REMARKS BY HHS SECRETARY TOMMY G. THOMPSON
Presentation of the President's Fiscal Year 2003 Budget
For the U.S. Department of Health and Human Services
Welcome to the Department of Health and Human Services.
I'm pleased to be joined by my senior advisers and agency heads.
The year 2003 will be the 50th anniversary of our Department.
As we lay out our budget plans today for fiscal year 2003,
and prepare the strategic groundwork for our next half century,
we should look at where we've been, what's been accomplished,
how much has changed, and how much remains to be done.
In 1953, when President Eisenhower created the Department
of Health, Education, and Welfare -- whose name was later
changed to our current Department of Health and Human Services
-- many of the medical advances that we take for granted today
were yet to be developed. The specter of polio spread
fear across our nation. Two years later, the Salk vaccine
was licensed, and a nationwide vaccination effort was undertaken.
Today, we are within reach of worldwide eradication of polio
-- an event that would have seemed impossible then.
In 1953, the NIH got a major new facility (some things never
change!). It was the NIH Clinical Center. Today
the Center is undergoing major expansion and modernization.
And the potential for NIH research to improve our lives just
keeps expanding -- particularly with the dawn of stem cell
research.
In 1953, the Department had some "offspring" who have since
grown up and gone out on their own: the Social Security Administration,
the Department of Education and Howard University. And
we added important new members to our family, especially Medicare
and Medicaid. Since these programs were created in 1965,
they have provided trillions of dollars for health care coverage
of the elderly, the disabled, and low income Americans.
Today, at age 36, it's time to modernize them and
prepare for the retirement of the Baby Boom generation.
And finally: in 1953, the total Departmental budget -- including
Social Security -- was seven billion dollars.
The President's budget for HHS in fiscal 2003 is $489 billion,
almost a quarter of all federal spending. That's a substantial
investment -- a 6.3 percent increase over 2002 to achieve
many important goals. We must choose our priorities
carefully -- and the president is doing just that.
At HHS, we're very excited about the path the fiscal year
2003 budget carves for our department and the health of our
nation.
With this budget, President Bush makes a very powerful and
important statement about the health of America. Despite
the economic challenges facing the federal budget, and the
necessity to increase defense and bioterrorism investments
substantially, the president still puts the health security
of all Americans front-and-center.
The President recognizes that -- even during our nation's
war on terrorism -- securing the safety and welfare of our
nation goes beyond securing our borders and communities.
It goes to the heart and health of every American.
With this budget, the President makes a healthy investment
in a healthy America.
There are four major components of this broad and diverse
HHS budget that I would like to focus on with you this afternoon
before opening up to questions:
First, bioterrorism. As President Bush said last
week in his State of the Union message, preventing a bioterrorist
attack is of paramount importance to the security of our country.
At the same time, should an attack occur, the President is
committed to making sure we are prepared to handle it successfully.
To that end, the Department of Health and Human Services is
providing the medical and public health resources America
needs to respond effectively to any act of bioterrorism.
Our budget for the next fiscal year includes $4.3 billion
for bioterrorism preparedness, an increase of $1.3 billion,
or 45 percent, above FY 2002. This budget supports a
variety of activities to prevent, identify and respond to
incidents of bioterrorism.
The NIH will get $1.7 billion for research into new vaccines
and diagnostics as well as strengthening the security of its
facilities. The FDA will see an increase for its review
of vaccines and diagnostics. And the CDC will see increases
for the security of its facilities as well as upgrading its
lab capacity.
And, the Bush administration will continue its investment
in strengthening the public health system -- sending more
money to states and hospitals, including educating our medical
personnel on how to recognize and treat diseases.
We're getting stronger each and every day in our ability to
respond to a bioterrorism attack. This new investment
shows the President is determined to make sure our response
capabilities get to where they need to be at the federal,
state and local levels.
Next is health security for America. Along with
securing America against a bioterrorism attack, the President's
budget strengthens the security of our individual health.
This includes improving access to health care, particularly
for our low-income working families and traditionally underserved
populations in urban and rural areas.
The President is taking a comprehensive approach to securing
access to health care for our citizens, utilizing some of
the best ideas of both Republicans and Democrats and building
upon the best that the private sector and government have
to offer. Three major components of this comprehensive
health care package are:
Health Credits: $89 billion in new tax credits
would be made available for people to buy health insurance
in the private sector. We've improved this proposal
to make sure people can get the benefit of these credits up-front,
helping them pay their monthly premiums.
The budget also makes a major improvement by allowing states
to create purchasing pools through which families could gain
access to health insurance. The health credits could
also be spent on private sector health insurance purchasing
groups.
SCHIP: The President wants to ensure that $3.2
billion remains available to states for the effective SCHIP
program. This is money that went unspent by states and
was due to be returned to the treasury. We've created
a model waiver program for states seeking innovative ways
to cover its citizens with SCHIP, and the availability of
this money makes SCHIP a powerful tool for providing health
care to children and their parents.
In just one year, we approved waivers and state plan amendments
to extend health coverage to 1.8 million people and enhance
benefits for 4.5 million people. We also eliminated the waiver
backlog.
Community Health Centers: One of the most underrated
ways we provide quality health care to the poor and underserved
is through our community health centers. They represent
a great vision for the future of health care in America --
neighhorhood-based clinics where people, regardless of their
income, can come to see a doctor or health professional.
President Bush continues his commitment to doubling the capacity
of our community health centers in America by including $1.5
billion for them in 2003 -- a $114 million increase for an
estimated 170 new or expanded health center sites and over
800 new health care providers to practice in underserved areas.
Of course, the health security of millions of seniors in our
country depends on a strong and secure Medicare program.
Right now, Medicare covers only 53 percent of the average
senior's annual medical expenses, and the program's benefit
package has not kept pace with advances in medication and
treatment.
So, the FY 2003 budget dedicates $190 billion over 10 years
for targeted improvements and comprehensive Medicare modernization,
including a subsidized prescription drug benefit, better insurance
protection, and better private options for all beneficiaries.
This budget identifies two immediate steps that HHS can take
to help seniors with drug coverage: First, the Department
will work to implement a Medicare-endorsed prescription drug
card, which will give seniors immediate access to drug discounts
as high as 25 percent; and second, the Department will use
its new model drug waiver program to allow states to expand
drug coverage to Medicare beneficiaries in partnership with
the federal government.
In addition to these immediate steps, this budget provides
for transitional drug coverage for low-income seniors.
The federal government will provide its regular match with
states up to 100 percent of poverty, and then pay for 90 percent
of costs for beneficiaries between 100 and 150 percent of
poverty.
The bottom line is that we need to provide a prescription
drug benefit this year. But it would be a mistake to
address prescription drugs in a vacuum. We must make
it part of a comprehensive strengthening of Medicare, securing
the viability of this popular program for our Baby Boomers
and future generations. We can't put the problems facing
Medicare off any longer. Now is the time to act.
Perhaps there's no greater investment we can make in our future
health security, however, than by researching the cures to
the diseases than plague our people today. With this
budget, the President meets his commitment to double the NIH
budget.
The budget would increase NIH funding by $3.7 billion -- the
largest one-year increase ever for NIH. The NIH budget
will support almost 36,000 research projects with grants,
an all-time record for the agency.
Now, of course $1.5 billion of this new money is for much-needed
bioterrorism research. But there is also another $2.2
billion for other research. Cancer-related research
sees a 13 percent increase, and research for diseases such
as diabetes, Alzheimer's, Parkinson's, and HIV/AIDS will see
increases in the high single digits.
President Bush and myself want to aggressively seize the opportunities
that the medical and scientific advances of this decade are
providing us.
Third, there is welfare reform: Welfare reform
is a remarkable success. It has worked beyond expectations,
helping more than 5.4 million people move from shackles of
AFDC to the independence of work. In doing so, these
families are climbing out of poverty and becoming self-sufficient.
In fact, 2.8 million fewer children are in poverty because
of welfare reform.
But we are not done. There is a clear and important
next step to welfare reform. This budget boldly takes
that next step, and I applaud the President for keeping us
moving forward in this landmark endeavor.
The next step requires us to work with states to help those
families that have left welfare to climb the job ladder and
become more secure in the workforce. And while doing
so, we must not leave behind those still on our caseloads.
Our budget provides $16.7 billion for block grant funding
and high performance bonus funding, provides supplemental
grants to address historical disparities in welfare spending
among states, and strengthens work participation requirements.
It also provides $100 million in broad demonstration authority
focused primarily on encouraging stronger families.
In addition, we will be submitting a proposal to create a
matching state grant program to strengthen families and reduce
out-of-wedlock births.
While this represents level funding for the TANF grant, in
reality it provides money that states can spend on helping
workers remain in the workforce. States will be able
to apply the savings gained from caseload reduction into new
programs that help workers thrive in the workforce.
We're giving states the flexibility they need to implement
effective education and job training programs, as well as
money to strengthen families and reduce illegitimacy.
We plan to work closely with Congress, hopefully on a bipartisan
basis, to more specifically shape the next step in welfare
reform.
In doing so, however, we cannot get away from the foundation
of welfare reform's success -- work. Welfare reform
must not become a college scholarship program. Work
must remain at the core of TANF, for work is the only way
to climb out of poverty and become self-sufficient.
And we must continue to make sure that work pays for families,
providing the proper child care and health care programs.
President Bush helps in this regard by providing another $350
million in Medicaid benefits for those in the transition from
welfare to work.
Welfare reform is the greatest social policy change in this
nation in 60 years. We must remain committed to building
this program so that it is a path to work and independence
for American families who need some extra help.
Finally, I want to draw special attention to disease prevention:
Throughout this year, HHS and its agencies will aggressively
take on preventing the onset of diseases such as diabetes
-- a disease that clearly is preventable with a better diet
and exercise.
Americans are rightfully concerned about the growing cost
of health care. But tackling these costs must begin
with each and every one of us. If we take care of ourselves
and our families, we'll visit the doctor less often, need
fewer medical procedures, and require less medication.
Health care costs are something each of us can help reduce
through actions within our own families.
Prevention is also an area in which this budget provides the
opportunity for some innovation and creativity. For example,
the budget includes:
- $20 million in new money for a Healthy Communities Initiative
-- a community-based approach to focusing on how we can
live more healthily and prevent illness. And,
- $84 million, including an increase of $10 million, to
prevent health problems caused by medical errors.
This patient safety initiative will help us use new technology
and research to tackle the fact that up to 98,000 American
die annually because of medical errors -- the wrong prescriptions,
the wrong doses or mistaken combinations of drugs.
In conclusion, these are just four of the most prominent
components of the President's budget for HHS. It's a
budget in which the President clearly makes the health of
America a priority. This budget provides greater security
for the health and well-being of all Americans. I look
forward to addressing these important issues with Congress
in a bipartisan and productive manner.
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