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as 100. Basically what this shows is that national health care expenditures as we all know are going up three times as fast as the CPI, three times as fast, with no signs of abating whatsoever.

So, this all threatens us. It threatens to bankrupt our efforts to bring the deficit under control, bankrupt personal finances, and I want to continue to work with you, Mr. Secretary, to find ways to reduce program costs without causing serious damage to the necessary services that government provides.

We have to find additional efficiencies someplace, eliminate duplication and overlap, eliminate fraud and wasteful spending. And I might venture forth in one other area. I think we need to correct programs that unnecessarily shift costs toward the Federal Government when the State and local governments might legitimately pick up a greater share of that cost, and I will go over some of those with you in a bit.

Mr. Secretary, I look forward to our discussion this morning, I look forward to working with you again this year in developing a budget that we can all support. Finally, Mr. Secretary, I call your attention to a question I will raise with the Family Support Administration concerning the growing Federal loss in the child support enforcement program and I will get into that with you during the questioning period.

So again, welcome. I congratulate you on a very good first year. I was delighted to see you appeal the first budget estimates that came down in December. I thought it was great of you to do that, and it came back better than what it was in the initial stages.

So, at this point I would like to yield to my distinguished colleague and ranking member, Senator Specter, for any opening statement he would like to make.

OPENING STATEMENT OF ARLEN SPECTER

Senator SPECTER. Thank you, Mr. Chairman.

Mr. Secretary, I join the chairman in welcoming you here and congratulating you on a good first year.

As we look at the categories which are under the direction of your department, it is staggering, but there is so much to be done and so little to do it with. We see the costs of health care in this country in the range of $600 billion, about 12 percent of the gross national product, and the cost escalating, and we know that there are millions of Americans uninsured. It costs billions of dollars, and the President has given you the task of a proposal to try to meet those needs, and it is enormous.

We have just finished last year's budget, and Senator Harkin and I and others wrestled on the Senate floor and made adjustments and transfers, and we have obligations from some of those transfers from last year, and now we start the process again and look at an enormous number of needs.

We confront the most difficult problems of our society, the problem of drugs, which your department has a major role in, detoxification and the homeless, and the problem of lead poisoning and big improvements in Gaucher's disease, needing additional funding. There is a small increase for the National Institutes of Health, a

small increase for mental health research. We have to find, somehow, somewhere, some way more moneys for these matters.

I compliment you, Mr. Secretary, on speaking out on the effort to market a new cigarette directed at blacks in America. In the context of the problem of addiction for profit, a new direction was made there, and without 1 cent in cost to the Federal Government, or the taxpayers, with a very effective jawbone, you were able to stop that kind of a program. I think that is a sign as to what can be done by effective advocacy for someone who is willing to move to the forefront and take a tough, controversial position and make it stick.

A year ago there were a lot of difficulties besetting your situation as we moved through the confirmation process, and you have come through that with real leadership. I think that you, with our help, will be up to the job of making ends meet here somehow, some way. However, as I look over the list of needs in your department and look over the available funds, it is going to be a difficult task to work our way through to a conference report, such as the one we tackled late in last year's session, and to try to make ends meet.

But this is the starting point. We are glad to see you here, and we will work with you as best we can to fulfill those obligations. Thank you, Mr. Chairman.

Senator HARKIN. Thank you, Senator Specter.

Any other opening statements?

Senator Burdick.

Senator BURDICK. I have no opening statement. I have a series of questions when the times comes.

Senator HARKIN. Do you have an opening statement, Senator Bumpers?

Senator BUMPERS. I have no opening statement.

Senator HARKIN. Thank you.

Secretary, welcome. Please proceed with your statement.

Secretary SULLIVAN. Thank you very much, Chairman Harkin, Senator Specter, and members of the committee. It is a pleasure to appear before you this morning to discuss our Department's proposal for fiscal year 1991, and I point out that the total budget for the year that we are proposing is $464 billion, an increase of $27.5 billion over fiscal year 1990, or a 6.3-percent increase overall.

OVERVIEW

The appropriations request that this committee will consider is $136.8 billion. This is $12.3 billion over fiscal year 1990 or an increase of some 10 percent.

This budget represents not only the President's priorities, but my own as well.

As you are aware, our goals in 1990 that we set were not fully achieved, a prime example being Head Start. That proposal, that program we had proposed with the President's budget an additional $250 million for fiscal year 1990; we ended up with a congressional appropriation of $151 million, some $99 million less than we wanted. But this year we are back to ask for an even greater Head Start appropriation because of our strong commitment to this pro

gram, a proposal for $500 million increase in that program which would allow an increase of some 180,000 children in the Head Start Program which would bring us within striking distance of the President's committed goal of bringing all eligible 4-year-olds into a Head Start Program or a Head Start-like program.

We would have some 70 percent of the eligible 4-year-olds in the Nation covered by this program if indeed it is approved, so I certainly solicit your support for addressing this program.

I would also add that at the Governors' meeting with the President in Charlottesville a few months ago, the Head Start Program was uniformly cited by the Governors as a program that works, that is successful, helps meet the goal of having all children in the Nation ready to begin school. The Head Start Programs helps tremendously not only with its educational benefits, but it is health, nutrition, and other benefits as well.

We were also disappointed last year that the funds that we had requested for the human genome project were not fully funded. That program is funded, I believe, at $60 million this year. We have requested an increase of $108 million for this. This represents a major scientific undertaking, one which has been identified by scientists. It is probably the highest priority, major, big science effort that we should undertake.

This will help us map the 3 billion genetic bases in the human chromosomal complex and will give us a handle for greater understanding of the more than 3,500 genetic diseases and, more importantly than that, give us information that we can use to bring forward new therapeutic developments to improve the health of our citizens.

Now, in fiscal year 1991 we are committed to improving the health of the American people, and our program that we have submitted, our budget, will focus on helping children, strengthening families, investing in the future through our biomedical research effort, improving access to health care, promoting good health, fighting AIDS, combating drug abuse and, as you noted, we do have the lead responsibility for the demand reduction activities for drug abuse. That includes treatment, research, prevention activities, and education, and we are fully committed to that.

ENTITLEMENT PROGRAMS

We are also committed to prudently managing the entitlement programs which we are supervised to really hold in trust those for the American people. I speak of, of course, not only our Medicare trust funds, but also our Social Security trust funds as well.

In addition to the Head Start Program that I have already discussed, we are requesting the full authorized ceiling for our JOBS Program; that is $1 billion that we have requested. This program, which was passed by the Congress in 1988, will give individuals on welfare, on AFDC, a real opportunity to develop job skills and educational skills that they can enter the market, become self-sustaining, and this is not only important economically, but it is also important in terms of how our citizens view themselves as directing their lives. We are proud to say that program was implemented with our regulations on time last year. We have some 27 States

that have implemented the JOBS Program, and the increase in our budget will help us meet the goal of having all States having implemented JOBS Program by October 1 of this year.

We also are requesting increased support for our AFDC related child care. That will increase by some $283 million for a total of $489 million.

We are also requesting a $47 million increase in child welfare services. This increase would represent a 19-percent increment, and this would help communities manage increasingly more difficult caseloads.

We are proposing in addition a 10-percent limitation on annual increases in foster care administrative costs. This proposed limitation will help to keep these costs in check which have escalated by some 2,800 percent over the last several years, but this will not interfere with the payments to foster families or training of parents and staff.

We are also back to request significant funding for the homeless. We are requesting a total of $233 million, $27 million of which was provided in fiscal year 1990. As you know, the President voiced his commitment in February of last year to full funding of the McKinney Act homeless programs.

On January 24 of this year the President announced his new national drug control strategy. As I mentioned, my Department has the lead responsibility for the demand reduction efforts and in our budget we have requested some $1.7 billion to help us meet our goal of better treatment and better research and prevention and education activities.

We will also have several new initiatives in our drug control strategy including a $50 million community prevention grant program and a $6 million project providing nonmedical services for infants born addicted to crack. We are seeing an increasing problem in our cities with crack babies.

Our budget also includes funds to increase access to quality health care, particularly for disadvantaged pregnant women and their infants. Clearly the fact that our Nation ranks 18th among the industrialized nations in infant mortality is a disgrace. We feel that we should not be No. 1, as you pointed out, Mr. Chairman, in per capita expenditures for health care and 18th in infant mortality. This is a problem. We know what to do. We simply have to focus our resources on doing it. The initiatives in our budget focus $63 million to target programs which address infant mortality. In addition to an overall spending of some $3 billion in different programs that assist in infant care. This improves our outreach activities in a variety of strategies for pregnant women.

We also are pleased that the Medicaid expansions that were enacted as a result of the President's request last year bringing women with incomes up to 133 percent of the poverty levels into the Medicaid Program as well as their children up to age 6 will help significantly to address the health programs of our citizens.

Now, our death rates for our minority populations, as you know, really are significantly higher. This includes not only cancer, but also heart disease, a variety of other disorders as well and because of the fact that the life expectancy of black Americans is some 6 to 8 years less than white Americans as a result of this health gap,

we are proposing a special minority initiative of $117 million which includes funds to support more training of minority health professionals, health programs for housing projects in conjunction with housing and urban development and other initiatives there as well. Concerning rural health care, our budget includes some $357 million to provide access to rural health for our citizens; 92 percent of this amount or $327 million, will be spent on services given in rural communities. This includes the continuation of those activities initiated by the Congress last year for disease prevention and information outreach.

Some $30 million is earmarked for research on the special conditions impeding access to quality care in rural settings. We also plan to spend some $9.4 million to support research by the Alcohol, Drug Abuse, and Mental Health Administration on projects that specifically focus on mental health services in rural areas.

As I indicated previously, we are committed to strengthening our Nation's biomedical research enterprise. Thus, in this fiscal year, we propose to provide a total of $8.9 billion for biomedical and behavioral research at NIH as well as ADMHA. This is an increase of $436 million to strengthen basic research and development efforts of NIH and ADMHA.

Included in this, of course, is the human genome project that I discussed previously. We hope that you will agree with us that it is a high priority that should be funded.

We also include in our budget funds, $89 million for infrastructure improvements on the campus of NIH itself. Over the years we have delayed structural improvements and maintenance, and we can no longer do that, so that we hope that you will support our effort to provide some $89 million for needed improvements in our physical facilities on the NIH campus. NIH is a premier biomedical research institution, which has not only been central to the many achievements we have made in improving the health of our citizens over these last several decades, but also is unequalled around the world as a facility that brings together on one campus a number of outstanding scientists. We have a number of Nobel laureates on that campus, and we want to do everything that we can to preserve and enhance the productivity of NIH, not only for the advancement of knowledge, but also for the advancement of health as well as the importance of its advances to our biotechnology programs. As you know, biotechnology represents one of the few areas where as a nation we have a very strong positive balance of payments. Biotechnology is in its infancy and represents tremendous potential not only for the advancement of our medical capabilities, but also from an economic perspective, it represents a tremendous opportunity for us to extend our lead in comparison with other nations and will have tremendous economic benefits as well.

So, from all of those perspectives NIH is important, and we hope that you will support our request.

Concerning AIDS we, in fiscal year 1991, for all AIDS including treatment, propose to spend $3.1 billion. Of that $1.7 billion is for activities of the Public Health Service for research, education and prevention activities. In addition, within this amount there is a $780 million increase for Medicare and Medicaid services for AIDS and HIV-infected individuals.

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