Remarks to the House Budget Committee

Good morning. Mr. Chairman, Mr. Spratt, and members of the Committee, I am honored to present the President's FY 2004 budget for the Department of Health and Human Services-a budget that continues to advance the President's goal of ensuring that every American has access to health care.

The President proposes outlays for HHS of $539 billion. $539 billion represents an increase of $36.8 billion-or 7 percent-over last year's request, and an increase of more than $109 billion-or 25 percent-since 2001.

The discretionary part of the budget increases $1.64 billion-or 2.6 percent-to $65 billion of budget authority. This would be $606 million higher than the enacted FY 03 appropriation.

Our most urgent priority is bioterrorism, an area where we have moved with unprecedented speed, commitment, and determination to prepare our nation for an attack or a public health crisis since the terrorist attacks of September 11.

It is clear that our public health structure is stronger than ever and getting stronger every day as we work with states and local communities to prepare for possible attacks and other health crises. Yet there is much work to do, and we remain committed to building on our unprecedented efforts to protect the public health.

Our budget would spend $3.6 billion to further enhance the steps we've taken since that terrible day, including an additional $1.46 billion in State, local, and hospital preparedness.

Additionally, President Bush recently announced a new initiative, Project Bioshield, that would also help prepare the country for a bioterror attack. He would spend roughly $6 billion over ten years on new countermeasures. This proposal would speed up research and approval of vaccines and treatments and ensure a guaranteed funding source for their purchase--just the latest in our forward-looking efforts to protect the homeland.

While we are preparing the nation for a bioterror attack, we are also working aggressively to strengthen and modernize our two largest health programs: Medicare and Medicaid-popular programs that are badly in need of an update.

As you well know, Mr. Chairman, our nation's Medicare program needs to be strengthened and improved to fill the gaps in current coverage. The President has proposed numerous principles for Medicare enhancements to ensure that we are providing our seniors with the best possible care.

We have dedicated $400 billion over the next decade to achieve this ambitious goal, and we look forward to working closely with members of Congress to develop and pass a responsible and effective Medicare bill this year. The budget proposes a prescription drug benefit that would be available to all beneficiaries, would protect them against high drug expenditures, and would provide additional assistance through generous subsidies for low-income beneficiaries to ensure ready access to needed drugs.

Passing Medicare legislation will be a huge task, and improving Medicaid is also urgent. In fact, Medicaid is growing even more rapidly than Medicare-the federal portion is $162.4 billion this year, and the program is growing at about 9% a year. But state Medicaid programs are under tremendous financial pressure, and beneficiaries risk losing coverage. Two-thirds of States have already made reductions or have reductions pending.

The President has proposed a plan to preserve coverage, make Medicaid more efficient, and provide better health care delivery. We would begin by addressing the immediate fiscal needs of the states. We would meet the 9% base growth in the program and then forward funding by $3.25 billion for 2004 and $12.7 billion over seven years. If Congress adopts this plan, states will be able to build on the successes of the State Children's Health Insurance Program. I had a chance to discuss this proposal with many governors on Monday, and their reaction was very positive.

Let me be very clear about two things. First, state participation in the new program would be optional. Second, mandatory populations will continue to receive all of their mandatory benefits. The Medicaid entitlement will be unchanged. States will have more flexibility in covering optional populations, which account for a large part of Medicaid spending. They will gain the ability to target special needs populations, such as those suffering from mental illness and AIDS.

If we do not improve Medicaid, a million Americans could lose coverage this year, and millions more next year. I look forward to working with Congress to make sure they keep it.

At the same time we expand access to health care, we also want to reduce the number of people who need it. And because so many Americans suffer from preventable diseases, this Administration has made prevention a key priority. Our budget proposes a new investment of $100 million to promote a healthier lifestyle by emphasizing prevention of obesity, diabetes, and asthma.

Turning from health to welfare, many of you worked on welfare reform 1996 and we all know how successful it has been. We will work with Congress this year to reauthorize the program and to strengthen work requirements and support for healthy families. The President's budget would spend $17.6 billion for 2004 on TANF, and the $2 billion contingency fund remains available. Now is not the time to turn back; we must move forward in helping millions of Americans become self-sufficient.

In a continuing effort to improve the lives of children who are at risk of abuse and neglect, we are proposing a child welfare financing option that States can use to improve their child welfare service systems. We propose to spend nearly $5 billion for foster care in 2004, a $238 million increase over last year's request.

The President has made improving our nation's health and health care one of his biggest priorities for the year, and by working together, we can make it one of our proudest achievements. I look forward to all the work, and I know our discussion this morning will get things rolling.

Thank you, Mr. Chairman.

Last Revised: February 26, 2003

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