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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?

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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?

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

within the Alcohol, Drug Abuse and Mental Health Administration incorporate alcohol as well as drug prevention. Most drug abusers are poly-drug abusers and in many cases alcohol is one of the many drugs they are abusing. Through the Office of Treatment Improvement we are working toward providing comprehensive drug treatment which includes addressing alcohol abuse.

Question. Is it your intention that the $99 million proposed in the ADAMHA budget for "capacity expansion" would be directed to alcohol, drugs, or both?

Answer. The Capacity Expansion program will expand the availability of comprehensive drug treatment services. However, as most drug abusers are poly-drug abusers, their treatment will address all the substances they abuse, including alcohol as appropriate.

Question. I your view, what would it cost to make significant inroads in expanding the capacity to treat alcohol and other drug problems?

Answer. Significant inroads to treat drug and alcohol abuse can only be achieved through a partnership between Federal and State governments, communities and the private sector. Since 1989, the Department's budget for drug treatment has nearly doubled, and I believe that the new $99 million Capacity Expansion Program in my FY 1992 budget is a significant effort in this direction.

NIH CONSTRUCTION

Question. Mr. Secretary, as you recall, last year the conference committee provided $15 million for extramural construction, with report language in support of completion of the mouse production facility at the Jackson Laboratory. I understand that you have agreed to issue a competitive request for applications for a mouse production facility for up to $10 million. Is this correct?

Answer. After consultation with me and other senior HHS staff, the Acting Director of NIH decided to · issue a Request for Applications for construction of a

large-scale mouse production and mutant characterization facility. There will be an open competition for up to 75 percent of the allowable costs (not to exceed $10 million) of a requested project.

Question. Mr. Secretary, buried deep within the budget for the NIH is a request of $13.4 million for phase I design work for a 15 year upgrade and reconstruction of the Warren G. Magnuson Clinical Center. This project is expected to cost over $800 million and may well approach $1 billion by the time

the project is completed. Mr. Secretary, this is probably the biggest single camel's nose under our appropriations subcommittee tent this year. have you reviewed the need for this very expensive and significant upgrade of the clinical center?

Answer. NIH has sought the assistance of the Army Corps of Engineers to evaluate the NIH facility needs in general and the clinical center specifically. Following completion of this evaluation a final determination of how to proceed with respect to modernizing the clinical center will be made. But please keep in mind that the clinical Center is over forty years old. It was designed and built in a different technological age, yet still remains the largest research hospital in the world. Whether we improve the current facility or replace it, the cost will be significant.

VACCINE INJURY COMPENSATION

Question. Apparently, many more claims petitions than anticipated have been filed against the National Vaccine Injury Compensation Fund. The estimates for paying these claims run as high as $3 billion.

How many claims have been filed for the preOctober 1, 1988, vaccinations, and when do you anticipate these claims will be settled?

Answer. A total of 4,047 pre-October 1, 1988 vaccine injury claims have been filed. The recent Vaccine and Immunization Amendments of 1990 extended the time the claims Court has to review the pre-October claims by 180 days, allowing for a total of 420 days.

Question. What is the history of payment on claims so far, and what are the projected costs for payment of the new claims?

Answer. As of March 12, 1991, 149 pre-October 1, 1988 cases have received judgements for compensation. The total amounts awarded for these claims has been $93.9 million. Estimates for the remaining claims are not available at this time. The Department currently is reviewing the claims to determine a sound estimate.

Question. What is the Administration's position on settling these claims: will the Department be submitting a supplemental?

Answer. The Department is currently working to derive a sound estimate on the cost of the preOctober 1, 1988 vaccine injury claims. Once this estimate is derived, we will review options for handling the claims.

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