Bush Unveils Details of $1.96T Spending Plan
President Bush yesterday offered Congress his detailed FY 2002 budget proposal, a $1.96 trillion spending package that would "make modest reductions" in a number of government programs -- including many health-related initiatives -- and "give the government a more conservative cast," the Washington Post reports (Kessler/Goldstein, Washington Post, 4/10). Under Bush's budget plan, the federal government would increase discretionary spending on domestic programs by 4%, a "crucial underpinning to Bush's prime domestic objective" -- his 10-year, $1.6 trillion tax cut package. "This budget funds our needs without the fat," Bush said, adding, "It represents compassionate conservatism" (Kessler/Goldstein, Washington Post, 4/10). Two-thirds of the spending increases would fund six programs, including Medicare, Medicaid and NIH (Pear, New York Times, 4/10). According to the Los Angeles Times, Bush's budget "makes room" for his tax cut by "holding down most domestic spending" and providing "smaller increases" than Democrats have proposed for programs such as Medicare (Rubin, Los Angeles Times, 4/10). "The president has laid out a fair and responsible budget. It proves we can make important investments in education, defense and health care and return at least $1.6 trillion back to the taxpayers who created the surplus," House Majority Leader Dick Armey (R-Texas) said, adding, "It's not only fair, it's the right thing to do" (Godfrey, Washington Times, 4/10).
Under Bush's budget package, HHS would receive a 5.2% funding boost, increasing the agency's discretionary budget to $56.7 billion (Toner, New York Times, 4/10). NIH emerged as the "biggest winner" in HHS, with Bush requesting a $2.75 billion, or 13.5%, increase for the agency's budget in FY 2002. The increase will allow NIH to support 34,000 research grants -- including more than 9,000 "new and competing" grants --and "vastly increase" funding for the Office of Research on Women's Health by $28 million, to about $50 million, boost spending by 20% for the new National Center for Minority Health and Health Disparities to $158 million from $132 million and increase overall spending on AIDS research by 11.5% to $2.5 billion. In addition, NIH plans to spend $42 million to develop smallpox and anthrax vaccines as part of an antibioterrorism initiative administered jointly with the CDC. Bush also proposed $124 million in additional spending for community health centers, which treat "largely uninsured" patients in urban and rural communities, to fund 100 new centers and the expansion of 100 existing facilities (Washington Post, 4/10). HHS Secretary Tommy Thompson said that in next year's budget, HHS programs "are going to be scrutinized a lot more. There will be a lot more changes" (Kessler/Goldstein, Washington Post, 4/10).
While Bush proposed "sizable increases" for medical research and community health centers, he recommended funding cuts for AIDS treatment and health care training programs, as well as initiatives to provide health insurance for low-income children, a "pet program" of former President Clinton (Weisman/Kiely, USA Today, 4/10). Bush's budget would eliminate the Community Access Program, established under Clinton to coordinate care among public hospitals, clinics and other providers for those without health insurance and "slash" training grants for health professionals to $140 million next year -- a $213 million cut. In addition, the president would "trim" programs that provide young doctors with advanced training in children's hospitals from $235 million to $200 million (Washington Post, 4/10). The New York Times reports that Bush's budget would "shave money" from the programs to "stay within overall spending limits." According to Thompson, "The president's budget is responsive to children and families who need a helping hand, while being responsible to the taxpayers who offer that hand" (Toner, New York Times, 4/10). He also "angrily challenged" criticism about some of the budget cuts, maintaining that Bush's proposal "substantially increases the investments the federal government makes in children ... to suggest otherwise is completely inaccurate" (CongressDaily, 4/9). While some HHS officials also have "grumbl[ed]" about the "big boost" for NIH, Thompson said, "What's more important than finding a cure for cancer? What's more important than finding a cure for Alzheimer's" (Toner, New York Times, 4/10).
In addition to increasing HHS discretionary spending, Bush has proposed spending $46 billion over the next four years to provide a prescription drug benefit under Medicare for low-income seniors until Congress "overhauls" the program (Washington Times, 4/10). The president's budget would provide $156 billion over 10 years to fund a drug benefit for Medicare beneficiaries and reform the program, an amount "widely considered inadequate" (Toner, New York Times, 4/10). Lawmakers from both parties consider a drug benefit under Medicare to be a "political imperative," and most agree that the cost of the initiative would be "much higher than the president's figure" (Rosenbaum, New York Times/Minneapolis Star-Tribune, 4/10). "Nobody really knows" how much a Medicare prescription drug benefit will cost, White House Budget Director Mitch Daniels said (Hutcheson, Philadelphia Inquirer, 4/10). Although Thompson admitted that "estimates of cost" for a drug benefit "differed greatly," he reiterated the Bush administration's commitment to providing prescription drug coverage for seniors and said he hoped to "offset" the cost with savings made through Medicare "restructuring" (Toner, New York Times, 4/10).
Bush's proposed budget has "already provoked howls of protest" from Democrats and advocacy groups (Crutsinger, AP/Nando Times, 4/9). Democrats "immediately charged" that the president's plan "neglects" health care, a Medicare prescription drug benefit and other programs in order to "make room" for his tax cut (Godfrey, Washington Times, 4/10). In recent weeks, Democrats have "assailed" Bush for "subsuming" the projected Medicare Part A trust fund surplus -- $393 billion over 10 years -- into a general contingency fund (Caruso, CongressDaily, 4/9). House Minority Leader Dick Gephardt (D-Mo.) called the budget a "partisan document rich in ideology and short on balance," while Senate Minority Leader Tom Daschle (D-S.D.) "chose tougher language," concluding, "[T]his may be the first budget in history that wasn't just dead on arrival, it was dead before arrival" (Kessler/Goldstein, Washington Post, 4/10). Ron Pollack, executive director of Families USA, said that the president's budget "literally shortchanges Americans' health care by providing too little support and reaching too few people." He added that Bush, rather than using the budget surplus to "shore up" Medicare and cover the uninsured, "siphons off billions of dollars for tax reductions" (Toner, New York Times, 4/10).
Meanwhile, the AP/Philadelphia Inquirer reports that "among more than two dozen tax relief items" in his budget, Bush has included a refundable tax credit that would allow uninsured Americans to purchase private health insurance. The program, when "fully phased in," would provide individuals earning less than $30,000 in adjusted gross income with an annual credit up to $1,000 -- $2,000 for married couples with incomes up to $60,000. According to the AP/Philadelphia Inquirer, the plan would cost about $71.5 billion over 10 years. In addition, Bush has proposed "to make medical savings accounts permanent." MSAs, "a perennial GOP favorite," allow individuals to "make tax deductible contributions" for medical costs. The president also has proposed allowing a deduction for long term health care costs (Anderson, AP/Philadelphia Inquirer, 4/10). However, Bush's budget would cut funding earmarked for implementing a prescription drug reimportation program by $20 million, almost 90%. Under the program, pharmacists and wholesalers could reimport from abroad prescription drugs that meet federal safety standards. However, the Clinton administration refused to implement the initiative, which Congress passed last year, maintaining that the program would endanger the public's health and safety. Thompson said that reviving the program this year "is looking doubtful." Bush's budget would cut $20 million from the $23 million program, "using what's left to prepare HHS for carrying out the law should Thompson conclude that it reduces prices without increasing health risks." Although Thompson said that he would "make that decision soon," he added that FDA officials have "recently expressed concerns about the difficulty of certifying U.S.-made medicines" from abroad (McQueen, AP/Bergen Record, 4/10).