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REMARKS BY: DONNA E. SHALALA, SECRETARY OF HEALTH AND HUMAN SERVICES PLACE: H. H. HUMPHREY BUILDING, WASHINGTON, D.C. DATE: MARCH 19, 1996
Let me be clear: As the President said in his State of the Union Address, "The era of big government is over." The Clinton Administration believes that we must balance the budget in seven years and shift more responsibility to the states and local communities.
Since coming to office in 1993, the President's economic policies have slashed the deficit almost in half -- from $290 billion in 1992 to $164 billion in 1995. This budget will help us finish the job -- by cutting the deficit even further and putting us on the right track to reach balance in 2002.
But, as the President has said time and time again: We can balance the budget and ensure fiscal accountability without turning our backs on our families and our future. And, that's exactly what the President's FY 1997 budget proposes to do.
The President's budget for the Department of Health and Human Services totals $354 billion in outlays, an increase of just $27 billion, or 8 percent, over the comparable FY 1996 amount.
We know that, to balance the budget, we must reform our entitlement programs -- so that they serve our citizens better and more efficiently. And, we know that the most effective social and economic policies help create good jobs and strong families.
That's why we've already granted waivers to 37 states that are now reforming welfare for 10 million parents and their children -- that's about 70 percent of all AFDC recipients.
And, that's why, for those trying to move to independence, the President's FY 1997 budget for welfare makes changes that encourage work, demand responsibility, and protect children.
We do this by replacing the current AFDC program with a new time-limited program in which assistance is provided only in return for work and preparation for work.
Overall, our proposal would save $40 billion over seven years -- while still increasing child care funding, strengthening child support enforcement, protecting vulnerable children, and giving states flexibility to meet the needs of their own communities.
Reining in costs and protecting our most vulnerable citizens. That's the right balance -- and it's the same balance we've struck with our Medicaid proposal.
Under the Medicaid waivers we've already granted, we're increasing flexibility for states, cutting costs, and providing health insurance for 2.2 million more working Americans and their children.
The President's FY 1997 budget builds on that success. It saves $59 billion over seven years -- and it reforms Medicaid the right way. Our plan maintains a strong federal-state partnership. It gives states unprecedented flexibility to meet the needs of their citizens. It retains nursing home quality standards. And, it maintains Medicaid's historic guarantee of health care for our most vulnerable citizens.
Along with Medicaid and Social Security, Medicare has transformed what it means to be old in America. The President's FY 97 budget strengthens and improves our Medicare lifeline -- while still holding premiums at 25 percent of program costs.
Our plan reduces spending by $124 billion over seven years -- and guarantees the solvency of the Trust Fund for more than a decade. But, it does much more than that.
Today, 4 million Medicare recipients are enrolled in managed care plans -- that's a 67 percent increase since 1993. As Medicare recipients continue to move to managed care, we're ensuring that they have more -- and better -- choices for their health care.
That means expanding the types of plans available to seniors -- to include Preferred Provider Organizations and Provider Sponsored Networks. It means creating an open enrollment system -- and giving Medicare recipients the best information so they can choose the right plan. And, it means expanding coverage of preventive benefits -- like flu shots and mammography -- that save precious lives and conserve precious resources.
But, to meet our citizens' health care needs, we must do more than expand choices. We must guarantee quality and fiscal accountability. And, that's exactly what we're doing.
In FY 1995, the HHS Inspector General, the Health Care Financing Administration and the Administration on Aging teamed up with officials at the federal, state, and local levels -- to crack down on health care fraud and abuse and maintain quality in five key states.
It's called Operation Restore Trust. And, in FY 1997, we want to expand Operation Restore Trust into every state in America.
Under our budget, we're creating two innovative programs with secure and stable funding for HCFA and the Inspector General -- so that we have the resources we need to not only punish health care crime, but also to stop it before it occurs.
All across the department, we're changing the way we do business -- and finding new ways to work better and work smarter.
As part of the President's plan to dramatically shrink the size of the Federal Government, we reduced our staff by nearly 3,300 FTEs -- a full 5 percent -- between FY 1994 and FY 1995 alone.
We've merged some of our operations and eliminated entire management layers. And, we've freed the Assistant Secretary for Health from day-to-day administrative responsibilities -- in order to strengthen this absolutely critical leadership and policy role in the Department's public health and science agenda.
At the same time, we've created an innovative operating division -- the Program Support Center -- whose sole purpose is to provide administrative services on a fee-for-service basis for HHS and other federal agencies.
Under the leadership of Lynnda Regan, a former business manager at Westinghouse, the Program Support Center will be internally financed, competitive, and create real incentives for long-term savings. It is truly a model built for the future.
And, it's all part of a fundamental commitment to improve our management throughout the department. Let me give you just a few more examples.
Today, more than 15 million Medicare and Medicaid recipients are enrolled in managed care plans. As more and more people move to Managed Care, the face of health care is changing. And we must change as well.
To meet these challenges, we've brought together the leadership of the entire department -- from HCFA to AoA, from CDC to NIH and from the Agency for Health Care Policy and Research to the Indian Health Service -- to help ensure that managed care becomes an opportunity -- not an obstacle -- to deliver low cost, high quality health care in the 21st century.
And, we're increasing our investment in IHS by $186 million -- so that American Indians and Alaska Natives are empowered with the tools they need to improve the health of their citizens and their communities.
Let me take a moment to tell a story that I think best exemplifies the kind of vision and tough minded management approach that we've brought to this department in the past three years.
It's a story of Head Start -- a program that, when done right, works superbly to give our most vulnerable children a hand up on the educational ladder and a hand up in life. But, as we found out when we got here, in some communities, Head Start wasn't always being done right.
So, we brought in the best experts in the country -- and asked them for a candid assessment of what needed to be improved. And then, we rolled up our sleeves and got right down to work. With those experts and bipartisan support in Congress, we developed ways to set quality standards, provide resources to help centers meet them, and enforce strict penalties for those who don't.
Since 1993, we've helped 100 grantees improve their programs and provide quality services to their children. But, that's only half the story.
We've also gotten tough by cracking down on -- and ultimately shutting down -- those programs that aren't cutting it. And, in just two-and-a-half years, we've closed 26 programs.
What this story shows -- and what this budget shows -- is a fundamental commitment that can be summed up in three words: smart, tough management.
Make no mistake about it: Our 1997 budget represents a commitment to reform -- not ruin -- government; to alter, scale back, and consolidate some existing programs -- while still protecting and improving upon the priorities of this Administration and this country. I want to outline two of those priorities today.
From day one, Head Start -- and our overall commitment to our neediest children -- has been -- and will continue to be -- a top priority for this Administration.
Walking every child up to the same starting line is the purpose of Head Start -- and the President is committed to making it a reality for more children. That's why he's asked for an increase of $350 million -- to give 40,000 more children a head start in life.
And since the earlier children get to the starting line, the better, the President is requesting $159.3 million to reinforce our Early Head Start commitment to more than 25,000 infants and toddlers under age three.
The President believes that the best safety net for our children is -- and will always be -- strong families. And, whether they're struggling to get jobs or keep them, we know that families need good child care to keep their children safe.
That's why the President is requesting $1 billion for the Child Care block grant -- so that 70,000 more children from low income families can have high quality child care and their parents can have peace of mind while they work, train or go to school.
We've all heard the horror stories. Abused Children. Neglected children. Forgotten children. The President wants to work with states and communities to stop these tragedies. That's why he's requesting $419 million in discretionary spending to help abused and neglected children -- by encouraging parental responsibility when possible and providing foster care and adoption when necessary.
But, our commitment to children doesn't stop there. The President believes that we must help parents guide their children along the right path -- the healthy path -- the safe path -- in life.
That means increasing our investment in AIDS prevention by $34 million. It means building on the President's historic children's tobacco initiative by supporting innovative community partnerships that give children the facts about a deadly addiction that could take years off their lives.
It means working with the White House Drug Policy Coordinator General Barry McCaffrey -- to ensure that all engines of our drug strategy -- prevention, treatment, research, interdiction and law enforcement -- are working together.
And, when it comes to preventing teen pregnancy, it means building on our success -- from targeted demonstration grants to welfare waivers that require teen mothers to stay in school and live with a responsible adult.
To help ensure that a clear message of abstinence and responsibility reaches into the hearts and minds of young people, our budget includes a new $30 million initiative -- that will help communities all over America implement local strategies with promising track records of reducing teen pregnancy.
That's a good start -- but, government can never solve this -- or any other problem -- alone. That's why we have developed an integrated, coordinated approach to youth development that I call Safe Passages.
From working with the media to counteract all the dangerous messages our children hear to sponsoring major new health campaigns, we are bringing together our entire department and all the different adults and institutions in young people's lives -- to help them bypass the dangerous minefields of adolescence and make safe passages to young adulthood.
Next, we have continued to put fighting disease and fostering good health at the top of our priority list -- where they belong.
In a time of fiscal austerity, the President's FY 1997 budget continues our historic and bipartisan commitment to biomedical research -- a commitment that has paid off time and time again -- from the mapping of the Human Genome to the creation of new drugs targeted to specific diseases, like AIDS, manic depression, and stroke.
In the battle to improve the health of our citizens, our success tomorrow may depend upon the investments we make today.
That's why the President is calling for an overall increase of $467 million, or 4 percent, in the National Institutes of Health budget.
We know that NIH's extramural research project grants provide the seeds and soil of tomorrow's greatest discoveries.
And, that's why we've proposed an increase of $166 million to fund over 6,800 new and competing research grants -- that's 200 more than in 1996 -- for a record total of more than 25,000 grants in FY 1997.
The President is also committed to turning the 40 year old Warren G. Magnuson Clinical Center at NIH into a state-of-the-art clinical research center and hospital. Each year, an average of 20,000 adults and children from around the country travel to the NIH clinical center for cutting-edge experimental treatment and study. In this country, half of all federally funded clinical research beds are located at the clinical center.
But, just as we can't fly into the future riding in a horse and buggy, we certainly can't expect a hospital built in the 1950s to transport us into the next century.
This $310 million investment in a new clinical center will mean the highest quality clinical research; performed by the world's very best scientists; in a research hospital that is more efficient, more affordable, and more flexible in adapting to today's realities and tomorrow's challenges.
Our long term commitment to research has already brought some real successes in the fight against AIDS. But this fight is a long way from being won.
That's why the President's 1997 budget places all of NIH's AIDS-related funds -- $1.4 billion -- into a consolidated budget for the Office of AIDS Research -- to help ensure a coordinated and flexible response to this epidemic. The recent external review of the NIH AIDS research efforts makes it very clear that OAR plays a critical role in our search for a cure.
The President's budget also calls for $807 million for Ryan White activities -- a $32 million increase over this year. This money will help us bring AIDS related services to hard to reach populations -- especially in cities -- and provide primary care for 5 to 10 thousand more people living with HIV/AIDS.
Some of the best news about AIDS is the success of a new class of drugs called protease inhibitors. But, they can only help improve lives if people have access to them. That's why the President is proposing a $52 million supplemental Ryan White appropriation for 1996 -- so that the best science in the world reaches more people who need it.
A lot of us saw the movie Outbreak. That was fiction. But new and emerging infectious diseases are a reality that threaten all of us -- in our water, in our air, and in our food.
The President's budget almost doubles -- to $45 million -- our investment in CDC's national strategy for identifying, investigating, and ultimately stopping new infectious diseases around the world.
Make no mistake about it: This small investment pays off -- not only in dollars and cents, but most importantly, in healthier lives and brighter futures. And, that's what our 1997 budget is all about.
It's about balancing the budget; being tough managers; and making a sustained investment in the preventive tools all of our citizens -- from the youngest to the oldest -- will need to thrive in the 21st century.
Thank you.