I recently visited the local processing plant I buy much of our meat from and he HAS to have a USDA inspector on premises whenever they are slaughtering. I even met him. I've been to several processing plants/slaughterhouses and have always seen an inspector.
I don't know where this meat inspectors "phase out" thing got started, but it is simply not true. Poultry may be one thing, but Beef/lamb/pork seems to be another. I think we should correct this so that no further mis-information gets out.
Also, I think the FDA is being confused with the USDA....the Food and Drug Administration is not the same as the US Department of Agriculture.
Again, I would love to see some sources on this, I haven't been able to find anything.