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Release No. 0058.04

**Transcript of Agriculture Secretary Ann M. Veneman's remarks
regarding**

**President Bush's FY 2005 Agriculture Budget**

**Washington, D.C.**

**February 2, 2004**

**\
SECRETARY VENEMAN:** \"Well, good afternoon, and thank you all for
joining us this afternoon. Happy Groundhog Day \-- for those of you who
are keeping track of how much longer these cold days are going to
continue, and I know it\'s going to be another bad one tonight.\
\
"Today is also, as you know, the first Monday in February, and that
means that the President is releasing his annual budget proposal.\
\
\"This afternoon we will provide you with a briefing on the USDA\'s
budget for fiscal year 2005. Our deputy secretary, Jim Moseley, is out
of town, but we appreciate all of his hard work in helping put this
budget together. I also want to thank my Subcabinet, many of whom are
here with us today, and all of those who are in the various agencies and
offices who report to them and do so much work to make sure that we get
our budget done on time and make the tough decisions.\
\
\"They all work hard throughout the year to help USDA better serve all
of the various aspects of the American food and agriculture system, and
they also play valuable roles in the budget process. And I want to thank
especially our budget and program analysis staff headed by Steve
Dewhurst as you know. They just do an outstanding job. I think we have
one of the best budget staffs in all of government, and I\'m very proud
of them.\
\
"As we begin today\'s briefing, each of you should have a copy of the FY
2005 Budget summary, the USDA press release, and the supporting chart.
And these charts are going to be displayed on the monitor here. This is
the first year doing the budget briefing with the new high tech, so look
forward to that.\
\
\"If you are listening to our webcast or you\'re listening by phone,
this information that we\'ve handed out is also available on our website
at [www.usda.gov](http://www.usda.gov/).\
\
\"First I\'d like to tell you what the budget does. The budget is
consistent with our administration policy book Food and Agriculture
Policy for the 21st Century, and it supports the USDA strategic plan.

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Both are designed to enhance economic opportunities for agricultural
producers, support increased economic opportunity and improve the
quality of life in rural America, protect America\'s food supply and the
agriculture system, improve nutrition and health around the country and
conserve and enhance our natural resources and environment.\
\
\"As you know we are in a time of fiscal constraint. The President today
is proposing a responsible budget across the federal government, which
holds non-Defense and non-Homeland Security discretionary spending
increases to less than 1 percent. At the same time, his budget funds key
priorities such as the War on Terror, protecting homeland security,
permanent tax relief for Americans, strengthening the economy and jobs,
and health care affordability.\
\
\"His budget puts our nation on track to reduce the deficit by half
within five years.\
\
\"The budget for USDA faces those same fiscal realities, and this
proposal focuses and maintains resources in order to meet our strategic
goals. As you will see from the budget numbers themselves, in most
program areas we have a great deal of growth during the tenure of this
administration. The President is committed to strengthening these
programs both in additional resources and in sound policy development.
The numbers and the data we present today build upon the Omnibus
Appropriations Bill for 2004, which the President signed just a few days
ago.\
\
\"As you may recall, last year we presented the Fiscal Year 2004 Budget
while we were still awaiting our appropriations for the \'03 fiscal
year, which made the basis of comparison much more difficult last year.\
\
\"The 2005 Budget focuses funds on key priorities for USDA:\
\
\"Ensuring a safe and wholesome food supply and safeguarding America\'s
homeland and continued administration of the 2002 Farm Bill, the major
provisions of which we have implemented in the past year. This includes
providing historic increases for conservation funding and protecting
natural resources.\
\
\"Providing unprecedented funding for a food and nutrition safety net,
expanding agricultural trade, expanding housing for rural citizens and
investing in America\'s rural sector; strengthening forest health and
firefighting capabilities and improving USDA\'s program delivery and
customer service.\
\
\"The FY 2005 Budget calls for \$82 billion in spending, an increase of
\$4 billion, or about 5 percent above the level for 2004. And the charts
I think can clearly illustrate this.\
\
\"This is approximately \$13 billion higher than the actual level for
2002 and represents growth of 19 percent since this administration took
office. Discretionary outlays are estimated at \$20.8 or almost \$20.8
billion, a 3 percent change or \$720 million below the 2004 level. And
the discretionary is shown by the blue here with the green on the top
showing the mandatory accounts in our budget.

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\"I will now review some of the details of the budget. The President\'s
2005 Budget funds an inner-agency initiative to improve the federal
government\'s capability to rapidly identify and characterize a
bioterrorist attack. This initiative will improve national surveillance
capabilities in human health, food, agriculture and environmental
monitoring.\
\
\"In keeping with the President\'s commitment to homeland security, the
USDA Budget for 2005 includes \$381 million under what we call the Food
and Agriculture Defense Initiative. These funds enhance monitoring and
surveillance of tests in diseases in plants and animals, conduct
research on emerging animal diseases, increase the availability of
vaccines, establish a system to track select disease agents of plants,
expand the unified federal/state diagnostic network in all 50 states.
And the dark blue part of that bar there represents the completion funds
for the National Centers for Animal Health in Ames, Iowa, which is the
largest single item under this initiative, at \$178 million.\
\
\"So as you can see in this chart, the expansion of the kinds of
activities under this initiative \-- that also in 2003 the dark blue
represents the amount of funding that went into the Ames project. That
funding carried us over into the \'04 Fiscal Year, and now this will be
funding that\'s sufficient to complete the entire Ames renovation
project. And I did announce that in mid-January when I went to Ames.\
\
\"As you know, the research and the diagnostic activities at the Ames
complex are a crucial part of our response to BSE and to other animal
diseases. In light of the discovery of the BSE-positive cow in Canada
last May and then of course the announcement that we made on December 23
of the cow that was found in Washington state, I then announced on
December 30 a series of actions to strengthen the protection of the food
supply, public health and animal health.\
\
\"The budget also as a result of that significantly increases funding
for other BSE-related activities. It enhances USDA\'s BSE response plan,
which has been in place since 1990 and has continuously evolved based on
current knowledge of the disease.\
\
\"To further enhance our systems, the budget requests for 2005 proposes
\$60 million, which is represented on this chart. And again, keep in
mind that the \$178 million for Ames is very relevant to BSE too because
we do our BSE testing out there.\
\
\"But this \$60 million is broken down as follows: \$5 million for our
Agricultural Research Service to conduct advanced research and
development of BSE testing technologies, \$17 million for our Animal
Plant Health Inspection Service to continue collecting 40,000 samples
for BSE testing, \$33 million to accelerate the development of a
national animal identification system, \$1 million for our Grain
Inspection, Packers and Stockyards Administration to enable rapid
response teams to deal with BSE-related complaints in the cattle market
regarding contracts or lack of prompt payment; and \$4 million for our
Food Safety and Inspection Service to conduct monitoring and
surveillance of compliance with the regulations for specified risk
materials and advanced meat recovery. Those are part of the announcement
that we made on December 30.\
\
"As we have responded to the BSE situation we have been constantly
guided by what is in the best interest of public health. Protecting food
safety and public health is one of the primary missions of USDA, and
this focus is reflected in the budgets of this Administration.

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\"The Budget for 2005 seeks record level support for USDA\'s Food Safety
and Inspection Service, meat and poultry food safety programs, as well
as increases to strengthen food and agriculture protection systems.
These areas of our budget have been top priorities for this
Administration since we came into office, particularly since the tragic
events of September 11, 2001.\
\
\"This additional funding continues to build upon a solid record of
achievement in further strengthening our protection systems to ensure
the integrity of our food systems. FSIS funding will increase to a
program level of \$952 million, an increase of \$61 million over the FY
2004 level. This represents an increase of \$170 million or 22 percent
in these food safety programs since FY 2001 when the Bush Administration
came into office.\
\
\"The \$952 million for FSIS comprises \$828 million in appropriated
funds and continuation of existing user fees. So the \$715 \[million\]
here and the \$113 \[million\] are continuations of appropriated funds
and the existing user fees. And then there is also provided the
additional amount, \$124 \[million\] in user fees, which would be user
fees for anything beyond one shift.\
\
\"The current user fees, I might just explain, is anything that is not a
full second shift. It\'s a partial shift, and that is what we already
have existing user fees in our program for.\
\
\"Funding for FSIS will support 7,690 food safety inspectors. It will
also provide specialized training for the inspection workforce,
increased microbiological testing and sampling, strengthened foreign
surveillance programs, and increased public education efforts.\
\
\"Next, the President\'s Budget supports the continued implementation of
the Farm Bill. USDA has worked hard to implement the 2002 Farm Bill
quickly and efficiently. We appreciate the outstanding efforts of our
staff here in Washington, DC, and in field offices and county service
centers all across the country. Funds are provided in the budget to
support continued implementation of the Farm Bill. We are in the process
of implementing the largest and most far-reaching farm bill conservation
title ever. It represents an unprecedented investment in conservation
that will have significant and long-lasting environmental benefits.\
\
\"The total program level funding for Farm Bill conservation programs
increases from about \$2.2 billion in fiscal year 2001 when this
Administration took office to \$3.9 billion in the fiscal year 2005
Budget proposal.\
\
\"And what this chart shows is the funding on the green line, the
cumulative acres enrolled in the dark blue and the new acres enrolled in
the light blue.\
\
\"The overall increase is \$385 million or almost 11 percent over 2004.
The expanded programs include \$2 billion for the Conservation Reserve
Program \-- that\'s adding \$76 million; \$1 billion for the EQIP
Program, and that\'s an increase of \$25 million; \$295 million for the
Wetlands Reserve Program to enroll an additional 200,000 acres;

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million for the Farm and Ranchlands Protection Program, increasing \$13
million; and another \$421 million for the Grassland Reserve Program,
the Ground and Surface-Water Conservation, The Wildlife Habitat
Incentives Program, the new Conservation Security Program, and Water
Conservation and Water Quality

enhancements of the Klamath Basin of Oregon and California.\
\
\"The 2005 Budget also reflects the Bush Administration\'s continued
commitment to nutrition and fighting hunger. By including a record of
\$47.9 billion for domestic food assistance programs. This is a \$2.5
billion increase over fiscal year 2004. Our continued support for these
programs follows the course of compassion that has been set by President
Bush.\
\
\"The Food and Nutrition Budget supports an estimated 24.9 million Food
Stamp participants, a record level of 7.9 million low-income
nutritionally at-risk WIC participants, and an average of 29 million
schoolchildren each day in the School Lunch Program. So the School Lunch
Program is the light blue bar that is the tallest bar, followed by Food
Stamps, which is the middle blue bar, and then WIC program is the green
bar. And this is showing the number of people who are served through
these programs.\
\
\"As you can see from the chart, participation in these programs has
been rising over time and is expected to continue through 2005 Fiscal
Year. Particularly with the WIC and the School Lunch Programs we are
reaching more Americans and helping educate them about healthy eating
and the importance of balanced diets. These efforts help support the
President\'s Healthier US Initiative and many of these services are
delivered in cooperation with our partners under the President\'s
Faith-based and Community Initiatives.\
\
\"The budget also includes a \$3 billion contingency reserve for Food
Stamps and \$125 million contingency reserve for WIC to be available to
cover unanticipated increases in participation of these programs.\
\
\"One of the most important ways to expand opportunity for American
agriculture is through trade by maintaining and opening markets for our
products. We have seen this close tie between agriculture and markets
with the BSE situation. The fiscal year 2005 Budget continues a strong
commitment to export promotion and foreign market development efforts by
proposing \$6.6 billion in spending. Since this Administration took
office, these programs have experienced significant growth, increasing
by \$1.4 billion or 27 percent since fiscal year 2001.\
\
\"Funding for USDA\'s Market Development Programs including market
access and cooperator programs are maintained at current year levels. A
program level of \$4.5 billion is provided for the Commodity Credit
Corporation Export Credit Guarantee activities. At the same time the
efficiency and productivity of American farmers has allowed the United
States to lead the world in global food aid. More than \$1.5 billion is
requested for U.S. foreign food assistance activities including \$75
million for the McGovern-Dole International Food for Education and Child
Nutrition Program, which is a 50 percent increase over 2004.

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\"So clearly this budget continues to provide strong support for
development of markets and assistance to those most in need around the
world.

have also worked hard on this budget to provide funding to increase
rural home ownership and establish the infrastructure to enhance
economic opportunity and the quality of life in rural America. The
Administration proposes spending \$11.6 billion for rural development
programs; \$3.8 billion is requested for direct and guaranteed Section
502 single family housing loans. The President\'s Budget will provide
nearly 43,000 new home ownership opportunities for low and
moderate-income families in rural America. These programs are crucial in
USDA\'s efforts to support the President\'s minority home ownership
initiative, which has the goal of home ownership for an additional 5.5
million minority families by the end of the decade.\
\
\"In addition \$1.4 billion is requested for the Water and Waste
Disposal Program which will provide about 650,000 rural families with
new or improved water and waste disposal facilities. The budget proposes
\$331 million for broadband loans and loan guarantees in fiscal year
2005, building upon a \$1.6 billion program developed over the past
several years.\
\
\"Next, the fiscal year 2005 Budget proposes \$5.2 billion for programs
of the USDA Forest Service. In recent years we have seen the increasing
risk of wildfires that devastate forests and watersheds, habitats and
wildlife, and property and human lives. We are working in close
partnership with the Interior Department to reduce that risk by
implementing the President\'s Healthy Forests Initiative, the Healthy
Forests Restoration Act, and the National Fire Plan.\
\
\"The fiscal year 2005 Budget continues implementation of the Healthy
Forests Initiative including funding the Healthy Forests Restoration
Act.\
\
\"The USDA budget includes \$266 million for Hazardous Fields Reduction,
an \$8 million increase above the FY 2004 level. This would support
treatments on an additional \$1.8 million acres, up 200,000 acres from
fiscal year 2004.\
\
\"The goal of the Healthy Forests Initiative is to promote timely
decisions, greater efficiency, and better results.\
\
\"By removing regulatory and management obstacles, the Department aims
to treat more acres and mitigate future catastrophic fire losses.
Approximately \$1.7 billion is requested for the National Fire Plan,
which is about the same level as 2004. The Forest Legacy Program is
funded at \$100 million, a \$36 million increase over the 2004 level.
The fiscal year 2005 Budget also includes \$666 million for preparedness
and \$686 million for suppression activities, which provides funding at
the 10-year average adjusted for inflation.\
\
\"Finally, the Budget supports the Department\'s strategic plan and our
continued efforts to implement the President\'s management agenda which
focuses on improving performance and results in government. USDA is one
of only 8 out of a total of 26 federal agencies to be scored a green or
at the highest level for our progress on all five of the major areas
under the President\'s management agenda. And I am pleased to report
that for the second year in a row and only the second time ever USDA
will again be receiving a clean audit.\
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\"As part of our implementation of the President\'s management agenda,
USDA is working on several initiatives to better integrate computer
systems and technology. In doing so we are providing employees with the
tools necessary to quickly and efficiently deliver services and to
benefit our customers.\
\
\"The 2005 Budget will allow us to build on our progress and our
management priorities by providing resources needed to improve customer
service through continued modernization of technology. This includes
\$137 million in fiscal year 2005, an increase of \$18 million, to
upgrade technology in the county office service centers.\
\
\"Electronic government is a major focus of USDA in 2004 which I
announced in a speech I made about three weeks ago. By increasing our
customers\' ability to interact with us over the Internet, we can save
them and USDA time and money. As part of these efforts we are nearing
completion of a new basic computing infrastructure for our field
agencies so that employees and customers will be able to share data
electronically.\
\
\"The budget proposal also strengthens the security of the Department\'s
facilities and information technology. The budget also increases funds
to focus on efforts to strengthen civil rights and equal treatment under
our programs. The fiscal year 2005 Budget proposes \$22 million for
USDA\'s Office of Civil Rights, an increase of \$4 million over 2004.
This includes an increase of \$2 million to process complaints in a more
timely manner and an increase of \$1 million to improve our tracking and
analysis of civil rights complaints.\
\
\"This completes my overview of some of the key points of this budget.
Again, to summarize, the 2005 Budget is a responsible budget, and it
funds key priorities and programs here at USDA by focusing funds on the
key areas for USDA including food and agriculture defense, BSE-related
activities, and record level of support for farm conservation programs,
food safety and nutrition programs.\
\
\"I want to thank you again for being here today, and I will be happy to
take a few questions before I turn it over to our excellent budget folks
and Steve Dewhurst and his team. So thanks again.\"

**REPORTER BRASHER:** Phil Brasher, Des Moines Register.\
\
\"Could you address the Conservation Security Program? You had in your
rule indicated that you all would do a supplemental revisited somehow if
the spending cap was lifted which it was in the Omnibus Appropriations.
But it would appear from your budget request you\'re projecting to spend
\$4.4 billion through 2010, that you\'re still envisioning a quite
limited program from what was in the Farm Bill.\"\
\
**SEC. VENEMAN:** \"Well, it is a combination of spending caps that the
Congress puts on. Even though as I understand it they lifted the ceiling
on it they actually then put in a limited amount in the budget. And I
think it\'s something like \$41 million for 2004 that came out of the
Omnibus. Our budget proposes to put in \$209 million. So we\'re
proposing a substantial projected increase in that program.\
\
\"And those would be to fund new contracts \-- in other words, that\'s
not money that would continue on in, that would anticipate funding the
contracts into the future. It would be money that is all funding current
contracts.

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**\
REPORTER:** \"Are you changing the rules at all, lifting up the
restrictions? You\'ve got it limited to selected watersheds right now.\
\
**SEC. VENEMAN:** \"Well, the rules, it would be inappropriate for me to
comment on what we anticipate doing with the rules because they are in a
public comment process right now, and so we\'ll take all the public
comments into account as we look at the final rule.\
\
**JIM WEBSTER:** \"Jim Webster, Webster Agricultural Letter. Given your
expanded outlays for conservation programs, particularly in NRCS,
you\'re proposing yet at the same time though a cut of more than 2,000
staff years from 2004 to 2005. How do you handle the increased program
load? Is this largely a contracting out or outsourcing of jobs?"\
\
**SEC. VENEMAN:** \"Well, as you know, we did have in the Farm Bill
authority for the technical service providers. It\'s a program that we
have now implemented, and I would leave it to the Budget people to
answer your questions more specifically on the exact number of jobs that
are being provided versus the technical service providers. But in fact
we are using that partnership that we have with people that have this
capability through the technical service provider provisions that were
included in the Farm Bill. And as you know, we held a number of
listening sessions on these provisions so that we could figure out the
best way to implement it. And I think that accounts for most of the
change you see in the jobs."\
**\
CHUCK ABBOTT:** \"I was wondering if you could discuss a little bit the
money that\'s being proposed for bioterrorism and protecting food
security, particularly if you could talk about what\'s happening this
year in light of development of bird flu in Asia and today is reports of
the human, possible deaths from human to human contact. And of course
whether you\'ve made a decision on taking additional money from the CCC
to fund activities this year on mad cow and other food security.\
\
**SEC. VENEMAN:** \"Okay. As I announced last week when I talked about
our BSE funding, I did indicate at that time that we are looking at
possible additional funding from the CCC for BSE-related activities
along the lines of the kinds of activities we outlined in our \'05
budget. We are still working with OMB on that request.\
\
\"We did however in last summer or fall include an additional I think
\$5 million from the CCC for BSE-related activities following the find
in Canada. That included, you know, increasing the number of tests and
some other activities. But, so we have included some increase in those
funds already from the CCC. We have others that are pending.\
\
\"And then as far as the bird flu situation, this is something that
we\'re monitoring very carefully. It obviously is devastating to these
countries\' poultry industries who have contracted the disease in their
countries. I think there are as many as 10 countries now, and some of
these countries are the largest poultry exporting countries. And so it
is having an impact not only in those countries but on the markets to
which they export.\
\
\"I can\'t say at this time that we anticipate additional funding for
those activities. Obviously we don\'t have it in this country, but
we\'re following the situation very closely in Asia.\
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**DAN GOLDSTEIN:** "Dan Goldstein, Bloomberg. Part of your initiative,
the Food Defense Initiative, is contingent upon the \$124 in user fees
that obviously are going to be going to the meat packers that didn\'t
make it through the Budget, That was proposed last year. It didn\'t make
it through Congress. Has the situation changed with the BSE case in
Washington State that you think you can go back to Congress and get the
meat packers and get the big companies like Tyson and Smithfield to go
along with this?"\
\
**SEC. VENEMAN:** \"Well, I don\'t know about that. It is something we
proposed several years. I think both administrations have often proposed
user fees. But I really think these user fees are something that are not
very well understood. And as I tried to explain before, we have now user
fees \-- that\'s dark blue on top of all of those. Those user fees apply
to a partial shift. So the inspectors come in and they do a single
shift. Everybody gets that. So basically it\'s usually some of the
smaller packers that will do a partial shift. They have to pay for that
partial shift out of a user fee. All we\'re doing is proposing that
anything over one shift in a meat plant should be paid for by a user
fee. We think that promotes equity among the big guys and the little
guys.\
\
\"And so that\'s what this is. I would point out that this is the FSIS
Budget. It\'s not really part of the initiative per se of the Food and
Agriculture Defense. But as we\'ve tried to indicate in the remarks, all
of these are very inter-related. You talk about the FSIS budget or the
APHIS budget \-- you overlay that with the Food and Agriculture Defense
which both of those agencies as well as a number of others and FDA and
Homeland Security are very involved in \-- you look at the BSE issues,
and of course the Homeland, the Protecting the Homeland Initiative
includes the Ames funding. But of course Ames has, you know, big
importance to our BSE activities and other food safety and animal health
activities. So many of our budget \-- well, we\'ve put them into
categories, so many of our budget items really do intersect with each
other. But we\'ve had to be able to discuss this to put them into
separate charts and so forth.\
\
\"Thank you all again very much.\
\
**MR. STEPHEN DEWHURST :** \"Thank you very much. Let me just do a
couple things here, and then I\'ll entertain some more questions. A
couple things. Just technical points about the budget that may help in
your understanding that I think are important to understand. The
Secretary said where programs are driven by appropriations all the
comparisons in this bill are to the Omnibus Bill the President just
signed.\
\
\"There\'s not a lot of new legislation proposed in this budget. People
are asking me, you know, are you doing things to the farm programs, you
doing things\-- the answer is no. We\'ve got some user fee legislation
the Secretary talked about. We support the reauthorization of Child
Nutrition, but not a lot of new legislative initiatives.\
\
\"One other thing I\'d mention has to do with our Credit Programs,
particularly our Rural Development Programs. When you look in the
summary book what you\'re going to see is, some program levels are
declining but outlays remain about the same. That\'s because our
programs, some of them are deeply subsidized. They are very sensitive to
interest rates. Interest rates are up a little bit. That means we can
buy less programs with the amount of money that we have. So it\'s not so
much a decision for or against a program as much as a decision of what
you can afford within a given budget constraint for a lot of those
programs.

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\"I\'d also wake up Jim Webster back there. Jim, your question about the
NRCS, I think it\'s important to understand that if you look at those
numbers on a three-year basis, you have a little bit of a bump in the
middle in the \'04 column. They go up a little bit and they come down a
little bit. There\'s a couple reasons for that. One is in the Omnibus
Bill that Congress gave us some Emergency Watershed money, essentially
one-time money, for use in \'04. And there\'s quite a few congressional
earmarks in the NRCS budget \-- over \$100 million worth of them \--
which are not funded in the Executive Branch Budget generally.\
\
\"When you discount for those things you find in fact an increase in
employment for things like the technical assistance required to carry
out the Farm Bill programs. So we\'re glad to provide you any details
you want on that, but it\'s a little more complicated than just looking
at the two-year totals.\
\
\"I\'m sorry. There was a hand, and I lost track. Right here.\
\
**JERRY HAGSTROM:** \"Jerry Hagstrom from Congress Daily. Could you
explain the expectation of an increase in the number of people receiving
Food Stamps a little bit on who\'s coming into the program and why?\
\
\"And secondly, I notice that there is a I think a \$100 million
decrease in spending on tobacco. Could you explain that one?"

**MR. DEWHURST:** \"I can do one out of two. Will you give me credit for
that? (laughs)\
\
\"Food Stamps, in my history here, we have some models we use to predict
Food Stamp program, and those models include a number of factors \--
cost of food, unemployment and so forth. The models are not perfect in
the sense of being able to predict with great precision how many people
will be on the program. And my experience has been that Food Stamps is a
little bit of a lagging indicator. So you can have unemployment coming
down and still have Food Stamp participation rising.\
\
\"That\'s true in this budget because in fact if you look at the
unemployment assumptions that underlie the budget, they\'re coming down
a bit in the President\'s budget. But our Food Stamps participation is
continuing to increase.\
\
\"I haven\'t noticed \-- I\'ve actually looked at the data and I may be
missing something other analysts have seen \-- I have not noticed a
drastic change in the demographics of the program. It looks like a
fairly broad increase in participation to me.\
\
**REPORTER:** \"(off mike)\
\
**MR. DEWHURST:** \"Yeah. They drive part of our budget, is the increase
in food cost.\
**REPORTER:** \"(off mike)

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**MR. DEWHURST:** \"The Food Stamp benefit is premised on the cost of a
food plan. And to the extent food costs go up, the cost of that food
plan goes up. And depending on your income you either get enough money
to fully finance that food plan or you get a part of the money and the
government assumes you have enough money of your own to put into it. So
the program is driven by food costs and by the numbers of people on the
program.\
\
\"Farm programs \-- the overall outlays are relatively flat, about \$12
billion in each \'04 and \'05. That\'s lower than the baseline that we
had just six months ago. And some of the programs go up and some of the
programs go down for specific reasons. The truth is, if you want to go
through the commodities or talk about tobacco I\'ve got some people here
can help you with it. But I\'d rather not expose my non-economist
training at the moment.\
\
\"Yes, ma\'am.\
\
**SLYVIA SMITH:** \"Sylvia Smith with the Ft. Wayne Journal Gazette.\
\
\"There will be recommendations on Child Nutrition to Congress this
year, and this phrase \"to make improvements in program integrity
without creating barriers,\" does that mean there won\'t be any
recommendations with respect to soft drink machines and other junk food
machines in school?\
\
**\"MR. DEWHURST:** \"I don\'t know. The undersecretary would have to
answer that question for you. Frankly, it\'s not a budget matter and
doesn\'t affect the numbers.\
\
\"Yes, ma\'am?\
\
**ANN MULKERN (sp):** \"Ann Mulkern with the Denver Post.\
\
\"Going back to the Food Safety and Inspection Service and the user
fees, if I\'m reading this correctly \-- and I\'m asking you to tell me
if I am \-- if you do not get approval for these user fees, it looks
like you\'re actually cutting the total budget appropriation. And if
that is the case, can you talk about, you or Dr. Murano, talk about
what\'s actually going to be cut if you don\'t get those user fees?\
\
MR. DEWHURST: \"Well, the Administration is supporting a level of
program for the FSIS, \$952 million. And the Administration has
suggested how to fund it, and you\'re right \-- part of it is new user
fees. From our perspective the ball is now in the court up on the Hill.
If they choose not to fund it that way, we still support the program
level. We need that amount of money. We do not support cutting that
number below \$952.\
\
**ANN MULKERN:** \"(off mike) give you the money, where is it going to
come out of in your actual spending?\
\
**MR. DEWHURST:** \"Well then it becomes their choice.\
\
\"Yes, sir.

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**DETSEL (sp):** \"Hi. Tom Detsel with the Oregonian.\
\
\"While you\'re fully funding the Health Forests Initiative, it looks
like you\'ve outlined a number of pretty hefty cuts in other forestry
programs \-- state and private forestry systems and research. How do you
justify those cuts?\
\
**MR. DEWHURST:** \"Here\'s the deal. The Forest Service has a
relatively stable budget in total within a constrained budget. There are
two priorities in that budget, probably more than two but at least two
that are big money budgets. One is Healthy Forests and the other is Fire
Suppression. We fund Fire Suppression cost at a 10-year average. That
requires \$686 million in the \'05 Budget. That\'s an \$89 million
increase over the \'04 number. So other things are budgeted more tightly
in the Forest Service.\
\
\"We have some folks here. We can spend time with you after the briefing
if you\'d like running down the list.\
\
\"Yes, ma\'am.\
\
**KAREN ROBB:** \"I wanted to ask a little bit about the President\'s
Management Agenda and how you guys are doing. The Secretary mentioned
you got a clean audit. What is the chances of you actually making the
early close of the November 15 closing of the books for 2004?"\
\
**MR. DEWHURST:** \"Well, that\'s the objective for next, for you know,
for the end of 2004. All I can tell you is that work has already been
started to achieve that objective. Almost the minute they got done with
this year\'s books they turned to the question of getting next year\'s
books done by that deadline. Folks who know more about it than I do are
optimistic we can get that done. We\'ve had two years of experience now,
and we think we\'ve encountered about every problem one can encounter in
getting that job done.\
\
\"So we\'re pretty optimistic we\'re going to be able to hit that date.
But it takes a lot of work.\
\
\"It\'s not my fault, Chuck."\
\
**CHUCK ABBOTT:** \"No, but it will be mine after awhile. I\'m Chuck
Abbott with Reuters.\
\
\"I was curious. In one of the budget books disseminated by OMB this
morning, in talking about the Agriculture Department it said that the
President\'s Budget included the \"common sense proposal to not count
combat pay as part of income when determining Food Stamp eligibility.\"
I\'m curious. How many people would fit into that category? How many
people or families fit in that category of being in combat territory and
also receiving Food Stamps? I\'ve been told from folks who have defended
FDA\'s statistics that the number was pretty small in 2002, but that was
of course before the mobilizations for Iraq and Afghanistan.\
\
**MR. DEWHURST:** \"I\'m trying to remember the numbers. There are
numbers of military people on Food Stamps, and you can draw whatever
conclusion you want from that. I think the number is relatively small.

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There are \-- it is certainly relatively small relative to the entire
caseload. It does seem strange to send somebody overseas and then for
the extra pay he gets subtract from his Food Stamp benefits. So there\'s
going to be a proposal not to do that.\
\
\"But I can get you a breakdown of the Food Stamp rolls with the latest
data we have on how many of those folks there are.\
\
\"Let me \-- I\'m sorry.\
\
**ALLISON FREEMAN** (St. Louis (unclear) Energy Daily) How are you
proposing to do the technical assistance funding this year, and how will
that affect the acreage-based programs?"\
\
**MR. DEWHURST:** \"I know the answer to that question, but let me see
if I can explain it in plain English. Under current law we provide the
technical assistance for all of the Farm Bill-driven conservation
programs through a process by which money gets taken out of some of the
programs we call the \"paying programs\" and used for the benefit of
other programs. So the receiving programs, the biggest ones by far are
the CRP and the Wetlands Reserve Program.\
\
\"So when you look at the \'04 numbers for programs like EQIP, which is
a paying program, the actual level of that program\'s going to be lower
than it seems because it\'s going to send some money to these other
programs.\
\
\"In total in \'04 about \$120 million will come out of the paying
programs to the benefit of the receiving programs. And that has been an
issue in the Congress in here.\
\
\"What the Administration is proposing in the \'05 Budget is that the
Congress appropriate funds for the CRP and Wetlands Reserve technical
assistance \-- thus, making it unnecessary to get that money out of the
so-called \"paying programs,\" so that the loss to those programs which
is roughly \$120 million in \'04 would only be about \$23 million in
\'05.\"\
\
**JIM WEBSTER:** \"I\'m looking in vain. Am I looking in the wrong
places? Didn\'t you used to have a section in here that listed the
legislative proposals? I don\'t find it."\
\
**MR. DEWHURST:** \"I took it out because we didn\'t have very much
legislation is the truth of it. The only thing we really had was the
user fee legislation, and we discussed that elsewhere in the book. So if
that\'s a sin, I\'m guilty. (laughs) I was trying to make the book a
little shorter. It gets longer every year. It\'s still over 100 pages.\
\
\"Yes, ma\'am.\"\
\
**KAREN ROBB :** \"Another management question. In the book you are
asking for additional money for the Common Computing Environment at the
service centers. And I\'ve talked to several of them and they said that
they are getting the updated equipment on time. They all got it in
September, and it\'s sitting in boxes because nobody has the money to
install the new computers.\
What\'s going to be done about that?\"

-more-

**MR. DEWHURST:** \"If you look at the \'04 budget, the Congress gave us
substantially less money than we asked for for the Common Computer
Environment. We asked for the restoration of some of that money in the
\'05 Budget. It is a very high priority, but it is also a limited
resource. I don\'t know if \-- we have our chief information officer
here.\"\
\
\"I don\'t know, Scott, whether you\'re aware of what the lady is
talking about, computers in boxes that are not being unloaded?\
\
\"Oh. Some of it may have been allocated to temporary office employees,
and there\'s some reduction in workload in some of these programs, and
fewer temporaries. So the real reason they\'re not being unloaded may be
that we just don\'t have a need for them at the moment. But that\'s
something we can look in to.\"\
\
\"Yes, ma\'am.\
\
**MAUREEN GROPPE (SP):** \"You mentioned that some of the cuts in the
Rural Development Programs, they look like cuts, downturn in spending
but you said they\'re not really cuts. Where are the real cuts in this
budget? What are the programs that are not, you\'ve decided not to ask
for as much money for as the previous years?"\
\
**MR. DEWHURST:** \"What you find in this budget, this is sort of my own
thumbnail sketch, and I shouldn\'t be \-- when I\'m talking about cuts
in the budget I\'m really talking about the discretionary piece of the
budget. There\'s three or four basic components to it. There are \-- and
again this is compared to the \'04 Omnibus Bill level \-- there are in
those bills something on the order of \$400 million in congressional
add-ons that are not funded in this budget. There are about \$150
million in user fees recommended in this budget. And there are a series
of program reductions. PL480 happens to be reduced in this budget. Some
of the environmental programs, while they are constrained, some of the
rural development programs are constrained \-- you know, the
discretionary budget is a complicated budget, so I don\'t know if I can
capture it very easily by going down the list and seeing where the
numbers go down."\
\
Two more. Let\'s go over here.\"\
\
**REPORTER:** \"Just to follow up on the forestry stuff, it looks like
you\'re cutting the Forest Service budget by \$361 million. Is that
right? Why such a large figure? What are you doing there?\"\
\
**MR. DEWHURST:** \"Well, the major component of that cut is money the
Congress gave us this year to repay previous borrowing to finance fires.
If you take the borrowing machinations out of it, the budget\'s
relatively stable. But that there is a \$299 million cut because they
gave us some money to put back money we had previously borrowed from
programs to fight fires.\
\
I\'m sorry, one.\"

**JERRY HAGSTROM:** \"Could you tell me, what is in the budget for
implementation of country-of-origin labeling considering that the
Congress has said you would not final country-of-origin labeling for
most products but you\'re supposed to finalize it for fish products.\"\
-more-

**MR. DEWHURST:** \"We do not have a budget increase for that. AMS has
the resources it needs to finish the regulation and do what\'s legally
required. Thank you very much. We appreciate your time and attention.
Again, if you have a significant interest in a given area come see us
and we\'ll try to get you in touch with the right people. Thank you.\"