Mr. Chairman and Distinguished Members of the Subcommittee:
I am pleased to appear before you today to discuss the President's 1998 budget for the
Department of Health and Human Services.
As we move toward a new century, our Nation faces significant health and human service
challenges. Advances in biomedical research and medical technologies, changing demographics,
and transformations in the structure and delivery of health care and social services all present us
with new opportunities and new demands. The President's FY 1998 budget for the Department
of Health and Human Services (HHS) ensures that our Nation's health and social services
programs will have the flexibility to address these changes.
Our budget takes several critical steps toward creating a stronger and healthier nation:
-
It puts us on a path to a balanced budget by 2002;
- It preserves Medicare and Medicaid by reforming, strengthening, and modernizing both
programs;
- It helps provide health insurance to growing numbers of American families, especially
children who do not have it;
- It helps families raise strong and healthy children by strengthening our investment in
Head Start, teen pregnancy prevention and abstinence education; increasing opportunities
for adoption; and bolstering our efforts to reduce tobacco and drug abuse among youth;
- It provides assistance and support to States as they assume new responsibilities under
welfare reform and to families as they make the transition to work;
- It creates a strong public health agenda for the next century by sustaining biomedical
research at the National Institutes of Health, developing a new food safety initiative,
combating infectious diseases and providing life-extending drug therapies to people with
AIDS; and
- It emphasizes tough management strategies that cut costs, ensure program integrity,
create technological opportunities, promote effectiveness, respond to our customers and
empower our partners.
The President's FY 1998 budget proposes a balanced budget by FY 2002 through a combination
of program savings, responsible reforms and strong management. The Department of Health and
Human Services plays a major role in this balanced budget effort. The President's FY 1998
budget for the Department of Health and Human Services totals $376 billion in outlays of which
$34.7 billion is discretionary spending. Of the total amount requested, $228 billion in spending
will be for programs that fall under this Subcommittee. This amount includes $31.7 billion in
discretionary spending, an increase of 1.5 percent over FY 1997.
PRESERVING AND STRENGTHENING MEDICARE AND MEDICAID
Medicare
The President's Medicare plan preserves and modernizes the program, reducing projected
spending by a net $100 billion over five years while guaranteeing the solvency of the Part A
Hospital Insurance trust fund until 2007. We are reforming Medicare to make it more efficient
and responsive to beneficiary needs to make it a more prudent purchaser, to give seniors more
choices among private health plans, to cut the growth of provider payments, and to hold the Part
B premium to 25 percent of program costs.
In FY 1998, HHS will continue to crack down on Medicare and Medicaid fraud and abuse
through implementation of the Medicare integrity and anti-fraud and abuse programs that are
authorized by the Health Insurance Portability and Accountability Act of 1996. Building on the
successes of the HHS pilot project, Operation Restore Trust, HHS and the other Federal, State,
and local partners will expand anti-fraud efforts to all 50 states.
Medicaid
The President's plan for Medicaid reforms the program but preserves the guarantee of health and
long-term care coverage for the most vulnerable Americans -- more than 37.5 million children,
pregnant women, people with disabilities, and the elderly. The President's legislative proposals
in Medicaid will achieve a net savings of $9 billion over the five years from 1998 through 2002.
This total is comprised of both spending and savings proposals that improve and strengthen the
Medicaid program, while more appropriately targeting spending for our most vulnerable
populations.
Recognizing that growth in Medicaid spending has declined significantly over the past two years,
this budget seeks to maintain these lower spending levels in the out-years when spending growth
is projected to rise more rapidly again. The President's Medicaid savings are achieved through
the establishment of a per-capita cap and through the reduction and re-targeting of DSH
spending, for a total of $22 billion over five years. The budget also makes a number of
improvements to the Medicaid program, including changes to last year's welfare reform law,
costing $13 billion over the same period.
The major spending initiatives include the children's health initiative and welfare reform related
proposals. The plan also helps States meet the most pressing needs, while giving them
unprecedented flexibility to administer their programs more efficiently. Finally, the plan retains
current nursing home quality standards and continues to protect the spouses of nursing home
residents from impoverishment.
MAINTAINING AND EXPANDING HEALTH CARE
COVERAGE FOR WORKING FAMILIES
One of the best signs of a healthier tomorrow was passage of the Health Insurance Portability and
Accountability Act of 1996 which addressed some of the problems workers face in getting, and
holding onto, affordable health insurance. We must now take the next step to help the growing
numbers of American families who lack health insurance coverage. And that is exactly what this
budget proposes to do.
An estimated 10 million children in America today do not have health insurance. The President
is proposing these steps to help address this problem and reach the goal of reducing the number
of uninsured children by up to 5 million by the end of FY 2000.
- First, the budget proposes $750 million in annual grants to States to build on their recent
successes in working with insurers, providers, employers, schools, and others to develop
innovative ways to provide health insurance coverage to children who have neither Medicaid
nor employer-sponsored insurance.
- Second, the budget provides funds to allow States the option to extend one year of continuous
Medicaid coverage to children, thus increasing continuity and security for children and
families and reducing administrative burdens on States, families, and health care plans which
now have to determine eligibility on a monthly basis.
- Third, the budget includes a $1.7 billion initiative to help about 700,000 children in the
families of temporarily unemployed workers maintain health coverage between jobs. This
program of grants to states will be available to recipients with incomes below a certain level,
who had employer-based coverage in their prior jobs. States will have substantial flexibility
to administer the demonstration program.
Finally, we will work with the Nation's Governors to develop new ways to reach out to the
3 million children who are currently eligible for Medicaid but are not presently enrolled. In
addition, under current law, an estimated 250,000 14-year-olds will become eligible for Medicaid
in 1998.
As a part of the President's health legislation package, our budget includes $25 million in grants
to States to establish voluntary health insurance purchasing cooperatives to take advantage of
economies of scale to which small firms normally do not have access in purchasing health
insurance.
BUILDING STRONG FOUNDATIONS FOR FAMILIES AND CHILDREN
The best gifts we can give our children are strong families, safe communities, and good health.
Strong foundations are important for every child's future. Both research and the experiences of
parents and caregivers tell us that a child's environment during the early years is especially
critical to his or her ability to succeed in school and later in life.
In addition to expanding health care coverage for children, this budget includes many other
special initiatives to help our children and families. It is sound fiscal policy to invest in our
nation's children; the pay off obviously can be substantial. For this reason, the budget proposes
a set of strategic investments.
Head Start: Studies of children enrolled in Head Start and other similar programs continue to
show that the Head Start experience has a positive impact on school readiness, increases
children's cognitive skills, boosts self-esteem and achievement motivation, and improves school
social behavior. Head Start has also been shown to help parents improve their parenting skills,
increase participation in their children's school activities and, in many cases, helps parents on the
road to self-sufficiency. In short, Head Start works and needs to be expanded to reach more
Head Start-eligible children in families not currently served by the program. The budget
includes $4.3 billion, $324 million more than in 1997, to ensure that Head Start stays on track to
serve 1 million children by 2002. The additional funds will allow Head Start to serve an
additional 36,000 new children and their families, bringing total Head Start enrollment to an
estimated 836,000.
Adoption Initiative: Each year, State child welfare agencies secure homes for less than one-third
of the children for whom the goal is adoption or another permanent placement. These children
wait an average of three years to be placed in permanent homes. President Clinton has
challenged States and Federal agencies to at least double, by the year 2002, the number of
children in foster care who are adopted or permanently placed each year. HHS will lead the
effort to identify barriers to permanent placement, set numerical targets, reward successful
performance, and raise public awareness. The FY 1998 budget includes $21 million for an
adoption initiative. Funds will be used to provide training and enhanced technical assistance to
States; support grants to States to assist them in removing barriers to adoption or permanent
placement; engage business, church and community leaders in this initiative and develop and
lead a public awareness effort to include public service announcements, print material and
increase use of Internet to promote adoption. Our budget also proposes paying $108 million
between FY 1999 - 200d in incentives to states for increases in adoptions over the previous year
which will be offset by corresponding reductions in foster care costs.
Tobacco: Every year, tobacco-related cancer, respiratory illness, heart disease, and other health
problems take the lives of 400,000 Americans -- the vast majority of whom began smoking
before their 18th birthday. Consequently, in August 1996, the Administration approved the
boldest proposal ever made to kick Joe Camel and the Marlboro Man out of our children's lives.
The goal of this initiative is to cut tobacco use among our young people by half over 7 years by
reducing the ready access that teenagers have to tobacco products and by lessening the pervasive
appeal that these products have for potential underage users. Our budget includes $34 million to
implement the regulation. The budget also provides $36 million for CDC and $22 million for
NIH for financial and technical support to States for tobacco control and cancer prevention
activities. In addition, the Substance Abuse and Mental Health Services Administration
(SAMHSA) is working with States to help them comply with the 1996 Synar regulation
requiring that they reduce the availability of tobacco products to underaged youths.
Reducing Substance Abuse Among Youth: After years of steady decline, marijuana use is
rapidly increasing among American youth. As much a cause for concern is the fact that
adolescents increasingly feel there is little or no risk to themselves or others in their abusing
drugs. To attempt to reverse these trends, the Department is increasing the resources dedicated to
preventing marijuana and other substance abuse. The FY 1998 budget specifies $98 million for a
SAMHSA youth substance abuse prevention initiative which will allow HHS to mobilize and
leverage Federal and State resources, raise awareness and counter pro-use messages, and measure
outcomes. Approximately $63 million will be dedicated to State Incentive Grants. These grants
will require Governors to develop comprehensive State-wide strategies for reducing youth
substance abuse. In designing their plans, States may propose their own approaches but will be
offered a menu of effective substance abuse prevention strategies and programs that are based on
scientific research. SAMHSA will focus public education efforts on reaching youth and their
caregivers by integrating and expanding its Girl Power! and Reality Check anti-drug use
campaigns. To measure outcomes, approximately $28 million will be used to expand the
National Household Survey on Drug Abuse to capture state-level data. The Household Survey
now provides data for making national estimates on the prevalence of substance abuse in the
population age 12 years and older as well as information on behavior, attitudes, and household
characteristics. The expansion will allow the Department to make state estimates of substance
abuse for youth between 12 and 17 and for young adults, benefiting those who are designing
state substance abuse prevention and treatment activities. The Administration also calls on
Congress to enact SAMHSA's Performance Partnership proposal, which would give States more
flexibility to design and coordinate their anti-abuse and mental health programs and target
resources to community priorities.
Preventing Teen Pregnancy: Teen pregnancy rates are going down, but more needs to be done.
Each year, about 200,000 teenagers who are 17 or younger have children. Their babies are often
low birth weight and are at high risk for infant mortality. They are also likely to be poor -- about
80 percent of the children born to unmarried teenagers who dropped out of high school are poor.
In contrast, just 8 percent of children born to married high school graduates aged 20 or older are
poor. The FY 1998 budget includes $14.2 million for the Adolescent Family Life program, an
abstinence-based education initiative which continues to build on the Administration's ongoing
efforts to assure that communities are working to prevent out-of-wedlock teen pregnancies. This
budget also includes $13.7 million for CDC's program for the prevention of teen pregnancy. In
addition, the new welfare reform law signed by President Clinton on August 22, 1996, provides
$50 million a year in new funding for the Health Resources and Services Administration (HRSA)
to support State abstinence education activities, beginning in FY 1998.
PUBLIC HEALTH FOR THE 21ST CENTURY
Investments in public health can yield substantial returns -- fewer premature deaths, fewer and
less costly illnesses, and healthier, more productive lives. The FY 1998 budget invests in
biomedical research and in public health initiatives that show great promise for improving
critical health problems while controlling future costs.
Biomedical, Behavioral and Health Services Research: The budget continues the
Administration's longstanding commitment to biomedical research, which advances the health
and well-being of all Americans. For the National Institutes of Health (NIH), it proposes $13.1
billion for biomedical research that would lay the foundation for future innovations that improve
health and prevent disease. The budget includes $223 million to emphasize research in six areas
NIH has identified as showing the most promise for addressing public health needs and yielding
medical advances, including research on the biology of brain disorders; new approaches to
pathogenesis; new preventative strategies against disease; genetics of medicine; advanced
instrumentation and computers in medicine and research; and new avenues for therapeutics
development. In addition, the request funds research on HIV/AIDS, breast cancer, drug abuse,
spinal cord injury and regeneration, as well as many other diseases and disorders that affect the
health, productivity, and quality of life of all Americans. The budget request also includes the
second year of funding for a new Clinical Research Center, which will give NIH a state-of-the-art research facility in which researchers can continue to bring the latest biomedical research
discoveries directly to patients' bedsides.
In just the past year, NIH-sponsored research has produced many major advances, such as
locating the first major gene that predisposes men to prostate cancer; pinpointing the location of
the gene that researchers believe is responsible for familial Parkinson's disease; and unveiling a
map which identifies the locations of over 16,000 genes in human DNA, about one-fifth of the
estimated 80,000 genes packaged within the human chromosomes. This will give researchers a
ready list of "candidates" for genes involved in human diseases.
Of particular note is an increase of $30 million for NIH's National Institute on Drug Abuse
which is part of the Administration's cross-cutting commitment to combat drug abuse. The
increased funding will further the development of a medication for the treatment of cocaine
addiction.
The budget includes an initiative devoted to improving health care quality. The Agency for
Health Care Policy and Research (AHCPR) has requested $5 million on the Quality and Cost
Effectiveness Initiative to narrow the gap between what we know and what we do to improve
health care. The initiative will focus on developing knowledge and strategies to improve the
quality of clinical care. Research on quality and cost effectiveness also plays a crucial role in the
continuing effort to decrease expenditures for the Medicare program, while providing quality
health care.
Food Safety: In recent years, new and serious food safety problems have occurred with
increasing frequency, including illness outbreaks caused by food-borne pathogens such as
E. coli, Salmonella, enteritidis, Vibrio vulnificus, and Cyclospora. The Centers for Disease
Control and Prevention (CDC) has estimated that each year as many as 33 million cases of food-borne illnesses in the United States result in up to 9,000 deaths. To respond effectively to these food safety issues, the President has proposed a $43 million food safety initiative, including
$34 million for CDC and FDA to strengthen surveillance systems for food-borne illnesses
nation-wide, and to improve Federal-State coordination when food-borne disease breaks out.
The budget would also further support a modernized system of food safety inspection in the
seafood industry that quickly identifies potential food safety hazards in the production and
processing of such food. In addition, the U.S. Department of Agriculture is a partner in this
initiative, with an increase of $9 million requested in FY 1998.
Infectious Disease: Recent outbreaks of various infectious diseases have shown that emerging
and re-emerging infectious diseases are an important potential threat to public health. Preventing
infectious diseases is far less costly, in human suffering and economic terms, than reacting with
expensive treatment and containment measures once public health emergencies occur. To
address this need, the budget includes $59 million, $15 million more than in 1997, for CDC's
efforts to address and prevent emerging infectious disease. Funds will support training and
applied research, and strengthen significantly the States' disease surveillance capability.
The budget also includes $88 million (which is $5 million more than in FY 1997); for NIH's
efforts to expand research on new and resurgent infectious diseases as well as the development of
vaccines. Funds will support basic and applied research on infectious diseases to facilitate the
detection and control of infectious agents.
HIV Treatment and Prevention: In 1996, the Ryan White CARE Act was reauthorized with
strong bipartisan support. The budget proposes over $1 billion for HRSA's Ryan White
activities, $40 million more than in 1997. This will help our hardest hit cities, States, and local
clinics provide medical and support services to individuals with HIV/AIDS. Under this
Administration, funding for Ryan White grants has risen by 158 percent. The 1998 budget
would fund grants to cities and States to help finance medical and support services for
individuals infected with HIV; to community-based clinics to provide HIV early intervention
services; to pediatric AIDS and HIV dental activities; and to HIV education and training
programs for health care providers. The FY 1998 Ryan White request includes $167 million
specifically for the AIDS drug assistance programs. In an effort to give states the flexibility to
provide a combination of primary AIDS care services -- AIDS drugs, insurance continuation and
other medical and support services -- to best meet their own needs, the budget provides a $15
million increase to the overall Title II state grant program. Finally, the budget proposes $634
million for the CDC's HIV prevention activities, $20 million more than in 1997 to help prevent
HIV among injecting drug users, who are at great risk of HIV infection.
STRONG MANAGEMENT
In keeping with the President's commitment to the American people to reinvent and reduce the
size of Government, the Department has continued to streamline organizational structures and
focus our efforts on reducing employment while preserving the resources necessary to carry out
our missions. The Department as a whole ended FY 1996 at a comparable level of 57,629 FTE
which is more than 1,600 FTE under the budget target for the year. Since 1993, the Department
has reduced staffing levels by approximately 7,600 FTE, or 12 percent. As we struggle to meet
balance budget targets, we will be looking for innovative ways of financing our streamlining
plans for this and future years.
The FY 1998 budget request supports the continuation of our efforts to transform the Department
into a high-performance, customer-focused organization. Our past efforts have led to better
service to our customers, reduced bureaucracy and red tape, increased flexibility in the
administration of our programs, and internal changes that help the Department work better and
save taxpayer dollars. For example, as a result of a recent study of our data collection centers,
we are consolidating our data operations resulting in an expected savings of $57.3 million.
We view the Government Performance and Results Act as an invitation to demonstrate the
effectiveness of the programs we administer by measuring results. As we implement this Act,
we will strive to measure program outcomes that reflect our goals.
HHS and its partners have a significant body of experience to build on in measuring program
results, most notably our Healthy People 2000 initiative, which has focused widespread Federal
and non-federal resources and attention on specific health outcomes for Americans. In the past
year, internal pilot performance plans were developed by each of our operating divisions. Our
FY 1999 budget will include detailed performance goals and measures that focus on the results
our programs achieve.
CONCLUSION
The FY 1998 budget for the Department of Health and Human Services accomplishes four major
goals.
-
First, it makes a major contribution to the goal of a balanced budget through targeted reforms
of our entitlement programs and by limiting discretionary program growth. It also
contributes to this goal through continued effort to curb fraud, waste, and abuse in Medicare
and Medicaid.
- Second, it preserves, protects, and expands our health insurance system. Medicare is
protected and trust fund solvency is extended. Medicaid will be reformed and expanded to
cover up to 3 million more children. Two new programs will also extend health insurance to
unemployed workers, their families and uninsured children.
- Third, it provides much needed investments in programs -- Head Start, teen pregnancy
prevention, adoption programs, and tobacco and drug use control among our children -- that
help families raise their children.
- Fourth, it proposes a public health system for the 21st century that will improve the nation's
health by expanding medical research to ensure the safety of our food supply and
strengthening our ability to respond to new and emerging infectious diseases and AIDS.
Thank you, Mr. Chairman, for the opportunity to present our budget to this Subcommittee. We
look forward to working with this Subcommittee on our FY 1998 budget requests. I will be
happy to answer any questions you or Members of the Subcommittee may have.
SUMMARY OF BUDGET REQUESTS
FOR PROGRAMS UNDER THIS SUBCOMMITTEE
Health Resources and Services Administration (HRSA) - The FY 1998 budget request for
HRSA is $3.3 billion. Over $1 billion is proposed for Ryan White activities, a $40 million, or 4
percent increase over FY 1997. This will continue our commitment to improve the quality and
availability of care for individuals and families with HIV and AIDS. The request for the
Consolidated Health Centers cluster provides $810 million for grants to local health centers that
serve vulnerable under-served populations, including migrant workers, homeless individuals, and
residents of public housing. This funding level maintains our commitment to ensure that they
receive quality health care. The HRSA budget supports funding of several programs with the
sole mission of improving the health of women of childbearing age and their children. These
programs include the Maternal and Child Health Block Grant ($681 million); and the Title X
Family Planning program ($203 million). In addition, HRSA will fund a new $50 million
mandatory abstinence education block grant to States which was authorized in the Welfare
Reform Bill.
Centers for Disease Control and Prevention (CDC) - The FY 1998 request for CDC totals $2.45
billion in program level, a net increase of $36 million over FY 1997. Within this level, $25
million will be targeted to improve infectious disease prevention and control; and $10 million
will be used to help ensure, in partnership with other government agencies, the safety of the food
supply. Also included in the request are increased resources of $20 million to target HIV
prevention efforts toward injecting drug users, a growing segment of all new AIDS cases. The
FY 1998 budget also continues and enhances CDC's diabetes control program, with a requested
increase of $10 million. With this initiative, CDC will fund diabetes control programs in all 50
States. CDC is requesting an increase of $15 million to conduct multi-faceted tobacco control
programs in 32 States and the District of Columbia to reduce the use of tobacco, especially
among our nation's youth. An added $5 million is requested to begin to replicate model
programs to conduct intensive chlamydia screenings across the country. Reducing chlamydia
infections ultimately results in a much lower rate of reproductive health consequences including
infertility of women. Finally, the elimination of most vaccine-preventable diseases remains a
major priority of the CDC. With the funds requested, CDC will be able to support the same level
of State purchases of vaccine, as well as improvements to the delivery system, as was done in FY
1997.
National Institutes of Health (NIH) - The FY 1998 request for NIH totals $13.1 billion, an
increase of $337 million, or 2.6 percent, over FY 1997. Within this increase, $271 million is
devoted to providing a 3.9 percent rate of growth in funding for investigator-initiated research
project grants (RPGs), NIH's highest priority. These grants support new and promising ideas
cutting across all areas of medical research. In FY 1998, the NIH budget provides nearly
$7.2 billion to support a record total of 26,679 RPGs, including 7,112 new and competing RPGs.
Overlapping with the RPG increase is the NIH request for an additional $223 million to
emphasize research in six areas NIH has identified as showing the most promise for addressing
public health needs and yielding medical advances, including research on the biology of brain
disorders; new approaches to pathogenesis; new preventive strategies against disease; genetics of
medicine; advanced instrumentation and computers in medicine and research; and new avenues
for therapeutics development. Also included within the request is an additional $30 million
specifically to expand research on drug abuse and drug treatment and prevention. The
development of a medication for the treatment of cocaine addiction is the highest priority for FY
1998 of the National Institute on Drug Abuse. The FY 1998 budget continues to request all of
NIH's AIDS-related funds -- $1.5 billion -- in a single account for the Office of AIDS Research
(OAR), consistent with the provisions of the NIH Revitalization Act of 1993. The Director of
OAR will transfer AIDS funds to the Institutes in accordance with the comprehensive plan for
AIDS research developed by the OAR along with the Institutes. The Administration strongly
supports a consolidated AIDS appropriation within NIH as a vital part of ensuring a coordinated
and flexible response to the AIDS epidemic. In addition, $90 million in total is requested, the
same as in FY 1997, for the second phase of construction funding for NIH's new Clinical
Research Center.
Substance Abuse and Mental Health Services Administration (SAMHSA) - The FY 1998
President's budget for SAMHSA totals $2.2 billion, an increase of $34.4 million or 1.5 percent
over the FY 1997 enacted level. This funding level will continue our commitment to improving
the quality and availability of mental health and substance abuse services. The request dedicates
additional resources to substance abuse, including a $10 million increase for the Substance
Abuse Performance Partnership Block Grant and $28 million for data collection activities to
expand the National Household Survey on Drug Abuse (NHDSA) to individual States. A major
component of SAMHSA's budget will focus on combating recent increases in teenage drug use.
The 1998 budget request continues to expand funding for the Youth Substance Abuse Prevention
Initiative by mobilizing and leveraging Federal and State resources to call upon Governor's to
develop State-wide prevention plans; raising public awareness and countering pro-drug use
messages aimed at adolescents and families; and tracking youth drug use at a State-by-State level
to measure progress of youth drug attitudes and use. This proposal directly addresses Goal #1 of
the National Drug Control Strategy to "motivate America's youth to reject illegal drugs as well
as the use of alcohol and tobacco."
Agency for Health Care Policy and Research (AHCPR) - The FY 1998 request for AHCPR
totals $149 million in program level, an increase of $5.5 million over the FY 1997 level. The FY
1998 request will fully fund previous research commitments, support the Medical Expenditure
Panel Surveys (MEPS), and fund the Quality and Cost Effectiveness of Clinical Care initiative.
This initiative will focus on developing knowledge, tools and strategies to improve the quality of
clinical care. This research also plays a critical role in the continuing effort to reduce health care
expenditures, while still providing high quality services. The $36.3 million requested for MEPS
will continue this major data survey, providing the public with timely national estimates of
health care use and expenditures, private and public health insurance coverage, and the
availability, costs and scope of private health insurance benefits among the U.S. population.
Health Care Financing Administration (HCFA) - HCFA is the largest purchaser of health care
in the world. In FY 1998, Medicare and Medicaid expenditures will be about $311 billion for
71 million beneficiaries. The FY 1998 request for program management, the budget responsible
for administering these two programs is $1.8 billion or a little over one half of 1 percent of total
Medicare and Medicaid outlays. Of this amount, almost 70 percent will go to 75 private sector
insurance companies throughout the United States who process and pay the claims for the care
given to Medicare beneficiaries. Only about 20 percent ($359 million) of the requested amount
will go to fund federal employees and their activities (about one tenth of 1 percent of total
Medicare and Medicaid outlays). These activities maintain and strengthen the Department's
commitment to develop more efficient operating systems; manage programs to fight fraud, waste,
and abuse; and promote and monitor managed care spending and quality of care. To deal with
the growth in new health care facilities joining the Medicare program, the Department proposes a
user fee for new facilities to be collected by the States to cover the cost of initial surveys.
Administration for Children and Families (ACF) - ACF is the Department's lead agency for
programs serving America's children, youth and families. It also has the lead in implementing
the recently enacted Personal Responsibility and Work Opportunity Reconciliation Act of 1996
(P.L. 104-193), including the Temporary Assistance to Needy Families (which replaces the Aid
to Families with Dependent Children program), the child care entitlement program, and new
research and evaluation activities.
The FY 1998 budget for ACF totals $34.6 billion, including $19 billion appropriated under the
Personal Responsibility and Work Opportunity Reconciliation Act of 1996. Our request includes
$8 billion for discretionary programs that promote safe and healthy children and youth and
support our Nation's working families including: $4.3 billion for Head Start to provide an
additional 36,000 children with Head Start experience and establish strong foundations for a
total of nearly 836,000 children and their families; $1 billion for the Child Care and
Development Block Grant; and $410 million for a range of discretionary programs that help
States and local communities protect children, including a new Adoption Initiative to bring more
foster care children into healthy, stable homes.
The FY 1998 budget also includes almost $27 billion for entitlement programs. Of this amount,
approximately $17 billion is for the Temporary Assistance for Needy Families (TANF) program,
which transforms welfare into a system that requires work in exchange for time-limited benefits.
A total of $2.2 billion (this includes $107.5 million in estimated carryover from FY 1997) is
requested for child care programs to allow States maximum flexibility in developing child care
programs. This amount combined with $1 billion in discretionary spending requested for the
Child Care and Development Block Grants, will further the Administration's commitment to
supporting families and moving families from welfare to work. In FY 1998, we estimate that
Federal and State governments will spend about $3.5 billion in order to collect over $13.7 billion
in child support payments -- an 8 percent increase over 1997. The budget also includes
$4.3 billion for Foster Care, Adoption Assistance and Independent Living programs. The
President's Adoption Initiative proposes to pay incentives to States for increases in adoptions of
children from State foster care systems. This new entitlement to States will result in no net
increase in outlays because increases in Adoption Assistance will be offset by savings in Foster
Care.
Administration on Aging (AoA) - The FY 1998 budget for AoA provides $838.2 million for
programs aimed at maintaining or improving older Americans' quality of life. For FY 1998,
AoA requests $291.4 million for Supportive Services and Centers, to provide funding for the
nationwide network of 57 State units on aging, 661 Area Agencies on Aging, 6,400 senior
centers, and more than 27,000 service providers. Also requested is $469.9 million for Nutrition
Services, to continue providing the 242 million congregate and home-delivered meals served to
vulnerable senior citizens. In addition, AoA requests $9.3 million for in-home services for the
frail elderly, $16.1 million for grants to Native Americans, $15.6 million for preventive health
services, and $4.0 million for aging training, research and related programs. Finally, to improve
service and streamline administration, the request includes three program changes: a
consolidation of the various programs authorized under Title VII of the Older Americans Act
into a single Grants to States for Protection of Vulnerable Older Americans program, with total
funding of $9.2 million; a transfer of the Alzheimer's Disease Demonstration Grants to States
program ($8.0 million) from the Health Resources and Services Administration (HRSA) to AoA;
and the transfer of DOL's Community Service Employment for Older Americans program
($440.2 million) to AoA.
General Departmental Management (GDM) - The FY 1998 budget request provides a program
level of $192 million for General Departmental Management (GDM), including an appropriation
of $172 million and intra-agency transfers of $20 million in one-percent evaluation funds. GDM
supports those activities associated with the Secretary's roles as chief policy officer and general
manager of the Department through nine Staff Divisions (STAFFDIVs): the Immediate Office
of the Secretary, the Offices of Public Affairs, Legislation, Planning and Evaluation,
Management and Budget, Intergovernmental Affairs, General Counsel, and Public Health and
Science, and the Departmental Appeals Board. In FY 1998, the GDM request includes funds for
Policy Research -- formerly a separate appropriation account -- to support research on issues of
national importance.
Office for Civil Rights (OCR) - The OCR requests $21 million, an increase of $1 million above
FY 1997. OCR has made significant progress in addressing issues such as race discrimination in
access to health care and discrimination against persons with disabilities. The FY 1998 budget
request supports outreach and other compliance initiatives that seek new ways of preventing civil
rights problems and addressing potential discrimination in HHS programs. This includes
implementation of new nondiscrimination requirements covering adoption and foster care
placements that will support the President's Adoption 2002 initiative.
Office of Inspector General ( OIG) - The OIG requests a discretionary budget of $32 million, a
decrease of $3 million below the comparable FY 1997 level. OIG will focus its resources in the
following areas: evaluating various options and methods to increase collections in the Child
Support Enforcement Program; assessing the adequacy of the Food and Drug Administration's
control over investigational new drugs; investigating grant and contract fraud, research fraud, and
allegations of wrongdoing in the Department's public health programs; and auditing management
control systems and financial operations.
In addition, the Health Insurance Portability and Accountability Act of 1996 appropriates funds
to OIG for the Health Care Fraud and Abuse Control Program. OIG will receive between
$80 million and $90 million in FY 1998, to be determined by agreement between the Secretary
of HHS and the Attorney General. Under this program, OIG will: build upon and expand the
proven effective policies and practices of Operation Restore Trust; enhance general Medicare
fraud and abuse enforcement activities; and develop innovative anti-fraud initiatives.