For now, calls for greater monitoring seem likely to go unheard, both because the "atypical" case appeared to be a one-in-a-million genetic mutation that officials said posed no threat to the food supply, and because of tightening budgets.

Funding for cattle health programs in the proposed 2013 budget is set to fall by 20 percent compared to two years earlier.

Discovery of the infected dairy cow at a rendering plant in central California may stoke an intensifying debate over food safety in the United States, already a major topic after the "pink slime" furor this spring, fungicide-tainted orange juice from Brazil and never-ending efforts to control disease in food caused by salmonella and e Coli bacteria.

While major importers from Japan to Canada pledged to maintain beef shipments and U.S. officials stressed that the "atypical" case had occurred in the cow spontaneously and was not in others animals, critics were quick to respond.

"Yesterday's announcement of the fourth case of BSE, or mad cow disease, in the United States clearly highlights the need for a comprehensive national animal identification system," said Representative Rosa DeLauro, a senior Democrat on the House Appropriations subcommittee that oversees the USDA and a frequent critic of its handling of livestock issues.

"We were lucky to identify this case."

MAD COW SAFEGUARDS WORKED - USDA

But government officials say luck had nothing to do with it.

While the USDA tests only a fraction of the herd for mad cow -- about 40,000 head a year, versus a total of 34 million slaughtered last year -- it does so under a protocol that is aimed at higher-risk animals and, it says, can detect mad cow at the level of less than one in a million head.

In the past decade, efforts to impose more thorough surveillance and testing measures and a system to track cows back to potentially infected herdmates were knocked back, deemed too onerous and costly for the industry to bear.

The two major U.S. safeguards are a ban on using cattle protein in cattle feed, which can lead to animal-to-animal transmission, and keeping parts of the cow that can carry high concentrations of the disease, such as brains, spinal cords and nervous tissue, out of the food supply.

"We test for BSE at levels ten times greater than World Animal Health Organization standards," said USDA chief veterinarian John Clifford in a blog posted on Wednesday.

The disease takes years to develop, so when it does occur spontaneously it chiefly found in older cattle. In the United States, most slaughter cattle are butchered before two years of age, too young for the disease.

The California cow is the fourth known U.S. mad cow case. The first was in 2003, and no Americans have been diagnosed with mad cow from the animals. Government and industry officials lined up after the Tuesday's announcement, touting the detection of the infected animal as proof of the strength of the existing U.S. measures.

"I am confident of the safety of American beef," Agriculture Secretary Tom Vilsack, who insists U.S. testing is based on world standards, told Reuters Insider TV.

COST, LIABILITY SHELVED ANIMAL ID PLAN

Still, the USDA itself has in the past put forward stricter trace-back measures for protecting against BSE, which can cause a fatal disease in humans who eat infected meats.

Just after the first mad cow was identified in 2003, USDA proposed a mandatory system of registering livestock facilities and major food animals with the goal of tracing a disease outbreak to the home farm in 48 hours. Animals would get ID numbers assigned by the tracking system and the information would be kept in a database.

The idea withered in the face of objections of high costs for high-tech tags, government intrusion onto private property and fear among producers of facing liability claims.

USDA subsequently proposed a rule in 2011 that covers livestock shipped across state lines and initially exempts feeder cattle, the bulk of the cattle population. The USDA rule allows eartags, brands, ear tattoos and breed registry certificates to be used, a potential welter of identifying marks and documents, but a familiar approach for producers.

A final version of the rule is expected to be issued by the end of this year, says USDA. It asked Congress for $14 million for the new "animal disease tracability" system in the new fiscal year, an increase of $5.6 million.

"This is the fourth time we've had a warning shot that if we had a major BSE problem, we wouldn't be able to find where all the exposed cohort ended up," said Sarah Klein of the Center for Science in the Public Interest (CSPI), which says the nation has "a third-world animal identification system."

Such measures could prove a tough sell in Washington's current climate, where both political parties are looking for ways to reduce the growing federal deficit.

Funding for cattle health safety programs at the USDA this year will fall to $99 million from $112 million in fiscal 2011, and drop further to $90 million, under a White House proposal for fiscal 2013. Funding to fight two diseases, Johne's in cattle and chronic wasting disease in wildlife, would end but more money is sought for a livestock-tracking plan.

"We will certainly review this case to see what could be improved but it would be premature at this point to assume it merits additional funding," said a spokesman for Representative Jack Kingston, who chairs the House subcommittee that writes the USDA budget. "In this case, the system worked."

While the specter of mad cow disease as a health scourge has faded during a decade of success in controlling the disease -- only 29 cases were reported worldwide last year, down from a peak of over 37,000 in 1992 -- the latest case has emboldened those in favor of more testing.

Japan tests all cattle over 20 months of age and European nations test cattle over 30 months, said Michael Hansen of the Union of Concerned Scientists, who said the U.S. needs to adopt more stringent measures.

"Surveillance has to include a percentage or all animals over a certain age," said Hansen.

(Editing by Matthew Robinson and Bob Burgdorfer)

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