Lobbying fight over infant formula highlights budget gridlock
Sometimes an obscure lobbying fight tells a larger story. This phenomenon is playing out right now on the unlikely issue of infant formula -- and the broader, disturbing lesson is how hard it is to take even the most common-sense steps to save taxpayer dollars.
Infant formula is big business, and formula makers' biggest customer by far is the federal government. More than half of U.S. formula sales come through the Special Supplemental Nutrition Program for Women, Infants and Children (WIC), which provides it free. In fiscal 2009, formula accounted for $850 million of WIC's $7.3 billion budget.
Starting in 2002, formula makers began to offer products with additives -- docosahexaenoic acid (DHA) and arachidonic acid (ARA) -- to replicate fatty acids in breast milk. Not surprisingly, these formulas cost more. The Agriculture Department, which oversees WIC, allowed state programs to decide what formula to buy. Not surprisingly, formula makers lobbied states to spring for the souped-up versions.
And, perhaps not coincidentally, when WIC was reauthorized in 2004, Congress tucked in language telling states that when soliciting bids for infant formula, they could not require manufacturers to include or omit specific ingredients.
You can guess what happened next: Formula makers began submitting bids only for the costlier products. A February 2010 Agriculture Department study pegged the added cost at $91 million annually, more than a tenth of the infant formula budget. Now new formulas with even more ingredients -- and even higher prices -- are being offered through WIC.
All well and good if the pricier formulas were clearly better for babies. (The best thing for babies is breast milk, but that's another matter.) Manufacturers claim that the additives promote brain and eye development, and that the evidence for this is overwhelming. But while the Food and Drug Administration has approved the additives' safety, it has not -- because it says that's not part of its mandate -- looked into whether they have the claimed beneficial effects.
No one expects WIC to go back to the old formula. In fact, it's not even available. The real issue is what happens as these kinds of ingredients proliferate. DHA and ARA are turning up in everything from baby foods to eggs to juice, along with other ingredients such as prebiotics, probiotics, lutein and lycopene. Additives are threatening to become The Thing That Ate the WIC Budget.
With WIC up for reauthorization, the Senate Agriculture Committee has approved a measure to require the Agriculture Department to assess the additives. A House committee this week is poised to consider a similar provision that directs USDA to get the best scientific advice before deciding whether to provide costlier foods with extra ingredients.
Not surprisingly, formula makers -- Abbott, Nestle and Mead Johnson -- are lobbying hard against the provision. So is the manufacturer of the additives, Martek Biosciences Corp., which has brought in well-connected Democratic lobbyist Lanny Davis.
In an e-mail to one Democratic lawmaker, Davis argued that the provision "is a 'Trojan Horse' for those who have an agenda to deprive women, and especially poor women . . . of the choice of using infant formula," and warned of potential "discriminatory" effects. In a telephone interview, Davis said the issue was being pushed by unnamed "lactivists" who want to force all women to use breast milk.
The industry trade group, the International Formula Council, was also quick to play the race card, arguing that it "would likely result in a two-tiered system, in which nutritionally at-risk WIC participants, many of whom are minorities, are denied access to products widely available to the general population."
This touching concern for the poor would be more convincing if those supporting a scientific review did not include the National WIC Association; the California WIC Association, the largest state group; and the liberal Center on Budget and Policy Priorities.
Meanwhile, lawmakers who like to lecture about wasting taxpayer dollars are oddly hostile to a provision that could spend them more wisely. In the House committee, Michigan Republican Peter Hoekstra is expected to try to strike the review provision, and it is at risk of being removed on the Senate floor.
You might think that lawmakers would welcome the chance to save money in an era of tight budgets. You might think that companies confident about their products' value would welcome the chance for a federal stamp of approval, not fight it. But only if you haven't spent much time in Washington.