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Proposed WIC Changes Would Weaken Efforts to Cut Costs and Fight Fraud

May 17, 2016 at 4:30 PM

A bill from Rep. Todd Rokita, which the House Education and Workforce Committee is scheduled to consider tomorrow, would change the WIC nutrition program for low-income women and young children in ways that would cater to corporate interests and likely make this highly regarded program less cost-effective.

First, the bill would require each state WIC program that wishes to use the time-honored practice of competitive bidding to select suppliers of infant foods (other than infant formula) to jump through a series of hoops that appear designed to discourage states from using competitive bidding.  For decades, WIC has used competitive bidding to reduce the cost of infant formula and some other foods for infants. 

In particular, the bill would require state WIC programs to produce — as a condition of using competitive bidding — complex economic analyses of issues like retail prices and product availability for non-WIC customers that likely would be beyond the capacity of many state programs to produce.  Such requirements could have a chilling effect on states’ use of competitive bidding to secure the best prices for infant foods. 

Diminished use of competitive bidding would mean that WIC — which is not an “entitlement” that automatically provides benefits to all eligible recipients — could serve thousands fewer mothers and children for the same level of federal spending (or would require some millions of dollars more in federal spending to continue serving the same number of children). 

Gerber Foods, which controls the majority of the U.S. market for infant foods other than formula and is a subsidiary of the Swiss corporation Nestlé, has been lobbying for limits on competitive bidding for infant foods other than formula.  Limiting use of competitive bidding would likely boost Gerber’s profits.

Second, the bill would undermine the Agriculture Department’s (USDA) ability to combat fraud by grocery stores that serve WIC participants.  State WIC programs authorize stores to participate in WIC and oversee their WIC transactions to make sure that vendors follow program rules. 

Occasionally, WIC retailers commit fraud or exploit loopholes in program rules to boost their profits while driving up WIC costs.  In rare instances, USDA has required a state to place a moratorium on approving new grocery stores to participate in WIC until the state has addressed this problem.  USDA has used this approach only in unusual cases of very serious program integrity concerns.

The Rokita bill, however, would require USDA to ensure in advance that not a single vendor would be adversely affected by a moratorium.  This would make it impossible for USDA to implement a moratorium, eliminating an important program integrity tool.

WIC is a sound example of government at its best.  It targets effective, evidence-based support to a vulnerable group during a critical period of life.  It is extremely cost-effective and is an impressive public-private partnership.  The Rokita bill’s WIC provisions would weaken the program by tying the hands of WIC administrators who want to get the best price for WIC foods and to ensure that grocery stores don’t engage in unscrupulous behavior at WIC’s expense.  The bill would place special interests ahead of the interests of low-income children and taxpayers.


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