len downie the former executive board editor of "the washington post" and the media scholar published a report that said the economic foundation of the nation's newspapers is collapsing and newspapers themselves are shrinking. the knight foundation's commission on the information needs of local community said, local journalistic institutions are themselves in crisis with financial technological and behavioral changes taking place in our society. yet there is universal agreement that healthy journalism is a vital ingredient in a democratic society. citizens need trusted sources of information about how their government and major institutions function. only a thriving news media can serve as a check on a powerful government. at this moment of tremendous change, what course should policy take? how can we guarantee the

survival of an independent media serving the public interest? what role can government policymakers play that does not preach first amendment protections. to answer these and other questions we have assembled a panel of experts that have different points of view that promise a lively discussion. let me begin by introducing the panelists. first, and if you will raise your hand, susan desanti is the director of the office of policy planning at the federal trade commission where she previously served from 1995 to 2006. among her current projects is a study on changes to the news media in the internet age. to her right is gene policinski vice president and deputy director of the first amendment center, a program of the freedom forum. is a veteran journalist to who helped in executive positions at "usa today" and was a correspondent covering washington for gannett news service.

in the middle, andrew subten as senior vice president and policy director of the media access project. and he has been with the media access project since 1978 representing citizen interest before the federal communications commission and congress. to his left is steve waldman. he is senior visor to the chairman of the federal communications commission directing that agency study of the state of the media. he was co-founder, ceo and editor-in-chief of belief net, a leading web site on religion and spirituality. before that he was national editor of u.s. news and national correspondent for "newsweek". finally, right here is our breath wall vice president and senior associate general of the net newspaper where she advises television stations and web sites on issues including intellectual property, ethics,

privacy and libel. she has been with the net since 1985 and previously was in private practice. please welcome the panel. [applause] i may by my count three journalists versus three attorney so that should be interesting. we will save some time later on for your questions but first i would like to begin by asking susan and steve to tell us what they have learned so far from the studies that they are in on the state of the media and i would like to start with susan. >> thank you very much barbara. i first want to emphasize the views i express today are my own. they do not necessarily represent those of the commission or any individual commissioner. this is especially important because the commission is still in a fact gathering phase. as barbara mentioned the ftc has a project on the future of

journalism in the internet age. one of the first questions i often get is why is the federal trade commission involved in this? and so i wanted to share with you the fact, which is not well-known, that the ftc actually does have a special statutory authority to gather facts and issue reports on events or trends in the economy that have significance, and we have done this before. we have worked on a report on the radio industry in the 1920s. it was one one of the events leg towards the formation of the federal communications commission. in the 2000's we did a report on patent law and innovation so it is not something totally new that we are doing here. this certainly is the case that, when we look to see the situation in the news media, we see a lot of financial difficulties, and there are

trends there that have significance not just for the economy but also to whether we are going to have a future that includes the well-informed citizenry that we need for a well functioning democracy. so, what has the ftc done with this project so far? we have had two workshops, both of them two days. in december 2009 we had a workshop that was basically gathering the facts about the economics of the news industry these days. and, we found at least three critical facts. the first is that there are certain ways caused by overleveraged purchases of newspapers and times when it was thought that margins of 20 or 30% would continue for a long time, and they obviously haven't. it is important to note in that context that most newspapers as a stand-alone enterprise in the united states, most of them are

still profle. but if you look at them only a stand-alone enterprises, but you can't look at them only as stand-alone enterprises because they are part of larger organizations that are still saddled with the dead from those overleveraged acquisitions. second, there have been significant reductions in advertising revenues to newspapers. why is that important? because newspapers traditionally got about 80% of their revenues, at least during the 20th century. from advertising. so what are the causes for that? there are two main ones. one is the great recession of 20007, 2008, 2009, 2010. that recession has hit traditional advertisers for newspapers particularly hard. that includes auto dealers, retail stores, housing sales etc. and then there is another

cause which is the development of on line advertising. this is most striking if you look at classified advertising. had used to provide about 40% of newspaper revenues. it is now substantially reduced as a source of revenue for newspapers. why is that? you can put your classified ad on craigslist for free so why would you list them in the newspapers necessarily? so let's take those three crucial facts and look at them in terms of the question for today's panel, which is, is it time for a bailout for newspapers? in my view there is no reason why do you would want to bail out newspaper owners who have made bad business decisions. i haven't even heard the newspaper owners asking for a bailout and no one is suggesting that the financial world would tumble if newspaper owners didn't get a bailout. second, in terms of the recession, well there are many,

many businesses that are having hairy hard times during this recession. there are many people who are being laid off. not just journalists. socom eventually, we believe, the recession will lift gradually. it will probably take much longer than any of us here would like, but that is still a phenomenon that is a short-term phenomenon. finally, let's look at the on line advertising, and this is the phenomenon that i think might justify some kind of shift in government policy to provide more support for news organizations in general and i want to be clear that we are talking about news organizations. we are not just talking about newspapers. this has to be across platforms especially since almost all news organizations these days are on line, so the differences between

platforms is getting blurred to some extent. in any case, there is some evidence that this movement of advertising on line can upend the business model, the news organizations especially newspapers and broadcast news. there is a great deal of innovation going on with small on line newsgathering organizations, but no sustainable new business model has arrived-- has arisen. there are reasons to believe that the free market for news, especially public affairs news, is potentially subject to market failure and that means there is the possibility that a new business model will not emerge. finally, it would not be novel for the government to provide indirect support for news organizations, and i emphasize indirect. so, what did we do? we had a workshop in march for

two days to talk about, together experts and talk about what might some of these policy options be that should be considered? that is where i will leave it and i'm happy to elaborate as to the extent we have time or if anybody's interested. >> do we will definitely come back later and hear what comes next. steve, same question to you. where does your study stand and what do you think the next steps will be? >> the fcc study is a couple months behind the ftc's study. we are looking at some of the same issues, but we also have a special emphasis. in addition to understanding what has happened with the news business as a whole, the federal communications commission has direct regulatory authority over really every part of the media industry other than newspapers,

so local broadcast, cable, radio, wireless etc.. so, we need to make recommendations, the plan is to make recommendations in general for congress, for society as a whole but specific way to make sure that the fcc is approaching these issues in a wise way. some of the rules on the fcc's books were conceived before there was an internet. some of them were conceived before there was a tv, so to assume that the people who constructed the scott it right back then is probably wishful thinking. so, obviously i agree with susan's general assessment that there is a pretty serious potential problem going on in the news business. there is a drop of 44% revenue from newspapers since 2000. newsmagazine staffs have been

cut in half since their peak. local news has cut back. across the board, you have some very serious contraction. now, a few points i wanted to make about what does that mean in terms of government intervention? first, the term bailout, i think the term bailout that kind of put into the discussion about news because of a coincidence of timing. the contraction of journalism happened to happen at the same time we were bailing out the auto industry and the banking industry. i don't actually know anybody who is advocating a a lot of newspapers or any part of media for that matter in the same way we have talked about with other institutions. in that sense there is a simple answer to that question to this. it is no, there isn't going to be a bailout of the newspaper industry. now that is not to say, first of

all it is not to say the crisis isn't just as severe as what is happening with autos are banks because, though the banking system might not collapse as a result of newspapers declining, what is being lost is potentially just as serious, the ability to hold public leaders accountable, the ability for consumers to be protected, the ability for our basic democratic institutions to function well. that is a big deal. it is a big deal and that is why the fcc launched this project in the first place. it is not so much we have a particular interest in the economic health as any of these other industries. it is what does this mean for democracy? there is a lot of different points that i think we could talk about. i think the two that have been weighing on me the most, one is the concept of unbundling and bumbling, which you have probably talked about a lot in

other contexts, but it a sickly refers in some sense to the ways that newspapers and other media institutions were able to cross subsidize different functions within the same operation. people have their favorite example, whether it is the horror scopes or are essentially subsidizing the city hall reporter or the sports scores subsidizing the bag dad bureau. there is truth to the idea that one of the reasons that journalism that wasn't as cost effective than a strict sense was subsidize is that newspapers were able to create this overall bundle that works in its totality, but if you break it apart and suddenly start applying straight supply and demand economics to each component, everything changes. and now you can bet get your box scores for free and then some on

line. and it really basically calls the question for the first time in perhaps 100 years of what are you willing to pay for news? the answer may be not much. then you have some interesting dilemmas of what happens in a world where people are not willing to pay for something that we nonetheless think it's an important social value. the other thing that has been kind of coming back, coming at us over and over again is a confusion that has developed between what you might call abundance of media outletsnd abundance of journalism. i will often hear people say, how can he say that there is a crisis or a shortage? there is tons of new outlets, there are tons of new web sites. you can get information more ways than ever before. you can get it on your phone. you can get a traditional ways.

and so it has the feeling that we are in an age of abundance in many ways we are. and yet, if you trace back the information that you get in all these many different outlets, you find it is actually a small and shrinking number of journals that are providing the information that go out to an ever large-- ever enlarging the number of outlets so you have both this area of abundance on one part of the media spectrum and an era of shortage of scarcity on another part, and it is very important to kind of disentangle those two forces if you want to think wisely i think about public policy. >> thank you. that is a great start. barbour i'm going to turn to you next is someone who represents a very important media company. how do you see the situation as

described by the two previous speakers and how did we get here? >> well, i have to say susan really hit the nail on the head and i think the workshops you have been conducting have been quite informative. and the points that you made steve as well are very profound. but in terms of the economics and for those of you who don't no, did that is a company that publishes 82 daily newspapers including "usa today" and we have 26 television stations around the country as well. and, in terms of how we got here, it is hard to know where to begin, but if you were just the top three, what susan pointed out is exactly correct, the decline and classified advertising has had a huge impact, because as you said, 80% of newspapers traditionally have

been supported by advertising and of that 40 to 60% has come from classified advertising, so the decline and classified advertising has had a profound impact on the dollars available for news gathering. and, secondly, the news streams of revenue on line simply don't pay as well as the old streams did. and there have been a lot of formulations of this but i think publicly the most precise is the one that marked contrary is mentioned at of your workshops which is, in print a pair of eyeballs, per year is probably worth-- a year but on line those eyeballs are only worth about $75, so it is hard to see the lines crossing with the emergence of the on line products emerging and growing, and we are growing audiences on line at a very good clip, but

the dollars that we derive from those audiences are smaller than those that we derive from the traditional print products. and also the fixed cost nature of the business can't be discounted. print is capitol intensive. at distribution is very expensive and we have to maintain that cost structure whereas new entrants come in and they don't have any of those expenses. so i think it is a confluence really of those three major developments that has found us where we are today. >> andy, you have some thoughts about whether in all of this there is an appropriate role the government can play. >> sure. first of all, i find myself in the odd situation of agreeing with everybody here in what has been said so far. so but they hypothesize somebody

who is not here, someone like ariana huffington, people who talk citizen journalism and people in their proverbial pajamas blogging away and somehow are fighting a function that replaces traditional journalism. and i would disagree with that person, because there is this irreducible world for these people called journalists in these people called editors, who create these products that tell us things we didn't know we wanted to know until we saw the headline are we saw the story they are and found it to be very important and produced with professionalism. i think this is the public good. i think there is a serious danger of market failure, and there is a tradition which susan

alluded to, going back to the very start of the country. it is inherent in the goals of the framers of the constitution and the first amendment to create a well-informed electorate for making sure that voters are informed about issues of the day and able to make wise decisions in the democratic process. i am going to actually read a couple of sentences from professor michael john, talking about the affirmative role of government in this context. congress congress he said is not debarred from all action of freedom of speech. legislation which urges that freedom is forbidden but not legislation to enlarge and enrich it. the freedom of mind which befits members of a self-governing society is not a fixed fact of human nature. it can be increased and established by learning, by

teaching by the unhindered flow of accurate information by giving men and women health and security by bringing together to produce of communication and mutual understanding although the federal legislature is not for bid and to engage in that positive enterprise and cultivating the general intelligence of self-government obviously depending on the contrary positive field, the congress and the united states has a heavy basic responsibilities to promote the freedom of speech. now i do subscribe to this very robust view of government's role in using the first amendment as a tool to promote civic discourse. we have done that since the beginning. people like paul starr and robert chesney have written wonderfully about postal subsidies and incredibly important roles that they played in creating a robust and effective journalism, and how

really for the last 100 years that it has been an accident of technology that we have had a profitable cross subsidized journalism created by large advertising revenues in the newspaper and broadcasting industry and how we are now facing a real dilemma. i think it is entirely appropriate for governments in the tradition of these.neutral subsidies, advertisements for public notices, postal subsidies in the noncommercial space, public radio which barbour can speak to. there are ways to do this that do not impede and greatly promote first amendment values. i will leave it to barbara but i don't think in her years at npr the fact that some of npr's funding came from the government

impeded the figure or effectiveness of npr's journalism. i think we need to look two ways to do that. there are some terrific models and we can talk about them. we certainly want to incubate. i would like to have something like a national endowment for journalism like the nea and the neh, to take new models and try them out, to assist people and trying to develop new and different ways to do it. it may well be that we will not come up in this new environment for a journalism that is truly self-sustaining without some governmental role and i think this needs to be a very important part of the discussion in seeing how government can do this in a proactive way. >> thank you, and in the next part of our discussion we will get to some of the specific proposal so i won't press you on that now. i want to give gene a chance to get in. gene has first amendment in the title of his job.

>> i'm going to run with that idea and try to take sort of a longer view and bigger if na paragraph ratified in 1971. so let me react a little bit to what has been said here. steve, you answered no, i might be attempted to answer on the bailout no and never let with some i will admit, some caution. the concept of public funding for laboratories and experiment for new development to assist an industry that frankly has never been all that good at innovation quite honestly. we have trained-- change the width of the columns and we congratulated ourselves only adopted 50 years after technology made it possible. i think when we talk in this context, there are a few things to think about. we in some ways are talking about a crisis of mechanics, of the corporate suite, that is in

terms of acquisitions and expansion versus the core product of news. we are not talking necessarily about a crisis of journalism and what is interesting to me in terms of a market model is that we have this incredible formula for success in terms of the free press and that is that we have a tremendous and maybe even growing need for information to do with an incredibly complex world. we have new mechanisms in which to deliver it and we have an incredible thirst by all accounts because of the explosion of users and web sites for that information on the consumer end so from that sort of basic model if you are setting up a mom-and-pop store somewhere in picking a product, you couldn't pick a better product than journalism and an environment for which a free press could function. i think again in the longer view, if you think about free speech, freedom of press, we have gone through an evolution, a circle. i call it from the village green

to the village screen. we have really circumvented in some ways these entities that grew up starting the late 1800's and robustly into the 21st century that were interposition between the consumer, the news gatherer or the news itself and the consumer. so we have this marvelous innovative period turcotte having said that, too to many of my colleagues are at work and to many industries are doing things like weak week furloughs without pay. too many journalists have been redirected to other careers for me not to say that in fact there is a crisis but again i think when we talk about the subject and i am struck because we have done other panels on the subject as well. we are in a transition. we are in from a model that worked or 80 years, 60 years, to something new. with all respect to the studies going on, we are dipping cups

into the waterfall right now. we are trying to find it in this tremendous flowing environment and i worry that if we come up with a solution today it won't be an appropriate solution for tomorrow in terms of what happens within entanglement of government. however we told the protection, and entanglement of government with the free press. i think we need to be very cautious about this. not trying to ignore the fact that every day fewer journalists are employed and we are also losing the high inspector in of journalists, the senior people with the most experience are leaving in numbers we would not have anticipated ever and certainly would not have occurred in a natural cycle. not only are we losing numbers that we are losing the talent pool at the top that has that 30 years and not just at a national level. i grew up starting with a smaller newspaper before it went to the world's largest neighborhood daily and what i learned there was often from somebody with 20 years of

spirits who knew more about the accounting budget for the municipal workings than anybody holding off office because they had them through all of those administrations and all of those transitions. we look at these mega-solutions. we need to think about preserving somehow that kind of thing and a viable industry. most newspapers and standalone operations, most television stations still are viable entities. community newspapers where they don't face the craigslist depravation of the classified are also seen as an an important news conduit because you can punch in your zip code and get the weather forecasts for altima tennessee. those are the places that are still robust journalism going on. when we look at solutions i hope we will consider that and and what do we need to enlarge their role, to assist their role? community newspapering at that level is still i think very robust. and i think we need to worry

again through all of this, and i understand and i've read tonight report and our friends who publish len downie who publish their report. but the founders were very specific. the 45 words are out there and it does say, there is no dairy or two assisting, congress shall make no law and implicit there was a desire to keep government not only out of restricting but directing and with all due respect i never thought i would be quoting jerry falwell but from the shackles, shackles and no matter how one structures indirect-- the first aggregators were the colonial newspapers who could mail each other for free. they were aggregators in 1791. but we need to be very cautious about stepping forward because remember we also deal with the big unknown, the skeptical public. who will see any assist as they

have with other industries as the hand of government somehow tilting the objectivity or pushing the objectivity or lack of that arty axis so i think we need to be very cautious and i really don't have 1 foot in the tar pit. i think subsidizing universities and other places for innovation is a good idea but i worry about the intrusion. >> barbara did you want to add something? >> i really just wanted to interject very briefly that we have been bearing the newspaper industry but it is premature. it is not dead. in fact this quarter i think around the country uc the numbers improving. we still think we have a very viable and vital business. it was exciting last fall. gannett invited most of its-- to our headquarters and there were

three days of meetings. the message was really watchdog journalism is our future. local watchdog journalism is our future and we think we have a future. we have recognized they think that the bailout notion is a little far-fetched, but even government subsidies of journalism i think are pretty radical when there are much smaller steps that could be taken to improve the financial health of newspapers by the government. i will just mention a couple. one is that, the going wisdom seems to be that postal subsidy has benefited newspapers, but in fact something of the reverse is true because the periodical rate applies to weeklies primarily, the beneficiaries are magazines in the weekly newspapers.

so the daily newspapers have actually been a postal trend that is heard is quite significantly and that is that the postal rate commission has given much much lower rates to saturation mailers. why does that matter? saturation mailers are like the ads that send advertisements out to an entire community. by contrast would we do at the newspapers we take the same ads, we called them inserts, and we put them in the newspaper. for those people in the community who don't subscribe, we mail. that is called high-density mailing and high density mailing that we do, which is select if i address, is much much more expensive than saturation mailing and continually when the increases come through we see very low increases for saturation and much higher for high density. that is a very small thing but it could benefit newspapers and

particularly the advertising revenue stream that is essential to their survival quite significantly. so, they are-- with andy on the panel i'm not going to talk about crossownership right now, but let's face it, we are treated like the dominant voice and the doj applies the market definition that basically considers us monopolists. again if we are looking to ways to maybe have consortiums or joint ventures etc. and be able to have them approved through the department of justice, there are very small steps which involve looking slightly differently and we think more realistically at the market that could help us again along the way so there wouldn't be a need for a handout from the government. >> i saw susan making a note when you are talking about the postal rates and i wanted to return to you and ask what kinds of policies, policy changes and

policy adoptions are you thinking that the ftc might be considering? >> well, it is not necessarily what the commission will end up considering that we did have actually the chairman of the postal rate commission, and speak at our workshop in march and unfortunately the postal rate commission and the postal service says you may have noticed, is not doing well financially so they are really not that enthused about any ideas that would include lowering rates for anybody actually. >> making them even might be a start. >> yes, yes and more power to you. >> just a thought. >> it is a valid thought. it is a valid. i think the general notion is the poster rate subsidies did a lot more for newspapers at the beginning of the country when

the founding fathers really had a notion that they needed to subsidize newspaper delivery to help train the country together and to also inform citizens and help get the democracy functioning. they are not helping newspapers or news organizations and pretty to you are these days. another idea that has probably, the idea that is most readily of interest is this whole notion of not just how do you increase revenues to news organizations, but how do you reduce the cost of newsgathering? so we had presentations on some of the work that is being done to make government data more readily available and more easily manipulatable. that is a trend that is going on and a lot of areas, including at

the securities and exchange commission. we had somebody come in and explain to us how they have developed new types of financial reports that companies are now required to submit that allow you much more easily to compare across companies with the various factors are, or whatever those financial terms are, and there is more and more that can be done that would certainly facilitate some of the watchdog reporting that you were talking about as the future of news. we did also discuss-- there have been discussions about new types of organizations that would be either a hybrid, nonprofit and for-profit, or for-profit but with a social purpose, and the

thought is that news organizations might fit into that kind of an organization, which would allow newspapers to thrive may be a five or 6% return on investment, what would allow the boards. >> corporate executives are clutching their chests. >> that is not the kind of person who would be running this organizations. these are organizations that would be run for the purpose of getting some investment but also for having a social purpose, and they would be specific bylaws that would allow the members of the boards or actors to take into account social purpose in making dions. >> this is the ll lc. >> jl three c. has gotten a lot of press but it is by no means the old me organization that is out there. this is part of it take movement

movement -- not just a minute gene. >> i'm just going to be quiet in the corner. >> i can feel you chomping in the bit. but there is a much rot or movement for these, what are sometimes called for benefit corporations to help out in economic and development zones and newspapers might be a beneficiary of that. the problem is the irs has not been brought along shall we say on some of these issues and there are significant tax implications that need to be worked out there. the corporate side of the law is being worked on and developed. the tax side of the law, not so much. and then we talked about copyright and i will let other people talk as well. >> okay. gene. >> again, i think the concept of

a public sphere or public focused entity reporting news and information on the surface sounds really wonderful. i worry that again, going back to 1791 or earlier, that we had a system of government determination of social purpose, and we see that replicated into today's society, called licensing. printers were licensed, and again i don't want to engage in hyperbole just for the sake of recounting history but when i hear an entity defined by social purpose as a news organization, as a newspaper or radio or television i think we open that door for what pushes the limit. if it is watchdog journalism, to take a look at how well the disabilities or congress is doing their their job that is

fine, but when something approaches that line? right now they set up, they are in the free market, they set up a stall and they succeed or fail by their merits, by the is this. i am worried about that zone in the middle, that little tiny zone or large zone where they approach the things there is great debate about the social purpose, then where again in terms of a free press are we going to draw that line? >> i just want to be clear, nobody is talking about licensing them. >> i was going to say broadcast stations are licensed. >> the fcc is a different issue. >> so do you want to talk a little bit about the mood things you are thinking of? >> first just a broader.. we are talking is that the debate is whether the government for the first time she get involved in regulating. right now all of the tv stations in america and all the radio stations got their licenses from the public through the agency of

the federal government. the government decides what kind of wireless spectrum is auctioned off. the government decides how much of the satellite spectrum should be set aside for educational programs. the government decides how much of cable should be set aside for public access. the government decides how many radio stations a single company can own, how many towns can have crossownership between newspapers and radio stations and on and on and on. i am not defending any of these policies in particular. i'm just saying, the current reality is that government is involved in the media worlds and all sorts of ways so the goal should be to make sure it this is done in a wise way. there tends to be a little bit of these conversations and it gets a little bit of a misleading idea because the newspapers are the least

regulated part of a media ecosystem. broadcasts really is a different thing, so one of the things we are looking at what the fcc is there has historically been what is referred to as the public interest obligation for broadcasters and that has been the subject of argument and debate back and forth for decades about what that means, what the government's role is in enforcing something like that. it is very tricky. you have got the theory that is sensible. unlike someone who just sets up shop with a printing press and there is an unlimited number of renting presses that can happen, there is not an unlimited amount of spectrum. the spectrum belongs to the public. the government is charged with the task of deciding who gets some of the spectrum are in for a long time the government said okay, because you are going to get the scarce public resource you have to serve the public interest in some way and that is traditionally had implications

in terms of news, public affairs programming. one of the things we are looking at, what does it even mean to have a public interest obligation now? is it fair to have public interest obligations applied against broadcasters when their competitors don't necessarily have them? is there at public interest obligation for wireless? they have spectrum to map. most importantly, is there a way of free conceiving our notions of public interest, public interest obligations for the 21st century in a way that would help with this problem? >> everyone will want to know how does the current discussion of rabin and reallocating spectrum and having broadcasters even sell back some of the spectrum, how does that fit together with an inquiry that said just that local news in

particular my needs some support it seems like a mixed message. >> well, not necessarily. one of the things that local broadcasters said to the fcc when it was going to the broadband process was, we should not treated as if this is just an economic equation. we are entities that have special relationships with the community, often touting the importance of local news. and i think that is great and i think the response is that the best way for broadcasters to make sure that they have all the spectrum they need is to fulfill their obligations to their community. so, it could be a win-win. the broadcasters to take seriously the need to improve their local news were to offer local news and journalism will have a much stronger case in terms of spectrum, but more importantly they will help solve this problem of the potential

crisis in journalism in america. >> and the. >> first of all, in direct response to your last question, the possibility that some portions of the spectrum that is presently being utilized by over the air television will be rededicated for broadband purposes underscores the extraordinary benefit that television broadcasters are now getting free of charge, and the responsibility that comes with that. i look forward to the day when we can develop spectrum cheer him-- sharing but for the near term ended term, this spectrum that television broadcasters are using is highly valued and it's is reasonable for the public to expect public service in exchange for use of their spectrum. more broadly, gene's concerns

are certainly well-placed but i do think it is possible, as we have done in my canyon, with broadcast regulation to make these things a viewpoint neutral as well as platform neutral. indeed the traditional postal subsidies we started talking about, they didn't ask whether you were a republican or a democrat or a federalist or a quitted newspaper in a day when newspapers were frequently owned by political parties and were highly partisan. i think fox news and msnbc has better analogues than cnn. it is possible to devise mechanisms including voucher schemes that have been proposed, that will free, can free the government from any notion about making a value judgment about

the content, and you know it is tricky but then again, the goal here which is to preserve a democratic process is an important one and a tricky one. >> barbara did you want to get into the spectrum? >> actually, i wanted to make a slightly different., which is that the question of whether the government should fund journalism in any way, shape or form is at the heart of the first amendment that we have been discussing here and i came across the other day a study of four argentinian newspapers and this was a study that was conducted by a harvard business school professor and a northwestern business school professor. they looked at at before argentinian newspapers over 10 years and look at specifically the amount of coverage in those newspapers that was critical of

the government, and then they looked at the amount of advertising that had been placed in those newspapers by the government and indeed in argentina that is quite common and it is done by plan. the government can put in any amount of advertising at once. it is not public notice related or anything like that. surprise, surprise, there was a "huge correlation" between the amount of dollars that were spent in the newspapers by the government and the lack of coverage of government to use. so i think whatever we talk about here today has to be against that backdrop, that certainly if you are looking to the government to fund you or to another source if it is a private donor you are not going to want to offend the source of your revenue. >> can i respond to that? "the wall street journal"'s largest advertiser is the united

states government. in the back of "the wall street journal" bears "wall street journal" bares all these dea forfeiture adds and federal notices that someone in "usa today" as well. this is largely done by did and i don't think anybody could say that "the wall street journal" and either the news portion or the editorial portion pulls its punches. >> i don't want to belabor the point but public notices are not a government subsidy newspaper. public notices are published so that the government can take property away from individuals and the only way they can do that constitutionally and legally is to give notice and newspapers are still the best way to get that notice. so that is not a form of subsidy. it is is there for a completely independent reason and because it is directed a process process that includes no favoritism, maybe you are right.

>> i just wanted todd o point and i'm not espousing government subsidies for news organizations, because you know at our march workshop we looked at a lot of other ideas that have nothing to do with that, but i do want to know, in surveys of audiences, the corporation for public broadcasting is the most trusted news source in the united states. so yes, yes-- so it is not impossible. there certainly have been bumps in the road there but it is also true that in many many countries, most countries in europe, there are government supported news organizations like the bbc, and so there are ways. i am simply suggesting that there are ways to construct chinese walls etc., etc. does

this country want to go in this direction a lot or? that is not my perception, that that is a u.s. tradition but simply to say that not every government involvement necessarily implies entanglement, and i do think that it is very important to make sure that that is the case, that you have structured it properly. >> quickly. >> we had a session here, freedom of information day and i believe to make it more excessive volt to anybody on line but also news organization so we can do investigative reporting, database reporting as a great example where government on its own could do what it does , the free press can do what it does and again not to be facetious but if you look back we have the first amendment along with the goal of rights. eight years later the alien sedition act. good intentions in the broadest

sense. we want to let this government survive against a hostile nation and they were good intentions. with all respect again. for public interest we had a fairness doctrine that grew, was applied. some would say failed and drew broadcasters away from things like editorials on line and a simple way to avoid having no political reporting. anyway there is that criticism. those are both examples of one long ago in mind were recent were in the public interest ultimately we have a detrimental effect on the free flow of information. i'm not saying-- we have a government and there was is a reason for that. but i think we have some historical examples and there are other smaller examples on the local level where government acting in what it calls the public interest of the moment really thwarted the free flow of information and again that is where my concern comes from.

i think we are chairman leslie and abated and i think there are plenty of journalists who will watch out for whatever government policies and practices there are in the public with the web web has a marvelous opportunity to be that same sort of watchdog that again history teaches us things about these early discussions. >> i am going to ask another question now but if you have a question yourself, we are ready to take those in there are two microphones here and i will be happy to call on you as soon as i asked this question, which is to steve, and that is i wanted to ask you what the relationship is between the study that you are doing and other things that are going on at the fcc, the localism investigation and media ownership investigation. for example when localism, there is a discussion of possibly local news councils and that kind of thing, so how do you see all of these pieces fitting

together? >> a lot of them basically will get rolled up into the future of media report and will make recommendations on what should be the status of the previous localism proceeding that happened. the ownership review is on a slightly different track because of the different legislative history and has a schedule dictated by congress and that is basically congress requires the fcc every four years to look at its rules and make sure its rules on ownership still make sense and by the way i should say about the future media project, we are looking at not only potential regulatory interventions but potential deregulatory steps as well. the idea right now is to look at the full slate of what the government does to see not only are there things we can do but

are there things the government should stop doing that might also help? >> barbara, do you want to suggest anything? [laughter] >> we could go on all day. but let me just pick up on a point. when you talk about localism and you alluded to the local news councils the night be established. i think there has been in the discussion of public funding of the media, kind of a conflation of national news and local news and everybody thinks it is all the same. when indeed, it is quite different. the european examples are primarily national news organizations that have been funded. i am very close to the local news business. we have newspapers in big cities like phoenix and detroit but we also have appleton and oshkosh and the thought that there would

be a local news council and each of those communities that would somehow figure out what quality journalism was in an unbiased way and give that money to the best entrance is kind of ridiculous. who would be on that council? who would be judging the quality of the news? >> just to clarify one thing. there were two different local news councils that have been talked about. the local news council that has been proposed as something that would do what you said is in the downey report. what was in the fcc paper was a question of whether or not there were ways of getting local tv stations to do more aggressive outreach to find out what they should be covering which is a little bit of a different thing. i can claim total ignorance on all of that because i'm i am new at the fcc. i have no opinion on anything that happened more than three months ago but i just wanted to clarify that there has never been any attempts or interest at

the fcc to establish local news councils of that sort are kos be okay. >> i think we have a the question here. yes, bob. and if you could identify yourself are kos be bob with-- i want to pick up on gene's.about to quote jerry falwell which i would never do. and address a question to andy and various examples he gave of postal subsidies and so on. starting with the long quote about how government should get involved affirmatively with the press and actually i don't know of anyone who suggests promoting first amendment values is itself a first amendment violation. for example i don't know if anyone who would suggest for a local government to build a library is somehow a violation of the first amendment but i want to go to the notion of the entanglement that comes with subsidies. everyone has mentioned postal subsidies and of course i-india

andy i know you are familiar with the long history of the government trying to manipulate postal subsidies to favor speech that the government like or disfavored speech that the government did not like. the nea for example for journalism and yet the supreme court held that because of the nea subsidy it can demand conditions based on content, public broadcasters are a wonderful asset but they don't have the same editorial rights has commercial broadcasters and if you have funding to the e-rate you are obligated to use content filters whereas if you don't take the e-rate then it would be a first amendment violation to impose a content filter on internet terminals in libraries so i get with those examples in mind, how would you respond to the entanglement in the first amendment problems that are created or alternately do you see subsidy is an opportunity to impose conditions on media across platforms that he would enable to do through direct regulation?

>> your points are very well taken, and takes us down into the weeds of course. i am not saying it is easy. i'm not saying it is without difficulty. i am saying that we are facing a genuine problem going forward, and here i do want to note barbara is right-- barbara wall is right-- you are right too but barbara wall is right that the journalism is a profitable business and an ongoing business. we are not talking about the death of the. there is a secular change going on and only when we come out of a recession are we going to know how much is won and how much is the other, but anyway you look at it, part of this is secular and there are some very fundamental changes. i think we need to look at ways

to do it. there are better ways and there are worse ways. .. especially local tourism, is essential to democracy. again, i am not endorsing that. i am just pointing out there are ways to skin this cat. we want to avoid the mistakes of the past. nothing is perfect. i point to the example of for all the problems that there are , npr and pbs has worked remarkably well.

it has great promise. these are platform neutral their communities has great promise and these are mutual things, so why do think we need to design them. i do think that you make very, very important warnings about the kind of problems that can i rise and we need to design around them. >> there is a question here. >> we heard on the earlier panel that broadband internet is a disruptive technology and we clearly have seen its effects on the newspaper industry. does it was the same risks for broadcasters, local broadcast journalism? how about national news network's? and if so are we going to be back here in five years talking about subsidies for those news gathering efforts? >> do you want to answer that?

>> well, again i think it is too soon to say. we own the broadcast stations and it's been a trying time over the last couple of years but there have been again, you know, bright spots on the horizon. for one thing the citizens united case is going to benefit local stations in the upcoming e election cycle and i really don't want to go there. [laughter] but i do think though you're right that it's all part of a very long term secular change and both newspaper and broadcast will be impacted. >> steve, have you formed any views about that at this point? >> i think the short answer is that it's not quite as bad as newspapers for the simple reason tv stations were never as dependent on classifieds so that whole leg of the store when it disappeared from newspapers it

didn't whack tv stations the same way. but the other factors that affected newspapers are also affecting tv stations. the drift of audience online, the lower ad rates on line versus where you could get on air. so there is no question that some of the challenges. by the way i don't mean to be a downer, but on the one hand some things will get better. there's great innovation going on, the economy will get better. on the other hand there are ways in which the negative parts of this haven't fully played out yet. we do not have universal broadband and for all the benefits broadband will bring it actually exacerbate some of the problems in certain pockets. one of the reasons community newspapers are doing relatively well describes list hasn't gotten there yet but he will. >> maybe not. [laughter] so when the classifieds keep going down some of the smaller newspapers are going to start to have those problems as well. >> susan, have you found anything so far in your study

that would be a response to that question? >> i think steve summarize did very well. >> okay. good. this microphone. >> white and case. this is addressed to anybody who wants to take it. six months ago my thinking on these issues would have been close to james's and today probably closer to andrew. it was informed by a book i'm not endorsing but i think people should take a look at. it's called "the death and life of american journalism," and it's been reference to it by chesney and nichols and a lot of it is based on research of the historical role, government and directly subsidizing the press and some of the ideas talked about here are talked about in this book as well but it did cause me to think of this issue in a different way than i had before and as i said my own view is probably shifted as a result of that in a since the child of the 60's and 70's and when one talks about journalism there's

one word that captures journalism at its best and the fear is how we in danger of losing the capability of this happening again and that word and a lot of people can guess it is watergate and that is the classic example of how journalism in some respects saved the republic. and if we are going to move into a situation now where the ability of investigative journalism is going to be harder and harder to maintain because of these economic problems what are we putting at risk and even though i am concerned about the first amendment side and the entanglement of the lesser two evils is having a form of subsidy but preserving the ability to do what investigative journalism did in the past, isn't that a price worth paying? >> if i could come and again i see what you are seeing in terms of moving to maybe the more of the middle of the panel as it were but let me just say as i said at the beginning i think these are the best times. investigative journalism is going on in so many different

ways, community levels as well as national from groups that internet only the comer ground single issue groups and they live and investigate and there's a model in all places in china where localities how your investigative reporters to report on certain government corruption because it's a tolerable reporting i guess as long as you are not attacking the large party that you're talking about a manager of a municipal waste water plant that's not doing its job you can investigate that. these are great robust times and died of see that in the same fashion. i think there is a commercial viability this still exists and i think that again news organizations that have been with us a long time still have which was talked about a number of reports and have come up in all of your panels which is trust despite this alleged skepticism they are still seen as i can perhaps lower down the circulation level as trustworthy than use and sources of information. so i don't think that

necessarily this innovation and move and change from the mechanics of how journalism is practiced is what we are talking about. we talked about the mechanics of saving entities. >> and i'm going to also give a response even though i and the moderator to that question because i'm one of the people who was actually working in journalism in washington when the watergate story was being investigated and we can't forget the fact that even in those good old days there was still a tremendous pressure placed on the "washington post" company because they also owned television stations that had to be licensed and that was used specifically as a threat and the reason watergate was successfully investigated by the "washington post" was because of a courageous owner who saw her duties and also had some very good people working on the story who were able to begin to

unravel it, and for my money it will always depend on the commitment of the ownership and what barbara said about the commitment to watch dog journalism that that is what is going to distinguished journalism in the future i thi th is very helpful. susan. >> i want to point out there are six state capitals that have no reporters covering them and so while yes, there is lots of innovation that is going on and we are not talking about everybody, every newspaper in the country dying tomorrow. there is a significant loss of journalistic capacity and i do think that that's what we are really talking about here. we are not talking about particular entities. we are tom docking about the journalistic capacity in particular with respect to public affairs journalism and i think that combined with local nature is where the most concern is and in fact economic theory

would suggest there should be the most concern. >> to highlight that point depue's state of the media reports that came out a couple weeks ago said that there had been about a $1.6 billion contraction in the newspaper spending and they did something interesting which is the winter meant to the foundations and said how much money as the foundation put into journalistic start-ups which tremendous innovation and it looks like a ton of money. they come up with 150 million soak 1.6 billion contraction, 150 million put into contract and that still leaves a gap. >> last question. >> from public knowledge this is picking up negative on the last conversation. i hear discussions how expensive it is to print and mail newspapers and the failure of classifieds and horoscopes what have you saw mr. blais like you're talking about business models and you are not talking about journalism casseaux we are talking unseating the newspaper

business model, barbara, honestly i think mailing newspapers to people we shouldn't even be thinking about that. >> we aren't mailing newspapers. >> that is what the discussion is about. >> let me just make my point, we are not mailing newspapers, we are mailing advertising, that is what i was saying. we don't mail newspapers, may be very small communities to, we deliver them because people want it and there are still people who want that newspaper there so yes we are looking for a business model. we are looking at ways to tweak the business model to save money in wheys that doesn't in her that the journalism. for example it's been widely reported that our newspaper in detroit, the detroit newspaper actually the two newspapers there we've reduced home delivery to three days a week. now we are still printing and newspaper seven days a week with the delivery costs being so high we are just delivering three

days a week and it's been a tremendous success so there are ways we can look at saving journalism and saving our business and the two are not mutually exclusive. >> just to finish my thought, and i said this to steve personally that my concern is that a lot of the discussion is about preserving business models. steve, you told me a lot of folks have come up to you and talked about how we see the copy read and make sure google doesn't link up to us or how do we get to google to pay? i'm concerned if we are talking about saving journalism let's talk about that and let's not talk about preserving business models because business models have to change when we have disruptive technologies. >> i have to say i didn't hear anyone say that they didn't think business models should change. i think there was a real connection here. anybody else w to respto that? >> i just think you can't talk about how are you going to maintain journalism without

talking about what is the business model going to be for how you maintain journalism. so that's why people are talking about business models, they are not talking about business models in the sense of we need to save every single newspaper that's all there. at the moment, however newspapers -- and i believe this was in the latest state of the media report unless it's changed -- but it's currently the case that newspapers get 90% of their revenue from their print versions. so although yes they are facing competition from th now from online news organizations that don't have those fixed costs they are not at liberty at this point to just say we are all going to go on line. that's not going to work. and so there is a big transition going on and the whole question is how do you save journalism is where are you going to get the

money to save journalism. and so that is why we are talking about all of these different sources which are potential new business model, lowering costs, how else can you get revenue from foundations and then as a part of it, are there government policies that could change that would help us with the funding for journalism broadly conceived against all platforms. >> steve? >> another way of looking at this is there is no shortage of demand for news now. there's traffic for news on line as booming. so the problem is not that people have decided american journalism is not interesting or is unreliable or something. the problem is the business model collapse. that is what has caused the collapse of journalism. one thing is there were a couple of people that used the term

market failure before and i realize that's a term that has a specific economic meaning. but it kind of rubs me the wrong way because a lot of what exactly happened is rampant market success that's caused this problem. it's part of why added rates have gone down as advertisers no longer have to waste have their budgets on things they don't know whether it works. part of why the bundling with the newspapers is people don't have to pay for stuff that they were not interested in. they can pay for just a sliver their interest in and advertisers can go to the product they want to be associated with. so in a lot of ways what's happened is 100 very positive things all adding upcreate this one very serious problem with accountability journalism. >> since i'm one of the people who used the term market failure i just want to explain market failure in this sense means a

problem the free market on its own name not solve, and in particular there's a focus on public affairs news because there is a possibility of free writing for news that relates to how to the voters in terms of savitt news. if i am a voter i can be rationally ignorant of how why should vote in the election because i can say the chance that my vote is actually going to make a difference is infinitesimal. so i'm not going to invest my time and energy in finding out of about why should vote for and all that kind of stuff. i'm going to the free ride on the guys down the street i know followed this stuff pretty closely and i generally agree with them on things, so i'm not going to pay money or demand news about that. and this is an issue that has

been studied and is a potential source of insufficient consumer demand for public affairs reporting. the basic concept of this type of failure is there is free riding so you don't get sufficient consumer demand. the other part is yes, we are all delighted with the vast quantity that news is available for free on the internet. unfortunately for the doesn't pay for a journalists salary so that's another part of the problem. >> okey we are going to have to call the into this year and continue in the coffee break. please join me in thanking our wonderful panel and a great discussion. [applause] [inaudible conversations]

[inaudible conversations]

next, a hearing on federal school nutrition programs. the obama administration recently announced plans to target child hundred and obesity through meal programs at schools. this is a little more than an hour and a half.

>> the koren being present the committee will come to order to conduct a hearing on improving children's health, strengthening the federal child nutrition programs. i want to welcome of openness and thank you for taking the time to be with us. i'm going to introduce you in a moment but first we're going to have opening statements from myself and by representative klein. my statement starts out this morning so we will change it right away and say this afternoon. we will examine how strong your nutrition programs can help fight childhood obesity of the deck and help improve our students learning and health. today almost one out of three children are obese. child obesity affects all aspects of a children's lives from their physical well-being to the academic success to their self-confidence. the health of our children should be the top priority as many of you know first lady michelle obama recently announced an indian child of obesity will be her first major policy initiative.

last month she launched the let's move campaign to ensure children born today will grow up as healthy adults. mr. klein and myself for both the white house when she met with the bipartisan group on what contributions we might make as we consider the reauthorization. bye offering the realistic goal of making children healthier, more active within a generation she set the stage for a dramatic improvement to help achieve this goal her initiative contains the four key pillars, getting parents more involved and informed about nutrition and exercise, making healthy food more accessible and affordable, increasing the tension to physical activity and improving the quality of food and school meal programs. the first lady and i both know that the government will alone cannot curve this epidemic. individuals, families, communities and the private sector all share responsibility. i welcome her involvement and look forward to working with her on this initiative. this committee can play a key role in its effort in today's hearing provides an opportunity

to hear from stakeholders. for over 40 years the child nutrition programs have helped families who've struggled with the traces of putting food on the table or paying another bill. the school lunch and school breakfast programs and to a child and adult care food programs and the wic program have a nutritional -- has provided initial safety net for these families serving nearly 45 million individuals across the country. studies show pregnant women who participate in the women's infants and children program have a healthier pregnancy and healthier babies. studies also show that low-income women are less likely to breast feed and high income mothers. thanks to federal, state and local efforts wic period in eckert proved breast-feeding rates and others in the population. the child and adult fare program also provides critical metrician support to young children. this program helps make nutritious meals and snacks possible for 3 million children and child care centers, family child care homes, head start and

after-school programs. the meals the children receive in the programs are more nutritious and well balanced than in other child care programs. this success tough economic times and the paperwork requirements that focus sponsors to make the difficult decision to stop administering this program. south-central l.a. one of the highest risk areas of ponder and obesity in california no organization was able to sponsor this program this year and we will go into detail in the question period. as a result more than 5,000 low-income children lost access to all the meals and snacks. if we're serious about improving children's health we have to make these programs and other critical source of nutrition in priority. but the discussion does not and there has the first lady said we must consider the whole school play in providing meals in environments that promote academic achievement. we expect children to come prepared learning. with studies showing hundred and

poor nutrition can be barriers to success. our work to reauthorize the child nutrition programs prisons a great opportunity to change the way children eat, to expand access to a nutritional meals and in the child hunger crisis in the country three we must ensure schools have the support they need to provide high-quality meals and safe meals so that children can make healthy choices. we must ensure all eligible children can access the programs by removing barriers families face when enrolling in the school meal programs like confusing application forms. today we learn about the work that lies ahead to provide all children with a healthy nutritious and safe meals they need to lead all the successful lives. i want to thank the witnesses for joining today and look forward to hearing your testimony and now i would like to recognize mr. klein the senior republican for the purpose of an opening statement. >> thank you. good morning to all. welcome to the witnesses. today we will examine filed the code federal child improvement with an eye toward improving

health, child abuse the rates are a concern for parents and families and the present a challenge to the health of the nation as a whole. what children eat at school certainly plays a role in the overall nutrition. so i welcome this opportunity to look at what parents and local schools are doing to promote healthy eating habits. the last time we free authorized the federal nutrition programs congress called on school districts to establish local wellness' policies as a way to promote good health and engage parents in a discussion about nutrition and physical activity. in fact it was my friend mike castle of took the lead on addressing children's health and these local thomas policies. local policies are the most direct and responsive strategy for promoting healthy eating habits at home and at school. the of schools to get body in and involvement from friends and students that account for a demographic and economic differences as well as local food preferences and they avoid the danger of a one-size-fits-all federal approach to school menu planning. of course the school breakfast and lunch programs are not the only initiatives to support

child nutrition. when congress reauthorize as child nutrition programs we will also look at the child and adult care a good program and the women infants and children program commonly known as wic. together these progress of combat hunger and promote nutrition through meals education and subsidies to low-income americans. a role in removing these programs should be to strike the appropriate balance between federal support and local leadership. with local wellness' policies and other initiatives school districts are exploring a broad range of policies to promote better health and combat hunger. i would caution as we prepare to renew and extend these programs that we not confuse support for health the school environment with federal mandates for what children and their families are allowed to eat. one report from the institute of medicine concluded radical changes might actually undermine participation in the school lunch program saying, quote come to school children are not satisfied with the taste of food served in school meals participation in the school meal programs is likely to decrease

and of course. that is not as a school meals should not be nutritious but ultimately good health habits began at home. that's why it's important for local schools to have the flexibility to work with parents to develop policies that work for their students. local schools also need the flexibility to determine what food is sold outside the cafeteria. many schools are voluntarily including healthy snacks in the vending machines or extracurricular events. ultimately it is local control over food policy that allows for innovation while still responding to each school's unique circumstances. we've all heard the of regis stories in which a piece of banana bread at a sale does not meet nutritional standards but a bag of chips meets the requirements. clearly arbitrary nutritional mandates can backfire when they override common sense. i hope we will keep these cautionary tales in mind as we explore how parents and local schools can improve children's health. thank you. i yield back. >> % to the committee rules

members may submit opening statement in writing which will be made part of the permanent record and not like to introduce the panel of witnesses for this hearing. first witness ms. dora rivas is currently serving as president-elect of the school nutrition is a season after serving as a member of the membership committee in 2005 to 2006. ms. rivas has been in food service for 36 years. in january 2005 she took the role of food and child nutrition services executive director for the dallas independent school district. ms. rivas is certified with the texas association of school nutrition and credentialed as a school metrician specialist in school -- with the school nutrition association. she also is a registered dietitian with the american dietetic association. carolyn morrison is of the child and adult care food program for all and the ceo of child care development services and oregon. in addition to being the current, past president of the national child and adult care

food program she served in numerous national ust committee's task force to improve this program. ms. morrison served as adviser of the food marketing institute the california child and adult program roundtable california food policy advocates and oregon sponsors alliance and i believe the colleague, chris woman interest the next witness. >> today i have the pleasure of introducing one of my own constituents, karen saluja the deputy director of the public health foundation enterprise as wic in irwindale, for me to read this organization is a nonprofit agency that's been providing wic services in the los angeles and orange county area for over 44 years. she oversees 54 wic centers that are throughout the county is serving 325,000 clients every month and i am pleased to report in my district she oversees

seven wic locations who serve over 46,000 people. ms. saluja first joined the public health commission wic in 1984 as a nutritionist. she's a registered dietitian and a member of the national wic association, the american public health association and the american dietetic association. she's focused much of her work on breast feeding and is a strong and vocal let it for healthy babies and families. thank you, ms. carolyn for joining and i look forward to the testimony. >> welcome. the next witness will be lucey gettman. she began her career as an advocacy corps donner for the of hunger alliance in ohio and helped policy and professional positions with the ohio attorney general, ohio student aid commission and the university council ohio. immediately prior to work the national school board association she was the director of the federal relations for reading recovery council of north america. ms. gettman specializes in early

childhood education, child nutrition education technology and literacy issues for the national school boards association. welcome to all of you. you're prepared testimony will be placed in the record in its entirety. you're going to be given five minutes to explain the highlights of your testimony and in front of you you see the small box is to be when you begin a green light will go on. when you use that four of your five minutes and orange light will go on and you may want to think about wrapping it up and then when a red light goes on wartime will have expired. welcome. we look forward to your testimony and the responses you will have to the members of the committee's questions. this rivas, we will begin with you. >> thank you. chairman miller, members of the committee. thank you for a much for continuing the externals tradition of this hearing. we deeply appreciate the courtesy. the two highest priorities on the paper in general are to expand access and improve the nutritional content of the meals and the environment of the local

school. first of several suggestions to expand access to the we recommend that direct certification and directed verification be a high priority that you continue to expand its use for child nutrition. we recommend that stat should be amended to allow for community eligibility in high poverty areas of the children do not have to individually fill out the applications. the hunger free school act h.r. 4148 has a provision that embraces this concept. we support expansion of the summer food service program and the after-school child care program. we support the healthy start act introduced by representative stephanie and jo ann emerson to provide 5 cents and usda commodities and that is h.r. 4638. we urge the congress to expand the free meal program gradually over time to meet the income guidelines consistent with the income guidelines in the wic

program. h.r. 3705 has been introduced to do this and we support that approach. finally we ask that you close a major loophole in the statute which allows funds that appropriate school meals to be used for expenses and unrelated to providing the school meals. there is no provision in the statute or in the regulations that govern what expenses can be reimbursed with this funding. furthermore when a charge is made we believe to be inappropriate there is no recourse. there is no appeal process to the usda. our suggested amendment is written in the testimony. second, with regard to nutrition integrity we have a few suggestions. partnership with first lady michelle obama's let's move campaign committed to further improving health the school meals and advancing nutrition education for americans children. i encourage you to go to our website to learn more about that partnership on the first lady's lips move campaign.

we urge the committee to increase the reimbursement in all meal categories. we urge you to also amend the statute and require the secretary to establish a consistent national application of the most recent dietary guidelines for all meals reimbursed by the department of the agriculture. the current statute is depicted in two important respects. first it requires meals to be consistent with the goal of the dietary guidelines. that is not specific enough. the meals must be consistent with the guidelines not just the goal of the guidelines. second someone must be in charge of deciding if the meals are in fact consistent with the guidelines. that responsibility must rest with the secretary. if every state and local community can decide if they are meeting the guidelines then there is no standard at all. children need the same nutrients regardless of where they live. it is basic science. the country is spending a lot of money to develop a fee iom

report and craft the lighter guidelines. they should be followed consistently. the time has clearly come to end the so-called time and place pool and give the secretary of the authority needed to regulate the nutritional quality of all foods and beverages sold on the school campus during the school day. the secretary should be required to promulgate regulations to guarantee that all foods and beverages sold in food are consistent with the most recent addition of the dietary guidelines for americans taking into consideration the recommendations of the institute of medicine and s and a recommendation for national nutrition standards. while it is mostly a matter of science, let me also mention the current multiplicity of nutrition standards across the country is drifting off the cost program. the more product specifications that exist in the school market the higher the cost of production and the cost the program. again, this specific amendment with regard to the consistency is included in the written

testimony. we must finally establish an effective nutrition education program in the schools. chairman miller, members of the committee, thank you again for continuing the special tradition. we pledged to work closely with the majority and minority to craft a reauthorization bill that is both faithful to our children and responsive to the deficit. i would be pleased to answer any questions that you may have. >> ms. morrison? >> good afternoon, mr. chairman and members of the committee. my name is carolyn morrison of the four, and a sponsor of the child and adult care program in oregon. stinky for this opportunity to join this afternoon to discuss a role of the child and adult care program plays in ensuring young children have access to good patrician and offer recommendations for the reauthorization. program improvements can also

help reduce charnel to the overweight and obesity priority about which the first lady is passionate. every day across the country millions of low-income families rely on the healthy food their children receiving child care programs because of this usda program. we all know hundred stifles a child's health intellect, creativity, capacity to learn and to be at their best. this program resources support good nutrition and prevent childhood obesity by offering healthy to and teaching young children and their care givers about healthy lifestyles and meal patterns. as a middle class, who decided to be a child care provider in the early 80's i learned firsthand from my exposure to low-income children in my care. i will never forget the four-year-old boy who wondered why i cooked and didn't just go out and buy fast food. his mom was poor and struggled to meet in suite. she left her kids but haven't the resources, knowledge or energy to feed them well. the only nutritious meals for children received for those that she received in child care or when they were at school.

given the crucial for early childhood nutrition plays in supporting the good health cognitive growth and development of a child and the lack of knowledge and resources of many working families, expanding access to the program is vital to ensure all children have the opportunity to grow strong and little for -- of the product lives. the day care program the attend as their primary source of food. they spend ten to 12 hours each day in care and receive most if not all of their meals while they, are there. 11 child care facilities the option of serving a third meal service as was previously allowed is an opportunity to improve child nutrition through this reauthorization. the program is and the essential source of support for child care provider centers and head start programs. program resources include training and technical assistance, onsite visits and reimbursement for food and meal preparation costs. the program also serves an important role in creating and maintaining accessible

affordable quality child care for working families. reducing the program area eligibility test in the current 50% to 40% could accomplish authorization improve access to health females for more young children. increasing the availability and consumption of fresh fruits and vigils, whole grains and low-fat dairy products for children in child care is essential to improve development and health and prevent obesity at the onetime early childhood when it can have the most long-term effect. updating the program nutrition standards and meal patterns to make them consistent with the most recent dietary guideline could be accomplished through the reauthorization. improving the call the will require enhanced meal reimbursements. the network of programs sponsors is breaking down. sponsors are choosing to discontinue offering the service because they cannot afford to continue to operate in the paperwork and oversight responsibilities.

nationally 27% of sponsors have chosen to leave the program. this is an especially serious problem in los angeles where the sponsors chose to close leaving over 700 providers on served in every low-income community. a large challenge in my state of oregon is the size and geography of the state will 67% of caregivers are concentrated in six of the 36 counties providers in a rural area participate as well. sponsor administered of reimbursement rates should be brought up to the level necessary to provide quality nutrition and wellness education, cover the cost of transportation per serving rural areas, cover the cost of additional visits and the time spent in helping low-income providers overcome literacy and language issues. retention of caregivers is challenging as they must remain eligible for the program by meeting training requirements. we worked to meet this challenge by developing and offering online training and help the nutrition. this positively impacted

retention of child care providers on the part and as they now have access to mandatory training regardless where they live. among other topics the focus on serving more fresh fruits and vegetables, low-fat milk and whole grains and have a secondary benefit of helping them eat licensing requirements. pernicious with local colleges and universities have enabled us to develop these resources as they are simply isn't enough money from sponsor reimbursements to develop them. in closing, we strongly support legislation by representative tondo the axis to nutritious meals for young children act which includes the recommendations i have discussed today. and last i would like to invite each of you when you were at home and more districts to visit child care homes and is sponsoring organizations to see firsthand the importance and opportunities available through the program for playing a role in provincial fronts of their lives and the child obesity epidemic. thank you very much for this opportunity to share this information with you on behalf of the sponsors.

>> thank you. ms. saluja? >> is this on? ranking member, distinguished members of the committee, staff, and thank you so much, congresswoman for a nice introduction. i am chairman saluja from los angeles. i work with this large organization that the doctor told us about. and i'm also here as the voice of the national association which essentially is the efficacy voice of over 12,000 service agencies that provide wic services to over 9.2 million participants throughout the country. of these nine plants 2 million, 7 million are infants and children under the age five and exactly what we are talking about here today preventing child to obesity needs to start in the wic pergamon buy into to tell you we have a solution. we can actually start to prevent child abuse the from the day the child is born and the way the we do with is by ensuring that this child gets exquisitely breast fed, not only does he get exclusively breastfed at birth

but he gets the duration because according to the center for disease control and prevention we can prevent 15 to 30% of childhood obesity if the child is breastfed in the greatest protection happens when the child gets no formula, no solids and goes on to at least six months. now this is a magic pill. why haven't we increased it? well it certainly isn't for lack of effort because i want to thank all the members of this committee. i want to thank chairman miller specifically, representative carolyn mccarthy the chair of the health the subcommittee. thanks to all of you the appropriations committee bill provided a major expansion they quadrupled the breast feeding money is in the last bill they created a new breast feeding performance bonus which is very unusual and is extremely welcomed by wic agencies and provide new funding for evaluation of program effectiveness. the wic food package was like heaven for all of the providers. we've been waiting for it to

change and in october 2009 it did change and it's a tool for us to get out there with good nutrition messages and it has a little extra food for the full the breast-feeding mother which helps us package exclusive breast feeding. you might say what is wic doing with breast feeding? our rates are increasing the are increasing very slowly. and we are lagging behind the national data because non-wic moms do better than wic so why is that happening? well i'm here to ask you for five things. everybody's asking you i'm sorry, number one we would really like you to director and patrician services to restore the 2-dollar increment that the foley breast-feeding moms have when they have that little extra edge it doesn't sound like a lot but that $2 that wic out on the field didn't leverage it when they are working with the mom when she's kind of vacillating i don't know what should i do, you get extra fruits and vegetables so we would like to see that put back in. we would like you to make us

some time so we can help the mothers where they need the support and you might say how my going to do that i can't create time? you can. you can help by extending certification for children that is 40% of our prisons to one year. we do that for breast-feeding moms, we do that for instance, we should do it for children. that would release precious minutes breast-feeding mothers need for support. now, what about barriers external to wic because everybody doesn't live in the wic world. if they did we wouldn't have childhood obesity and freddie would be worse because that is how dedicated the staff is. well, the external barriers to breast feeding really mean comprehensive policy changes and the institutions that our mothers go to outside of wic because we really need to optimize this money that has been put into wic to do what we should be doing and i and speaking specifically of unsupportive infant feeding policies and health care systems. i'm speaking of the intense

direct marketing of infant formula and of support. so what i'm asking you all is to really -- i hate to think outside of the box but think outside the box and work with members of congress and figure out how can we tackle this problem? how can we pass legislation that says if there are mckay births have been in a hospital bed hospital should not sabotage breast feeding should support breast-feeding and you might say how this is sabotage breast-feeding? pbr given formula bottles right at birth. mothers get separated from their babies. it's not that people want to be me and it's just the policy. it's like an archaic policy that needs to be changed and there are hospitals now that have embraced policies, outcomes are different, oregon has a very wonderful hospital. northern california does. throughout the country we have some very good models. i would love us to have more of them throughout the country. what about marketing formula? you might say -- my time is almost up. mothers get very confused with

marketing messages. they come to wic and say can i have that breast milk in a can? there's no such thing? it's because they get free formula when they leave the hospital, degette formula, coupons and free formula at the doorstep. this has to stop. we are spinning our wheels in the wic program, mothers are suffering and babies are getting fatter and none of us want that. i know my time is up so i will not keep that beautiful quote i had at the end. i get to more to ask in my written testimony to for indulging the i appreciate your attention to read >> thank you. ms. gettman. >> chairman miller, ranking member klein my name is lucey gettman, director of federal programs for the national school board association. as a former child nutrition advocate and now an advocate for school boards i thank you for the opportunity to address the committee on this important issue affecting children enrolled in public schools. the national school board association represents the nation's nearly 15,000 local

school districts and over 95,000 local school board members by working with and through the state school boards association's. at the organizational level the school health programs department assist school policy makers and educators to make informed decisions about health issues affecting the academic achievement and healthy development of students and the effective operation of schools. services are provided with and through nsba school boards and partnership with other national organizations such as the national association of state boards of education, the alliance for health your generation and action for healthy kids. additionally nsba is very proud of its efforts to promote nutrition in the schools and prevent child obesity through web based services, educational programming and publications. a summary of efforts is provided as an appendix to this statement. without question local school districts believe child nutrition is vitally important

to fostering a healthy and positive learning environment for children to achieve their full potential. help the students learn better. children and youth who eat nutritious foods and stacked for healthier, perform better in school and learn behavior's that will keep them healthier throughout their lifetimes. school boards are acutely aware of the importance of ensuring that children have access to health and nutritious foods and many have already taken steps of the local and state level to improve nutrition and healthy eating. 16 and was the state of delaware where a public-private partnership of education and health stakeholders including the delaware school board association established the edith p. vincent healthy school awards to recognize public schools championing children's health including nutrition. nsba's health programs department maintains many examples of school district efforts to improve student health and nutrition on its promising district practices

database. calfee nutrition success stories include districting in kentucky that increased breakfast purchase of passion rates to 95%. a district in new jersey that holds monthly coordinated health team meetings to discuss increasing use of threats and its troubles, coordinating with food services and meeting with the pta. there's a pennsylvania district that created its own well misbrand to establish a new culture in the district to promote health and there is an arkansas district implemented a water only policy for sale in the district's vending machines. there are many other examples of local initiatives because the commitment to increasing student access to halt the and nutritious food is not unique. what is unique however are the circumstances of each school district. what is successful of one won't necessarily work at another. the geography, the economy, demographics and resources available in the community very for each district. the challenges, opportunities and responses to the local circumstances will also very.

local decisionmakers and stickers are in the best position to understand and meet the needs of each district including child nutrition with the federal government planning an important supportive role. therefore i have the following recommendations for strengthening and nutrition programs and the child nutrition reauthorization. of recognize local school district authorities and very tense among local circumstances and lobbies or policies addressing child nutrition. next, refrain from imposing additional regulations or mandates on schools outside of the federally subsidized school lunch and breakfast programs and adequately reimburse school districts for the cost services. in addition, support school districts, local communities and states that are assuming greater responsibility for health and nutrition through incentives and grants that enable them to further expand their local commitment and finally ensure adequate resources are available for the school nutrition programs for the meals and administration, for the

equipment and facilities improvements, training for staff education and other stakeholders for nutrition education and support of local on the ships. these recommendations are based on nsba's resolutions determined by a national 150 member delegate assembly members of which are selected by the states to collectively established policy representing the perspectives of 95,000 local school board members the process is annual and on going into the policy development begins in local communities in the states and colonnades at nsba's annual convention each spring. in conclusion, reauthorization of the child nutrition act is an opportunity to celebrate the progress made since the to those of for reauthorization and to envision and even healthier future for the children improving the quality of and expanding access to school meals is important to the children and the nation. school districts or vital partners in the effort to ensure healthy and positive learning and firemen for children to

achieve the full potential. the child nutrition act reauthorization is an opportunity to acknowledge and support this local leadership and authority. thank you again for the opportunity to comment. nsba looks forward to the continuing conversation and collaboration about this critical issue. thank you. >> thank you to all of you for your testimony. ms. morrison, can you just -- i only have five minutes i need a better explanation, not better and more expensive than what happened and why these agencies in los angeles decided they can no longer participate. >> the program was being sponsored by an organization, multi service organization and the csb administrative compensation for the program was not financially viable for the organization to continue

supporting that program. there's not enough money for the administrative reimbursement to support that program and to be a accomplish the requirements. >> and that is separate from the food package? >> separate from the mails, yes. >> you're understanding is it was the question of cost administration? >> that's true. it's the cost of administration of the program that is causing the sponsors to discontinue sponsoring the program. >> he would attribute that to what? why has that changed on all the sudden? >> one of the things that happened in the last year is the reimbursement for administration was reduced because of the consumer price index which went down which caused the reimbursement rate for a certain level of homes to go down. also the administrative burdens of paperwork and the additional block claiming that has become a

requirement caused programs to close because it requires more visits and it can't be accomplished without increasing reimbursement for the administration. >> thank you for that. ms. rivas, you make two recommendations with respect to the dietary guidelines and one is that it's no longer sufficient to simply try to meet the goals or that you are attempting to meet the goals of the dietary guidelines you think that dietary guidelines themselves have to be met. is that a fair statement? >> weld, currently we have national guidelines that follow the dietary goals. recently the usda contract it with the institute of medicine to further looking to the

dietary guidelines in order to look at the overall problem of reducing charnel to obesity. and so currently what we want to be able to do is increase our reimbursement and so that we can go ahead and meet those guidelines. what we needed the secretary of agriculture to be given the authority to be able to define the guidelines so that we can consistently applied -- >> how they apply to the -- how they apply to this commission programs? >> part and? >> how the apply to the school attrition program and how they would be in compliance petraeus connect how the guidelines for the institute of medicine recommendations are going to be applied consistently throughout the country. >> and you've landed that on the secretary -- you think that's

the case? >> we currently have patterns that we have new recommendations from the institute of medicine that have been offered through the institute of medicine and where we are needing additional guidance to be given to implement those five lines nationally so that they are consistent. currently many states and local districts are making changes to their local standards, and it increases cost because there's different versions that are being applied nationally. being able to apply them consistently and have the secretary of agriculture define what those guidelines are will make our programs more consistent and reduce the overall cost of our programs. >> thank you.

i'm delighted when i read in your testimony that you joined up with first lady michelle obama in this campaign for healthy eating and healthy meals and trying to use she explained to us trying to use these programs as teachable moments as part of the classroom as she would say whether it is the school garden with a lunch or breakfast program to do this and i was discussing diabetes with some people yesterday and when you think that the 23 million children and adults in the united states have diabetes the number of children under the age of 20 its 186,000 individuals. so it would seem to me that as we talk about obesity and diabetes and diets there's a moment here to do in education that if you have this explosion of diabetes in the adult population some kind of work with the children while you have

these moments around the school nutrition programs could conceivably if well structured and properly delivered could conceivably have a lifetime of benefits for those individuals and i don't know how you are thinking about this but -- >> absolutely. we see the school nutrition association sees this as a wonderful opportunity to utilize the school cafeteria as a learning laboratory for healthy eating so that we can improve the eating habits of our children. we support coordinated school health programs so that we can work together with the total school community to be able to promote the school lunch program. we have healthy meals that provide healthy entrees and more fresh fruits and vegetables, more whole grains, and the model

with a healthy meal is and if the students for the savitt in the program they are able to take that message home and so in partnership with the total school community i think that we can work towards having healthier students and then reducing all of the chronic illnesses that result from unhealthy eating. ..

the. >> and i think, it ms. gettman your representing the national school boards association that there should be more local control with the federal government should be careful how it to intrude in that. but it does seem to me that the child nutrition initiatives at the school district local level allow for more employed to and support from parents which i think we will all agree is very helpful the more parents are involved and in general the better we are. not just nutrition could you

address that to involving the parents and how that would relate to how much the federal government dictates of this process? ms. gettman to use. >> mr. chairman, members of the committee, parents are absolutely play a critical role in the success of all of our collective efforts. and to maximize and capture between the family and communities that diss para roach cahal. one thing to keep in mind local school board members are appointed or elected by their community and many of the more parents or educators or a provider or a business leader of that community and there is the

leverage point* to optimize the collaborative potential. with regard to the role of parents talk about said teachable moments that was brought up earlier it can't be maximize at the local district level through pta the role of the school districts, communities, local school districts initiatives that can magnify parent involvement to improve child nutrition. >> thank you. and i know one thing about the local school board is you can reach out and touch it. my daughter has been involved lately in a battle mother of two children of the public schools.

i just need a clarification clarification, ms. rivas, the weather was you or not i will turn to you because of falls under the realm that you were discussing to address the issue of the competitive moves where sometimes you have the athletic organizations, the school, bake sales and cook the famous brownies and banana bread and that sort of thing. it is your position that should fall into the same guidelines the secretary would promulgate? >> that's correct. we support of local policy and menu planning. however it ever role as food service directors is to

teach children could basic nutrition they go through the cafeteria line we tried to teach them what a good balanced meal. when we are talking about meals a served outside of the classroom, very often they do not support that same message. so we're urging congress to eliminate the time and place role. 58 so what messages trying to send in the cafeteria it in promoting the recommended dietary guidelines and the institute of medicine recommendation, they need to be a consistent message throughout the whole campus. >> you do want to regulate the bake sales? >> we want to have the secretary to determine what those guidelines should be so we are consistent in the

cafeteria and outside of the cafeteria because what we are trying to do is participate in the program and when students are tempted to go outside of the cafeteria they are not drinking their milk which is a critical part of their growth and development. >> my a time is expired i believe i do have the answer that you do want to regulate the bake sale. others have questions. >> thank you. want to think chairman bill lire -- miller for having this hearing today for something the subcommittee has been thank you for bringing the information i a

thing when we start looking at mrs. obama looking at this consummate moving up the radar that we know that we will need to change these things. we've worked in a hard way on issues for the child reauthorization. and just thinking back spending over 30 years as a nurse working on the ob/gyn floor we need to make sure our nurses and doctors are trained with the benefits of a breast feeding. that is why we tried to get the appropriations and introduce legislation addressing this issue.

as i am also looking at how we can utilize volunteers such as those in americorps programs to assist in meeting the goals of child nutrition programs especially for wic. the question i would ask one of the great hurdles we're having with wic mothers this finding with additional resources with support wic and its efforts to promote breast-feeding possibly through volunteers what is the course you are looking at? >> they give for your question. it just puts it back i feel that we're barking up the old tree but if you put a lot of resources into breast feeding good two with the institutions don't make it happen right it is throwing more money at the problem

hoping it goes away. i really want to a knowledge the peer counseling money is phenomenal because that is what have-- helps with peer to peer support people who understand your situation but when moscow to deliver when the baby is crying and doesn't take their breast is very difficult for them. face that helps maybe a community task force collaborative level we could bring 1 million people on the streets say hospitals you need to change for everybody sings the same tune. also access the stamp program when they apply for food stamps all of these programs need to be in sync we have the same message here to support exclusive

and long-term breast feeding to prevent childhood obesity and all of the other fabulous things that come along with it. there is definitely a place for volunteers seven david to local programs to figure out how best they can use them. we can never have enough resources but systems change. we know for new companies have detailed people if you change the name them on the horizon. maybe the volunteers could be the detail that go out so i think there is a way to do this. think through this locally and collaborative labor you have to get rid of the problems that have been created by the moms and babies don't suffer needlessly and we don't have

a conniption fit. [laughter] >> my time is almost of we have a couple of programs working in my district working with the exercise program together i didn't have anybody talk about that for the three years it is emplace the children started to get higher grades across the board and we are overlooking nutrition, exercise actually increases marks for the children and face that our young women and boys at that age need to move around a little bit more and we have constrain them in so many ways. i am not saying a free-for-all but at recess between seven jack's has

helped them quite a bit. >> thank you, mr. chairman i want to give you an day since i have been here you are is the best panel to stay within five minutes. [laughter] i want to start at birth. that is what i did for a living. i totally agree several things iran across working and a birthing center one of the issues for the mother is work going back to work and breast-feeding is a huge issue. basically your cultural issues white emphasize that in our practice but we deliver 1200 babies per year so we have a high% the many problem is that many moms are working and it is difficult in the workplace unless it is the initial work environment.

there's also a point* that i think it is a problem. and also how we grow what it is extremely important to know that we started a program called up and ask them. we found a 39% were over wage or at risk and 1% under way to do it we began a program called and hopefully "up and at 'em" will be a lifestyle. my mother did not allow me to be in the house. you had to be out. we only eight when we eighth. i was in a rural counties so there were no fast-food restaurants sob a perishables and fruits and that is our i.e. today. we are what we each. i think that is a situation

where that pass to begin at birth. win $2.68 is what we pay and it cost $3.32 produce a new you are in the whole already. i am sensitive to that that you brought up to 15. also school cafeterias have the expenses to the lunch program were you pay for a lot of things that have nothing to do with food. i would recommend what was very helpful to do the energy audit for all of our buildings and found out one of the biggest energy consumers was the old of sense that you prepare the food. we were able to go in with a company that actually found enough energy savings to replace more modern equipment at no cost per car

will look at those opportunities out there. i would like to your comment we would now budget for two years over a two-year period of time that makes good sense if you could and use best practices like that in any comments with what i have said quote expect i appreciate your comments and i congratulate you and your practice. it is a very common misconception that people hold the 12 recipe but you go back to work but the reality is working women and low-income moms disproportionately affected by that and it is seen as that put it really isn't. wic comes into play there we have money for breast pumps. from my experience personally the last 10 years we have been putting palms at birth sites and have

legislation in 36 states, it is in my testimony that provide lactation accommodation at the zero worksite intimacy and joyce joyce -- was angeles we'd never have the employer that turns us down. the mother says i am ready to go back to work there are conditions we call the employer and tell them about the california law and a welcome them with open arms we give the pump for three and a given back when they are done. this working woman program in los angeles it gives us 120 extra days of exclusive breast feeding just because the mother has the support and location provided at the worksite. having said that i would really enriched that we look to see we have the contingency fund if needed to buy additional bonds because that is the challenge as you so well

pointed out per car 12 recognize the legislation introduced for office this offering lactation facilities. we do need to take this up at the nation and that they are not only compatible but they should be encouraged. it is the duration of exclusive breast feeding is the first line of defense against childhood obesity. thank you. >> do you also ask ms. morrison? >> what we are proposing is that we are allowed to have business 101 you don't plan a budget without having contingency funds to try to have carryover. with the food program regulations we're not allowed to have carryover. it is very difficult.

>> thank you, mr. chairman. have many of the panelists aware of the successful farm to school programs for local farmers to sell food to a local schools? >> i know across the country we have a number of successful farm to school programs and we worked three united states department of agriculture through the commodity program to direct farm to schools to our school district in dallas but there are a number of them across the country. >> are they helpful? should they be encouraged? >> absolutely. we're able to get a bright greater variety of fruits and vegetables students have not been exposed to use of it is very successful and we would be glad to provide you

with a list of some successful programs. >> thank you. >> will the gentleman yield? >> yes. >> representing the garden state of like to bring to the gentleman's attention to h.r. 4710 introduced to amend the school lunch program for improving farm to school programs. >> good. [laughter] >> that was my question. >> ms. rivas is it any more expensive to buy healthy meals and and healthy meals? >> yes. we currently provide healthy meals tsai want to start with that because we currently meet dietary guidelines. >> it is more expensive?

>> it is. significantly more to offer more whole grains and fresh fruits and vegetables. >> one of the curiosities of the program the reimbursement rate is the same all over the country with low-cost and high-cost areas but the cost of personnel may be vastly different but the reimbursement is exactly the same? does that make sense? >> does that make sense? we all have different challenges. the look and we struggle with that. we have labor costs and through cost and fuel costs but the overall problem is that it is totally underfunded sell all of us are struggling with a tight budget and if we need increased reimbursement we were urging $0.35 across the

board for breakfast and lunch. we are wanting to me the institute of medicine new recommendations of offering more fruits and vegetables and an order to do that we need higher reimbursement. >> how much of the budget is used up with administration and trying to find out who was eligible and who was not? now seems that everybody is already eligible the makes no sense prepare you could sir betty and with the eligibility standard. >> you do reach a certain threshold where at a certain point* where you have certain districts with free and reduced lunch participation and is more cost-effective to eliminate the process of application

her. >> in virginia we have a tough budget situation and there is consideration given to dispensing school breakfasts. can someone say how on portend the school breakfast program is? >> i can certainly do that. i have been involved in a number of districts where we have had programs that we have expanded breakfast through grab and go and breakfast in the classroom. our teachers leonhard our best advocates because what they see his students across more attentive in the classroom and less students going to the nurse's office because they are hungry and there is research to show especially when it comes to analytical skills and math and science, they are able

to mentally be able to except those concepts a lot easier when they have had breakfast at. >> thank you. >> thank you, mr. chairman and all of you for your testimony today. ms. rivas the u.s. health care costs due to about eight -- of the city is estimated $150 billion per year half as paid for medicaid and medicare by one out of every $6 spent on health care we cannot afford to do the sparc road to many children in my district that i represent one of the poorest districts in the country depend on food served in the schools. i am talking about ohio that but i'm not willing to gamble with their health. getting unhealthy food is a

new, -- low-cost way to address obesity. but from the that perspective of the school nutrition association do think the minimum nutrition standard for food sold outside the school is needed to protect the integrity of the program and the health of all children? >> absolutely. we totally urge congress to eliminate the time and place rule because we absolutely believe the health of our students that we are investing in the future of our country when we have well nourished help the students. being able to teach the same message of healthy meals both inside and outside the cafeteria it is critical to them developing healthy eating habits in the future

and eliminating chronic illnesses as well. >> there should be a minimum standard? >> absolutely. we are recommending that the standards be set by secretary of agriculture following the recommended dietary allowances. >> thank you. ms. morrison the recommended congress reduce the eligibility test from 50 percent down at 40% to streamline access to health e-mails. while this reduction will have a positive effect on suburban and rural communities but also on the it urban areas? >> certainly. of the percentage of low-income children or families an urban areas is no different and their rural

areas precut if you have a district that has 50% that will impact more in the urban areas because you have more children concentrated in the urban area that would be impacted by reducing the eligibility at 40% in a rural area. to answer your question it would have a greater effect of the urban areas. >> ms. gettman at prohibiting the end salem and healthy food in machines some have a note nutrition standards for food one of the recommendations is congress refrain from imposing additional regulations are mandates outside of the federally subsidized programs if congress does not work to

create nationwide nutrition standards how we ensure that our children are only offer the healthiest food? >> thank you. a couple of responses come to mind include schools and school districts are moving in the right direction as to information you just shared demonstrates fairly significant although certainly not all school districts are already moving in the direction of making that local determination and for what is appropriate. one thing we have not talked about too much is the mind of the direction many school districts are going to with regard to implementing standards for school nutrition that i am not sure we address the question whether national standards have improved over those

which already exist? sometimes the flip side of uniformity is maybe we have not reached quite as high as we would have liked to. it is also important to honor the fact that long term solutions are more effective when they are locally initiate -- initiated with local engagement in comes from the local level. that is where i think we would recommend attention and resources being devoted. i would also have some thought to any unintended consequences to have a national standard and i already mentioned is it possible they could be weaker than those that already exist in some districts?

and also we want to make sure that our approach deals with all environments and climate and contacts the children have so it is not just school but also of home and in the community so students who do not have access to nutrition food for vending machines don't just bring them and/or buy them elsewhere or eating different man who then school. it is important to take a comprehensive approach as possible to recognize successful solutions to these issues we need to have strong engagement at the local level. >> i yield back. >> thank you, mr. chairman. i couldn't agree more nutritional information is

critical. numerous scientific studies have shown the benefit of low-fat high fiber plant to based options are also budgetary and zero were reduced me to. the american heart association diabetes association and is a two for cancer research and the american medical association and public health association have called on federal food assistance programs for fruits and vegetables and legumes and nine vegetarianism as we could make tremendous progress to bring down health care costs by expanding access with healthy vegetarian to race is to reduce children's intakes of fat and saturated fats and cholesterol they do perverse some of those options for allergic or religious reasons some

happen to be lactose intolerant virtues not to drink it for other reasons but miss out on vital nutrients if they don't have other supplements. should we have more vegetarian menus by making them more affordable and providing incentives from the schools especially low income schools to provide them? and do you think they should offer nine dairy milk alternatives to meet the standards of usda four kids who can't or won't drink milk? >> currently and we can make the operation we did in operations report on trends in menu planning in the last year and the majority of school districts are offering vegetarian options as a choice in their menu planning.

and in many cases many of the options because they're not very popular are more expensive. when we have special diets some of those substitutions are higher so there are more higher so that is why the additional reimbursement is helpful to be able to expand those menu of options. >> the second part about milk? >> currently, we offer a variety of milk and school districts can choose to offer as well melt alternate substitutions. the cost of a comparable milked substitute is about four or five times the price of the eight negative ounce carton of milk.

so there again it is more expensive to do that but many absorb the cost. >> what can we do to bring down those choices? >> more students think that choice. because when we put to this so i know option on the line of milk carton may cost $0.20 and a the soleil altmann it is 75. so when we put that on the line very few students take that choice. i am not sure how to get industry to be able to reduce those costs but obviously the more students that are exposed to it and learn to except that also lowers that cost. but basically it is not a

high-volume item it will cost us more spending can you share your recommendation on how to strengthen nutrition education and what role it can play to promote healthy eating it with physical activity in children? >> a number of years ago there were funds designated for nutrition education at the rate of $0.50 per student and those funds were eliminated. certainly more funding for nutrition and education would be necessary to be able to expand nutrition education also looking with the coordinated school health programs to work on incorporating nutrition information into the classroom curriculum. >> you mentioned school's main vegetarian option is what do you mean? >> i think is close up the

90%. i don't know the exact figure but i think it is between 90 and 96%. >> i yield back. >> thank you, mr. chairman. ms. rivas i understand the school districts bear a significant cost to administer the federal school lunch program. one of those has to do with what they pay the school district itself for the cost of just being there. and i understand there isn't any standardization with regard to what school district can charge. one of my district just gave me an example where they are charged for the full cost of using the multipurpose room all day long when in reality they only use than half an hour each day.

what can be done about this? i knew you talk to removing the cost entirely but cannot be done? >> usda allows some cost of producing or indirect costs to producing the miele as the allowable cost but currently there are no specific guidelines to determine what those in direct cost of our purpose three have the secretary of agriculture define those guidelines more clearly so nationally we can have more consisting guidance in what districts are able to charge. so to prevent some of the school districts for charging like the example

used in the multipurpose room only used minimally. >> should be done by the secretary your state by state? >> the most consistent way it is to said general guidelines by it is a funded program funded nationally the guidelines for menu planning all come from the secretary of agriculture. and i think they would be the best body to determine what those guidelines, they know what those expectations are four producing that male and establish the guidelines. what would be allowable i think would be best determined by the secretary of agriculture. >> also the administrative cost of verification that you talk about one way to a streamlined is to have a whole community qualify but

not all communities could qualify in that manner. what are other ways we could streamline the verification? >> i am not familiar with the variety of the ways that that can be done but i know that there is a certain threshold that a school district begins to achieve after a certain love all of a percentage of free or reduced, it gets to read it is more cost-effective to eliminate whole process. there is a big amount of expense to processing applications and verification. so there is a threshold and readjust but urge you to consider that because it would be a more cost-effective way for those communities to reduce the cost to the students but also expand participation.

i have experience with a provision where we had 84% free and reduced and and we went to the program we could eliminate the stigma that students had about the program and river able to increase breakfast about 50% from 30% and increase middle school and high-school over 10 or 15 or 20% of varying schools for credit is a good option especially in the communities where the threshold cost more money as opposed to the plate of children. >> there are relatively high purchase a patient rates of fully paying students but there is a shocking low-grade debt the subsidized level we say that it is only 7% from 60 at

90%. what is the cost and benefits of having students to be fully subsidized? >> that is another area that a recommendation in priority that the association had. sometimes there is a very small percent in that category having to pay $0.40 and frankly when you get some of those students and have families four or five children in the household, it gets very unaffordable for families and very often the cafeteria supervisors even though many struggle with their own personal budgets take money on a firm pocket to make sure the children have a meal. our recommendation is that over time we have the fat

scale adjusted to where we begin incorporating the guidelines to include the reduced student and expand too eventually where they are also fully subsidized like a free students are. >> thank you, mr. chairman. ms. rivas of several years ago we put a program in for fresh fruits and vegetables made available in the classroom various places i visited one of the programs and never very successful to the students and teachers could you comment? >> that is a wonderful program and i personally have that experience with

the dallas school district we have 20 or 30 programs right now where we received funding for fresh fruits and vegetables we have volunteers that come in to help distribute a wide variety in many of the children who are not exposed to some of these fresh fruits and vegetables have never seen a watermelon or kiwi fruit norstar free to because they cannot afford it at home. so our staff along with parent volunteers did go for a midmorning snack and it is a very successful program. >> what i noticed two or three schools that i visited that comes across social economic lines. >> absolutely it is available to all students part of the nutrition and education program part of that requires that you

provide nutrition education as part of the program. >> and doing to the wealthiest school district nothing was being wasted were very little. usa extremely operable program. we had to steady in an area lessee very impoverished syria and another that was the opposite. i started the breakfast program and i was a teacher for a small number of students. does the school breakfast program have any effect on attendance at the school? >> as i was mentioning the benefits of the breakfast program attendance was one

that i forgot to mention along with improved attention in the classroom, behavior in the classroom, being able to land certain analytical skills and going less often to the nurse's office is also great benefits of the breakfast program. >> especially among the poor they left without any breakfast quite anxious to get to school then they got there and they stayed there so you do see that the fact? >> i have some students having been involved with the breakfast program where there was breakfast and the cost and not one school and the student was rezoned to another school where they did not have breakfast and he wanted to go back to the other school because they had breakfast in the

classroom because they really needed the breakfast in the morning. >> thank you very much. all of you. >> the ku chairman miller i went to make knowledge carolyn mccarthy for working on the child nutrition program that is more important now than ever schools in my district i am finding the number of children who need the lunches and the breakfast and the number is greater than ever. as you may have gathered from i exchange with mr. scott i have a real interest in the farm to school programs. you probably know it is a key priority of the agriculture of secretary vilsack and first lady michelle obama has planted a

garden and this program not only provides the fresher fruits but also the important educational components that lasted into adulthood. i am pleased some of us have to improve the act for the improved use of local foods that improves the relationship between the schools and providers and provides mandatory funding each year for the program. it does provide local economic benefit but it provides an important -- important educational benefit progress president of school nutrition association, 50/50 now like to ask a couple of things. first, the breakfast program you recommend commodity

foods for breakfast which can be used if you already have them for the lunch program but they are not available there. what about farm to school? do see a role for that in the breakfast programs? >> we are urging congress to consider five more for commodity and the farm to school program in that value would certainly be a wonderful thing to have and you're absolutely right about the vegetable gardens providing the nutrition and education aspect to the students and knowledge because they are exposed and they see a growing at the

school kirnan sander able to see it is not just something you can pick up up the courage to star but they take the messages home to their parents. but in a financial assistance for the national institute of medicine has increased fare requirements in the breakfast category to expand more fruits and vegetables as well. so the funding is very critical to meeting those guidelines as well. >> the existing program form two squall has not been funded. what would you say about making the fending mandatory? >> absolutely. [laughter] >> that was a trick question

[laughter] in the fending you can make mandatory we will graciously accept. >> a key pillar of the first lady is celeste -- let's move campaign is to serve healthier foods. she is an encouraging are working toward the goal of doubling the schools that purchase of eight in the school challenge. what does it take to become a youth school? how can we help more if this doubling as a reasonable goal? >> the school nutrition association has been working closely with the usda

looking at the paper were criteria to make it easier for school districts to see the application to fallout it made it more complicated. not only does it have requirements in the menu planning which is key to the requirements but also a component for physical activity. and in the first lady campaign one is the physical activity but it is also quote a wonderful recognition that school districts can achieve that promotes both in the nutrition and nutrition education and physical activity.

we have a wonderful program and the school nutrition association will be encouraging more of our members to participate at our meetings and conferences and everywhere we can. >> thank you and i think the of their witnesses and i am sorry time does allow for discussion with those excellent witnesses. thank you. >> think you all for being here better nutrition creates better health and productivity and lovers health care cost per right now talk about that quite a bit on the hills of the work you do makes a big difference in the lives of these children and adults. thank you for that. recently we had a report that out of the university of new hampshire that has a disturbing note that said 55 percent of income

eligible rural households with children did not participate national school lunch program can you identify any barriers to that? >> i am not familiar with that community but i know that one of the barriers is very often there is a social stigma related to the application so more funding to be both to have technology and to make applications online an easier to access and reduce the stigma morale and have regarding making biel's available to them would be helpful but i think in a community where there is a high poverty area the

community eligible type of program or community eligibility could be very helpful. because in that case students would not have to fill out an application and that would reduce the cost of the application process to the district. >> that clearly has to be addressed and we like to submit a copy of the report to the committee? >> no objection. [laughter] >> i didn't think he would be mined day she would mind senate the other thing you want to ask the president's wife will put this terrific program into place and i know that's she has shown a great commitment for children and obesity the issue with diabetes and ixempra is the enormous mrs. obama has talked about the pillars and i can

remember last year when we had richard simmons here talking about the necessity for exercise how children aren't getting enough exercise i remember when my own kids were in the school punishment is if the child was hyperactive they were not allowed to move around they had to sit in their seats than they would have to sit in their seats and amiss recess it was exactly the opposite of the outcome. well reintegrate the programs and bring in more people will you be part of a team if you were in a school with a day-care setting where you will actually be included in some of the decisions made by principals and teachers as part of the education process to say not only is about food and good food so children don't have too much sugar or whatever it is or carbohydrates but

also make sure the policies from the playground make sense? because what mr. sims was talking about that it was not enough so you be a part of that integrated approach? >> yes. i would suggest you go to school nutrition and.org website because we have a press release where one of our initiatives partnering with the first lady was two include working to make coordinated school health it concept that is one that more members embrace. i think very often what we have found is when you work in partnership with a total school community we are more

successful including the total school environment. not only from menu planning but the physical activity as well as even the spending programs at the school because real support each other toward the same effort of reducing childhood obesity. >> i have great sympathy for one who is exasperated enough to say whatever tools we have but it does seem to be counterproductive for what we try to do. i was just school boards and others involved in budgetary decisions with physical exercise need to be a part of that so it is not just nutrition as one component looking at the whole child and all of the different issues to really change the direction we're heading. thank you all for being here. >> thank you for your testimony.

ms. saluja you made a recommendation i think i can follow-up if i was stunned by your description that you called the of breast feeding broke and hospital. i will take your suggestion back to mr. waxman and mr. rangel about this it is unacceptable in a year when we are talking about how to drive down long-term health care cost that the recommendations from the institute of medicine on breast-feeding would not be incorporated in to the birth of those children with mothers into those programs pri who i appreciate very much into the recommendation. we look forward to the reauthorization. you made a lot of good

recommendations some of which we have discussed with you previously and some we have yet to follow-up on. we will be sure to give the full attention of the committees. >> would just like to think the witnesses. >> without objection members will have 14 days to submit additional materials for questions for the record and without objection the hearing is adjourned. thank you. [inaudible conversations]