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approved for FY 1991, a $20 million Director's
Discretionary Fund, and authority for the Director, NIH
to transfer up to one-percent of each Institute's
budget for the purpose of responding to biomedical
research emergencies. The FY 1992 request again seeks
both authorities. In addition, Congress authorized
establishment of a 350 member Senior Biomedical
Research Service which will allow senior scientists to
be compensated at a rate not to exceed Level I of the
Executive Schedule ($138,900). Congress also approved
new pay levels for the Senior Executive Service which
now range from $87,000 to $108,300.

Finally, on March 15, 1991 I wrote to the Director of the Office of Personnel Management to recommend that the President establish the position of Director of NIH at Level IV of the Executive Schedule and that the position be designated as one of the 30 critical Executive Schedule positions (as authorized by 5 U.S.C. Sectiori 5377). The latter designation would allow the NIH Director to be paid at the rate for Executive Level I.

Question. Do additional enhancements need to be made for this position?

Answer. Over the past year we have made great efforts to rejuvenate the prestige of the NIH Director. During this time the position has also received several new authorities which with out a doubt will enhance the Director's ability to manage and lead the NIH. Once confirmed, I will meet with Dr. Healy to discuss the changes made to the Director's position and, if necessary, consider what further changes might be made. I do expect to meet with Dr. Healy on a monthly basis.

DELAYED OBLIGATIONS

Question. Mr. Secretary. the Ad inistration's request for NIH increases approximately $500 millon over last year, although $400 million of that would not become available until September 19, 1992, with just twelve days of the fiscal year remaining. There are similar situations in your budget for the Social Security Administration, the Low-Income Home Energy Assistance program and the Child Care program. Several of the agencies have suggested to us that this is going to create operational difficulties. While I understand this is being done to constrain outlays do you feel this is a desirable practice from a management or operational perspective?

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Answer. We do not believe that delaying obligations will contribute to any significant operational problems. Work load associated with the awards that will be delayed can be accomplished well in advance of the actual signing of the award. While such a practice may not be the most desirable, I believe it

is a reasonable action in light of the constraints imposed by the Budget Enforcement Act.

COST MANAGEMENT PLAN

Question. Mr. Secretary, as you know, both the House and the Senate last year asked the NIH to develop a cost management plan in an effort to bring some stability and predictability to NIH funding patterns. This draft plan was submitted to us on January 15 and has a number of key features including: 1) establishing 4 years as the average length of research grants; 2) requiring that the average cost increases for research grants be held to the biomedical price index; 3) funding the number of training slots recommended by the National Academy of Sciences; 4) abolishing the use of the concept of approving grant applications; and 5) increasing funding for other mechanisms to reflect inflationary costs.

Do you

Mr. Secretary, we have yet to receive the final cost management plan from the department. support the draft cost management plan that has been prepared by NIH?

Answer. The Public Health Service submitted the NIH cost management plan to my office on Friday, March 15, 1991. We are in the process of reviewing the document, and therefore I can not comment in detail on the proposal. I do agree in principle with the five "key features" of the plan that you mentioned, however, I wish to examine how NIH specifically proposes to address these issues. I also must caution that the availability of resources may not be sufficient to accomplish all of the objectives of the plan immediately, but will take some time.

LOW-INCOME HOME ENERGY ASSISTANCE

Question. Mr. Secretary, you originally proposed cutting the Low-Income Home Energy Assistance program by $1,142,000,000, leaving only $468,000,000 for nine Northeastern States. Apparently, the administration rejected this proposal revising the fiscal 1992 request to $1,025,000,000. This is still a whopping $585,000,000 cutback, which would force States to eliminate two millon people from the program.

Can you tell us why you originally proposed eliminating this program in all but the Northeast, which would have left Iowa and many other "cold" States with no LIHEAP funds?

Answer. We are faced with making difficult budgetary decisions, and with regard to LIHEAP we believe that the Federal government should provide benefits only in circumstances of exceptional need. Many options were considered for the LIHEAP program,

which was created in the early 1980's as a measure to supplement other sources of energy assistance.

The proposal referred to was based upon the fact that the Northeast region is most dependent upon home heating oil, which is subject to a volatile international market and therefore its price has been less stable than the prices of natural gas and electricity Nationwide only 12% of the population use heating oil, but in the Northeast 40% of the population (and 44% of the low-income population) rely on heating oil as the primary source of energy.

Low-income residents of Northeast States are more than five times more likely to use fuel oil as their main source of heating fuel (43.8%) than are low-income residents of the North Central (8.1%), South (4.7%), and West (0.5%) States. Even when liquefied petroleum gas and kerosene are included as fuel oil, low-income residents of the Northeast are more than twice as likely to use fuel oil as the main source of heating fuel.

This proposal was but one option that we considered regarding the LIHEAP program, but it was not the preferred option that is included in the President's budget.

Question. with more than 17 million people eligible for LIHEAP and fewer than six million being served, shouldn't we be increasing, not cutting, this program?

(BACKGROUND: The average LIHEAP benefit per household is less than $200 annually, covering roughly half of winter heating costs; in North Central States, however, LIHEAP benefits offset only 41 percent of heating costs, less than any other region, including New England.)

Answer. Energy assistance programs were created in the early 1970's as one of the Federal responses to the sharp increases in energy prices and the consequent immediate effect on low income households. LIHEAP, created in the early 1980's, was established to supplement other sources of assistance, not to supplant them. Many other Federal, state, and private sources supply funds for energy needs. with the overall budgetary limitations, we have had to make many priority determinations, and it is our best judgement that special energy assistance should be focused toward emergency crisis situations, and should be funded at a level of $1.025 billion, approximately 37% less than in FY 1991. The fact that many States continue to transfer LIHEAP funds to other block grants (28 States transferred $52 million in 1990) suggests that a reduction is warranted. In addition, The President's Budget takes into account the fact that the home energy burdens as a percent of household income for low-income households has declined between FY 1981 and 1989, from 8.0 percent to 5.4 percent, indicating a reduced need

for LIHEAP in offsetting home energy costs as a percent of household income.

BLOCK GRANT PROPOSAL

Question. A number of your programs are included in the OMB list of potential activities to be consolidated in to a massive block grant: Low-income Home Energy Assistance; the Social Services Block Grant; and state welfare administrative expenses for Medicaid and AFDC. Other programs include education and housing, totalling more than $20 billion.

Can you explain exactly how this proposal would work?

Answer. The Administration has included on the list of possible programs which could be turned over to States approximately $9.7 billion in HHS programs. These include the Social Services Block Grant, the Low Income Home Energy Assistance program, and administrative costs for the AFDC and Medicaid. This approach would reduce Federal overhead while allowing States greater flexibility to manage a pool of resources. Decision making would be moved closer to those directly affected by these programs. Finally, States would have greater opportunities to try innovative new approaches to current problems.

As to the specifics of how this proposal would work, Congress must authorize each program chosen for turnover in consultation with the Administration and the Governors. After the actual selections are made, the current funding distribution of such programs would be calculated for each State. The Administration would then propose to replace these programs with a single consolidated block grant to the States. The formula for this new block grant would approximate the same distribution to individual States as they currently receive under the existing program structure.

Question. Would there be any reporting requirements to find out if States decided to divert fuel assistance funds for education or housing?

Answer. The compelling arguments that make this proposal attractive to both the States and the Federal government is that it would allow States to manage a pool of financial resources more flexibly, move power and decision-making closer to the people, and reinforce the appreciation and encouragement of "States as Laboratories." Imposing reporting requirements on States would directly conflict with the goal of allowing States to manage more flexibly with less administrative and bureaucratic restrictions from the Federal government.

Question. Would HUD administer it, like the old "revenue sharing" program?

Answer. It has not yet been determined who would administer the new block grant. We expect Congress and Governors to be actively involved in working out the details of this proposal.

SUBSTANCE ABUSE FUNDING

Question. Your Department released a report last November on the economic costs of alcohol and drug abuse (for fiscal year 1985). That report estimates that alcohol abuse cost this Nation $86 billion in 1988, and drug abuse cost $58 billion. About $42 billion of the drug abuse cost is associated with law enforcement.

In 1985, the most recent year for which we have data, alcohol abuse caused 94,768 deaths. Drug abuse caused 6,118 deaths. In terms of lost productivity, alcohol abuse cost $24 billion, drug abuse $2.6 billion.

Alcohol was then and remains today the Nation's number one drug of abuse and top public health problem. Yet the budget proposes not a single penny more for the Alcohol, Drug Abuse, and Mental Health Services Block Grant than we provided in FY 1991.

Does this budget proposal reflect your original budget submission?

Answer. The Department requested $1.4 billion for the Alcohol, Drug Abuse and Mental Health Services Block Grant in its OMB submission.

Question. Do you support additional measures to combat alcohol abuse, such as an increase in excise taxes?

Answer. The Public Health Service's budget includes $988 million for alcohol efforts in FY 1992. within this level we are seeking an 8.1 percent increase for research on alcoholism and alcohol abuse. In addition, Medicaid and Medicare provide funding for alcoholism and alcohol abuse treatment. I support the alcohol excise tax that was agreed upon during last year's budget summit.

Question. Given that alcohol abuse is so much more prevalent and so much more costly to society, do you think the National Drug Strategy should address this issues?

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Answer. The National Drug Strategy provides a cohesive strategy for attacking illegal drug usage including the use of alcohol for those under the age of 21. While the National Drug Strategy does not address alcohol, the Department is committed to tackling this public health problem. All of the prevention programs operated by the office of Substance Abuse Prevention

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