Bush’s ’05 Budget for Health Services, Research Falls Short

A recent headline read “Bush Budget: Medicaid, 128 Other Nondefense Programs Face Cuts.”

Indeed, since President Bush released his Fiscal 2005 budget proposal last month (see Original article: page 6), it has become a budget known for its record size, its cuts, and the deficit it projects—$521 billion—in spite of those cuts.

The plan is also notable for including the start of funding for what could be a hugely expensive effort to visit Mars and for renewing the president’s call for making permanent the tax cuts he has put through Congress.

President Bush’s election-year budget blueprint calls for a total of $2.4 trillion in federal spending; a reduction in numerous programs in the face of record federal deficits and the costs of war; and a half a percent increase in domestic discretionary spending, the umbrella under which most health- and research-related expenditures fall.

While there is some good news in the budget for programs of interest to APA, we must also underscore that the rates of increase in funding for many of the programs, particularly with regard to the National Institutes of Health, do not keep pace with medical inflation.

In general, APA’s strategy will be to call on Congress to provide additional funds for vital programs.

Many of the increases in health- and research-related expenditures are tied to protecting the homeland from bioterrorism, as opposed to providing services or conducting more general research.

Here are some highlights of the president’s Fiscal 2005 budget request:

• His plan calls for $572 billion in spending for Health and Human Services, a 2.8 percent increase—but a 1.6 percent reduction in its discretionary funding. The overwhelming majority of HHS funding is for Medicare (50.3 percent) and Medicaid (31.5 percent).

• The Medicare drug benefit recently signed into law continues to grab headlines as the Office of Management and Budget projects it will cost $139 billion more over 10 years than the Congressional Budget Office had estimated. No significant Medicare legislation is expected this year; instead, the administration’s focus will be on the implementation of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003.

• The National Institutes of Health, under the president’s plan, would receive $28.8 billion in Fiscal 2005, which is a 2.7 percent increase over Fiscal 2004. The budgets of the National Institute of Mental Health, the National Institute on Drug Abuse, and the National Institute on Alcohol Abuse and Alcoholism would grow similarly. But since these rates of growth keep pace with neither medical inflation nor research opportunities, APA and its allies are lobbying Congress to add funds.

• The Substance Abuse and Mental Health Services Administration would get 6 percent more than in Fiscal 2004. The Center for Mental Health Services, in particular, would get substantial new funds to support, through grants, the development of comprehensive state mental health plans to reduce system fragmentation and increase services. In contrast, community grant programs for jail-diversion projects and for improved services to the elderly are slated to lose $7.5 million, which APA is lobbying aggressively to restore.

• The Department of Veterans Affairs would get an 8.3 percent increase over Fiscal 2004, although the VA’s discretionary spending budget would increase by just 1.8 percent. The president is proposing again the instituting of charges to some veterans for access to VA hospitals, but that proposal is controversial and failed to win passage last year. VA research funding would decrease by 6.1 percent overall, which APA is lobbying to restore.

• The Health Resources and Services Administration’s budget would decrease by 9.3 percent. Increased funding for health centers is slated, which would fund 1,200 new centers by the end of Fiscal 2006, but Title VII health professions programs would face deep cuts—96 percent below Fiscal 2004, inflicting extensive damage on scholarships for disadvantaged students, which we are lobbying to prevent.

• The president requested that the Indian Health Service (IHS) receive $497 million (a 3.8 percent increase) to purchase health care from non-IHS hospitals and health providers. Despite the proposed increase in service funding, the 4 percent increase in provider payments that the president had promised is not included in his budget, so APA, as part of the Friends of Indian Health Coalition, is lobbying for it. ▪

Eugene D. Cassel, J.D., is special counsel and director of APA’s Division of Advocacy. Nicholas M. Meyers is director of APA’s Department of Government Relations.