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REMARKS BY:	DONNA E. SHALALA, SECRETARY OF HEALTH AND HUMAN SERVICES
PLACE:		FY 2001 Budget Press Conference, Washington, D.C.
DATE:		FEBRUARY 7, 2000

When it comes to old black and white movies and the 15-cent stamp, I can be as nostalgic as the next person. But I'm not nostalgic for where we were seven years ago. Record deficits and predictions that the red ink would flow forever. Growing Medicare fraud. Teen pregnancy rates going up. AIDS deaths on the rise - with very few services and fewer treatments. Kids without immunizations. I could go on and on because for millions of Americans the pain went on and on.

Simply put: The gaps in our public health system and social safety net seven years ago were real and unworthy of a great nation. At this moment of what the President calls profound promise and possibility we are within sight of closing many of these gaps. We have the means. I'm convinced that we have the will. History bears me out.

Each budget we have presented to Congress has been in the spirit of the third of President Franklin Roosevelt's Four Freedoms: The freedom from want.

Our 2001 budget will help make us a nation free from the want of affordable, accessible and high quality health care.

Our 2001 budget will help make us free from the want of lifesaving prescription drugs.

Our 2001 budget will help make us free from the want of trustworthy child care, and the ability to care for our aging parents and grandparents.

Our 2001 budget will help make us free from the want of a research infrastructure strong enough to unlock cures to our worst killers.

Our 2001 budget will help make us free from the want of safe food and protection against infectious diseases.

This year's budget builds on seven years of progress and leaves us where we should be at the dawn of a new century: A nation pledging allegiance to: Expanded health care coverage. Renewed support for children and families. Greater scientific advancement. And the creation of a healthier America.

All - and I want to emphasize this - all in the context of fiscal discipline.

Here are the numbers: Our proposed outlays of 421.4 billion dollars for Fiscal Year 2001 is 9 percent above last year's budget. The discretionary portion of the budget is 48.6 billion dollars- a program level increase of 8 percent over last year. But, as always, our budget is about more than numbers on a ledger. This budget is about people.

The President noted recently that he was pleased that access to health care is part of this year's campaign debate. So am I. But let me be very clear: We don't have a year to think about this. The time to move ahead is now. That's why our budget makes a record investment in health care coverage. In access. And in quality.

Last year our State Children's Health Insurance Program, like a great Clipper Ship, caught the wind in all fifty states. Today, two million children are enrolled. Now we want to make sure this new program - and Medicaid - carry millions more children - and their parents - into the safe harbor of quality health care.

For parents, the President unveiled FamilyCare - an idea first proposed by the Vice President. It says to parents: If your children are eligible for Medicaid or the Children's Health Insurance Program, you should be too. FamilyCare is a partnership with the states. States that cover children up to 200 percent of poverty will have the option to cover parents with an enhanced federal match. That's a 50 billion dollar investment over ten years.

For children, we are proposing new ways to step up our efforts to enroll them in these vital programs. One proposal is to allow school lunch programs to share information with Medicaid workers. This is just plain common sense because any child eligible for a free lunch is likely to be eligible for one of these programs. We're also going to give states the option to extend coverage under the Children's Health Insurance Program up to age 21. In the spirit of federalism, we have one more option for states. Under these programs states will be able to cover children and pregnant women who are legal immigrants - regardless of when they came to the United States.

Together, these new approaches to expanding coverage build on our successes last year: President Clinton signed landmark legislation making it possible for millions of Americans with disabilities to join the workforce while retaining their Medicaid and Medicare coverage. He also signed a second new law giving states the option to extend to age 21 Medicaid benefits for young people who "age out" of foster care.

Even as we take these steps, we recognize that many low income adults still work in jobs that don't offer health insurance. These workers frequently rely on what Tennessee Williams called, "the kindness of strangers." Those kind strangers are local health institutions and professionals who provide services at a reduced or at no cost. Last year, Congress approved our proposal to invest 25 million dollars to help these community service networks build a seamless system of care for workers with no other place to turn. This year we want to increase that funding to 125 million dollars.

Most twenty year-olds think fifty year-olds are settled and financially secure. I know I did at that age. But the reality is that workers 55 to 65 are the fastest growing group of uninsured. Let's face it: There is nothing worse than losing your job, losing your insurance and knowing that Medicare is still 10 years away. So for the last two years we have proposed allowing displaced workers 55 to 65, and their spouses, to buy into Medicare.

We also proposed that former workers, 62 to 65, without insurance, be allowed to buy into Medicare. Although Congress has so far refused to see the wisdom of helping displaced older workers buy affordable health insurance, that has not stopped us from continuing to champion this good idea.

Groucho Marx famously quipped: Who are you going to believe, me or your own two eyes? On the subject of Medicare, too many people have been playing the role of Groucho - while the rest of us see with our own two eyes that the system needs to be strengthened and modernized.

First and foremost, that means dedicating 300 billion dollars of the surplus over 10 years to extend the solvency of the Trust Fund until at least 2025. The question is: What are we going to put in the hands of the next generation? Something they can hold and carry into the future, or an empty promise? We have a moral obligation to protect Medicare. But extending the Trust Fund is only the beginning.

Does anyone seriously believe that if we were building a Medicare system today, we wouldn't include a prescription drug benefit? That's like saying if we built a car today, we wouldn't include seatbelts. Not only would building such a car be illogical - it would be immoral. Even as I speak, three in five seniors do not have dependable drug coverage. The longer we wait, the worse this problem is going to become - and the more expensive it's going to become.

That's why we're again proposing a voluntary - I repeat, voluntary - prescription drug benefit. The cost of this new benefit will be 38.1 billion dollars over 5 years. The benefit will have no deductible and will pay half of all beneficiaries' drug costs up to 2,000 dollars in 2003 - and 5,000 dollars when the program is fully in place in 2009. Medicare beneficiaries with incomes below 135 percent of poverty will pay no premiums or cost sharing, and we're going to help employers that offer their retirees prescription drug coverage that is at least as good as the benefit we're proposing. We also want to eliminate all coinsurance and deductibles for preventive tests and screenings - saving lives by stopping disease before it starts.

Part of modernizing Medicare is making sure it operates more like a business. That means using state of the art purchasing and quality management tools to improve care while constraining costs. We propose to save 15.4 billion dollars over ten years with a modernization package that includes using Preferred Provider Organizations, expanding our Centers of Excellence, and paying competitive prices for disease management services.

Also - the days of Medicare as a blank check are over. We've dramatically cut overpayments - and now demand that our costs reflect market realities. We've also proudly become anti-fraud gumshoes. We've taken more than 1.8 billion dollars out of the hands of cheats - and put it back in the hands of taxpayers.

And we're not finished yet. We're proposing another 7.9 billion dollars over five years in cost savings from proposals that fight fraud and abuse, and we will work with our contractors to put in place strong management controls - and to assign financial specialists to each contractor.

As for nursing home care, our message to the bad apples is simple: If you're only in business to make a quick buck, we're going to put you out of business. This year's budget adds 71 million dollars to the President's Nursing Home Initiative to fund ongoing activities. This is 29 percent more than last year. These funds will strengthen state and federal oversight, speed up investigations of complaints, and pay for more enforcement tools.

Thirty years ago we were reading the Greening of America. Now we're seeing the graying of America. Millions of families want to care for their chronically sick or disabled loved ones in their homes. We should do everything possible to honor that wish.

Imagine this: You have two parents, both in their nineties, one with Alzheimer's and the other in a wheelchair. Too terrifying to think about? Maybe so, but we need to anyway. Between 1996 and 2010, the number of Americans over 85 is expected to double. Many of these older Americans will be living at home with informal caregivers. That's why our budget includes 125 million dollars for family caregiver support, and why we want to let states provide Medicaid services to qualified beneficiaries without seeking a complicated and time-consuming federal waiver. Last year the President proposed a 1000 dollar tax credit to help families who care for - and house - sick or disabled relatives. This year we propose to raise the credit to 3000 dollars.

I don't know if any of you read or saw The Cider House Rules. If you did, you know that part of the story takes place in a 1940s orphanage. The movie reminded me that millions of working families rely on the love and support of other adults to keep their children safe.

Government cannot - and should not - step into the shoes of parents and communities. But government does have a supporting role in what for many families is a daily drama: Balancing work and children. This is not our opening act. Federal funding for child care has more than doubled in the last seven years. Still, one recent study notes that in 1998 only 10 percent of the 14.7 million children eligible for federal child care subsidies received them.

Two years ago the President proposed a Child Care Initiative designed to give a "yes" answer to these three questions: Can I get it? Can I afford it? Can I trust it? Yet, when Congress was asked: Will you fund it? The answer was "no." Now millions of parents - some fresh off welfare and trying to move from first job to first career - are searching for affordable, accessible, high quality child care. As part of the President's Child Care Initiative, this year's budget adds another 817 million dollars to the Child Care Development Block Grant. This discretionary money brings the total Block Grant to 2 billion dollars. The budget also includes 600 million in mandatory dollars for a new Early Learning Fund. We will use this Fund to help vulnerable children in the critical pre-school years build a foundation for reading and learning.

Which brings me to one of the most successful programs ever created for children: Head Start.

Head Start has traditionally enjoyed bipartisan support - and for good reason: Research shows that Head Start helps children learn. Funding for Head Start has gone up each of the last seven years, and in 1995 we began Early Head Start for children ages zero to three. But we're not resting on our laurels. This year we're requesting 6.3 billion dollars for Head Start. That's 1 billion dollars more than last year - and the largest increase in the history of Head Start. The additional funds will allow us to enroll over 70,000 more children in Head Start, for a total enrollment of almost 950,000. That keeps us on track to meet the President's goal of enrolling one million children in Head Start by 2002.

Child support enforcement is another bipartisan success story. The reason is simple: For every 1 dollar we invest, we collect more than 4. Our message to delinquent parents is even simpler: You can run but you cannot hide. We'll track you down through the IRS. We'll track you down through motor vehicle records. We'll track you down through the National Directory of New Hires. One way or another - we will find you. In 1999, child support collections reached an estimated 15.5 billion dollars. However, next year we plan to do even better because of a new set of proposals that are self-financing and get more money to families.

I can't talk about children without talking about drugs.

We know marijuana use has leveled off among teens. We also know that there are teens in every corner of this country that are still saying "yes" to drugs and alcohol. So we're not giving up. That's why our budget includes over 3.3 billion dollars for substance abuse treatment and prevention.

Two more quick items under support for children and families: We're proposing to invest 100 million dollars over two years to help states test innovative asthma management techniques for children enrolled in Medicaid. Our budget also provides 80 million dollars for training at free standing children's hospitals that are also teaching hospitals. These hospitals train over 25 percent of all pediatric residents in the country. The 80 million dollars doubles our investment last year.

2001 A Space Odyssey was utopian fiction. But our FY 2001 budget is designed to make great scientific advancements - from biomedical research to disease prevention to quality health care - a national fact. In the last two years, the budget for the National Institutes of Health grew by over 30 percent. This year's NIH budget is 18.8 billion dollars - that's a 1 billion dollar increase over last year.

Why the increase? Because we now know that sustained public investment in basic and clinical research pays undeniable dividends. So this is truly a case of throwing good money after good. From detecting genetic disorders, to AIDS to new prevention strategies - the National Institutes of Health is the master goldsmith in the golden age of biomedical research.

Our budget request for AIDS-related research at NIH is 2.1 billion dollars, a 5.2 percent increase over last year. NIH will also focus on the human genome, neuroscience, clinical research, teaming up with other disciplines - including chemistry and computer science - and reducing health disparities.

Let me note - and I'll return to this subject in a moment - every Institute and Center is working on a strategic plan that will lead to a better understanding of health disparities and how to treat them.

No trip to the grocery store or a restaurant should be hazardous to your health. Yet every year, an estimated 76 million people get sick from the food they eat - and 5,000 will die. We intend to strengthen the President's Food Safety Initiative by adding 40 million to our interagency food safety program. Ten million will go to CDC to expand its award winning PulseNet system for identifying disease-causing bacteria. FDA will use the other 30 million dollars to inspect 100 percent of high-risk food establishments. Those funds will increase the FDA's total food safety inspection program to 109 million dollars. Overall, our budget for the Food and Drug Administration is almost 1.4 billion dollars - 13 percent more than a year ago.

We're going to respond vigorously to the Institute of Medicine's recent report on preventable medical errors. I'll have more to say about this when our review of the issue is complete. In the meantime, we're requesting an additional 16 million dollars for FDA to reduce these errors - and to make sure they're properly reported. Similarly, the Agency for Health Care Research and Quality - "ARC"- the lead agency on quality - will invest 20 million of its 250 million dollar budget on research into medical errors and what can be done to reduce them.

There's been so much talk lately about the health of the American economy, I sometimes want to stand on my soapbox and say: Let's not forget the health of the American people.

As the Deputy Secretary noted, we've made tremendous progress over the last seven years in improving the health of Americans. But we still have a lot of work ahead of us. That's why our FY 2001 budget puts a premium on fostering healthy living and better health services.

That is especially true for HIV/AIDS. I want to be clear: Stopping AIDS the way we stopped smallpox is a top priority for this Department - and our budget reflects that. From HRSA to CDC to NIH - every agency's AIDS-fighting budget is going up in prevention, treatment and research. I've already mentioned what NIH will spend on AIDS in FY 2001. But our total AIDS budget this year is 9.2 billion dollars - which is 8.4 percent above last year. The best way to fight HIV/AIDS is through prevention. That's why our budget proposes to spend an additional 75 million dollars to help prevent the spread of this disease. As part of our strategy of bottom up - not top down - decision making, the CDC will direct 40 million dollars of the new funds to local communities, including prevention services targeted to minority populations. CDC will also expand funding for fighting AIDS around the world by 26 million dollars.

Prevention is critical, but we have no intention of pushing to the sidelines the 750,000 Americans living with HIV. Our budget for Ryan White - which is administered by the Health Resources and Services Administration - is 1.7 billion dollars, a 125 million dollar increase over last year.

Late last year, the Surgeon General released a new report on mental health. The numbers were a wake up call: One in five Americans will experience a mental disorder during their lifetime. Perhaps worse: Sixty percent of people with a history of mental illness do not seek - and do not get - help. At the same time, our knowledge about mental disorders has increased dramatically - as has the number of available treatments.

We need to narrow this disconnect between what we know and the help that mentally ill people receive. To do that, our budget increases the Mental Health Block Grant by 60 million dollars. That's a 17 percent increase. This is money that goes from the Substance Abuse and Mental Health Services Administration to states to treat people with mental illness.

For any parent with school children, 1999 must have been a year like no other. The statistics tell us that school violence is down. But the pictures from Columbine and other schools tell us something else: We need to reach young people with words - and in ways - they truly understand. And we must be prepared to wage this battle day in and day out. That's why our budget includes 78 million dollars to stop youth violence, including 50 million dollars to increase school safety and for mental health prevention and treatment.

There is another battle that requires constant vigilance: Defending against the threat of infectious diseases and bioterrorism.

Every year I talk about this I mention the latest movie where a virus threatens civilization. But this is no movie. And our determination to protect the American people from terrorism and emerging infectious diseases is no passing fancy. We're going to do what it takes - starting with an almost 50 percent increase in CDC's funding for national disease surveillance. We want make sure that if there's an outbreak of disease - that information leads to immediate public health action. As for bioterrorism - which may be the biggest threat of the 21st century - we're proposing to spend 265 million dollars to prepare for, and respond to, a biological attack.

This year we are making a major investment in our public health infrastructure - the bricks and mortar, and in our public health information systems. CDC proposes to spend 127 million - 70 million more than last year - to modernize and expand three laboratory sites. Some of the funds will go for facilities designed to handle the most lethal pathogens - such as Ebola. The remaining funds will go toward completing the Edward R. Roybal infectious disease lab, and construction of a new environmental health lab. We further propose to invest 73 million dollars - over two years - to build a National Neuroscience Research Center at NIH. This will put all NIH brain research under one roof.

We're also investing 20 million dollars in a "Health Informatics Initiative." In plain English, we are going to establish health data standards aimed at making the data more uniform and easier to transmit - while also protecting confidentiality. The goal is to improve patient care and health outcomes through better use of data.

I try to treat the HHS budget the way a grandmother treats her grandchildren: Don't show - in fact, don't even have - favorites. So I won't say that I saved the best for last. But I did save what may be our greatest moral imperative for last: Closing the gaps in health outcomes between minorities and the majority population.

In 1998, the President set a goal of ending health disparities in six major areas: Infant mortality, cancer screening, cardiovascular disease, diabetes, HIV/AIDS and childhood immunizations. Almost every operating division is making a contribution toward closing these gaps. That includes an additional 35 million dollars at CDC for community based research and demonstration projects to reduce disparities.

The Indian Health Service, whose proposed budget is 229 million dollars more than last year - the largest increase in two decades - will similarly focus on health disparities, and unique health problems among our First Americans, the 1.5 million American Indians and Alaska Natives.

This year's budget request presents annual performance information required by the Government Performance and Results Act. I believe strongly that government must be accountable. Setting goals isn't enough. We have to achieve them.

On the other hand, we must never be self-satisfied. We must never say: Set the bar this high and no higher. So the most important question is: How are we performing - not by our own standards - but in the eyes of the American people?

We believe our 2001 budget gives us the tools we need to help the American people live longer and healthier than ever before. That may sound like a great ending. But for this Department - this year - it is only the beginning.

Thank you.