News Release

HHS Proposes $689 Billion Budget for Fiscal Year 2007

HHS Secretary Mike Leavitt released today details of President Bush's FY 2007 budget request to Congress for the department, which meets the agency's most important priorities while exercising fiscal discipline to help meet the President's deficit reduction goals. The budget unveiled today proposes $698 billion in spending, representing an increase of more than $58 billion from FY 2006, or more than 9.1 percent.

"We have developed a responsible budget for 2007 that sets out a hopeful agenda for the upcoming fiscal year, one that strengthens America against potential threats, heeds the call of compassion, follows wise fiscal stewardship and advances our nation's health," Secretary Leavitt said.

The following are some of HHS' key proposed budget increases:

• Preparing for the possibility of a pandemic influenza outbreak and protecting our citizens against the threat of bioterrorism continue to be a high priority for the department. In FY 2007 HHS is requesting $4.4 billion for bioterrorism-related spending next year, which is a $178 million increase over FY 2006 spending. In addition, the department is seeking an additional $2.6 billion in funding next year for pandemic planning and preparedness.

• To continue our effort towards achieving the President's goal for most Americans to have secure personal electronic health records by 2014, the budget requests $169 million for health information technology initiatives, an increase of $59 million over FY 2006.

• The budget provides an increase of $181 million for the Health Resources and Services Administration (HRSA) to fund more than 300 new or expanded health center sites that will provide health care to an additional 1.2 million individuals in medically underserved communities throughout the nation. This funding will establish 80 new centers in poor rural and urban counties across the country. This request would complete the President's goal of establishing 1,200 new or expanded health centers.

The President's budget also includes funding for a number of new initiatives, including:

• $188 million to fight HIV/AIDS in the U.S. The funds will go to a number of notable goals such as the testing of 3 million additional Americans for HIV/AIDS and providing treatment for those people who are on state waiting lists for AIDS medicine.

• $28 million for �Choices for Independence� a new funding to identify alternatives that could delay or prevent elders from entering long-term care nursing facilities.

• $6 million for the Food and Drug Administration's new Critical Path to Personalized Medicine program, which would pave the way to drugs tailored to individual molecular traits, allowing health professionals to prescribe safer and more effective medicines.

• $50 million to support the First Lady's Youth At Risk Initiative to help youth at risk of gang influence and involvement.

• $25 million for the Methamphetamine Treatment Initiative, which will target funding to States with high methamphetamine abuse rates to provide vouchers for clinical treatment and recovery support services

Funding for Medicare benefits -- which assist 43.7 million Americans -- is estimated to be nearly $450 billion in FY 2007. The budget also proposes specific reforms to help sustain Medicare in the long term.

Thus, the proposed 2007 HHS budget includes a comprehensive set of Medicare legislative proposals to encourage efficient and appropriate payment for services; foster competition; and promote beneficiary involvement in their health care decisions. Net savings from these proposals total $2.5 billion in FY 2007 and $35.9 billion over five years.

"The President is committed to continue strengthening and modernizing Medicare but also reducing the burden of entitlement spending on future generations," Secretary Leavitt said. "Our budget proposes a plan that allows Medicare spending to grow at a slower rate while putting Medicare on a steady course toward financial security, higher quality and greater efficiency."

In order to meet the President's goal of cutting the Federal deficit in half by 2009, the HHS budget also includes targeted reductions in discretionary spending by about $1.5 billion in the next fiscal year.

"In preparing the budget we had to make some hard choices about well-intentioned programs, but we are very mindful of the importance of meeting the President's goal to reduce the deficit," Secretary Leavitt said. "There is a tendency to assume that any reduction constitutes a lack of caring, but cutting a program does not imply an absence of compassion. Government is very good at working toward some goals, but it is less efficient at pursuing others. Our budget reflects the areas that have the highest pay-off potential."

The budget proposes reductions in funding or elimination of several programs that have failed to receive acceptable performance ratings and whose purposes are covered by other HHS programs.

• A reduction in the Social Services Block Grant program by $500 million.
• Elimination of the $630 million Community Services Block Grant (CSBG) program.
• Reduction of $133 million in cuts to rural health programs run by HRSA. HHS is increasing overall rural health funding through other mechanisms, such as Community Health Centers, to make further improvements in rural health. For example, the Medicare Modernization Act makes available $25 billion to rural hospitals and health providers over the next 10 years.
• Elimination of the $99 million Preventive Health and Health Services Block Grant program.
• Elimination of the Indian Health Service's Urban Indian Health Program, saving $33 million; individuals covered by this program receive care through other HHS programs.

More information on the FY 2007 HHS budget can be found on the Web 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, 2006