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News Release

REMARKS BY
HHS SECRETARY TOMMY G. THOMPSON
PRESENTATION OF THE PRESIDENT'S FISCAL YEAR 2004 BUDGET
FOR THE DEPARTMENT OF HEALTH AND HUMAN SERVICES

Good morning. I need to go to a meeting at the White House in a few minutes, so I'll mention some of the highlights in the budget. After I leave, our budget director, Kerry Weems, and the agency chiefs will be here to take your questions.

I would like to take a moment to offer our condolences to the families of the crew of the Space Shuttle Columbia. These are remarkable men and women who risk their lives in the name of science, pushing the frontiers of humankind so we might live and lead higher quality lives. One of the brave heroes on Columbia was from my home state of Wisconsin, Laurel Clark. I know the people of Racine and Wisconsin greatly mourn her loss, but appreciate all she did to make the world a better place.

Thank you all for coming to this briefing on President Bush's budget for the Department of Health and Human Services -- a budget that continues to advance the President's goal of ensuring every American has access to health care.

In support of this and related goals, the President proposes outlays of $539 billion for this department for fiscal year 2004 --more than half a trillion dollars. $539 billion represents an increase of $36.8 billion -- or 7 percent -- over last year's request, and an increase of more than $109 billion --25 percent -- since 2001.

The discretionary part of the budget increases $1.64 billion -- or 2.6 percent -- to $65 billion.

This budget reflects the President's commitment to protect America against bioterrorism; modernize and strengthen Medicare, Medicaid, SCHIP, welfare, and child welfare programs; assure access to high quality affordable health care; prevent disease and enhance public health; invest in biomedical research; expand the role of faith-based and community organizations and improve the management and performance of HHS programs.

Let me mention a few highlights.

President Bush is committed to ensuring quality health care for all Americans. To advance this goal, he would strengthen and modernize our three largest programs: Medicare, Medicaid and TANF.

• The budget proposes $400 billion over ten years to modernize Medicare to encourage high-quality health care for all seniors. Improvements would include a subsidized prescription drug benefit, better insurance protection, more preventive benefits, and other improvements.

Medicare would offer beneficiaries more choices like those offered to federal employees, including the option to keep their current coverage if they choose. The fiscal year 2004 allocation for investing in Medicare benefits is more than $284 billion, of which $6 billion is dedicated to improving and strengthening Medicare. The total is a $17 billion increase over 2003 -- or 6 percent.

Medicine has changed dramatically since 1965, and Medicare needs to be brought up to date. Seniors have told us they want more, and we know that they deserve more. They deserve more preventive care, so they won't get sick as often; they deserve drug coverage, so they can afford modern medicine; and they deserve to choose the health care services that best meet their needs We're going to work with Congress to see that they get these and other improvements to Medicare.

• The President's budget spends $182.5 billion on Medicaid; more than a $20 billion increase over 2003 -- or 12 percent. Medicaid faces serious problems because, as one of the largest items in state budgets, it can be a target for cuts when state governments face budget pressure. The President wants to improve coverage for low-income Americans and allow people who might be cut from Medicaid coverage to keep it. He would do this by giving states more flexibility to tailor coverage to the needs of recipients -- particularly those with special needs, such as mental illness and AIDS. His plan would give states both flexibility and federal fiscal relief over the first seven years -- an extra $12.7 billion above what is currently projected -- including an additional $3.25 billion in fiscal year 2004.

Some of you were here on Friday when we outlined our plans to improve Medicaid. As I said then, the President and I know the pressures governors and legislatures face regarding Medicaid because we were both governors recently ourselves. I've talked to a number of governors in the past few days, I look forward to talking to more, and I expect they will be excited to participate in this option.

But relieving the pressure on state budgets is not the biggest reason to improve Medicaid. The biggest reason is the people who may lose coverage if we don't act. That's why we're going to invest more money right now to protect recipients from losing health coverage and create opportunities for expanding coverage to Americans who need it.

• Welfare reform was enacted by Congress in 1996 and has proved very successful. We will work with Congress this year to reauthorize the program and to strengthen work requirements and support for healthy families. The President's budget would spend $16.6 billion for 2004 on TANF. Further, the $2 billion contingency fund remains available. Now is not the time to turn back; we must move forward in helping millions of Americans become self-sufficient.
• I also want to highlight the new $65 million Centers for Medicare and Medicaid Services (CMS) Revitalization Plan, an initial investment at CMS to improve systems security, update Medicare fee-for-service claims processing systems, modernize information technology data structure, and revamp internal infrastructure.

The President would also expand access to critical health services for the uninsured. An increase of $169 million will allow us to serve nearly 14 million Americans through community health centers. This is part of the President's plan to nearly double the capacity of our community health centers nationwide over five years. Our investment for 2003 would be $1.6 billion, up from $1.3 billion two years ago.

The President and I want to prevent diabetes, obesity, asthma and many other chronic diseases. We included $125 million in the budget, a $100 million increase, to support community initiatives that help people make lead healthier lives and prevent diseases.

We are seeking $200 million for a new effort -- Recovery Now -- to assist more Americans who need critical alcohol and drug abuse treatment services. Faith-based organizations will be full and equal partners in the process of recovery. We expect to spend $600 million over three years.

We've been concerned about the problem of unpaid child support in America. We propose to enhance and expand automated enforcement of child support collections. Over ten years, under our proposal, the federal government would invest $218 million, and expect to provide children an increase of $7.5 billion in increased child support payments over the same period. We will begin examining the gambling winnings of those who owe overdue child support, as well as insurance claims and multi-state bank accounts. We want to make sure that children get the support family courts have decided they need and deserve.

We'll continue to support President Bush's New Freedom Initiative, which reduces barriers and promotes independence for people with disabilities. Our investments will help people to transition from institutions to community care or home care, provide respite services for their family caregivers, and address the shortage of community direct care workers. $1.75 billion over five years.

President Bush is committed to finding cures and treatments for cancer, AIDS, Alzheimer's, Parkinson's and other diseases. The budget contains $100 million to begin working with industry to ensure the nation has an adequate supply of influenza vaccine in the event of a pandemic. Last year, we completed a 5-year doubling of the budget of the National Institutes of Health (NIH). This year, we continue that commitment with a budget of $27.7 billion, a net increase of $549 million over last year. As a result of one-time projects being funded in fiscal year 2003, and not needing to be re-financed, actual NIH research investment will rise by $1.9 billion, or 7.5 percent.

• I would note that the budget requests $3.6 billion for bioterrorism funding to enhance the steps we've taken since September 11, 2001. If the request is approved, by the end of next year we will have spent $9.2 billion to research, prevent, and prepare for a potential bioterror attack.
• The President's budget increases by $20.5 million activities to protect our food from bioterrorism. Let me break that down: $5 million toward improving laboratory preparedness by helping laboratories across the country to exchange information on pathogens in food; $5 million to improve the quality of food monitoring and inspections through state contracts and grants; and $10.5 million to implement a registration system for domestic and foreign food production, handling and storage facilities, as well as a prior notice system for imported food shipments.
• Last year, we made the largest one-time commitment to the nation's public health infrastructure ever. In this budget, we are redoubling and building on our commitments to make America better prepared to respond to any kind of attack or disease outbreak.

We want to do everything we can to ensure that services provided to children, especially low-income children, give them every opportunity to succeed. The best predictor of a child's success in life is how well prepared he or she is to begin school. Cognitive development in early childhood is a critical factor in this preparation, and we know from research what kinds of environmental factors encourage healthy cognitive development in young children. Therefore, the President is proposing to give states more flexibility to coordinate pre-Kindergarten, Head Start, and child care funding to design integrated programs that are focused on the long-term interests of every child in their care. Total HHS spending on Head Start will be $6.8 billion, an increase of $148 million.

Finally, as the President announced last week, his budget will ask Congress to spend $15 billion over five years to fight AIDS in Africa and the Caribbean. This is a $10 billion increase over projected investment. He also proposes to expand access to medication for those living with HIV/AIDS with an increase of $100 million for the Ryan White AIDS Drug Assistance Program. The budget includes $150 million to follow through on the President's earlier commitment to prevent mother-to-child transmission of HIV. In combination with other government agencies, total investment will reach the half-billion-dollar level by fiscal year 2004. Total HHS investment on AIDS next year would be $14.2 billion.

It is an excellent budget and we're delighted with it. This is a challenging time for the federal budget, with the need to strengthen our economy, protect the homeland and prepare for the possibility of war.

The fact that the HHS budget contains so much investment in the health and welfare of Americans demonstrates President Bush's unwavering commitment to well-being of our citizens, including those most in need. With this budget, the President recognizes that America's greatest asset is its people, and he invests in making its people as strong and healthy as possible.

We look forward to working with Congress, with state governments, and with the medical community to carry out the improvements President Bush has proposed to make America healthier, safer, and better prepared.

The HHS budget document is located at http://www.hhs.gov/budget/docbudget.htm

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Note: All HHS press releases, fact sheets and other press materials are available at http://www.hhs.gov/news.

Last Revised: February 6, 2003

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