has popped into this debate. i know of no hearings on baby formula of the last congress when i was drinking have there been any reporter problems that was suggested there needs to be a reason to change infant formula is regulated can you comment on that? >> yes. we are not familiar either with the origin of that provision. we noticed it in this draft and of course, realize how high the regulated baby formula is and interested in receiving further information. it is very important as is the safety of the product and availability to mothers and children. >> my time is expired would have gone on with a pilot program but i think that has been discussed and i think

mr. ambrosio has comments it is important and i yield back. >> . >> the problem we have we have an important vote in the subcommittee of like to

adjourn five minutes then we can come right back the subcommittee if you bear with us for a recess for five minutes. dingell dingell >>

>> this of committee will reconvene representative degette. >> i went to echo mr. dingell thanks for working with us on this legislation. all inputs has been very, very important and and and if you will be surprised to know i want to talk about the mandatory recall provisions of the bill and i want to start with ms. dewaal. first of all, do you think their current provisions of the buyer of terrorism act are sufficient to give us the mandatory recall that we need and a robust food safety system? >> know i do not. the bio terrorism act did not really give the mandatory recall but it does give them the authority to take certain actions like administrative detention and other actions when they meat. >> really has the one step

back because is that as of this it -- sufficient i said mandatory recall i mentor feasibility. >> that is what happens when you break my train of thought. >> thank you for the clarification. the one step up and one step back trees ability was a good first up into this area. the provision into this bill is much improved what we have seen over the years is the fda has had trouble with identifying food products with major recalls an outbreak. >> it does not go far enough? correct you are nodding your head yes. >> there is such a huge food production chain if there is one. the records are not good if you don't know where the produce comes from you cannot

get anywhere. >> mr. ambrosio, mr. stenzel, ms. bailey, you don't object in general to the concept of trees ability comment do you? >> no. >> no. >> no with. >> in fact, in your testimony, you recommended for the secretary be allowed to build systems on information gathered and not be mandated to develop a specific type of system. correct? and ms. bailey endorse testimony, written testimony you talk route the concept of brokers and distributors and ingredients the ingredients to get the trace ability correct?

mr. stenzel to produce industry in this country i should not say this you were the ones that gave me courage to believe we could do trace ability because you are doing such a great job. i want to commend do the issue as i heard in all of your testimony today is concerned with the specific language of section seven of the committee draft is that accurate? >> that is right. >> and i just want, you talk in your verbal testimony today about the two may recall and talking about mandatory vs. voluntary recall but that made me think about trace ability because it does not really matter if the recall is mandatary or voluntary if it is over broad i guess i should

ask if it still devastates the entire market, correct? soberly it you want to have the ability to quickly trace where contamination came from food. what we have seen lately i was thinking about belated us, and the pistachio were they said don't eat any pistachio than i thought would if you had pistachios incorporated into granola or something like that? you could devastate a food agency do you want to comment on that ms. bailey? >> we're absolutely sympathetic with your goal to improve disability system it is a matter of prioritizing how we go about it. that is why we recommend, first of all, there is a difference between a single product like a strawberry that is ready steve

vs. ingredients that may be combing gold. >> exactly. >> we saw with the peanut paste problem when it brokers were involve the pc a will sell the paste to a broker to the end to manufacture that is what we include the recommendation that the distributor label it but going forward that we have learned working with our member companies it can be enormously expensive when you start to deal with cominco the products that is where we caution and think the legislation has it right. let's ask fda first identify cost benefit because resources are finite. >> my time has expired but i really hope all of you will come in and work with us on this trace ability when gray's because from the very days of

working on this issue you are saying my view which is we need to have trees ability throughout the industry but we cannot have a one size fits all trace ability system or technology the key is to be interoperable so if you have peppers and tomatoes and mixed in a salsa that is one level of complexity but if this also is incorporated in a process food, that is another layer then put into a restaurant or any place that is another layer. we have two work on that. i am amazed we do have the technology we just need to work on it i hope you work with us to improve the language. thank you for your indulgence mr. chairman. >> i had to take a deep breath because mr. mathisen and

chairman dingell, we have tried -- tried to educate the committee with the electronic pedigree with regard to drugs now there is an interest to do something expansive with pedigree with food is so stop and ponder and think about this because as we move to the drug's safety bill it is reason i went right at the fda commissioner you can say hubbell level of interest to make sure they go after tainted food but with regard to drugs that is different we will not send this message to the country that's tainted food bad lettuce is awful. but we could have a different standard when it comes to bad luck with your. i am uncomfortable. of me ask some questions because i don't think i completely understand when i

look at section 106, 107 we have the all in and under trees ability we have exemptions. i come from a very small town i grew up on that tippecanoe river we have to stop signs that is the size of the town i come from so i think about small, small businesses, and i worry so when we think about access to records and we say requirements with regard to restaurants are we going to include concessionaires? does anybody anticipate that? so when you go to mci every night, college football game, high school, little league? we make and year chile at our little league games.

who what will be included? what about convenience stores you make these poll into the mom and pop gas station? you can get elk sausage what type of requirements that we place and where do we stop? has anybody thought about it? as we as a committee the to have better definition as to who is in and who is out? total silence. >> congressmen at the risk of your wrath come i just don't think through safety is something that is determined by scale or size of company. i run a train association has very small number several be extremely challenged to comply with this regulation we also have big members but after the last summer outbreak we also found some of the issues and places people were getting sick were the very smallest restaurants we have got to have a system that will take care of ... >> there is a difference

between food-processing and food handling. the people of pure love to talk of the foodborne pathogens and sicknesses predominantly deals with the handling of through. right? not so much always the processing of a manufacturing facility. most feel they are being used as a scapegoat when it is the other hand going. everybody here in the audience we probably have gotten sick because somebody left out the mandates overnight or something. when i look at the trace ability requirements farms for example, have to keep their records or the league for everybody will be involved with to pass to keep their records but we will exempt now restaurants and farms required to maintain but direct sales

by farms are exempt. what about seafood? if we exempt on the farm we can exempt seafood? what about the trawler that goes out there and gets this seafood he owns the restaurant and the trawler and processes the food? should they be exempted like the farm? total silence. see? those of the same kind of questions i have when we started to pick and choose where do we draw the line? >> if i could, the language in that section at the end is very important and goes to the heart of our concerns. there are a number of questions, there has to be a sense of what is feasible technologically, what the cost benefit is and the relation to food safety. >> if we exempt farms, should

be exempt trout farms? catfish farms? fish caught on the great lakes? seafood? vivica zero questions that need to be answered. the analogy is it is similar to electronic medical records that it is a concept that makes good sense it is not easy to achieve and there are many reasons it is not technologically and other wise. >> it is easier for me to achieve electronic pedigree with the drug industry by cannot give corporation here but they say when i am trying to do is too complex? what the heck is this? it is a decentralized model to the umteenth degree perella to work with you mr. chairman. i yield back. >> we're done with our questioning you heard us earlier you may get written

questions by the close of business tomorrow we would like you to answer them by the close of business money. and again i want to thank you all. it is helpful i cannot a precise enough although the plan is to go to mark up next week we very much like and intend to consider a lot of the statements made today as we move forward over the next week and members have commented on how flyable the testimony will be as we move forward. without objection the meeting of the subcommittee is adjourned. thank you [inaudible conversations]

[inaudible conversations]

>> the national governors association say states are facing the steepest budget cuts in its 30 years. spending is projected to fall for the second year in a row. now more from the 35 minutes event. >> good morning ladies and gentlemen, welcome to the fiscal survey of state conference that all participants are in a listen-only mode we will conduct a question and answer session i now turn that

discussion over to scott pattison. >> i am the executive director with the national association of state budget officers and with me is raymond scheppach executive director of the national governors association. we are releasing our fiscal report which we do twice per year and we have been doing this report for well over 30 years. unfortunately i have two report these are some of the worst numbers we have ever seen. for example, for the first time ever actual spending for the states will decline this fiscal year 2009, 2010, two years a narrow. the last time this occurred, the only other time states had the outright decline in expenditures was 1983. that was just a little below about o.7% and the give you

some numbers. state spending estimated to decline 2. 2% this fiscal year 2009 which everybody knows and furrow states at the end of this month on june 30. 2010 we are projecting state expenditures will have the actual outright declined of 2. 5% that is very significant. growth because this is two years a narrow but also because the numbers are much more significant in terms of decline and the only other decline which was 1983. 30 states estimate the fy '09 budget will be negative. only six negative fy '08 to give concerts -- comparison in 2010 we expect 35 states will have negative budgets year over year they will be spending less in 10 a than

they did the year before and then they did 2008. one indicator of fiscal stress that is good is the actual cuts made to budgets after passage. after the governor has signed the budget. there is a chart hear that shows, these are fairly stark. we actually have a record for the first time ever, 42 states in this particular fiscal year will have to go back and cut after passage of the budget. the last time we saw a significant cuts two years in a row was the post a 9/11 recession period o two/o three, 37 states o two and 37 states and '03 went back and cut the budget following passage and signing by the governor fairly significant we are up at 42 for this year to put that into perspective last year fiscal

year await 13 states had to go back and cut the budget after passage we have seen a significant change in the other thing to of the size is this report really demonstrates how quickly the decline in the state's fiscal situation has occurred over the last 22 fiscal years with indicators like that with 13 states cut after passage in '08 know up at 42 this year. let me say about the eight gaps there are large majorities of states facing a shortfall there is a chart on those but 36 states have had to close gaps already during this particular fiscal year '09. we still have 20 states that are still closing gaps in have additional shortfalls. in addition, 2010 we expect 37

states to have budget gaps. that may grow. 2011 it is very difficult to project that far ahead for fy 11 but so far 24 states are reporting they do have budget gaps expected 2011 so have the expected budget gap and i would expect that would grow also. talking about revenue collections, no surprise to anyone that revenue collections are down significantly with all sources of revenue. there are numerous reports recently just finishing up the spring collection period that have demonstrated anecdotally and other wise very significant declines in revenue from the state. currently what we're seeing is the overall aggregate 6.1% decline year over year it of state revenue in the three major sources of revenue, sales, personal income, corporate income tax.

2009, current fiscal year, revenues exceeded expectations and wyoming and north dakota only which tended to be anomalies and we had budget gaps which forecasts were not meant in the 38 states. i would not be surprised as we end this fiscal year on june 30 that that number might grow. specifically sales tax collection was 3.2% lower, personal income tax, a 6.6% from a corporate income-tax, a 15. 2% this fiscal year over the last but unfortunately, i believe based on very recent anecdotal data those numbers may understate the decline in the tax revenue situation at the end of this particular fiscal year. what we finish up with the report conclusions on a balanced levels as a rainy day

fund coupled with the end of the day balance it is another good indicator of fiscal health and what we have seen is they are down but they still lag in terms of the fiscal situation they look a little better than the actual fiscal situation. we see balances are currently over 5% of state expenditures. that is a fairly significant decline from about 9% last fiscal year away and roll over 10% fy 2007. although to put into perspective one is states don't tend to tap the entirety of the rainy day fund immediately as you would expect those still exist but interestingly texas and alaska account for almost half, 40%

of state balances in their totality if you took those of you would have a lower balance level. some states i should mention are beginning the process of training the renewed a fund i expect some of those will be at to o. this report unfortunately shows fiscal situation based on as long as we have been doing this one of the worst in decades and whether we have growth budgets either 2011, 2012 for 2013 will depend on the length and severity of the recession in addition to other factors so with that and further explanation i will turn it over to the executive director of the national governors association, a governor raymond scheppach. >> thank you. i just want to do two things, number one talk a little bit about the relationship to the recovery

package to these particular numbers and stress of few of what i would call take away or bottom line terms of the recovery package it was a total 787 billion, of that 246 billion came to states or through states with entitlements to individuals. of the total 135 billion was relatively flexible that came out of two categories, the first was 87 billion of medicated not the federal money was flexible but allow states to take the previous match they would do, 6.5% and use it to plug holes in other places. the second piece the state's stabilization which was 48 billion that went to education and because education totals 30% of the annual state budget there was

a lot of flexibility there as well. the remaining 110 billion was specific in terms of categories, a little flexibility to move that money around. of course, it provided flexibility as economist often save with the balanced budget requirements states actually do pro cyclical activity cutting budgets, raising taxes makes the downturn deeper and longer. and i think when i look at the recovery package it was very positive from a number of standpoints for the states as well as it the economy. first 1,305,000,000,000 was a high percentage of the total that came to states that was flexible which was a plus. second, the money came in the two areas governors generally try to protect and terms of