PLACE: Auditorium, Humphrey Building, Washington, D.C.

SUBJECT: Press Conference on the Fiscal Year 2005 Budget

Good afternoon and thank you for joining us today to discuss President Bush’s budget for the Department of Health and Human Services for fiscal year 2005. I’m joined on the stage by our budget director, Kerry Weems, and the agency heads are in the first couple of rows to answer any other questions you may have.

This is the fourth time I’ve stood before you to present the Department’s annual budget request. And as I look back on the goals we’ve set over the previous three years, I’m happy to report that, working together, we met and exceeded many of them under the President’s leadership: We are building a new public health infrastructure to give doctors and hospitals the tools they need to respond to any public health emergency. We reenergized the fight against HIV/AIDS at home and abroad. We completed the doubling of the research budget at NIH, expanding the hope and promise of modern science. We broadened access to quality health care, especially for minorities, the uninsured and underinsured.

And, of course, two months ago President Bush signed the most comprehensive improvements to Medicare since it was created nearly four decades ago. For the first time, Medicare will provide coverage for the life-saving and life-enhancing medicines so many of our seniors rely upon.

Our work is making America healthier and helping to make the world healthier. We are proud of our record, but we will not rest on our accomplishments. The President is submitting an aggressive agenda for the Department of Health and Human Services that builds on our commitment to building a healthier, stronger America while remaining fiscally responsible to the American taxpayer.

In support of these goals, President Bush proposes outlays of $580 billion for HHS for fiscal year 2005 – an increase of $32 billion, or 6 percent, over fiscal year 2004. Our discretionary budget authority is $67 billion, an increase of $819 million, or 1.2%, over fiscal year 2004, and an increase of 26% since 2001.

Let me take a few moments to discuss some of the budget’s highlights.

Increasing Access to Health Care

This budget looks to build on our efforts to make quality health care more accessible and more affordable for all Americans. President Bush proposes establishing refundable tax credits to help low-income workers buy health insurance coverage. The President also proposes creating Association Health Plans to allow small business to provide health coverage to more workers by allowing them to band together to negotiate lower insurance rates.

Community health centers are a key element to increasing access to health care. In the last three years, we have expanded access for an additional 3 million people-regardless of their ability to pay-through 614 new and expanded community health center sites. President Bush is building on that success by requesting $1.8 billion for health centers to provide health care services to 15 million people – a 57 percent increase over the 2001 budget.

Community health centers contribute to our efforts to reduce health care disparities, as nearly 65 percent of the people who visit community health centers are minorities.

In pursuit of that goal, HHS is requesting $6.5 billion for targeted minority health spending in 2005 – a 19 percent increase over 2001. That includes investments in NIH to support research on improving minority health and narrowing the health gap in areas such as cardiovascular health, diabetes, infant mortality, cancer, dental health, and fetal alcohol syndrome. The budget would spend twice as much to reduce the incidence of HIV/AIDS among racial and ethnic minorities.

This investment in HIV/AIDS is part of an unprecedented and growing dedication to fighting the disease at home and abroad. The Department’s total HIV/AIDS budget request is $15 billion – a 31 percent increase over fiscal year 2001. Simply put, no administration in any nation has ever committed the time, energy and resources to fighting AIDS as the United States under President Bush.

As we increase access to quality health care, we also are striving to improve the quality of care available to Americans. That’s why this budget request includes a 4.4 percent increase in initiatives to increase patient safety by reducing the number of medical errors. This budget also builds on the five-year doubling of the NIH budget by increasing our commitment to medical research to $28.8 billion. That is a 41 percent increase over 2001 and will support nearly 40,000 research project grants – a record total for NIH.

With this effort to better protect patients and discover new medicines and treatments for disease, we also are rededicating ourselves to keeping people from getting sick in the first place. In addition to new preventive benefits available through Medicare, we are requesting a tripling of the budget for the Steps to a Healthier US program. This $125 million will allow us to partner with communities and promote healthy lifestyles among our nation’s families.

The Department also has a new initiative to spend $80 million over the next two fiscal years to purchase additional flu vaccine under the Vaccines for Children Program. With HHS buying four to six million doses of pediatric vaccine each year, we will help ensure that manufacturers produce enough vaccine to help prevent shortfalls in the coming years.

Protecting the Homeland

One of the areas where we’ve made our greatest achievements and face our greatest challenges is strengthening our public health infrastructure. Including the 2005 budget request, we have spent or requested nearly $15 billion since September 11, 2001, and that investment is showing tangible results.

We recognize the challenges ahead. That is why we are requesting $4.1 billion – a 14-hundred percent increase over 2001 – to strengthen our public health system. Let me mention just a few of the highlights:

The FDA request includes $181 million – a 56 percent increase over this year – for food security initiatives. With this budget, we will increase the number of inspections to 97,000 per year – eight times the number in 2001.

At NIH, we’re increasing the bioterror budget by $121 million to $1.7 billion to fund basic research on the bioterror-related agents. We also will support construction of specialized biosafety labs at universities and research institutions across the country.

And at CDC, we are spending $1.1 billion on bioterror-related activities. That includes a new Bio-Surveillance Initiative that will be carried out in coordination with the Department of Homeland Security, the USDA and the Environmental Protection Agency.

These investments not only will better prepare the nation for and protects us from a bioterror attack, they also will better prepare us for any public health emergency. We already have seen our investments pay off in CDC’s leadership in fighting the SARS outbreak last year and a coordinated public health response to the West Nile Virus. It even helped to deal with a particularly hard flu season.

This budget also provides the FDA with $30 million – an $8 million increase – to expand efforts to prevent BSE, or Mad Cow Disease, allowing FDA to intensify its efforts to keep forbidden animal proteins out of cattle feed.

Strengthening Families

We are also making significant strides in helping those most in need access the services they need while working toward achieving self-sufficiency.

For example, teen drug abuse reached the lowest levels in a decade. The TANF program continued to succeed in helping recipients train for work, find jobs and increase their income, despite the economic downturn. We remain dedicated to building on these successes.

President Bush also seeks to build on the success of the 1996 welfare reform law by reauthorizing the Temporary Assistance for Needy Families program to help more welfare recipients achieve independence through work and protect children and strengthen families. We all know that work is the road out of poverty.

At SAMHSA, President Bush requests $200 million to double the Access to Recovery program budget, which would provide vouchers to give 100,000 individuals, who couldn’t otherwise afford them, access drug- and alcohol-abuse treatment programs.

The budget includes $160 million for the Compassion Capital Fund, Mentoring Children of Prisoners, and Maternity Group Homes to support at-risk youth and homeless individuals.


Finally, I must underscore what is both a significant accomplishment and a significant challenge for our department going forward: the new Medicare modernization act.

We are preserving the same Medicare program and building upon it with better benefits and more choices. These better benefits include prescription drug coverage to save seniors money; improved preventive care; and better access to the doctors and medical care that seniors want.

Seniors have sought prescription drug benefits and improved care for a decade. President Bush and the Congress delivered.

Our challenge at HHS over the next several years will be adding these new benefits and choices to Medicare in an efficient and cost-effective manner….as well as educating seniors about the new benefits available to them. We plan to be very aggressive in educating seniors and implementing this new law effectively.

Now, some are raising questions about differences in cost estimates. It’s important that we step back for a moment.

Let’s put this discussion in the right context. This comes down to a difference in estimates between the Congressional Budget Office and HHS actuaries – a difference due to a difference in assumptions.

This is not unusual. On other occasions and on other issues, there are differences in estimates between the CBO and the administration.

But everyone knows that during the legislative process the only number that counts is the CBO score. There can be only one scorecard when creating legislation and that scorecard is CBO’s. The CBO score came in under $400 billion, and CBO reaffirmed that estimate last week.

Now, because preliminary estimates from our actuaries were tending to come back higher than CBO’s based on different assumptions, we knew that it was likely our final score would be higher. We should remember that the legislation changed significantly in the final days, and we did not have real-time analysis from our actuaries on the cost of those final changes. We did make conferees and others aware that we expected our final score would be higher. But we also knew that our estimate wouldn’t be the one that ultimately mattered in the legislative process.

Again, the score that counts when creating this legislation was the CBO score. Lawmakers were right to follow that score in making their decisions. And when CBO scores the budget we submit today, it would be expected that their estimate would reflect $400 billion or close to that number.

We must remember that these estimates are for a completely new program. Medicare has never offered a prescription drug benefit. It’s never offered so many choices in health coverage. Both sides are making their best guesses. They’re good-faith efforts by good people working for Congress and the administration.

And it’s important to note, that even using the higher HHS estimate, the President’s budget still cuts the federal deficit in half within five years.

Finally, let’s not lose sight of the fact that we’re providing seniors with prescription drug coverage that’s going to save them money. We’re making a significant investment in improving the health care of seniors.

We’re going to make this program work for America’s seniors. And we’re going to make it work as cost-effectively as possible.


In conclusion, this is a strong, fiscally responsible budget at a challenging time for the federal government, with the need to further strengthen the economy and continue to protect the homeland.

We look forward to working with Congress, the medical and science communities and all Americans as we work to carry out the initiatives President Bush is proposing to build a healthier, safer and stronger America.

Thank you very much.

For more information, please contact:

HHS Press Office (202) 690-6343