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$819,000,000 or 1.2 percent over fiscal year 2004 and an increase of 26 percent since 2001, thanks to the members on both sides of the aisle on this committee. The subcommittee is responsible for $63,000,000,000, an increase of $659,000,000 or 1.1 percent over fiscal year 2004.

In order to strengthen our bioterrorism preparedness and public health system, we have requested $4,100,000,000 up from $300,000,000 in 2001. I would like to invite the whole committee to come over and see our communications war room where we track all diseases and storms worldwide. It is something very visionary. A lot of you have been over to see it and Chairman Regula. I extend the invitation to all of you. Last year I tried to get you over for lunch but we never could get the dates to work out and hopefully we will this year. I would love to have you come over and see the operation of the department and see what we are doing.

This investment in bioterrorism will improve on the preparedness for bioterrorism attack or for any public health emergency. We have already seen our investments pay off in CDC's leadership in fighting the SARS outbreak last year. This was really an untold story of how impressive the public health workers in America were able to do their job fighting SARS last year. Our investments have also helped in the coordinated public health response to the West Nile Virus, the Monkey Pox and now to the Avian Flu. It even helped to deal with the particular hard flu season this past year. As you

all know, I am a very big proponent of information technology. That is why we provided a computer language which we call SNOMED to providers at no charge, which will be going out at the end of this month. We are leading the way in developing standards for electronic medical records. Last month, I announced a new FDA rule to prevent medication errors by requiring bar codes on medicine and blood products.

Community health centers are a key element for increasing access to and availability of health care for helping the uninsured. We are proposing to provide $1,800,000,000 for health centers to provide health care services to 15,000,000 Americans up by 4,500,000 people.

Last September my department announced 12 steps to a healthier US-grants totalling more than $13,000,000 to support community initiatives to promote better health and prevent disease. These 23 communities include one tribal organization, 15 small cities and rural communities and 7 large cities. These communities are doing some very exciting work in chronic disease prevention and health promotion. For example, in Washington State, health professionals are targeting Latino adults who have diabetes, asthma or obesity or have high risks of getting those conditions. In Michigan, through the Intertribal Council of Michigan public health officials are creating a resurgence of interest in passing on traditional wisdom and cultural practices, including consumption of highly nutritious traditional foods.

We are delighted by these activities and the department will expand the program this year with your help with an additional $44,000,000 and has requested $125,000,000 for these programs in 2005.

We look forward to working with this committee, the medical community and all Americans as we build upon our past accomplishments, implement the new Medicare law and carry out the initiatives we are proposing to build a healthier, safer and stronger America.

Thank you so very much for your past courtesies and thank you once again for having me back today.

[The justification follows:)








MARCH 4, 2004

Good morning, Mr. Chairman, Congressman Obey, and members of the subcommittee. I am pleased to present to you the President's FY 2005 budget for the Department of Health and Human Services (HHS). I am confident you will find our budget to be a positive solution to improving the health, safety, and well being of our nation's citizens. Before I discuss the FY 2005 budget, I would like to thank the

subcommittee for its hard work and dedication to the programs within HHS. I am extremely proud of the manner in which we have worked together effectively, in a bipartisan effort, since I was appointed Secretary. This cooperation should be lauded and the tremendous results for the American people can be

seen in our many accomplishments.

This year's budget proposal builds upon past accomplishments in meeting several of the health and social

well being goals established at the beginning of the current Administration. I deeply appreciate the level

of support I have received from the subcommittee during the past on so many issues that have touched American's lives. For example, with your help, the Department has funded 614 new and expanded health centers. This has effectively increased access to health care for an additional 3 million people, of which 64 percent are minorities, increasing the overall number of patients served in health centers by 30 percent. In the past three years, your support for protecting ow nation from bioterrorism has made the country better prepared and better protected.

Your unwavering commitment in doubling the budget for the National Institutes of Health has supported work by more than 217,000 research personnel affiliated with 2,000 universities, hospitals, and other

research facilities across our great nation. This support has led to a constant flow of new scientific chiscoveries. We have also established the Access to Recovery State Vouchers program, providing 50,000

individuals with needed substance abuse treatment and recovery services. HHS initiated a new Mentoring Children of Prisoners program to provide one-to-one mentoring for approximately 30,000 securing funding to provide vouchers of up to $5,000 to 17,400 eligible youth since 2001. Last year, we

worked together with Congress to pass the Medicare Prescription Drug, Improvement, and Modernization

Act of 2003 (MMA), adding prescription drug coverage for seniors and modernizing the Medicare program. While I thank you for your support in these and the many other accomplishments to improve

the health, safety, and well being of our citizens, there is still much to be done.

For FY 2005, the President proposes an HHS budget of $580 billion in outlays to enable the Department to continue working with our State and local government partners, as well as with the private and

volunteer sectors, to ensure the health, safety, and well being of our nation. This proposal is a $32 billion

increase in outlays over the comparable FY 2004 budget, or an increase of about 6 percent. The mandatory programs in the HHS budget total $S13 billion in outlays. Of this $513 billion, Medicare and Medicaid combine to equal 5474 billion, an increase of approximately $29 billion or 6.5 percent over FY 2004. The discretionary programs in the HHS budget totals $67 billion in budget authority. Of this total, this subcommittee is responsible for approximately $63 billion in budget authority, an increase of

approximately $659 million, or 1.1 percent over FY 2004.

For FY 2004 and 2005, the MMA appropriated $1.0 billion in start-up finds so that the Centers for Medicare and Medicaid Services (CMS) would have funds available upon enactment to implement the

enormous increase in new administrative responsibilities under the legislation. With rare exceptions,

however, these administrative costs have typically been categorized in the budget as discretionary. Thus, this year the President's budget classifies the $1 billion for CMS implementation of the MMA as discretionary.

In addition, the budget identifies approximately 5500 million in mandatory program savings for

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