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DEPARTMENTS OF LABOR AND HEALTH, EDUCATION,

AND WELFARE APPROPRIATIONS FOR 1972

HEARINGS

BEFORE A

SUBCOMMITTEE OF THE
COMMITTEE ON APPROPRIATIONS
HOUSE OF REPRESENTATIVES

NINETY-SECOND CONGRESS

FIRST SESSION

SUBCOMMITTEE ON DEPARTMENTS OF LABOR AND HEALTH,
EDUCATION, AND WELFARE AND RELATED AGENCIES

DANIEL J. FLOOD, Pennsylvania, Chairman
WILLIAM H. NATCHER, Kentucky

ROBERT H. MICHEL, Illinois
XEAL SMITH, Iowa

GARNER E. SHRIVER, Kansas
W. R. HULL, JR, Missouri

CHARLOTTE T. REID, Illinois
BOB CASEY, Texas

SILVIO O. CONTE, Massachusetts
EDWARD J. PATTEN, New Jersey

ROBERT M. MOYER and HENRY A. NĐIL, Jr., Staj Assistants

PART 1

UNIT
Statement of the Secretary of Hearth, Education, and Welfare

Overview of

972 Budget

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Printed for the use of the Committee on Appropriations

U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON : 1971

57-454 O

COMMITTEE ON APPROPRIATIONS

GEORGE H. MAHON, Texas, Chairman JAMIE L. WHITTEN, Mississippi

FRANK T. BOW, Ohio GEORGE W. ANDREWS, Alabama

CHARLES R. JONAS, North Carolina JOHN J. ROONEY, New York

ELFORD A. CEDERBERG, Michigan ROBERT L. F. SIKES, Florida

JOHN J. RHODES, Arizona OTTO E. PASSMAN, Louisiana

WILLIAM E. MINSHALL, Obio JOE L. EVINS, Tennessee

ROBERT H. MICHEL, Illinois EDWARD P. BOLAND, Massachusetts SILVIO O. CONTE, Massachusetts WILLIAM H. NATCHER, Kentucky

GLENN R. DAVIS, Wisconsin DANIEL J. FLOOD, Pennsylvania

HOWARD W. ROBISON, New York TOM STEED, Oklahoma

GARNER E. SHRIVER, Kansas GEORGE E. SHIPLEY, Illinois

JOSEPH M. MCDADE, Pennsylvania JOHN M. SLACK, West Virginia

MARK ANDREWS, North Dakota JOHN J. FLYNT, JR., Georgia

LOUIS C. WYMAN, New Hampshire NEAL SMITH, Iowa

BURT L. TALCOTT, California ROBERT N. GIAIMO, Connecticut

CHARLOTTE T. REID, Illinois JULIA BUTLER HANSEN, Washington DONALD W. RIEGLE, JR., Michigan JOSEPH P. ADDABBO, New York

WENDELL WYATT, Oregon JOHN J. MCFALL, California

JACK EDWARDS, Alabama W.R. HULL, JR., Missouri

DEL CLAWSON, Callfornia EDWARD J. PATTEN, New Jersey

WILLIAM J. SCHERLE, Iowa CLARENCE D. LONG, Maryland

ROBERT C. MCEWEN, New York
SIDNEY R. YATES, Illinois

JOHN T. MYERS, Indiana
BOB CASEY, Texas
DAVID PRYOR, Arkansas
FRANK E. EVANS, Colorado
DAVID R. OBEY, Wisconsin
EDWARD R. ROYBAL, California
WILLIAM D, HATHAWAY, Maine
NICK GALIFIANAKIS, North Carolina
LOUIS STOKES, Ohio
J. EDWARD ROUSH, Indiana
K. GUNN MCKAY, Utah

Paul M. WILSON, Clerk and Staj Director

STAFF ASSISTANTS
WILLIAM GERALD BOLING MILTON B. MEREDITH

JOHN G. PLASHAL
SAMUEL W. CROSBY
GARY C. MICHALAK

SAMUEL R. PRESTON
GEORGE E. EVANS
DEMPSEY B. MIZELLE

DONALD E. RICHBOURG
ROBERT B. FOSTER
ENID MORRISON

EARL C. SILSBY
JOHN M. GARRITY
ROBERT M. MOYER

G. HOMER SKARIN
AUBREY A. GUNNELS
PETER J, MURPHY, Jr.

CHARLES W. SNODGRASS
JAY B, HOWE
HENRY A. NEIL, Jr.

HUNTER L. SPILLAN THOMAS J. KINGFIELD BYRON S. NIELSON

GEORGE A. URIAN KEITH F. MAINLAND

ROBERT C. NICHOLAS III EUGENE B. WILHELM

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DEPARTMENT OF HEALTH, EDUCATION, AND WEL

FARE APPROPRIATIONS FOR FISCAL YEAR 1972

WEDNESDAY, FEBRUARY 17, 1971.

OVERVIEW OF 1972 BUDGET

WITNESSES

HON. ELLIOT L. RICHARDSON, SECRETARY
JAMES B. CARDWELL, ASSISTANT SECRETARY, COMPTROLLER
LEWIS H. BUTLER, ASSISTANT SECRETARY FOR PLANNING AND

EVALUATION
CHARLES MILLER, ACTING DEPUTY ASSISTANT SECRETARY,

BUDGET
Mr. FLOOD. The committee will come to order.

We have with us Mr. James B. Cardwell, the Assistant Secretary, Comptroller for the Department of Health, Education, and Welfare, and he is accompanied by Mr. Lewis H. Butler, Assistant Secretary for Plannning and Evaluation, whom we have seen here before, and Charles Miller, the Acting Deputy Assistant Secretary for Budget, whom we also have seen many times.

The first part of the hearing will be the regular chart presentation generally made to give us an overall picture of the Department's budget. We usually listen and don't consider this an examination period unless there is some one item here and there that a Member wishes to have clarified.

After the chart presentation we will hear, and of course question, the Secretary.

Is this your first appearance, Mr. Cardwell, in your new capacity ? Mr. CARDWELL. Yes; it is, sir.

Mr. Flood. We have known you long and favorably and well, and we think the powers that be had excellent judgment in elevating you to our friend Kelly's spot.

There is no doubt in our minds, or Kelly's either, that you will do the job adequately and well. So you can take the curtain up and prove I am right. Mr. CARDWELL. I will give it a try.

BIOGRAPHICAL SKETCH OF MR. JAMES BRUCE CARDWELL Mr. Flood. Before you do that we would want to have you place a biographical sketch at this point in the record.

Mr. CARDWELL. I am James B. Cardwell. I have worked for the Federal Government since 1942. I started in general administration in the Public Housing Administration, in fact in its predecessor agency, the old U.S. Housing Authority.

I had my first budget experience before the Independent Offices Appropriations Subcommittee.

I came to the Department of Health, Education, and Welfare in 1955, where I worked on the vocational rehabilitation program for slightly under 2 years. Between the period 1957 and 1959 I worked for the Office of the Secretary as the budget analyst.

I then went to the Food and Drug Administration as Assistant Commissioner for Administration where I worked for 8 years. I returned to the Office of the Secretary as departmental budget officer in 1967, to work for John Gardner when he was Secretary. I held that job until last August when Jim Kelly retired and became vice president for administration of Georgetown,

I have worked for Secretary Richardson since he took office last August. As the chairman has said, I have appeared before this group many, many times. I have learned a lot and I hope to learn a great deal

more.

COMPTROLLER'S OVERVIEW OF THE BUDGET

We would like to spend the next half hour giving you a quick overview of the budget.

We thought it would be helpful, and we have done this previously as you remember, to give you a breakdown against which you might later ask questions and deal with the witnesses as they come before you.

Mr. Flood. You are going to talk about the entire HEW budget!

Mr. CALDWELL. Yes, sir; this presentation deals with the entire budget.

We recognize that certain aspects of that budget do not come before this subcommittee. For example, most recently the Food and Drug Administration portion was shifted to the Subcommittee on Agriculture and Environmental and Consumer Protection.

FEDERAL AND TRUST FUND TOTALS

First we thought we would look at the total budget. In terms of Federal funds it adds up to $25.9 billion for HEW, an increase of $3.5 billion.

In terms of outlays, $24 billion, an increase of $2.6 billion.

HEW BUDGET IN BRIEF
(In billions)

1971 1972 Change FEDERAL FUNDS:

Budget Authority (Appropriations) $22.4 #25.9 $+3.5
Outlays

21.4 24.0 +2.6 TRUST FUNDS: Budget Authority (Receipts)

47.3 55.4 +8.1 Outlays

43.2 47.3

+4.1 INTERFUND ADJUSTMENT

-2.6 -2.5 +1

TOTAL:

Budget Authority

67.1 78.8 +11.7 Outlays

62.0 68.8 +6.8 Trust funds, of course, are the Social Security Administration Trust Funds. They account for the largest single share of the HEW budget, $55.4 billion in budget authority or receipts. This is an increase of $8.1 billion. Also, 1972 outlays are estimated at $47.3 billion, an increase of $4.1 billion.

The interfund adjustment line represents three items: (1) general fund payments into the trust fund for certain members of the military service who are eligible to receive benefits but did not pay into the fund.

(2) General fund payments for persons over 72 who did not pay in but are eligible for benefits because of the Prouty amendment.

(3) General fund payments for medicare benefits. People over age 65 who are not eligible for retirement benefits are eligible for medicare. Also the monthly premium payments for supplementary medical insurance are matched by payments from the general fund.

I might just mention that this $78.8 billion in budget authority on the consolidated budget basis puts HEW ahead of Defense for the first time.

Of course, it is only fair to point out that it would not be true if it were not for this large block of trust fund receipts.

Overall, HEW's share of the total Federal budget goes up a little bit. We were about 29 percent in 1971. We go up to about 30 percent in 1972.

OPERATING AGENCY BUDGETS

This chart is a rundown of the budget by operating agencies in terms of both budget authority and outlays.

As I mentioned previously, the Food and Drug Administration budget which adds up to about $95 million will no longer be considered

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