July 2005

The House of Representatives completed action on the FY 2006 spending bill for the Department of Health and Human Services (HHS) on June 24, 2005. The only good news for public health is that the result was not as bad as it could have been.

Standing firm by the total limit on discretionary spending proposed by the Administration, the House decreased HHS funding (excluding mandatory programs such as Medicare and Medicaid) by about one percent. This was the first time that Congress has considered an actual cut to HHS funding, although level funding for many programs over many years has caused reductions in service due to the effects of inflation.

The Administration had proposed to eliminate the Preventive Health and Health Services block grant program. The House added $100 million to continue it. This represents a cut of $31 million over the amount appropriated for FY 2005, but the actual cut is about $18.5 million, because the Administration has already reprogrammed a little over $12 million from the block grant to pay for influenza vaccine. NACCHO joined with other public health organizations to combat the elimination of the program, and a restoration of most of the funds has to be considered a victory in the context of this year's unprecedented tight budget. It is clear that the House of Representatives heard the voices of all the NACCHO members, more than 700, who took the time to write about their concern.

The Administration had also proposed a reduction of $130 million, or about 14 percent in funding for state and local health department bioterrorism preparedness. The House instead reduced that program by about $67 million, to $790 million. The Committee also increased funding for the Strategic National Stockpile by about half what the Administration had requested, adding $63 million for a total of $530 million. NACCHO will continue to press hard for full restoration of the health department preparedness funding by the Senate.

The House cut a total of about 5 percent from CDC. The cuts in these two programs for state and local health departments were the largest, except for a whopping cut of 89 percent in CDC's buildings and facilities budget. The CDC budget for health promotion and the VERB campaign was also cut.

The House took many other dramatic steps to stay within its budget caps. The total budget for the Health Resources and Services Administration (HRSA) is down 6 percent, including a 58 percent reduction in rural health programs. The House eliminated funding for non-nursing health professions education programs, including Area Health Education Centers. It increased the community health centers program by $100 million, one-third of the $300 million requested by the Administration. It cut the Maternal and Child Health block grant program by $24 million, or three percent. The House limited the National Institutes of Health, long accustomed to double-digit percentage increases, to an increase of less than one percent.

The House added one large program to HHS pursuant to the Administration's request. It included $890 million to implement the new Medicare prescription drug benefit. Although Medicare will pay for the benefit, large new administrative costs must be paid by discretionary funds, which puts even greater pressure on all other HHS programs.

The Administration issued a statement supporting the House bill, while asking for modifications to conform to its original budget. The following verbatim quote is from the Administration's June 23, 2005 statement, which can be found in its entirety at

http://www.whitehouse.gov/omb/legislative/sap/109-1/hr3010sap-h.pdf

"The Administration would like to continue to work with the Congress to provide additional funding for its highest priority health and human services initiatives, which could be financed by redirecting additional funds from low-priority programs such as the Preventive Health Block Grant, the Community Services Block Grant, and other programs that have failed to achieve results."

What Happens Next

The Senate Appropriations Committee is scheduled to act on the Senate version of HHS appropriations in mid-July. The Committee has an even tighter budget cap for HHS and the other agencies included in the bill (Department of Labor, Department of Education). However, at this writing, the Committee is reportedly exploring means to work around that cap. When and if the bill is passed on the Senate floor, the measure will go to a House-Senate conference, most likely in September after the month-long August recess. Both House and Senate leaderships have vowed to pass all appropriations bills in time for the new fiscal year, beginning October 1, 2005. However, the current truce between the

parties in the Senate over the filibuster rule and judicial nominations is fragile, and it is not possible to discount the possibility that larger conflicts affecting action on funding bills will arise.

The complete report of the House Appropriations Committee, which provides details of the actions the House took in passing the HHS appropriations bill, can be found by clicking on the link to "Appropriations Legislation" on the web site http://thomas.loc.gov