Mr. Chairman, Senator Harkin, and members of the
Subcommittee: thank you for the opportunity to speak to you today
about completing our appropriations bill for the 1996 fiscal
My message this morning Is simple and direct. Let's finish
the appropriations process for 1996. Let's do it without any
more continuing resolutions and without cutting the programs we
all agree contribute to the health and well-being of our
I want to briefly review for you the year HHS has faced. We
lost 3.5 million hours of work because of the shutdowns. We are
working very hard to make up for the valuable time lost.
We are now operating under the ninth continuing resolution
(CR) for 1996. Three HHS agencies - the National Institutes of
Health, the Centers for Disease Control, and the Food and Drug
Administration - have been funded for the entire fiscal year.
Only part of several other HHS agencies - the Indian Health
Service, the Administration for Children and Families, the Health
Care Financing Administration, and the Administration on Aging -
are funded for the entire fiscal year, while the remainder of the
Department is funded through March 15. Overall, only 58 percent
of the HHS discretionary budget has been funded for a fiscal year
that is nearly half over. Not only did the shutdowns create
backlogs of work, but the multiple short-term CRs created
additional burdens for HHS, for our state, local and nonprofit
grantees, and ultimately for the citizens we serve. These CRs
forced HHS to issue numerous short-term grants instead of single
annual awards that normally are provided. Without knowing when
or how much funds would be available to them, many grantees were
forced to discontinue services, delay payments to contractors or
forego essential planning activities.
For instance, when we think of Head Start, we most often
think of a single local Head Start center in a nearby
neighborhood. Head Start centers are operated by 1,400
individual grantees each year in neighborhoods all over the
country and serve more than 750,000 children and their families.
Because of the short term CR and reduced funding, many local
Head Start programs are having difficulty renewing annual
contracts with vendors for services such as transportation,
cleaning, and supplies. Arrangements are made on a weekly or
monthly basis, rather than on a more economical annual schedule.
To adjust to these cuts, in Iowa, the Head Start program in
Cedar Rapids is buying only minimal supplies, and training has
been dramatically cut back. In addition, three sites in Linn,
Benton and Johnson Counties are facing possible loss of their
licenses unless needed facility renovations are made; yet, these
renovations have been canceled because of funding uncertainties.
The Head Start agency in Bucks County, Pennsylvania, has put a
freeze on filling staff vacancies.
These disruptions and funding reductions undermine the
considerable progress that this Administration and the Congress
together have made in upgrading the quality of Head Start over
the past three years.
Because of the lack of full year appropriation for the Ryan
White program, which provides medical and support services for
people with HIV and AIDS, 42 cities-that are existing grantees
are presently receiving only about half the amount which they
would normally have received at this time.
Many community and migrant health centers also have been hurt
by the uncertainties and reductions caused by these short term
CRs. The community and migrant health program is a network of
1,400 health centers that serve as the health care provider of
last resort for the poor, for people infected with HIV, and for
other vulnerable populations. Health centers are small
businesses that must meet weekly financial obligations such as
payrolls, hazard insurance premiums, and medical insurance
payments. They are very vulnerable to acute cash flow problems
and often operate with little or no reserves.
Some health centers normally are able to leverage their
federal grants to obtain bank loans. But health centers now have
reported that banks are declining their loan requests. For
example, a Rhode Island bank withdrew a financial commitment
previously made to a health center after a reduced federal grant
left the center with inadequate collateral.
Clearly, the current funding uncertainties and reductions
hurt many of the hard-pressed individuals and families who depend
upon HHS programs.
On September 15, this Committee reported a discretionary
total of $28.1 billion for HHS. Recently, budget talks on
appropriations that have taken place between the Administration
and Congress have suggested that this amount should be raised by
about $600 million. So, as you finish the 1996 appropriations
process, I want to remind you of the areas where the Senate bill
The Senate bill takes us in the wrong direction in a number
of priority areas, but three in particular: Head Start, substance
abuse and Ryan White programs. These are areas where we've made
great strides, and we can't afford to lose ground.
We are all aware of the positive impacts Head Start has on
the lives of low income children as they begin their educational
development. The President had proposed in his 1996 budget a
path of investment in Head Start that would lead to a $1.5
billion increase by FY 2002.
The Senate bill doesn't go forward in building this program,
but takes a step backward, cutting spending by $133 million below
last year's level. This could reduce enrollment by 45,000 to
50,000 students if programs maintain their current level of
We are proud of our FY'95 success in implementing the Early
Head Start program which the President and the bipartisan
Congress created to reach our youngest and most vulnerable
infants, toddlers and their families. We must move forward in FY
'96 to provide top quality comprehensive services for even more
infants and toddlers who so critically need this early head start
to reach their potential.
Substance Abuse Treatment and Prevention
The Senate bill would provide only $1.7 billion (aside from
the proposed $200 million transfer from the Department of
Education) for SAMHSA - our primary agency supporting the
prevention and treatment of substance abuse and vital mental
health programs. At this level, we would be forced to cut
programs 23 percent from the FY 1995 enacted level. Particularly
troubling is the devastation to SAMHSA's demonstration programs -
over a 70 percent reduction in one year. The effect of these
cuts is staggering. The proposed $200 million transfer from the
Department of Education would somewhat ameliorate these cuts, but
it is not a good solution because it would fund SAMHSA at the
expense of another Administration priority - the Safe and Drug
Free Schools program.
Programs that reach an estimated 100,000 high risk youth
annually would be jeopardized. These programs have been shown to
have substantial benefits delaying the onset of alcohol and drug
use, and lowering the rates of cigarette and marijuana smoking.
Treatment programs that have shown great successes would also
be terminated. In Colorado a follow-up study found that of the
clients who had been arrested in the two years prior to treatment
admission, 94 percent had not been rearrested for driving under
the influence and about 80 percent had no arrests for other
offenses during the follow- up period. In another case, the
Miami Coalition for a Drug Free Community used SAMHSA funds to
support collaboration between law enforcement and
family/neighborhood task forces that were instrumental in
reducing crime by 24 percent, making over 8,000 arrests and
identifying and destroying crack houses.
The HIV epidemic is a growing public health problem and the
leading cause of death among Americans between the ages of 25 to
44 years. The Senate funding level for Ryan White activities of
$656.5 million - $67 million less than the President's budget -
will adversely affect communities already facing an overwhelming
demand for services.
The Senate committee level will mean:
over 75,000 fewer office based medical care visits, and
38,500 fewer home health care visits In title I cities;
- over 46,000 fewer office-based medical care visits and over
66,000 fewer home health care visits under title II;
- 10,000 fewer clients with HIV and 10,500 fewer clients at
risk of HIV infection receiving community based early
Pediatric projects will be unable to expand ZDV therapy to
reduce perinatal transmission; expand outreach, counseling and
testing and care for women and infants by 15 sites; or develop
new comprehensive HIV care programs for youth with or at risk of
In addition, up to 10 more cities are eligible to receive
title I awards in FY 1996. Reduced funding will force us to
dilute awards as the number of cities grow.
At the same time, the need for added Ryan White funds will
increase as a result of recent approval of a new class of AIDS
drugs called protease inhibitors, which have shown promising
results. Under current funding, many states will be unable to
expand drug coverage for the new and promising new drugs.
Administration on Aging
Chairman Specter and Senator Harkin, there are other funding
shortfalls in the Senate bill which deserve attention.
Our 1996 budget made a strong commitment to the needs of low-
income and frail elderly through nutrition and social services
programs funded by the Administration on .Aging (AOA). We
proposed increased funding for aging research to strengthen the
infrastructure for home and community-based care for the elderly.
The Senate, however, reduced spending for these activities by 91
percent. This will seriously limit AoA support for state and
community efforts to improve the well-being of older persons.
Senate proposed cuts would also curtail ombudsman and
preventive health programs. AoA now has 565 ombudsman programs
across the country that serve as a front line of defense against
elder abuse in our nursing homes. In 1 994 alone, ombudsmen
processed 207,000 complaints of elder abuse, neglect and resident
problems in nursing homes and helped resolve 74 percent of these
An AoA ombudsman in Pennsylvania found that an elderly
nursing resident had spent all of her savings on nursing home
care. The nursing home mistakenly began discharge proceedings
for non-payment. The ombudsman intervened with state authorities
and she was able to stay in the nursing home.
The ombudsman program has also made a difference in Iowa.
For example, an 88 year old resident was placed in a nursing
facility against her wishes. The state's ombudsman was called by
the patient's daughter who had made appropriate arrangements to
accommodate her mother but who was told by the nursing home that
her mother could not leave without her doctor's permission. The
ombudsman educated the daughter on the rights of the resident and
the ways in which the family could ensure that those rights were
respected. The patient was removed from the facility two days
later and is now being cared for by her daughter at home.
Agency for Health Care Policy and Research
The Senate recommendation of $127 million for the Agency for
Health Care Policy and Research (AHCPR) is a considerable
improvement over the House-passed level of $66 million. If AHCPR
research funding streams are suddenly curtailed, important
clinical guidelines for the medical community and critical
research projects will be curtailed. However, we recognize that
AHCPR will at least be able to do much more with the Senate
appropriations than it would be able to do if the devastating
House cuts were imposed.
Administration on Children and Families
The President had proposed $72.5 million for the new
community schools program in FY 1996 to offer teenagers
after-school activities including academic enrichment, tutoring,
and mentoring to at-risk youth as part of our crime prevention
efforts. However, the Senate has provided no funding for this
program. As a result, we will lose the opportunity to give more
than 110,000 youth the chance to escape the cycle of crime and
violence that now plagues their lives.
Because of lack of funding in the House and Senate budgets,
we have already closed two community-based youth programs: one in
Chicago and another in Los Angeles. If funding is not
appropriated for the Community Schools program, we will be forced
to close crime prevention and youth development programs in four
dozen more communities this year as well as fall to reach
hundreds more communities that have applied for funding.
The President had also proposed $21 million in social
services and child welfare research. Again, the Senate provided
no funding for these important research and demonstration
programs supporting welfare reform, child care, services for
abused and neglected children and family development. This small
investment has a great payoff in working with state and local
government and private agencies by providing information on how
to best serve those in need, and to enable our tax dollars for
these programs to go further.
The President also had proposed $122 million for programs for
developmental disabilities. The Senate reduced funding for these
important programs by 8 percent. This reduction will hinder our
efforts to support a wide variety of activities, such as
protection and advocacy and university projects, which target
assistance to individuals with developmental disabilities. The
effects of the disrupted funding are already being felt. in Los
Angeles, the protection and advocacy program has ceased taking
new clients. The Illinois Developmental Disabilities Council has
had to reduce projects targeted to minority groups in
metropolitan areas that provided direct assistance for families.
Health Care Financing Administration
The Continuing Resolution and three years of nearly level
funding in the Medicare Survey and Certification program have
built up large backlogs. Nineteen states have informed us that
they are no longer admitting providers requiring Survey and
Certification into the Medicare program because of funding
constraints and backlogs.
This activity assures quality standards in nursing homes and
home health facilities. The Senate recommendation of $135
million will bring the program below the levels of the CR.
Chairman Specter, Senator Harkin and members of the
Subcommittee, I know that you are concerned about making savings
in our bill and holding down administrative costs, but let me put
that in perspective for you.
Currently, our administrative costs are less than 2.5 percent
of total HHS outlays. Moreover, we have committed ourselves to a
seven- year right-sizing effort which will reduce the
Department's personnel by over 7,000 FTE from FY 1993 levels by
the year 2000. Last year, we made a substantial down payment on
our right-sizing plan, reducing HHS staffing by nearly 3,300 FTE,
or 5 percent.
In the 1996 budget, we recommended consolidating 108 programs
into 16 clusters, saving $15 million in administrative costs and
230 FTE. This proposal still awaits Congressional action.
Following the Vice President's reinventing government initiative,
we have eliminated an entire management layer by consolidating
activities of the office of the Assistant Secretary for Health
into the Office of the Secretary, while retaining and enhancing
the responsibilities of Dr. Phil Lee, our Assistant Secretary of
We also have merged the operations of the Assistant Secretary
for Management and Budget with the Assistant Secretary for
Personnel Management, creating an agency whose sole purpose is to
provide centralized administrative services on a fee-for-service
basis. We can expect long-term savings from this innovative
Finally, we have launched "Operation Restore Trust," a major
initiative to attack fraud and abuse in Medicare and Medicaid.
This five-state demonstration operates in New York, Florida,
Illinois, Texas, and California where 40 percent of Medicare
services are provided. It focuses on the three fastest growing
services in the programs - home health, skilled nursing
facilities, and durable medical equipment. Operation Restore
Trust represents a new partnership of the HHS Inspector General,
the Health Care Financing Administration, the Department of
Justice and the Federal Bureau of Investigation, states'
attorneys general, state Medicaid fraud control units, insurance
companies, and Medicare contractors who are combining their
efforts to crack down on fraud and abuse.
I am mindful of the very positive efforts that both you,
Chairman Specter, and Senator Harkin have made to increase the
602(b) allowance for the Labor, Health and Human Services and
Education Subcommittee which now stands at $62 billion. The
Administration has recommended that this allocation be increased
by $4.5 billion. This is necessary if we are to meet the
President's funding requests for critical health and human
services, education, and employment programs.
The Administration has supplied the Committee with a list of
potential funding offsets, which should supply the additional
$4.5 billion needed to fund the Labor-HHS Education bill for
Simply put, I believe it is time to finish the 1996
appropriations process so that we can manage our operations in
the most efficient manner possible and fund the high-priority
programs of this Department that have strong bipartisan support
in the Congress. We must stop the "cash and carry" approach to
financing vital health and human services programs.
Thank you, Mr. Chairman, for the opportunity to speak with
the members of this Subcommittee this morning.