants who are born premature or at low birth weight account for a disproportionate share of health care costs. Research has shown that the WIC Program has been playing an important role in improving birth outcomes and containing health care costs. Prenatal participation in WIC was associated with savings ranging from $1.77 (in Florida) to $3.13 (in North Carolina) in the first 60 days postpartum for each dollar spent on WIC.

Diet and Diet-Related Outcomes. WIC was found to more effective than other cash income or food stamps at improving preschoolers intake of key nutrients. The National WIC Evaluation found that children participating in WIC had higher mean intakes of iron, vitamin C, thiamin, niacin and vitamin B6, without an increase in food energy intake, indicating an increase in the nutrient density of the diet.

Infant Feeding Practices. A 1992 FNS study, based on an analysis of data from the 1988 National Maternal and Infant Health Study, found that those WIC participants who reported having received advice to breast-feed their babies from the WIC clinic were more likely to breast-feed than other WIC participants or eligible nonparticipants. Since then, the emphasis on breast-feeding in WIC has greatly increased in response to legislative initiatives which mandate breast-feeding promotion in WIC and provide for a national minimum breast-feeding promotion expenditure.

Immunization Rates and Regular Source of Medical Care. The National WIC Evaluation found significantly improved rates of childhood immunization and of having a regular source of medical care associated with WIC participation. CDC has cited linkage with WIC as a contributor to improved immunization status among low income children.

Cognitive Development. Cognitive development influences school achievement and behavior. Participation in the WIC Program has been shown to improve cognitive performance in children. The National WIC Evaluation found that the children of mothers who participated in WIC prenatally had better vocabulary scores, and children enrolled in WIC after the first year of life had significantly better memory for numbers.

III. Specific Factors Related to Investment Decisions

A. Linkage to strategic goals. This investment is linked to the strategic goals of the agency, which involve the general health and well being of women, infants and children. Specifically, Strategic Goal 3 for the Agency for FY 1999 is Improved Nutritional Status and Health of Low Income Women, Infants and Children, which includes objectives for improved dietary practices of participant women and children and improved health outcomes of program participants.

B. Long term planning. This investment is part of a long term plan to improve the health of women, infants and children in the U.S. The agency continues to request funding levels to support about 7.5 million participants, which it believes to be the level of eligible persons seeking WIC benefits.

C. Biases for or against program or project compared to other agency priorities. As noted from the results of the reports and studies, WIC has proven to be a cost effective program that protects and improves the health and nutritional status of low-income women, infants and children. WIC competes for funds with many other Agriculture Department programs, many of which have comparable priority within their own program areas. Balancing competing priorities is the role of the budget process.

D. Full funding. In FY 1998, the President's Budget request for a funding level adequate to support 7.5 million participants was reduced by Congress by about $85 million to support an average participation level of 7.45 million. There are disputes in Congress as to the legitimacy of the "full funding" estimate, but the differences are generally in the range of one-quarter of a percentage point of the request.

E. Spikes or lumpiness. The Administration continues to request a funding level adequate to support full participation. WIC funding is dependent on annual appropriations action by Congress.

F. Benefit/cost analysis. The WIC Program has shown, through numerous studies, that it is a cost effective program that saves from $1.77 to $3.13 in health care costs for every dollar spent in WIC.

G. Leasing issues. Not applicable.

H. Dedicated revenues. Not applicable.

I. Inability under BEA to use dedicated revenues to finance discretionary capital spending (i.e. CAPGO). Not applicable.

1. This is paper V. 9, based on the organization of the June 19, 1998 Table of Contents that accompanied the other synopses mailed to the Commissioners.

President's Commission to Study Capital Budgeting

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