November 2005 Edition 2

Katrina and Public Health Funding

“Long after this current budget challenge, our challenges with mandatory spending will still exist. The baby boomers will still retire, medical costs will still skyrocket, and our largest government programs will still grow far beyond our means to sustain them. If we fail to get a hold of this spending – or simply throw up our hands and say it's too hard – as many have certainly suggested – this spending, which currently takes up over half the federal budget, and is quickly growing – will eventually crowd out every other priority – education, agriculture, science, the environment, you name it – and will severely limit our ability to cover our basic costs – let alone respond to any future disasters.”  Representative Jim Nussle (RIA), Chair, House Budget Committee, Oct. 7, 2005, concerning the need to cut federal spending to offset Katrina relief costs.

“I don’t know how they sleep at night,” said Congressman Charles Rangel (DNY) in late October, commenting on House Ways and Means Committee plans to cut federal income support programs for low-income individuals and families to help offset Katrina relief costs.

The remarks of Congressmen Nussle and Rangel demonstrate the stark partisan differences in Congress as it works through a full, hectic schedule in October and November. Last spring, Congress agreed to a budget that required cuts in entitlement spending of $34.7 billion. In light of the additional expenses attributable to this season’s hurricanes, particularly Katrina, the House is attempting to cut more, up to $50 billion, to offset some of the hurricane relief spending.

Now the proverbial rubber has hit the road, as both House and Senate must pass bills that actually make these cuts by changing the rules for Medicare, Medicaid and various social support programs, including Temporary Assistance to Needy Families (TANF), foster care and child care. These bills, called “reconciliation” bills because they reconcile rules governing entitlement spending with the budget targets for those programs, are wending their way through various House and Senate committees with jurisdiction. Extraordinary tensions exist between great concern about the skyrocketing federal budget deficit and great pressures to spend still more on hurricane recovery. At this writing, the outcome remains impossible to forecast.

Against this backdrop, Congress must also seek enough agreement to pass appropriations bills, the funding measures that will provide FY 2006 money for all federal discretionary programs, including public health. The House has already passed a lean bill for health programs and the Senate is considering its bill at this writing. The process will culminate in a House-Senate conference committee, which must act in some fashion before a selfimposed November 18, 2005 deadline.

The new federal fiscal year began October 1, 2005. In order to avoid a government shutdown, Congress passed a Continuing Resolution (CR) to enable funds to continue flowing until November 18. In a departure from usual practice, the CR does not simply continue funding at FY 2005 levels. Rather, it provided for continuance at the lesser of three levels, the House-passed level, the Administration proposal, or the Senate Committee-passed level. The short duration of this action has little practical effect on programs whose funds go out later in the fiscal year. However, it sends a powerful signal that this year is not business as usual. Cuts in many public health programs, as well as an acrosstheboard cut for all discretionary spending, seem inevitable. The only question will be how much.

Avian Flu Fears Drive More Spending Proposals
Notwithstanding the bleak budgetary outlook, Congress has jumped energetically on the avian flu bandwagon. Legislation aimed at creating incentives for vaccine research and production, as well as stockpiling antiviral medications, is under active consideration. The Administration may make additional spending proposals in conjunction with the release of its pandemic flu plan (not yet released as of this writing on October 27, 2005). A key Democratic health staffer remarked, with a wry bitterness and not without basis in fact, that the only way public health has been able to get funded in a budgetcutting environment is when a particular new scare emerges. The drawback, of course, is that the “scare du jour” comes and goes, accompanied by increases and then decreases in resources.

The Senate has opened the door to an increase, rather than the President’s budgeted decrease, for local and state public health preparedness. On October 27, the Senate passed by voice vote an amendment to its version of the HHS spending bill that would provide an additional $8.1 billion for pandemic flu preparation. The Senate gave these funds an emergency designation, which exempts them from otherwise tight budget caps. The principal sponsor of this amendment was Sen. Tom Harkin (DIA). Harkin’s proposed amendment would have earmarked $600 million for state and local preparedness, but the compromise amendment that passed did not specify how the $8.1 billion would be allocated.

Two major hurdles remain. First, the amendment must survive a House Senate conference committee. Second, the amendment provides that the funds are to be distributed at the discretion of the President, after consultation with key House and Senate health committees. If the President makes specific budget proposals in conjunction with the release of his pandemic flu plan, an important clue to the Administration’s intentions will be whether those budget proposals include increases for state and local pandemic flu preparedness are included. The Senate action represents an important opportunity for local public health, but additional funding is not a “done deal.”

NACCHO will be advocating vigorously for enactment of this increase and for eventual designation of funds specifically for local preparedness. Please watch our Legislative Action Center at http://capwiz.com/naccho/home/. It will be important for the House of Representatives to hear support for the Senate amendment.