News Release

HHS Proposes Nearly $700 Billion Budget for Fiscal Year 2008

HHS Secretary Mike Leavitt released today details of the President's FY 2008 budget request to Congress for the department. The budget proposes total outlays of nearly $700 billion for Health and Human Services, an increase of more than $28 billion from 2007. This figure includes $67.6 billion in discretionary program spending, which is an increase of $95 million over the FY 2007 full year continuing resolution.

"For the past six years, this Administration has worked to make America a healthier, safer and more compassionate nation," Secretary Leavitt said. "I am proud of the strides we have made in health care through HHS initiatives. More than 39 million people with Medicare now have prescription drug coverage; our nation has been mobilized to prepare for potential pandemic flu; standards are being put in place to make health information technology interoperable; and we are bringing cost and quality transparency to the American health care system."

"The budget we are releasing today builds on our past successes and continues to invest in the future. It sets out an aggressive, yet responsible, budget that funds our priorities and helps sustain our long-term commitment to seniors and low-income Americans. We are serving our citizens with compassion while maintaining sensible stewardship of their tax dollars."

The HHS budget proposal reflects fiscally responsible steps to reform and modernize the Medicare program. Funding for Medicare benefits, which will help 44.6 million Americans, is expected to be nearly $454 billion in FY 2008, an increase of $28 billion over the previous year.

The FY 2008 budget includes a comprehensive package of Medicare legislative and administrative proposals that will help strengthen the program's long-term viability. These proposals will encourage efficient payment for services, foster competition and promote beneficiary involvement in health care decisions.

Restraining Medicare spending is a key factor in ensuring that the program will be sustainable for future generations. This package will save $76 billion in legislative and administrative changes over five years and slow the program's growth rate over that timeframe from 6.5 percent to 5.6 percent.

The President's budget continues the successful transformation of the Medicaid program. The unprecedented decline of $200 billion in Medicaid spending over 10 years since the last President's budget is due to the significant reforms implemented by the Deficit Reduction Act and greater collaboration between the states and federal government. Building on this success, the FY 2008 proposal outlines a series of proposed legislative and administrative changes estimated to save $25.7 billion over the next five years, keeping Medicaid up to date and sustainable in the years to come.

The President's budget proposes to reauthorize State Children's Health Insurance Program (SCHIP) for five more years, to increase the program's allotments by $5 billion over that time, and to target SCHIP funds more efficiently to those most in need.

Rising health care costs are also making insurance too expensive for millions of our citizens -- and the President's budget addresses that need. The goal is to ensure that all our citizens have access to a basic health insurance policy -- at an affordable rate. In his State of the Union Address, the President proposed new tools to help reach this goal:

• States that develop innovative approaches to expanding access to coverage should receive federal funds to help them provide this coverage. We will work with Congress to take existing federal funds and use them to create "Affordable Choices" grants. These grants would give our nation's governors more money and flexibility to get insurance to their citizens.
• The second initiative would reform the tax code to ensure that whether you buy health insurance through your workplace, or buy it on your own; you get the same tax break. It is indefensible that a person who buys insurance individually is treated differently than a person who buys it through an employer. The President's proposal would level the playing field.

  Helping people stay healthy longer also helps to reduce our nation's burden of health care costs.

  Additional highlights from the FY 2008 request include:

• $15 million for the Agency for Healthcare research and Quality to accelerate the movement toward personalized medicine, in order to provide the best treatment and prevention for each patient, based on highly-individualized information. This initiative undertakes pioneering work in the utilization of health IT for linking clinical care with research to improve health care quality while lowering costs.
• Improving drug safety and modernizing the way the Food and Drug Administration reviews drugs to ensure patients are confident the drugs they take are safe and effective.
• Enhancing the ability to keep this nation's food supply one of the safest in the world by improving systems to prevent, detect and respond to outbreaks of foodborne illness.
• Nearly $3 billion to support the health care needs of those living with HIV/AIDS and to expand HIV/AIDS testing programs nationwide.
• $25 million in FY 2008 for treating the illnesses of the heroic responders at the World Trade Center.
• $4.3 billion for bioterrorism spending, a $141 million increase over FY 2007. This includes a $135 million increase to accelerate the development of medical countermeasures for the Strategic National Stockpile and $154 million in funding to expand, train, exercise and coordinate medical emergency teams to respond to a real or potential threat.
• $1.2 billion to continue our pandemic flu preparedness efforts to increase vaccine production capacity and stockpiling; buy additional antivirals; develop rapid diagnostic tests; and enhance our rapid response capabilities.
• Nearly $884 million in activities to help those trying to escape the cycle of substance abuse; reduce the number of children who are abused and neglected; increase the number of children in foster care who are given permanent, adoptive homes; and meet the anticipated needs of refugees and unaccompanied alien children who come to this nation each year.
• Allowing the National Institutes of Health to fund more than 560 new and competing research grants.
• Funding the Centers for Disease Control and Prevention's Adolescent Health Promotion Initiative to empower young people to take responsibility for their personal health.
• Funding 340 new or expanded community health centers, surpassing the President's goal of 1,200 new sites. The request includes up to 120 new health centers in high poverty counties. In FY 2008, these new or expanded centers will serve 16.3 million people, an increase of 1.3 million from last year.
• Increasing the budget of the Indian Health Service to provide health support of federally recognized tribes, which will help 1.9 million people next year.

Secretary Leavitt noted that this nation's compassion does not stop at its borders. The President's budget includes $1.5 million to launch a new Latin America Health initiative to develop and train a cadre of community health care workers who can bring much needed medical care to rural areas of Central America. The budget will also support international work to reduce illness and death through programs like the President's Malaria Initiative; the Global Fund to Fight HIV/AIDS, Tuberculosis and Malaria; and the President's Emergency Plan for AIDS relief.

More information about the President's FY 2008 Budget Proposal for HHS is available at www.hhs.gov/budget.

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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: January 12, 2009