FDA chief: More money is needed for inspections

The money included in a proposed food safety overhaul will not cover the cost of the new inspections required by the bill, FDA Commissioner Margaret Hamburg told lawmakers on Wednesday.

"The amount of resources required to achieve these inspection goals would far exceed even the historic increases in the president's fiscal 2010 budget," she told the House Energy and Commerce Health Subcommittee. "FDA would support modification of these provisions to take into account the operational challenges involved, such as by changing these inspection frequencies."

Hamburg said approximately 378,000 food facilities are registered with the FDA, and inspecting a domestic facility costs more than $900,000. Inspecting a facility overseas costs almost three times more.

The bill would require FDA to inspect high-risk facilities as frequently as every six months. It imposes a flat $1,000 registration fee for food companies, which is expected to generate $375 million per year for the agency. The bill also requires food companies to pay the costs of FDA re-inspections and those related to food recalls. In addition, President Obama's budget includes $260 million for food safety.

Industry groups oppose the fees and Republicans are concerned about how the funds generated would be used. "If the goal is to improve food safety, we must ensure that funds are not funneled into other activities that may or may not have anything to do with ensuring food safety," said Energy and Commerce Health Subcommittee ranking member Nathan Deal, R-Ga.

Rep. John Shimkus, R-Ill., said the money in the draft bill has "no explanation, no earmarking, no direction." He added: "What justifies that amount? How are we going to ensure that it's not going to be used for other purposes?"

Energy and Commerce Chairman Henry Waxman, D-Calif., argued the fees were justified. "The bill simply asks industry to chip in its fair share" to ensure food safety, he said.

Rep. John Dingell, D-Mich., a leading proponent of the fees, agreed. "We are about to try and fund an agency which is hollow, which does not have either the personnel or the revenue or the money that it needs to do its job," he said.

Energy and Commerce Health Subommittee Chairman Frank Pallone, D-N.J., said the bill "provides FDA with the necessary resources and enforcement authorities to ensure that all companies are in compliance with the new requirements," adding that the panel expected to mark it up next week.

Food companies said they were open to paying some fees, but worry about their scope. "We are not opposed to all fees," said Pamela Bailey, president of the Grocery Manufacturers Association. "We are concerned about the size and purpose of the significant new fees proposed in the discussion draft."