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Let me also say that we have tested a large number of our generic drugs since these efforts have come to light, and we have found that the overwhelming number of our generic drugs are safe and effective. We are concerned about doing everything we can to maintain confidence in the integrity and the value of our generic drugs, and we will be continuing those efforts with FDA because we are concerned about that as well as reassuring the public.

Mr. WYDEN. The story says there were no internal control procedures or standards of conduct to speak of at the generic drug division. Are those areas that you plan to beef up in the days ahead? Secretary SULLIVAN. Yes, Mr. Wyden. We will be beefing those areas up as well as reinforcing with all of our employees their moral and ethical responsibilities.

Last summer, for example, I issued a memorandum to all department employees indicating what I expect to be standards of conduct of our employees. So we are going beyond that and working to be sure that we don't have that kind of problem in our agency. Chairman ROYBAL. Mrs. Morella?

Mrs. MORELLA. Welcome, Secretary Sullivan and I agree, you have been accessible and a committed person.

I welcome your commitment to enhancing the health of minorities. In fact, we talked about that yesterday. I was on the march in Selma, Alabama, headed by John Lewis from Atlanta and we talked about what has happened during 25 years in areas of education, not only voting rights but health and how much more needs to be done also, so I appreciate that commitment.

In my county of Montgomery, considered one of the most affluent, it is surprising and yet indicative that in that county alone an estimated 12 percent of our population is either underinsured or uninsured according to the planning and evaluation section of our health department. That doesn't even reflect the number of children or elderly or ill individuals who are vulnerable due to inability to get to a clinic or at risk because of inadequate nutrition or poor living conditions.

We particularly lament the fact that the homeless programs we have, the reductions in the allocation over previous years for the homeless supplement and hope that when you can make an opportunity, that you will do whatever you can to beef up those parts of the budget, of the whole health budget, too.

Since this hearing is on vulnerable populations and certainly includes the elderly in that we are the Select Committee on Aging, I still want to comment on another vulnerable population, and that is the children, particularly with infant mortality as one of your priorities, and the fact that as you look at Medicaid, the figures that we have indicate that the percentage of money-50 percent as I understand it, 50 percent of Medicaid recipients are children, and they get some 20 percent of the expenditures.

In contrast, the elderly is 16 percent of the Medicaid population and they have 39 percent of the resources. Therefore, what I am saying to you is during this time where you also support intergenerational working together and it has become more and more important that the wisdom of the elderly and their experiences be used to be combined with the promise and the excitement of the children so we can work together-that you do not see this as a

conflicting problem in terms of what we are going to be doing if this gap widens. What do you think we can do about it?

Secretary SULLIVAN. Thank you for your comments. Let me address, first, the homeless issue that you raised and indicate to you that President Bush in his budget message to the Congress last year, February of 1989, requested full funding of the McKinney Act. We were heartened by that request, but the Congress actually gave us less money than we requested by, I believe, some $30 million. I am very committed to the problem of the homeless, and I hope that our request this year will be fully funded, because we do have a serious problem with homelessness, one that we have to be much more successful in addressing.

I serve as vice chairman of an interagency council on homelessness that Secretary Kemp chairs since he is responsible for the housing aspects of the homeless problem. My department is responsible for the social services and medical care, and we are very concerned about making sure that we are reaching the homeless more effectively that we are, making surplus Federal property more available.

We have been frustrated by the fact that there seems to be great difficulty in identifying and then having such properties turned over to be available for the homeless. But we are working on that, and I hope that we are able to address that more effectively than we have.

On the question of the generation clash concerning funds for health care in Medicaid, we are committed to expanding our support for young children and pregnant mothers, because President Bush, again, in February of last year, proposed expanding Medicaid eligibility levels for pregnant women and children up to age 6, to 130 percent of the Federal poverty level from the level of 100 percent.

We are pleased that the Congress responded by increasing it to 133 percent of the poverty level. That will help significantly, but there still is the problem that you alluded to about the fact that over the last 10 years the incidence of children growing up in poverty has increased significantly. We need to do better than that as a Nation because our children are the future. If we don't improve their health status, their educational system, we are going to be in trouble as a Nation.

One other thing that I am pleased about in this overall problem is the President's promise to increase Head Start funding by $500 million this year.

Last year we asked for an increase of $250 million; Congress gave us $151 million. So we want to do better than what we have done, but we will need your help and that of your colleagues in the Congress in giving us the funding that we feel this program deserves. Mrs. MORELLA. No doubt in my mind that Head Start reaps enormous benefits and even with the increase it still isn't going to touch all the youngsters who would be eligible. You have a major challenge ahead of you and also in reviewing what the domestic policy council recommends in terms of health. Health is, other than the budget, probably our number one issue of concern for it touches everybody, and as the greatest country of the world, I think we have to show that greatness in the health area.

Thank you, Mr. Chairman.

Chairman ROYBAL. Thank you, Mrs. Morella.

Mr. Hertel?

Mr. HERTEL. Mr. Secretary, I am excited about the work that you are doing and commend you for your commitment and knowledge. In your statement and the last questions talking about infant mortality making that a priority, I represent part of the city of Detroit and feel very strongly about that, seeing the numbers comparing mortality to other nations but to see the terrible results.

A broad question-I know that you are in charge of the task force doing a domestic health study but how do you feel about the need in the future for a national health insurance?

Secretary SULLIVAN. We certainly have a serious problem in our country as we have indicated before with the large number of individuals without health insurance, in spite of the fact that we spend more money on health care than any other nation in the world.

Our task force is looking at ways to address these problems without imposing an onerous financial burden on our economy. We need to find ways to spend the money that we are investing more wisely, get a better return on those expenditures. So clearly I don't see the goal of increasing access to our health care system and controlling costs as mutually exclusive, not at all.

If we are successful in our efforts to improve our health promotion activities, that will help to maintain and enhance health, but also to control costs. We have a very expensive health care system where we can do all kinds of marvelous things-heart and kidney transplants, bone marrow transplants, cardiac pacemakers-but we haven't done very well in providing primary care to all our citizens in rural areas as well as inner cities.

Certainly Detroit is a city that has a serious infant mortality problem. I visited there last summer and saw clinics and met with health professionals there as well as individuals in the State health agencies. There are a lot of things that we can do and need to do to address that problem.

One of them is a better outreach program for infant mortality. We have proposed in the budget $63 million for various outreach initiatives, to bring pregnant women into the system earlier. It is much better for us to spend $400 or $600 or $800 on prenatal care than it is to spend $10,000, $20,000, or $50,000 on neonatal intensive care, and even there in some instances being left with a bad result, an impaired infant whose prospects for a meaningful, fulfilled life may be greatly compromised.

So clearly our emphasis is on finding better ways to spend our dollars as well as getting our citizens to involve themselves more actively in helping to maintain their own health.

Mr. HERTEL. I agree that that is the way to go and I agree on your overall belief that part of the responsibility of moving towards a national health program is what we not only serve those who have no insurance, but that we get a handle on cost increases that are going up.

Since the Federal Government has the highest number of employees, do you think it is possible that they could get better coverage for these Federal employees? The coverage today is not compa

rable as it is to many State employees' coverage around the country?

Secretary SULLIVAN. Yes, Mr. Hertel. Our Office of Personnel Management has developed a program to improve the health coverage of our Federal employees because we do have a large number of our citizens working for the Federal Government, not only here in Washington, but around the country. We must be mindful of their health needs as well as have a program that would be a model of what we might do elsewhere.

So, clearly, we are committed to working with our Office of Personnel Management in addressing the health care benefits that our Federal employees receive.

Mr. HERTEL. My last question is, earlier in your statement you talked about the strength of our Social Security system as the cornerstone, and I agree. I oppose people who say that because we are taking better care of our retired people through Social Security that now there is a problem and that we should move that money to the young people.

I think we should maintain protection for the seniors and take better care of the young people. Certain Republican members of the House are proposing that we switch in the future to a private pension system away from Social Security.

What is your opinion on that, Mr. Secretary?

Secretary SULLIVAN. Mr. Hertel, I believe that while some aspects of that suggestion have merit, overall I think that would not be an appropriate approach to take. That is what I mean by my statement that we really shouldn't tinker with our Social Security system.

Our system is a good one, one that resulted from a bipartisan agreement of 1983. We wanted to be sure that we protect the integrity of those funds so that the commitments that are made will be honored in the next century.

So while there may be some merit to some aspects of that proposal, I don't believe that we should move in that direction.

Chairman ROYBAL. The Chair recognizes Mr. Vento.
Mr. VENTO. Thank you, Mr. Chairman.

Dr. Sullivan, I am Congressman Vento in case you can't read my placard-I was interested to hear you talk a little bit about the McKinney Act because I have been very interested in that and working for it.

In reference to the funding level, what happened last year is the appropriations committees sought to emphasize other areas, transitional housing is a obvious choice and so actually we appropriated as much money for McKinney but it wasn't all in the right areas. It is, however, a refreshing change from what had preceded it.

Most of the regulations were driven by court order because of the reluctance of the previous administration to deal with some of the issues. I wanted to point out, and ask you a question about whether you would support a supplemental appropriation to make up for the areas where we didn't provide enough for the health care areas in the 1990 budget?

Secretary SULLIVAN. Certainly, we would be very pleased to receive the full sum of our request that we made last year, because

obviously falling short of that means that we are less able to provide the services for our homeless citizens.

Mr. VENTO. I am going to try to get enough signatures and cosponsors to go and put pressure on the House side and your help in that would be significant if that would get a priority treatment.

I know that you have to work that out within the administration. I would hope that we would keep on track in terms of making expenditures this year with regard to those programs.

Dr. Sullivan, you pointed out the increase in Head Start. As a former teacher, I am very pleased to finally see recognition of a program that has been around for 25 years. I appreciate the consensus, but after 25 years when you have a successful track record, I guess we should expect that rather than the opposition of the first 20 years.

The problem with the increase is that from a current spending budget, we reduced nutrition by $400 million next year. I am sure that wasn't your recommendation and I am concerned about that. I hope you share that concern about the $400 million reduction for nutrition programs for the youth.

Secretary SULLIVAN. Yes. I want to look at that. I look at the Head Start program as a comprehensive program that provides not only educational programs to disadvantaged children, but health and nutrition benefits as well so I would be very concerned about reductions in those benefits.

Mr. VENTO. Sometimes we talk about the good things in education without looking at the other side which is affecting nutrition cuts.

I work on the housing subcommittee, and we work on a lot of housing issues. One is the congregate services types of programs that take place in public housing. For example, I know you are very interested in trying to reach out with services. But in the recommendations under HUD, they are actually asking to eliminate programs dealing with congregate services for individuals that are in public housing.

Do you think that that is a good idea or would you have concerns or questions about that?

Secretary SULLIVAN. I, frankly, don't have enough information about that program in light of all of the programs in HUD to really comment on that. I do know that Secretary Kemp has had, as a high priority, increasing home ownership among public housing tenants. So whether or not this is a result of a shift in trying to promote that goal, I don't know.

Mr. VENTO. Congregate Services is a small program and it is obviously designed to try and provide various services to people in public housing. There have been a number of pilot programs around. I think it is a question of the left hand not knowing what the right hand is doing. I wanted to call it to your attention and see if generally we could get a little more focus.

After many years of public service, I am at an advantage in knowing some of the programs and this is an opportunity to share some of the concerns that specifically deal with the elderly programs.

Dr. Sullivan, can you explain or testify to what the cost is of health care as a percentage basis for Medicare recipients today? In

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