million for the development of pharmacology and toxicology research resources. RESEARCH CAREER DEVELOPMENT AWARDS The increase of $3.7 million requested for fellowships is primarily intended for research career development awards. These awards are making a significant contribution to the continued strengthening of our national capability to conduct sophisticated medical research. They are an important element in laying solid foundations for future research progress. I am convinced that it is most important to continue to expand this program at a modest but steady pace. An additional $6 million for training grants-representing an increase of about 3 percent-is needed to meet the normal rise in costs of these essential programs. MENTAL HEALTH STAFFING GRANTS A substantial increase of $15 million is requested for mental health staffing grants, bringing the total budgeted for this program to just under $34 million. These grants are making a major contribution to proving the quality of care available to patients with mental diserders in every part of the United States. DIRECT OPERATIONS OF NIH The amount requested for the direct operations of NIH is $237.5 million, which is $17.5 million more than the comparable amount available in fiscal year 1966. Approximately $3.5 million of this increase is for mandatory items. This leaves some $14 million for a number of Significant program developments. Of this amount more than $4 milEon is for the direct research activities of the Institutes. These increases will permit increased emphasis in surgery and cell biology in the Cancer Institute; fuller utilization of the anaerobic (oxygen-free) laboratory in the Heart Institute; and the strengthening of research programs in the Child Health Institute in reproductive biology, endoerinology, and ecology in the behavioral research laboratories made available to the Child Health Institute by the National Naval Medical Center. COLLABORATIVE PROGRAMS Increases totaling $2.2 million are provided for the collaborative programs. These funds will be used for such important research undertakings as the development of an improved artificial kidney in The Arthritis Institute and for developmental research and production of prototype rubella vaccines and for transplantation immunology and tissue-typing studies in the Allergy Institute. UNITED STATES-JAPAN COOPERATIVE MEDICAL SCIENCE PROGRAM Increases for the Office of International Research, which are induded in the $14 million program increase for direct operations, indude $2 million for the United States-Japan cooperative medical science program. As you know, this program was initiated by President Johnson and Prime Minister Sato as a result of their meeting in January of last year. Details of the program were worked out at a meeting in Tokyo the American and Japanese committees in April and at a joint co ference in Hawaii last October. It was agreed that the progra would be mainly focused on research on cholera, leprosy, tuberculos parasitic diseases, virus diseases, and nutritional problems. Ea country will finance the research of its own scientists. In addition the funds requested for this program in the General research and ser ices estimate, a number of related grant projects will be financed the Allergy and the Arthritis Institutes. The total NIH contributi to this joint program is expected to be almost $9 million. Although the increases over the current appropriations provid by these estimates are modest, the total request for $1.3 billion rep sents a very substantial national investment in biomedical resear The first budget request for which I testified after I became the Dire tor of NIH in August 1955 was for $126 million for fiscal year 195 The budget request to which I speak today is more than 10 times th amount. With prudent management--and a measure of flexibility the allocation of available funds-it will maintain the extensive NI operating programs at satisfactorily productive levels and will ena us to move forward at a reasonable pace with the new regional medic programs. PRESIDENT'S MESSAGE ON HEALTH AND EDUCATION Mr. FOGARTY. I was just looking for the message that the Pre dent sent us on health and education. It is on the front page of t New York Times this morning. President Johnson offers his health plan. Far-reaching programs asks f care and education. The budget this year does not look that way to me. President Johnson sent to Congress today a potentially far-reaching p gram to improve the Nation's health care services and recommendations to pand aid to education. If Mr. Johnson gets everything he seeks in his message, it will affect a v array of people-from preschool children to alcoholics, from elementary, hi school, and college students to the elderly sick. HISTORY OF NIH BUDGET REQUEST How does that statement compare with the budget for the Institu of Health? This is one of the most conservative budgets I have se The Institutes of Health asked for $1,611,624,000. You come o with $1,302,764,000, a cut of $308,860,000. This is the biggest cut I have seen. Has there been any such severe cut since you have been at the Ins tutes of Health? This is the biggest cut that I can remember. Dr. SHANNON. I would say this is the largest cut which has be made by the Bureau of the Budget in relation to a department request. Mr. FOGARTY. The Department cut you back some and then t Bureau of the Budget cut the Department's request $260 millio Give us the full story, including what you asked of the Public Heal Service. Dr. SHANNON. I can give you four figures. The NIH estimate to e Public Health Service was $1,657,856,000. The Public Health estimate to HEW was $1,611,624,000. The HEW estimate to the Bureau of the Budget was $1,562,774,000. The President's budget before you is $1,302,764,000. This includes the request for construction as well as for operations. Mr. FOGARTY. This is the deepest cut I have ever seen. They have et more money out of the Institutes of Health this year than any year since they have been in being. Dr. SHANNON. That is correct. Mr. FOGARTY. Getting back to what appears in the New York Times this morning concerning the President's message: MODERNIZING URBAN HOSPITALS One major new program is designed to encourage the modernization of obsolete Expitals in urban areas through Federal loans and grants. Under it, $5 million would be set aside in the year beginning July 1 to underwrite the costs of planning to update aging hospitals. In the following year the Government would guarantee 90 percent of the value of mortgages of up to $975 million for hospital renovation and, over 19 years, would pay 40 percent of the amount guaranteed, or $351 million. Again in the following year costs of additional renovation programs to an as yet undecided amount would be underwritten on the same basis by the Goverament. That is not under the National Institutes of Health, but perhaps you could comment on this, Dr. Stewart. Dr. STEWART. This is a new program which will be a legislative proposal. Mr. FOGARTY. Something in addition? Dr. STEWART. Something in addition. Mr. FOGARTY. You will not be coming back next year and saying: We have this legislation now so you don't need so much money for HillBurton. Dr. STEWART. No, sir, they have two different purposes. Mr. FOGARTY. I ask because this kind of argument is being used as the excuse for cutting back on education programs, like the federally impacted area program. Dr. STEWART. This is a different purpose. Mr. FOGARTY. The purpose is not any different than the difference between these education programs, but I am glad to get your answer. I hope you don't have to eat those words next year. COMPREHENSIVE PUBLIC HEALTH PLANNING A third major new program recommended by the President is aimed at developing comprehensive public health planning and services in States and communities. Mr. Johnson noted that the Federal Government now offers grants to States for programs dealing with specific diseases. This leads to an unnecessarily rigid and compartmentalized approach to health problems. I don't agree with that at all. He proposed first that Federal grants be made to States to plan better use of manpower, facilities, and financial resources to provide comprehensive public health services. These would amount to $10 million in the year beginning July 1. In the following fiscal year, Mr. Johnson recommended that there should b program to begin a new system of matching grants for comprehensive pu health services. Then he goes on. TRAINING IN ALLIED HEALTH PROFESSIONS Mr. Johnson's fourth recommendation for a new program was to prov grants for training in the allied health professions, which, he said, are critica understaffed. These include medical technologists, biomedical engineers, der hygienists, and other college trained health workers. The grants, totaling $8 million in the coming fiscal year, would go to struction and improvement of training facilities. They would also prov student fellowships for advanced training and stimulate institutions to deve new types of health personnel. CENTER FOR RESEARCH ON ALCOHOLISM Mr. Johnson said he had instructed that a center for research on the ca prevention, control, and treatment of alcoholism be set up in the Public Hea Service. Then he goes to education. Did you write this message for him, Dr. Stewart? Dr. STEWART. No, I have a few words which remained in there a f my contributions. I took part in developing the proposals wh are behind the legislative proposals which go with the message. 1 actual writing of the message was somebody else's responsibili Therefore, I fully support what the legislative proposals are. BUDGET BUREAU REDUCTIONS SINCE 1960 Mr. FOGARTY. Certainly this budget does not reflect an expans of activities in the field of health. Do you know what the Bureau of the Budget cut the Institutes Health in 1960? It was $15 million. In 1961 it was $10 million. 1962 it was $58 million. In 1963 it was $75 million. In 1964 it only $24 million. In 1965 it was $64 million. In 1966 only million was cut. For 1967 the cut is $260 million compared to $20 million last ye This doesn't fit in with this message at all. Here the Bureau of the Budget cut the Institutes of Health times more than last year. How does this fit in? Dr. STEWART. Mr. Chairman, the President indicated in his m sage the total increase for the Department of Health is just und $1 billion. Within that, the increase for the Public Health Serv is $274 million approximately. In the allocation of these increases among the programs, hig] priority was put on the development of manpower, resources, h pitals, and these areas in order to be responsive to the constrai which are put on because of the conflict in South Vietnam and inflationary tendencies. Mr. FOGARTY. That is not a very good answer. I suppose you ha to give some kind of answer like that. This is by far the biggest cut ever made in the Institutes of Hea budget request. The Secretary has been quoted as saying that the whole Department of HEW the Institutes of Health and the cial Security Administration stand out as models of good operation. However, between his action and the action of the Bureau of the Budget, the Institutes of Health this year have been cut $308 million below what they asked for. Dr. STEWART. Yes, sir. Mr. FOGARTY. It is about a 20-percent cut. Dr. STEWART. Yes, sir. NIH-PHS LIAISON ON LEGISLATIVE PROPOSALS AND REORGANIZATION Mr. FOGARTY. Dr. Shannon, what part of the message did you write? Dr. SHANNON. None, sir. Mr. FOGARTY. None? Dr. SHANNON. No, sir. Mr. FOGARTY. I thought, Dr. Stewart, that you said you cleared everything with Dr. Shannon, didn't you?' Dr. STEWART. I certainly did. Mr. FOGARTY. How much of this did you clear with him? Dr. STEWART. I will tell you, I cleared with Dr. Shannon all that I had a part insofar as the health message goes. Mr. FOGARTY. Has he agreed to your plan on the reorganization? Dr. STEWART. I cannot say at the present moment we are in full agreement, no. Dr. Shannon met with the Corson group several times. They went out to NIH, some of the members did. We have now developed a plan and have a meeting scheduled for Saturday to discuss it with the bureau chiefs of the Public Health Service so we can know which parts we all agree on and which parts we must work out. Mr. FOGARTY. I think you said that last week. Dr. STEWART. Yes. Mr. FOGARTY. Does that mean you will not recommend anything to Congress that the Institutes of Health do not agree with? Dr. STEWART. Not at all. Mr. FOGARTY. I took it that is what you meant when you said you would work out the parts that were not agreed on. Dr. STEWART. We will recommend to Congress what I recommend and what the Secretary supports. It is our great wish that we are all together on this. Mr. FOGARTY. Now you are saying they will take it whether they agree or not. Dr. STEWART. I can say that with some comfort, I think, Mr. Fogarty, because I think we are awfully close to an agreement. I don't even know we are in disagrement. We will explore that in depth. ROLE OF NIH DIRECTOR IN REORGANIZATION PLANNING Mr. FOGARTY. Dr. Shannon, what part have you played in this proposed reorganization? Spell it out because this will be controversial. Dr. SHANNON. We met with the Corson Committee on two occasions. The first occasion was to give them a general briefing on NIH and its relationships with various segments of the Public Health Service and with various segments of other departments of Government. Some 4 or 6 weeks later, at the time Mr. Corson's committee had reached some tentative conclusions, we met with them the second time |