    [Senate Hearing 105-872]
    [From the U.S. Government Publishing Office]

                                                    S. Hrg. 105-872, Pt. 1

      DEPARTMENTS OF LABOR, HEALTH AND HUMAN SERVICES, AND EDUCATION, AND
              RELATED AGENCIES APPROPRIATIONS FOR FISCAL YEAR 1999

    =======================================================================

                                    HEARINGS

                                    before a

                              SUBCOMMITTEE OF THE

                COMMITTEE ON APPROPRIATIONS UNITED STATES SENATE

                           ONE HUNDRED FIFTH CONGRESS

                                 SECOND SESSION

                                       on

                               H.R. 4274/S. 2440

     AN ACT MAKING APPROPRIATIONS FOR THE DEPARTMENTS OF LABOR, HEALTH AND
      HUMAN SERVICES, AND EDUCATION, AND RELATED AGENCIES, FOR THE FISCAL
             YEAR ENDING SEPTEMBER 30, 1999, AND FOR OTHER PURPOSES

                                   __________

                              Part 1 (Pages 1-572)

                       Corporation for Public Broadcasting
                            Department of Education
                    Department of Health and Human Services
                              Department of Labor
                  Federal Mediation and Conciliation Service
                           Nondepartmental witnesses
                     Physician Payment Review Commission
                  Prospective Payment Assessment Commission
                       United States Institute of Peace
                          Nondepartmental witnesses
                        Social Security Administration

                                   __________

             Printed for the use of the Committee on Appropriations

           Available via the World Wide Web: http://www.access.gpo.gov/
                                congress/senate

                                     ______

                         U.S. GOVERNMENT PRINTING OFFICE
    46-105 cc                    WASHINGTON : 1999

    _______________________________________________________________________
                For sale by the U.S. Government Printing Office
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                                     20402
                               ISBN 0-16-058158-3

                          COMMITTEE ON APPROPRIATIONS

                         TED STEVENS, Alaska, Chairman
    THAD COCHRAN, Mississippi            ROBERT C. BYRD, West Virginia
    ARLEN SPECTER, Pennsylvania          DANIEL K. INOUYE, Hawaii
    PETE V. DOMENICI, New Mexico         ERNEST F. HOLLINGS, South Carolina
    CHRISTOPHER S. BOND, Missouri        PATRICK J. LEAHY, Vermont
    SLADE GORTON, Washington             DALE BUMPERS, Arkansas
    MITCH McCONNELL, Kentucky            FRANK R. LAUTENBERG, New Jersey
    CONRAD BURNS, Montana                TOM HARKIN, Iowa
    RICHARD C. SHELBY, Alabama           BARBARA A. MIKULSKI, Maryland
    JUDD GREGG, New Hampshire            HARRY REID, Nevada
    ROBERT F. BENNETT, Utah              HERB KOHL, Wisconsin
    BEN NIGHTHORSE CAMPBELL, Colorado    PATTY MURRAY, Washington
    LARRY CRAIG, Idaho                   BYRON DORGAN, North Dakota
    LAUCH FAIRCLOTH, North Carolina      BARBARA BOXER, California
    KAY BAILEY HUTCHISON, Texas
                       Steven J. Cortese, Staff Director
                     Lisa Sutherland, Deputy Staff Director
                   James H. English, Minority Staff Director
                                     ------

     Subcommittee on Departments of Labor, Health and Human Services, and
                        Education, and Related Agencies

                     ARLEN SPECTER, Pennsylvania, Chairman
    THAD COCHRAN, Mississippi            TOM HARKIN, Iowa
    SLADE GORTON, Washington             ERNEST F. HOLLINGS, South Carolina
    CHRISTOPHER S. BOND, Missouri        DANIEL K. INOUYE, Hawaii
    JUDD GREGG, New Hampshire            DALE BUMPERS, Arkansas
    LAUCH FAIRCLOTH, North Carolina      HARRY REID, Nevada
    LARRY E. CRAIG, Idaho                HERB KOHL, Wisconsin
    KAY BAILEY HUTCHISON, Texas          PATTY MURRAY, Washington
    TED STEVENS, Alaska                  ROBERT C. BYRD, West Virginia
      (Ex officio)                         (Ex officio)
                          Majority Professional Staff
                                Bettilou Taylor
                                 Mary Dietrich

                          Minority Professional Staff
                                  Marsha Simon

                             Administrative Support
                       Jim Sourwine and Jennifer Stiefel

                                C O N T E N T S

                                  ----------

                            Thursday, March 5, 1998

                                                                       Page
    Department of Education: Office of the Secretary.................     1

                            Tuesday, March 10, 1998

    Department of Health and Human Services:
        Office of the Secretary......................................    59
        Health Care Financing Administration.........................    59

                           Wednesday, March 18, 1998

    Department of Labor: Office of the Secretary.....................   125

                            Wednesday, April 1, 1998

    Department of Health and Human Services: National Institutes of
      Health.........................................................   191
    Nondepartmental witnesses..................................331
    Material submitted subsequent to conclusion of the hearing.......   275

            Material Submitted Subsequent to Conclusion of Hearings

    Prospective Payment Assessment Commission........................   291
    Physician Payment Review Commission..............................   294
    United States Institute of Peace.................................   300
    Corporation for Public Broadcasting..............................   312
    Federal Mediation and Conciliation Service.......................   323
    Nondepartmental witnesses......................................333 deg.

      DEPARTMENTS OF LABOR, HEALTH AND HUMAN SERVICES, AND EDUCATION, AND
              RELATED AGENCIES APPROPRIATIONS FOR FISCAL YEAR 1999

                                  ----------

                            THURSDAY, MARCH 5, 1998

                                           U.S. Senate,
               Subcommittee of the Committee on Appropriations,
                                                        Washington, DC.
        The subcommittee met at 2 p.m., in room SD-192, Dirksen
    Senate Office Building, Hon. Arlen Specter (chairman)
    presiding.
        Present: Senators Specter, Cochran, Gorton, Faircloth,
    Harkin, Hollings, Bumpers, and Kohl.
        Also present: Senators Stevens and Byrd.

                            DEPARTMENT OF EDUCATION

                      Office of the Secretary of Education

    STATEMENT OF HON. RICHARD W. RILEY, SECRETARY OF
                EDUCATION
    ACCOMPANIED BY THOMAS P. SKELLY, DIRECTOR, BUDGET SERVICE

                    opening remarks of senator arlen specter

        Senator Specter. Good afternoon, ladies and gentlemen. The
    hour of 2 o'clock has arrived which is the starting time for
    our proceedings.
        Would the distinguished Senator from South Carolina like to
    make a comment about our distinguished witness?

                 opening remarks of senator ernest f. hollings

        Senator Hollings. And that witness is distinguished. I
    think the whole country is very proud of Secretary Riley's
    leadership and his contribution to education. I just wanted to
    amen the sentiments here. At this particular time, Mr.
    Chairman, our full committee, unfortunately, has got a regular
    hearing now, but I wanted to welcome him to the committee.
        I think the President's initiatives are well-founded, and
    the question is where do we get the money. That is what we have
    got to do. I am going this afternoon to the Budget Committee.
        For the information of everyone, we will be marking up on
    next Thursday, just 1 week from today, in the Commerce
    Committee to back a settlement bill, hopefully. I hope it is a
    comprehensive package approach because otherwise if they just
    break down into different parts and leave out this or put in
    some other thing objectionable, then we are not going to get
    anywhere. But the idea with Chairman McCain is that we get
    together and report out a package bill of some kind so that the
    Congress will then be prepared to work because we at the Budget
    Committee know the moneys for, let us say, Social Security,
    Medicare, and otherwise----
        Senator Specter. Are you still introducing the witness,
    Senator Hollings? [Laughter.]
        Senator Hollings. Let me yield to the chairman. Thank you
    very much.
        Senator Specter. We have a crowded agenda today. We have
    not only the Secretary, but we also are having a hearing on
    campus crime. The Governmental Affairs Committee has scheduled
    a meeting at 4 o'clock this afternoon, which was scheduled
    after this hearing was scheduled. We expect the meeting to be
    not as bipartisan as this subcommittee hearing will be. So, it
    is our hope to conclude our proceedings by 4 o'clock.
        We are pleased to welcome Secretary Riley here this
    afternoon.

                               prepared statement

        The Department of Education's budget request for
    discretionary spending for fiscal year 1999 totals $31.2
    billion, an increase of $1.7 billion, or almost a 6-percent
    increase over fiscal year 1998. We congratulate the Secretary
    and we congratulate the President for emphasizing education in
    addition to the increase which occurred last year.
        Without objection, my full statement will be made a part of
    the record.
        [The statement follows:]
                  Prepared Statement of Senator Arlen Specter
        This afternoon, the Subcommittee on Labor, Health and Human
    Services and Education will begin its series of hearings on the
    President's fiscal year 1999 appropriations requests.
        We are pleased to once again welcome Secretary Richard Riley to the
    subcommittee to discuss the budget for the Department of Education for
    the upcoming fiscal year.
        The Department of Education's budget request for discretionary
    spending for fiscal year 1999 totals $31.2 billion, an increase of $1.7
    billion or 5.9 percent over the fiscal year 1998 amount.
        You can see from the chart to my right the difficulty facing this
    subcommittee by the President's assumption that savings will be
    realized through enactment of user fees or new taxes.
        In fiscal year 1997, discretionary spending for this subcommittee
    totaled $74.7 billion.
        In fiscal year 1998, discretionary spending increased to a total of
    $80.4 billion.
        For fiscal year 1999, the President has requested $84.5 billion,
    but $1.9 billion of this amount would be financed by new user fees and
    assumed receipts from tobacco legislation.
        Mr. Secretary, the administration's budget request has put us in a
    real spot, basically $1.9 billion in the hole, and I fully expect that
    you will work closely with this committee as we try to resolve this
    dilemma.
        Mr. Secretary, of all of the funds contained within this
    subcommittee's jurisdiction, by far the most, direct, rewarding, and
    important investment we can make is in the education of this Nation's
    youth.
        Today we are also pleased to have a second panel of distinguished
    witnesses who will testify following Secretary Riley. These witnesses
    will discuss the issues surrounding security on our college campuses.
        Mr. Secretary, we will be pleased to hear your testimony at this
    time.

                     introduction of senator robert c. byrd

        Senator Specter. We are graced today by having the
    distinguished Senator from West Virginia, former President pro
    tempore, chairman of the Appropriations Committee, and just
    about every other title you can find. I would make one comment.
    Senator Dodd was at the funeral eulogizing Senator Ribicoff and
    said that Senator Ribicoff had to speak very briefly because
    his introduction was so long because he had held so many
    positions. Well, that is like Senator Byrd.
        The floor is yours, Mr. Chairman.

                   opening remarks of senator robert c. byrd

        Senator Byrd. Thank you, Mr. Chairman. I am very flattered
    by your making this opportunity available to me. I am not on
    the subcommittee, but I am very interested in the work of this
    subcommittee. I will be very brief because I am somewhat of an
    intruder here, but I am extremely interested in the education
    of our people.
        Mr. Chairman, members of the subcommittee, I thank you for
    holding this hearing on the Department of Education budget for
    fiscal year 1999. I extend my appreciation to you, Mr.
    Chairman, and to Mr. Harkin, for all of your hard work and
    commitment in the area of education.
        Mr. Secretary, I welcome you today. I realize that my time
    is limited, so I am going to have to be direct and succinct in
    my remarks.
        I am very concerned with the declining state of the
    American education system and our Nation's lack of progress in
    the area of education. As I said last year in this
    subcommittee, the Federal Government continues to pour massive
    amounts of money into education, and I have voted for every
    appropriation for education since the Senate and House embarked
    on Federal aid to education. I have never voted against one of
    those bills. I just am sorry to see zero improvement.

               Third international mathematics and science study

        Why is it that from 1993 to 1998, education spending has
    increased by 25 percent and at the same time results from the
    third international mathematics and science study [TIMSS]
    ranked the U.S. high school seniors among the worst
    participants in the areas of math and science? Why is it that
    in all three content areas of advanced mathematics, U.S.
    advanced mathematics students' performance was among the lowest
    of the 21 participating nations? These are supposed to be our
    Nation's stellar students.

                       Robert C. Byrd honors scholarships

        I am 100 percent for education, Mr. Secretary. I do not
    want to vote against increased spending for education. It gives
    me great pleasure to see well-deserving students--and there are
    many of them who are committed to their studies, and I am glad
    to see them attend college. That is precisely the reason that I
    began the Robert C. Byrd honors scholarship so many years ago,
    to provide the opportunity for an advanced education for those
    individuals who realize the meaning and the importance of a
    good education, not just for the time being, but forever.

                              Parental involvement

        If we ever hope to improve the quality of students being
    produced in this country, it is essential that we recultivate
    an interest in education for education's sake, not only in our
    Nation's children, but also in their parents. Our Nation's
    ailing education system is, in part, influenced by the parents
    of those children and young adults attending high school and
    college. Parents are role models, or should be, and children
    are likely to emulate them in a multitude of ways. Those
    parents who partake in intellectually stimulating activities
    and encourage their children to do likewise are slowly becoming
    extinct.
        What is much more usual is the example of the couch potato
    type of existence involving half-awake adults sipping a
    Budweiser and staring at mind-numbing--mind-numbing--violent or
    offensive TV programs. This lifestyle has been glorified and
    replicated in the deplorable, mindless TV sitcoms which crowd
    network TV and which are watched all too much by our young
    people. It is like a vicious circle, an example of life
    imitating popular entertainment, if such junk can be called
    entertainment, and vice versa.
        I just do not believe that merely proliferating education
    programs will solve the problems of improving our Nation's
    quality of students. On a fundamental level, there is something
    askew with the way we are approaching education in this Nation.
    I started out in a two-room schoolhouse where we did not have
    high technology. We did not have computers. We did not know
    anything about them. We did not have much money for supplies,
    but what we did have were dedicated teachers who really cared
    about the future of education and, therefore, exerted
    discipline to keep the focus of the schoolroom strictly on
    learning.
        My old coal miner dad told me that if I got a whipping at
    school, I could expect to get another one at home. He meant it
    and I knew he meant it. We had on that grade card a little item
    called deportment, and I was always very careful to get a good
    grade in deportment.
        We also had parents, as I say, who would back up the
    teachers. They did not say, ``I will go up and whip the
    teachers.'' They said, ``I will whip you.'' Today, this has all
    but disappeared, I am afraid. We have undisciplined students
    intimidating teachers and impeding the learning of their
    classmates. We did not have that in my day in school back in
    West Virginia. We have teachers who are more concerned with
    lawsuits today--and can you blame them--should they try even
    feebly to exert authority than in trying their best to impart
    useful knowledge.

                                 TIMSS results

        Mr. Secretary, no longer can we afford to fabricate excuses
    for why our students are not doing well. While it is true that
    the third international mathematics and science study is a
    rigorous test, posing difficult questions to students, other
    countries appear to be mastering these very same skills and
    concepts. Rather, we must look for solutions.
        According to the study, our high school students devote a
    significantly smaller portion of time to their studies and are
    less likely to take 4 years of math and science instruction.
    Now, why is that? Why are they permitted to opt out of these
    two critical disciplines? Obviously, getting back to the basics
    is where we need to focus.
        I am not here today to prescribe the solution for our
    Nation's lack of progress in the area of education. I wish it
    were that simple, and I could with the snap of my fingers
    change the results of the third international mathematics and
    science study and rank U.S. seniors as No. 1 in the world.

                              Parental involvement

        But I think we concentrate too much on what is the best
    team in the league, though no ball game ever changed the course
    of history. I like to watch games. I get all tensed up sitting
    on the edge of my chair, too, but when it is all over and I
    have watched that football game, I can say truthfully that when
    you have seen one game, you have seen them all. They are all
    alike. They never change, and no ball game is ever going to
    change the course of history. Ball games did not put man on the
    Moon. It takes the brain of the person who has a mind and
    heart, the dedication to study, and who is willing to work, and
    to exercise that drive and ambition, to get somewhere. And good
    teachers can go a long way in encouraging that and so can good
    parents.
        I think that all of my colleagues here would agree that
    ``U.S. Seniors Rank Among the Best and the Brightest'' would be
    a thrilling headline to have emblazoned on the front page of
    the New York Times or the Washington Post or the Washington
    Times or my hometown newspaper. But the question is: Why are we
    not the best?
        I suspect that part of the reason is because we have taken
    the focus off teaching the basics and using discipline to make
    sure order is maintained in the classroom and instead stressed
    pleasing everyone--parents, lobby groups, and students--with
    curriculums, dumb-downed textbooks, and teaching methods. We
    are subjugating time-honored techniques for grounding students
    with basic educational skills in history and geography, for
    example, to other laudable concepts and interests such as
    social sciences, which are good, but when students do not know
    when the Civil War occurred or in what century it occurred, and
    can only remember Abraham Lincoln because he got shot,
    something is wrong.
        I view such a juxtaposition as a grand mistake and I think
    test results continually prove me correct, unfortunately.
        I thank the chairman for giving me this opportunity to
    speak before the subcommittee.
        I have some questions, Mr. Chairman, that I would like to
    submit for the record. I will not impose on the time of the
    subcommittee, whose members have been so generous already with
    me. I would like to include them in the record, but I would
    like if I might ask if Secretary Riley would like to respond to
    my statement.
        Senator Specter. Well, Mr. Secretary, let me first call on
    Senator Cochran for an opening comment, and then we will call
    on you. Your response to Senator Byrd's statement may well
    constitute your testimony. [Laughter.]
        I would make just one comment on my father's agreement with
    Senator Byrd about football. My father watched a brief part of
    a football game once and a fumble occurred, one of those plays
    where 16 different people touched the ball and finally someone
    fell on it. And my father looked at it and said, why do they
    not give all those men another football? [Laughter.]
        Senator Bumpers. Mr. Chairman, may I just make one remark
    on Senator Byrd's statement about getting a whipping, if he got
    a whipping at school, he got one at home that night. There is a
    story up in the Ozarks about a kid who got a whipping every
    day. He got in trouble, and every night when he got home, he
    got another one. He got tired of that, and one day he made a
    commitment that he was going to do absolutely nothing to get a
    whipping at school for. And he had made it just fine, and about
    10 minutes before the bell rang, the teacher was walking up and
    down the aisle. And he stopped by this kid's desk, and he said,
    Johnny, who wrote the Declaration of Independence? And he was
    intent on not getting in trouble. He says, I don't know. I know
    I didn't do it. [Laughter.]
        When he got home that night, his father said, well, did you
    get a whipping in school today and he said, yes, I did, but he
    said, it wasn't my fault this time, Dad. He says, that's what
    you always say. What happened?
        So, he told him. He said the teacher asked me if I wrote
    the Declaration of Independence, and I told him, no, I didn't
    do it. He asked, if I knew who did it, and I said, no, I don't
    know. I know I didn't do it. His old man said, well, if you
    didn't do it, you probably had it done, and proceeded to give
    him another one. [Laughter.]
        Senator Specter. There will not be time for your testimony.
    [Laughter.]
        We thank Senator Bumpers for his opening statement.
    [Laughter.]
        Senator Cochran.

                    opening remarks of senator THAD COCHRAN

        Senator Cochran. Thank you, Mr. Chairman.

                            NIH research on Reading

        Mr. Chairman, I wanted to bring to the attention of the
    Secretary the fact that we are making progress on an initiative
    that we discussed at last year's hearing, and that was the
    convening of a reading panel to try to analyze research that
    had been done at NIH in NICHD, the National Institute of Child
    Health and Development, affecting the ability of children to
    learn to read or not learn to read at early ages. I am glad to
    see that the progress we have made has now resulted in the
    selection of some of these panel members and the work of the
    panel will begin soon.

                            America Reads Challenge

        I bring it up in this context: the budget proposal by the
    administration suggests that the President's reading program
    and a House-passed bill may form the basis of the Department's
    initiative on this subject, and substantial funds--I think
    about $200 million--are requested or predicted to be spent in
    support of this.

              House directive on convening Reading research panel

        I wonder whether or not you can react for the record during
    your comments or for the record in writing later, if you like,
    whether there will be an opportunity for the President's
    initiative to proceed with the benefit of the findings of this
    panel, which was supposed to be analyzing research data, coming
    up with techniques for screening, for teaching, suggestions
    about new ways to deal with problems of learning disabilities
    or reading disabilities, whether physical or emotional. The
    findings it seems to me can go a long way toward heading us in
    the correct direction and the right direction in trying to deal
    with this problem that is nationwide.
        I am not suggesting we need to federalize the reading
    instruction in our Nation's schools. What I am suggesting is
    for parents to have a better knowledge base in what to look for
    in terms of detection of early problems in children, and school
    districts to have the benefit of knowledge that has been
    developed by scientific-based research that is respected in
    this area so that we can develop at the local level or the
    State level, whatever the appropriate level is, the right kind
    of curriculum and initiatives to deal with reading problems at
    early ages.
        I am hopeful that you will look at the conference report
    again that was adopted by conferees on this subject wherein we
    talk about the importance of this reading panel that is going
    to be developing its findings and its recommendations. And I am
    going to read again into the record.
        ``The conferees endorse the language outlined in the Senate
    report''--this is the appropriations bill for this current
    fiscal year--``regarding research programs on reading
    development and disability, and also concur in the directive to
    the Secretary of Education to consult with the Director of the
    National Institute of Child Health and Human Development to
    convene a panel to assess the current status of research and
    effective approaches to teaching children to read.''
        We hope that the Department of Education will closely
    monitor the progress and try to see that the benefits of this
    research are disseminated for all who have responsibilities and
    interests in this area.

                           Title I allocation formula

        One other subject that I would like for you to look at and
    that is the title I program. It is designed to deal with the
    reality of poverty and the effects of poverty on children who
    grow up in that environment and the difficulties that they are
    confronting in trying to learn and succeed in school. We all
    know that the program was designed to provide school districts
    who have large numbers of these children with additional funds
    to help meet those needs.
        What worries me is that with the redesign of the title I
    allocation formula, a lot of States like mine are projected to
    get less money in the future than they have in the past for
    this program when we still have huge numbers of children who
    fall into the category of the population designed to be served
    by title I.
        What I am suspecting is that the reality of the political
    weight of the votes in the House of Representatives from
    population areas that are more influential because of their
    sheer numbers, we are seeing smaller States like my State of
    Mississippi and others like that getting less money now because
    of the pure, simple weight of the votes in the Congress and the
    influence that brings to bear on the policies that are made by
    this administration and by the Congress. I know the Congress
    helps write the allocation formula, but I suspect that there
    needs to be a new degree of attention being paid to this
    problem and I hope you can help ensure that this is done. Your
    comments along that line are what I am requesting.

                             Teacher training model

        Also your submission about the fact that our policies with
    respect to teachers, that we need to develop some kind of
    national model. I think the national writing project, which the
    administration has agreed needs to be funded this year, which I
    am glad to see, could serve as a nationwide model for teacher
    training. Rather than spending only $5 million on a program
    like this, make it the national model and spend the money that
    you had intended to spend in another area that would just be
    kind of spread out for everybody to experiment on their own.
    Here is a program that has proven to be effective. It has a
    huge constituency among those who have had the experience of
    the program. It works. Adopt it as the national model and fund
    it as the administration's model for teacher training.
        I have some other observations and questions which I will
    submit for the record, but I appreciate your attention to those
    issues.
        Senator Specter. Thank you very much, Senator Cochran.
    Before yielding to our distinguished chairman of the full
    committee, let me call on the ranking member of this
    subcommittee, Senator Harkin.

                     opening remarks of senator TOM HARKIN

        Senator Harkin. Thank you, Mr. Chairman. I apologize for
    being a little late. I just wanted to be here to again welcome
    Secretary Riley back to the subcommittee to discuss the
    administration's budget for the Department of Education.
        I want to state unequivocally that for the past 5 years,
    Mr. Secretary, you have been the voice and the advocate, the
    leading voice and the leading advocate, for improving public
    access, access to our schools, public education, and college
    education for countless Americans. There is no question, Mr.
    Secretary, about your dedication to making education a top
    priority in this country and your outstanding leadership.
    Indeed, President Clinton made a very wise choice in picking
    you to be Secretary of Education during this crucial period
    leading to the 21st century.
        I just want to commend you and compliment you in public for
    all that you have done. I have been involved in education a
    long time. I travel around the country, and everything I hear
    all over this country is thank God for Secretary Riley because
    we are moving ahead and we are making differences and we are
    making changes in this country.

                           Federal education funding

        Last year we had the single largest increase in education
    funding in more than 30 years. We enacted tax credits to help
    millions of Americans attend college. Again, this was done
    because of Secretary Riley's leadership, but it was also done
    on a bipartisan basis.
        I compliment our chairman, Senator Specter, for his
    leadership in guiding and directing this bill through, the
    largest single increase in education funding in 30 years out of
    this subcommittee. Senator Specter, you are to be commended for
    leading that charge.

                         Federal education initiatives

        Now, the administration's budget for next year builds on
    that success. It proposes bold actions. Too many students are
    taught in classes that are too large; 14 million students
    attending buildings that are unsafe; 5 million kids left
    unsupervised after school hours.
        So, these are all areas I know, Mr. Secretary, that you
    want us to look at and to approach in our appropriations
    process this year.
        So, I just want to say I applaud your leadership in
    attacking these serious concerns head on. These new investments
    that have been proposed by the President in these critical
    areas are ones that I strongly endorse, as well as many of the
    other recommendations in the 1999 budget request.
        Again, Mr. Secretary, welcome back and thank you for your
    great leadership.
        Secretary Riley. Thank you, sir.
        Senator Specter. Thank you very much, Senator Harkin.
        Our distinguished chairman of the full committee, Senator
    Stevens.
        Senator Stevens. Mr. Chairman, I am pleased to be here. I
    am familiar with your questions that you are going to ask about
    the gap in the amount of money that is sought and where it is
    coming from. So, I will just defer and wait for your questions.
        Nice to see you, Mr. Secretary.
        Secretary Riley. Thank you, sir.
        Senator Specter. Senator Bumpers.

                    opening remarks of senator DALE BUMPERS

        Senator Bumpers. Mr. Chairman, let me just say that I want
    to echo virtually everything that Senator Harkin said about my
    admiration and respect for the Secretary. He is an educational
    icon to educators in this country. He has been a good personal
    friend of mine for many years, and I have never known anybody
    whose reputation is any higher for probity or dedication and
    determination, especially the latter two, in the field of
    education.
        My reason for being here is not to squawk at the budget.
    Everything about the budget pleases me. I am glad to see the
    increases. I have the utmost confidence in this Secretary to
    spend the money very wisely.
        When the time comes for me to ask questions, I can alert
    the Secretary to a very simple $1.8 million grant application
    that we included in the bill last year and have just been told
    by the Department that they would not fund. Is the Secretary
    familiar with that?
        Senator Specter. Well, Senator----
        Senator Bumpers. I just want to make sure he is prepared
    for the question.
        Senator Specter. Let us proceed with his testimony and we
    will come back to questions, if we may.
        Secretary Riley, that is a long introduction. [Laughter.]
        But a good part of it was filled with compliments which you
    may not have objected to too much. You have quite a lot of
    questions pending already from Senator Byrd and Senator Cochran
    and Senator Bumpers.

                    Summary statement of Hon. Richard Riley

        Secretary Riley. If I might give a brief statement, Mr.
    Chairman, or would you like me to just go ahead and answer
    questions? I would like to cover a couple of points.
        Senator Specter. Your full statement will be made a part of
    the record, and to the extent you can summarize it and perhaps
    address the questions, I think that the questions which Senator
    Byrd and Senator Cochran have articulated are probably ones
    which you have on your mind in any event. So, the floor is
    yours as you see fit.
        Secretary Riley. If I might move through very quickly a
    very brief statement and submit the longer statement.
        Senator Specter. Fine.
        Secretary Riley. I am pleased to have Tom Skelly with me,
    my Budget Director, who has been with our Department, by the
    way, 24 years and worked side by side with Sally Christiansen
    for many years. So, Tom, it is good to have you with us.

                   fiscal year 1999 Education budget request

        I am going to move quickly through the discretionary side
    of the budget. I would say that this budget continues our
    strong emphasis on helping children master the basics, turning
    around failing schools, protecting children from drugs, and
    speeding up the process of getting technology in the classroom.

                           Reading programs increases

        Our 1999 request includes a $392 million increase for title
    I and a total of $260 million for America Reads. Our goal for
    both of these programs and others is to make sure that every
    child can read well and independently by the end of the third
    grade, if not earlier.

               Third international mathematics and science study

        And we must do a better job at teaching our children math
    and science, Senator Byrd, as you pointed out. America's 12th
    graders really hit the bottom in the latest third international
    mathematics and science study, and the results are unacceptable
    to me and I am sure to each of you.
        Our schools, according to the TIMSS study, actually do a
    very good job of teaching the basics of science and math in the
    first four grades. Senator, this is dealing primarily with the
    question you asked. We fall behind, however, in the middle
    years. As you recall, in grade four, we were second only to
    Korea in science--with all the diverse schools in this country
    and all the fourth graders, second only to Korea and all of the
    countries in the study. In math we were way above average, in
    the top levels, up above above average. In middle school, we
    dropped. We were about average. We were just barely above
    average in science, barely below average in math, and then in
    high school, as you point out, we dropped.
        I can respond to some questions and some analysis about
    that in a moment.
        But among the problems is that only about 20 percent of our
    eighth graders take algebra; 100 percent of the eighth graders
    in Japan take algebra. Many high school students check out and
    do not take the tough math and science courses. They just kind
    of drift through school, oftentimes not taking those difficult
    courses.
        The reality is that many science and math teachers are
    teaching out of field. I was talking to a foreign education
    secretary recently and I said something about how that was a
    problem. They said, I don't know what you are talking about.
    They could not imagine having a math teacher who did not finish
    in math--whose field of study was not math. That is a real
    problem in this country.

            raising Expectations, standards, and teacher preparation

        All of this is compounded by the fact that we set very low
    expectations for our students, and I think that is probably at
    the heart and it touches much of what you said.
        The results from the TIMSS study provide ample evidence for
    why we need national standards of excellence. I think that is a
    very important move that you have made and all of us have made
    together, and why the Senate should continue to support the
    President's call for voluntary national tests in reading and
    math. Parents not only want to know how their country is doing
    from the sample test like TIMSS and NAEP, but they also want to
    know how their children are doing as well. The only way we can
    find that is to have a comparable test for an individual child,
    and that is what the proposal is.
        Our budget includes $32 million to begin implementing an
    action strategy developed jointly by the Department and the
    National Science Foundation to improve math and science
    instruction. We are also proposing to create a $67 million
    teacher recruitment and preparation program in the reauthorized
    Higher Education Act, which will go a long way I think toward
    preparing many more teachers to teach math and science.

                       programs to reform failing Schools

        Now, to turn around failing schools, we seek your support
    for a new $200 million education opportunity zones program, a
    $30 million increase in the comprehensive school reform program
    to help some 3,500 schools--that was a part of the proposal of
    last year, to increase that--and an increase of 25 percent in
    charter schools, enough funding to start up 1,400 new or
    redesigned schools. Urban school districts from Philadelphia,
    Mr. Chairman, to Chicago to Seattle are putting promising
    practices into place and are getting some results. I was in
    Seattle recently and was very pleased with what I saw there.
        But to turn around failing schools, you have to begin with
    safety, and that is why we propose a $200 million major
    expansion of the 21st century community learning centers
    program, the after-school program, supporting 4,000 after-
    school centers, which serve as safe havens and learning places.
    We are requesting $50 million to put well-trained drug and
    violence prevention coordinators in one-half of all of
    America's middle schools.

                   Teacher training and technology initiative

        Education technology remains high on our agenda. We are
    placing a special emphasis on a new $75 million teacher
    training and technology initiative to make sure that all new
    teachers can use technology effectively in the classroom.

                     Student financial assistance proposals

        Our request for higher education builds on last year's many
    accomplishments. We are seeking to increase the maximum Pell
    award from $3,000 to $3,100.
        We are proposing a $53 million increase for TRIO, a strong
    expansion of the very effective work-study program.

                partnership programs designed to raise Standards

        Over 930 colleges and universities now have committed their
    work-study students to America Reads, 48 of those being in
    Pennsylvania. Penn State, for example, has over 400 students
    involved, and the University of Pennsylvania has over 90
    students involved who are working with middle school-aged
    students, tutoring them for help.
        Finally, I make special reference to the high hopes for
    college proposal. Our $140 million request would create new
    partnerships between 2,500 middle schools and our Nation's
    colleges and universities over the next 5 years. These types of
    partnerships are, to my way of thinking, one of the most
    effective and low cost ways to get high standards into our
    Nation's classrooms.
        The Tell Them We Are Rising Program at Temple, and the
    Berkeley Pledge Program at UC-Berkeley are two examples of
    these. I had the opportunity to be at Berkeley recently and to
    go out to a school in Richmond with Bob Berdahl, the
    chancellor, to see the wonderful work that Berkeley is doing
    with this little, relatively poor--many of the kids are poor--
    school. They are working one on one with them.
        In conclusion, I am prepared to work with the committee to
    craft a budget that reflects the high priority that the
    American people are placing on education. I think that is
    apparent. I believe we can succeed in the effort, if we
    continue as we have in the past, to leave politics at the
    schoolhouse door and work for the common good of all children.

                               prepared statement

        Now I would be happy to respond to questions, Mr. Chairman.
    Do you want me to address Senator Byrd's? Senator Cochran has
    left, and I will be glad to respond to his questions or give
    them to him in writing. How would you like me to proceed?
        [The statement follows:]
                     Prepared Statement of Richard W. Riley
        Mr. Chairman and Members of the Subcommittee: I am pleased to have
    this opportunity to talk with you about President Clinton's 1999 budget
    request for the Department of Education. This Subcommittee has produced
    strong budgets for education over the past few years, but I think you
    will find that the President's 1999 budget represents the most
    comprehensive effort yet to raise standards and give schools, teachers,
    and students the tools to reach those standards.
        The American people have made education their number one priority,
    and the President's budget for education reflects their concerns. In
    particular, the 1999 request includes the largest increase in 30 years
    for Federal elementary and secondary education programs. Our purpose is
    straightforward: we want our elementary and secondary schools to match
    the world-class quality of our colleges and universities.
        The President's 1999 budget proposal would reduce class size in
    grades 1-3, help school districts build new schools and modernize
    existing ones, improve teacher quality, target new assistance to poor
    urban and rural schools, help bring technology into the classroom, and
    give all Americans the financial support and information they need to
    go to college.
        We are requesting a total of $31.2 billion in discretionary budget
    authority for fiscal year 1999, an increase of $1.7 billion or almost 6
    percent over the 1998 level. The request also includes two major
    education initiatives that fall outside of the discretionary budget,
    and I want to briefly mention these before moving on to a summary of
    our discretionary request.
                       class size and school construction
        First, President Clinton is proposing to spend $12 billion in
    mandatory funds over the next 7 years to recruit and train 100,000 new
    teachers. These teachers would help reduce class sizes in grades 1-3 to
    a nationwide average of 18 students. We believe that small classes are
    critical to giving our youngest students the foundation they need for
    high achievement in the later grades. In particular, small classes
    would help ensure that all children are able to read well and
    independently by the end of the third grade.
        In addition, small classes would make it possible for teachers to
    provide extra support and attention to children with special needs,
    including children with disabilities and children with limited English
    proficiency. The 1999 budget includes $1.1 billion in mandatory funding
    to launch the Class-Size initiative.
        Second, the President is proposing Federal tax credits to pay the
    interest on almost $22 billion in bonds to build and renovate public
    schools. Schools across the country are suffering from overcrowding,
    created in part by the ``baby boom echo'' that will increase school
    enrollments every year for the next 10 years. These growing enrollments
    create a tremendous need for new schools in many districts.
        In addition, the General Accounting Office has reported that
    existing schools require over $100 billion in repairs to ensure that
    teachers can teach and students can learn in safe and orderly
    conditions. I would also note that beyond the issue of safety is the
    need to modernize schools to take advantage of educational technologies
    like computers and the Internet.
        The President's proposal would help to build or modernize an
    estimated 5,000 public schools, with half of the support allocated to
    the 100 school districts enrolling the largest numbers of poor
    students. I want to emphasize, however, that the Class-Size and School
    Construction initiatives would improve educational opportunity and
    achievement for all students.
                       helping children master the basics
        Turning now to the President's discretionary request for the
    Department of Education, we are continuing our emphasis on helping
    children master the basics. We know that early competence in reading
    and math is critical for all children, but it is particularly important
    for disadvantaged and limited English proficient students, who often
    fall behind early and find it difficult to catch up in the later
    grades.
        The primary Federal program for raising the achievement of such
    children remains the Title I Grants to Local Educational Agencies
    program. The 1999 request includes a $392 million increase for Title I,
    all of which would be distributed to high-poverty urban and rural
    schools through the Concentration Grants and Targeted Grants formulas.
        We also are proposing to increase the number of teachers qualified
    to teach the basics to Hispanic and other limited English proficient
    students by doubling funding for Bilingual Education Professional
    Development to $50 million.
        The budget provides $260 million for America Reads, which would
    support local programs that provide tutoring and help improve reading
    instruction in our schools, so that every child can read well by the
    end of the 3rd grade.
        In mathematics, we have new and disturbing evidence that our
    students are far short of where they need to be to compete in the
    knowledge-based economy of the 21st century. Last week, the Department
    released the latest results of Third International Math and Science
    Study (TIMSS), on which U.S. 12th graders outperformed only two of the
    21 participating countries in math and science.
        This level of performance is just unacceptable, and to my mind
    confirms the need to raise standards dramatically in American schools.
    When the 8th grade math curriculum in American schools looks like the
    7th grade curriculum in other countries, and when 28 percent of our
    high school mathematics teachers did not major or minor in mathematics
    in college, it is clear that we have not set our expectations high
    enough. The TIMSS results provide yet more evidence that we need
    national standards of excellence in core subjects like mathematics and
    science. The President's call for voluntary national tests in reading
    and math is intended to address this need, and I hope the Senate will
    continue to support the development of these tests.
        The 1999 budget also would help improve teaching and learning in
    math and science by providing $32 million to implement an Action
    Strategy developed jointly by the Department and the National Science
    Foundation. The strategy is designed to improve the math teaching of
    elementary and middle school teachers, assist communities in the
    selection and implementation of rigorous instructional materials,
    maximize the effective use of existing Federal resources, and promote
    public understanding of the importance of challenging middle school
    math.
              raising achievement in poor urban and rural schools
        A second priority in the Department's discretionary request is to
    support fundamental change in America's urban schools, where promising
    efforts to turn around low-performing schools are starting to take
    hold. While much of our proposed investment in helping children master
    the basics will help urban schools, the budget includes several
    initiatives targeted on the special challenges faced by poor urban and
    rural schools.
        For example, the new $200 million Education Opportunity Zones
    program would make approximately 50 grants to poor urban and rural
    districts to improve accountability, raise teacher quality, and expand
    public school choice. A $30 million increase in the Title I
    Comprehensive School Reform program would help some 3,500 schools
    accelerate educational improvements and turn around failing schools. A
    25-percent increase in Charter Schools would support the expansion of
    public school choice through the start-up of up to 1,400 new or
    redesigned schools. And to help recruit and train new teachers for
    urban and rural areas, we are proposing to create a $67 million Teacher
    Recruitment and Preparation program in the reauthorized Higher
    Education Act.
        School safety is a special concern in high-poverty areas, and
    extended learning time can help disadvantaged students catch up in
    their academic skills. That is why this budget includes a $200 million
    major expansion of the 21st Century Community Learning Centers program,
    which would support keeping approximately 4,000 schools open after-
    school as extended learning safe havens. In addition, we are requesting
    $50 million to hire Safe and Drug-Free Schools Coordinators, who would
    help almost half of all middle schools develop and implement effective
    strategies for keeping our kids away from drugs.
                             educational technology
        A third priority--one that I know is shared by several members of
    this Subcommittee--is educational technology. A $50 million increase
    for the Technology Literacy Challenge Fund would help more schools buy
    hardware, train teachers to use technology, and develop and buy
    software. The $106 million request for Technology Innovation Challenge
    Grants would support 24 new awards to develop or adapt cutting-edge
    technology for America's classrooms. And a new $75 million Teacher
    Training in Technology initiative would help make sure that all new
    teachers can use technology effectively in the classroom.
                  helping students prepare and pay for college
        Finally, our 1999 request builds on last year's historic
    achievement in helping students and families pay for college, which
    included a $300 increase in the maximum Pell Grant award and the
    creation of the HOPE Scholarship and Lifetime Learning tax credits.
        The President's budget proposes $7.6 billion for the Pell Grant
    program, an increase of $249 million that would further raise the
    maximum Pell award from $3,000 to $3,100. A $70 million increase for
    Work-Study would reach the President's goal of giving one million
    recipients the opportunity to work their way through college, while
    also supporting additional Work-Study tutors for America Reads.
        We are asking for $583 million for the TRIO programs, a $53 million
    increase aimed at expanding the number of Upward Bound projects--
    especially in under-served areas including Hispanic students. TRIO's
    efforts to encourage low-income students to prepare for and enter
    postsecondary education would be reinforced by the HIGH HOPES
    initiative.
        HIGH HOPES for College for America's Youth would promote
    partnerships between colleges and middle or junior high schools in low-
    income communities. Beginning in the sixth or seventh grade, the
    program would give students information about college and what it takes
    to go to college, along with support services like mentoring and after-
    school activities that help children stay on track to complete high
    school and enroll in college. The $140 million request for HIGH HOPES
    would be the first step toward serving more than 1 million students in
    2,500 middle schools over the next five years.
                                   conclusion
        The 1999 request for the Department of Education reflects an
    ambitious and comprehensive effort to help States and communities
    address critical issues in education and prepare our children for the
    challenges of the next century. I believe we can succeed in this effort
    if we continue--as we have in recent years--to leave politics at the
    schoolhouse door and work for the common good of all our children.
        I will be happy to take any questions you may have.

                          Math and science achievement

        Senator Specter. Well, Senator Byrd cannot be with us long,
    as I understand his schedule, so if you would respond at this
    point to his question, we will then proceed with a round of
    questions for the members.
        Secretary Riley. Fine.
        Senator, I certainly agree with the tenor of the strong
    concern you have for excellence in education, and I tried to
    address in my statement some of the TIMSS issues.
        Let me say some more on that. It is very clear to me that,
    for example, our 8th grade students, generally, in math and
    science are taking what 7th grade students are taking in most
    of the countries that did a lot better than us in the middle
    schools and in the 12th grade.
        However, we have improved performance in math and science
    almost a grade level over the last 12 to 14 years. That has
    been a result of targeting on math and science--coming out of
    putting a person on the Moon and all those other efforts to
    target math and science education. Obviously, we have not
    improved enough. Others have gone up probably a grade level
    plus.
        So, we have made improvement. We are making improvement.
        The fact that we do so well in the fourth grade certainly
    makes it right clear that the basics that we have up through
    the fourth grade we are excelling in, leading the world in
    science and almost in math. Then we begin to drop. I think a
    good part of it is low expectations. We do not demand enough, I
    think, for some of our students, as you pointed out, and of
    teachers in the system. In high school, 25 percent of our
    students, for example, take physics. In countries we are
    competing with, about 75, 80, to 85 percent take physics. So,
    our students compare on a physics exam very poorly.
        Those kinds of things I think we can do something about. I
    do think we ought to start urging 4 years of math and science.
    I remember when I was Governor of South Carolina and raised it
    to 3 years of math and science, people thought that was rather
    dramatic. Now it is clear to me that we need 4 years of math
    and science, and, of course, I hope States would use the TIMSS
    information to move that forward.
        As you know, I support the tenor also of the Byrd
    scholarship which is merit driven, and that also makes a very
    good statement I think and I am very pleased that it is in our
    budget.

                              Parental involvement

        So, I think high expectations and parental involvement are
    needed. Parents are involved more in elementary school
    obviously than middle school and high school. I think it is a
    good thing for us to urge parents to get more involved with
    their children in middle school and high school and talk with
    them about the kinds of courses they ought to be taking to go
    to college, to be successful in life, and talk with them about
    drugs and about smoking and about alcohol or whatever. So, I
    think parents are a very critical part of the mix also.
        Mr. Chairman, do you want me to address Senator Cochran's
    issues or wait----
        Senator Specter. I think Senator Cochran may be rejoining
    us. He said he would try to return. So, let us await his
    return.
        Now we will start 5 minute rounds for members.
        Senator Byrd. Mr. Chairman, before you begin, may I thank
    you again and may I thank all the members of the subcommittee
    for being so patient with me. I am not a member, and the
    subcommittee has been very gracious.
        And I thank you, Mr. Secretary.
        Secretary Riley. Thank you, sir.
        Senator Specter. Senator Byrd, I know I speak for all the
    members. We are glad to have you here. Thank you.
        I said at the outset, and a number of members have joined
    since, that following your testimony, Mr. Secretary, we have a
    hearing on campus safety, and after we had scheduled these
    hearings, Governmental Affairs scheduled at 4 o'clock a
    proceeding on the report which is going to be very complicated
    and contentious. So, it is my hope we will conclude by 4
    o'clock.

                Budget offsets--tobacco settlement and user fees

        We are going to proceed now with 5 minute rounds. So, the
    first question I have for you, Mr. Secretary, is in making your
    budget projection, $1.9 million is based upon proceeds from a
    tobacco settlement and from unauthorized user fees. If we do
    not get those sources of revenue, which are right now highly
    speculative, how will we pay for that $1.9 billion?
        Secretary Riley. Well, I understand from what was said
    earlier by Senator Harkin or one of the Senators that there is
    some positive information developing, hopefully, on that issue.
        Senator Specter. Positive information developing,
    hopefully.
        Secretary Riley. Hopefully. [Laughter.]
        Senator Specter. That is a long way from being a bird in
    hand.
        Secretary Riley. If that is resolved and, of course, those
    funds are there----
        Senator Specter. If not?
        Secretary Riley [continuing]. Then we think the best use of
    the funds would be as we indicate. If not, which is your
    question, then we still think the idea of sending funds to the
    States for them to use to reduce classroom size for those early
    grades one, two, and three, and especially for hiring teachers
    specially trained in reading, that this would be very, very
    helpful for this country. All we can say is that we think those
    are very worthwhile purposes. If this offset is not there, then
    we would welcome other offsets or suggestions and would be
    happy to discuss those kinds of things with you.
        Senator Specter. We too would be interested in welcoming
    other suggestions, but this budget is very problemsome, Mr.
    Secretary, because of that $1.9 billion gap.

               Class size reduction--use of parochial classrooms

        But let me go on to another question and that is on the
    President's initiative on class size reduction. The
    subcommittee asked for a study by your Department, which is not
    yet complete except for some information. This is an idea
    advanced by Cardinal Bevalaqua of Philadelphia where the
    schools are overcrowded, yet the Catholic schools have a lot of
    space. It costs $7,000 a year to educate a student in the
    Catholic schools. Cardinal Bevalaqua would like to open his
    doors for $1,000.
        It obviously implicates church-State separation. Can you
    give me your view on that sort of a proposal?
        Secretary Riley. Of course, we were asked to give a report
    back on that subject, and we will have that to the Congress by,
    probably, April. We are just about completed with it.
        Some of the initial findings of the report are that among
    the 34 large urban school districts, 22 reported some
    overcrowding in anywhere from 13 to 91 percent of their
    schools. The associations representing private schools
    indicated that private and parochial schools have some space
    available, but approximately one-half of those associations
    believe that the space is quite limited. That was a mixed view.
    As I say, this is not final information.
        The associations also indicated some problems and concerns
    that would develop in such a transfer. Schools could maintain
    their current curriculum, their current admissions, assessment,
    and other policies without change. These concerns are what came
    back to us. Religious schools would not be required to permit
    exemptions from religious instruction to transfer students.
    Private schools would not be required to serve a large number
    of students with special needs. There would be no increase in
    Government control of private schools and so forth.
        So, you have a lot of concerns expressed by private schools
    that if they get into this, they do not want to shift the
    nature of their private school basis. We have not completed
    that study, but those are some questions that have been raised
    to us by some of the private school people.

                           Campus Security Act panel

        Senator Specter. Well, my yellow light is about to turn to
    red, and I want to maintain the timing. So, I will conclude my
    round simply by pointing out another panel we are going to have
    on compliance with the Campus Security Act, and I would hope
    that you could stay for a few minutes, Mr. Secretary, although
    your assistant, Mr. David Longanecker, will be the principal
    witness.
        Senator Harkin.
        Senator Harkin. Thank you, Mr. Chairman.

                    Youth violence and after-school programs

        Mr. Secretary, I have here an article from the Des Moines
    Register last fall, and the headline reads ``Killing Time
    Literally After School.'' It talked about a study that was done
    at Northeastern University, the College of Criminal Justice in
    Boston by Mr. James Allen Fox about the fact that juvenile
    crime is worse in the afternoon--and not late at night--between
    2 p.m., and 8 p.m. Almost 50 percent of violent juvenile crimes
    occur between 2 p.m., and 8 p.m. Only one-seventh occurs
    between 11 p.m., and 7 a.m., when curfews typically are in
    effect.
        I know that you want to address this issue, and you can
    tell us more about your efforts, what you want to do in getting
    after-school programs?
        I will just say that James Allen Fox said in the afternoons
    we used to have sports, drama, and music. We had violins and
    now it is violence.
        So, what exactly are you proposing, Mr. Secretary?

                    21st century community learning centers

        Secretary Riley. Well, last year, this current budget year,
    you approved our request for the 21st century community
    learning centers and appropriated $40 million for that program.
    That was in my judgment a very wise move.

                             After-school programs

        We have proposed in this budget to raise the $40 million to
    $200 million and to have it funded for 5 years, $1 billion over
    5 years going to after-school programs. It is all involving
    partnerships, quality programs that would address the issue
    that you raise. Parents want children, if they are in after-
    school programs, to have access to computers, art programs,
    academic programs, sport programs, those exciting, interesting,
    engaging things to do, not just to bide time, but for there to
    really be learning time that is also interesting.

                Mott Foundation funds for After-school programs

        The Mott Foundation, by the way, a private foundation, was
    so interested in that purpose, the after-school purpose, that
    they have committed $55 million over a 5-year period to place
    emphasis on quality in those programs. They had people come in
    and meet and talk about how best to implement after-school
    proposals, how to set up the after-school programs. Mott had
    bidders conferences around the country and 5,000 people
    attended.
        In this $40 million program that you all approved last
    year, we had room for funding perhaps 400 of these programs;
    16,000 requests were made about the program.
        I do not think there is any question that this is the right
    direction to go. If we are going to solve many of the problems
    that TIMSS and other studies have shown, we have got to make
    good use of that after-school time for all children. That is
    it, and as you point out, youth crime and victimization both
    happen primarily during the time, as they say, the school bell
    rings and before the factory whistle goes off. So, I am very
    hopeful that you all would fund that additional amount for that
    existing program.
        Senator Harkin. Thank you, Mr. Secretary.
        I also think that that is one of the most important things
    that we can be about. I think it is one of the great helps that
    we can give our elementary and secondary students around the
    country.
        I see my time is running out.

                      Math and science achievement--TIMSS

        I just want to ask you about the TIMSS study. How come?
    Just one more time. Why in the 12th grade we are so low, 4th
    grade we are so high? What is happening between the 4th and the
    12th grades?
        Secretary Riley. Well, I will not repeat all of the things,
    but the TIMSS study observed in eighth grade that the American
    curriculum was an inch deep and a mile wide. The curriculum,
    for example, in Japan in eighth grade would have like seven
    topics. America would have like 32 to 33. There is not anything
    wrong with that at all, but it is just kind of the way we go
    about teaching math and science, a little bit of everything.
        Their suggestion, of course, is to get deeper into fewer
    topics early to build a foundation for high school. A key way
    to do that is algebra. To have algebra in the eighth grade we
    think is absolutely critical. There is no reason in the world
    why our students cannot have algebra and some geometry by the
    eighth grade. That is what happens in practically every other
    country we are competing with and having difficulty with.
        I think the programs that we have proposed are having a
    quicker effect in elementary school also. The high standards I
    think are working, and the technology things that we are doing.
    Title I largely funds those early school years, and the changes
    in title I, doing away with the watered-down curriculum, and so
    forth are producing results. I think all of that is making a
    big difference.
        Then when you get on up into high school--this test was
    given in 1995. Maybe there are some changes that are taking
    place now, but not near enough, not near quickly enough.
        Senator Harkin. Thank you very much, Mr. Secretary.
        Senator Specter. Thank you, Senator Harkin.
        We are going to proceed with order of arrival, which is the
    subcommittee rule. We next go to Senator Bumpers, then Senator
    Faircloth, Senator Gorton, and Senator Kohl. Senator Bumpers.
        Senator Bumpers. Thank you, Mr. Chairman.

               Mississippi Delta early childhood services project

        Mr. Secretary, last year this committee and the conference
    committee put a $1.8 million grant in its report for the Easter
    Seals of Arkansas to do a demonstration project in the delta
    region of Arkansas, Louisiana, and Mississippi. The idea being
    that early childhood specialists would serve children with
    disabilities in the delta region--right now these children have
    to be taken to Little Rock. Transportation is a big problem, so
    a lot of them do not even bother to go.
        They are wanting to prove something which really I suppose
    we all already know, but at the end of the three demonstration
    projects, they intended to put rehabilitation experts there to
    live in the delta and serve the poor disabled children there.

               Mississippi Delta project--Easter Seals Foundation

        We thought it was all saucered and blowed, as we say in
    Arkansas. Senator Specter was very kind to put it in his mark.
    The members of the delegation in the House from those three
    States, as well as the Senators from those three States, wrote
    letters. We did not put it on our wish list until we talked to
    the Office of Special Education and Rehabilitative Services of
    the Department of Education who assured us that they would
    honor this report language.
        The worst part of it is, the Easter Seals of Arkansas began
    hiring medical and planning staff and then suddenly we get a
    letter about 1 or 2 weeks ago saying the Department will not
    provide the $1.8 million.
        And this has created a real problem. Not only do we need
    the demonstration project for one of the poorest areas of the
    United States, but the Easter Seals of Arkansas have agreed to
    take on the continuation of this at the end of 3 years by, as I
    say, providing special education and rehabilitative services
    down there to those children. It seems like a really wonderful
    deal for the Department of Education, but right now it is a
    traumatic thing for everybody because we suddenly get this
    letter out of the blue sky from a Judith Heumann. Is that the
    way you pronounce it?
        Secretary Riley. Yes.
        Senator Bumpers. Saying they were not going to honor it. As
    I say, we would not have even put it in our wish list had we
    not known it was going to be honored.
        Secretary Riley. Well, Senator, let us continue to work
    with you on it. These were competitive grants, that is the way
    these are handled. Another competition I think, Tom, is coming
    out very soon?
        Mr. Skelly. The Easter Seals Foundation may be eligible for
    more than one competition. The competition that you addressed
    in the report is one where the average grant is about $150,000
    per year.
        Senator Bumpers. That does us no good. We got the letter.
    That was the suggestion, that this competition was available to
    us. If we won it, it would be $150,000. It does not even
    scratch the surface on what we are trying to do.
        Mr. Skelly. It would be $150,000 per year.
        We are considering yet another competition for which Easter
    Seals might also be eligible. We have not announced that
    competition yet. So, it is possible that the second competition
    would be for a larger amount of money. We have not worked out
    all the details.
        Senator Bumpers. Mr. Skelly, with the utmost respect, why
    did you not make all of these excuses back when we talked to
    you in the first place before you committed to us that you
    would honor this? I mean, I am aware of all of that. Easter
    Seals is aware of all of that. The letter said that we had
    substantial unexpended funds. The truth of the matter is we do
    not have substantial unexpended funds, and $150,000 does not
    get the water hot. I have a list of five things that were set
    out in Ms. Heumann's letter and none of them really help us at
    all.
        Mr. Skelly. We will be looking into that situation again
    more, Senator. There are funds provided under State grants to
    the area, and our staff have talked to the State
    representatives and others down there about possibly getting
    more of that money that is already provided from the Federal
    Government to the States for these same services. But I
    understand there is a problem in getting enough trained staff
    to work there, and that is why we are interested in looking at
    Easter Seals as a source of the kinds of services that could be
    provided to students down there.
        Senator Bumpers. Mr. Secretary, this is really a dismaying
    situation for me personally and especially for the Easter Seals
    of Arkansas who looked forward to doing this project and, as I
    say, who have already hired some people in anticipation of it.
    Then all of a sudden out of the clear blue sky, 4 months after
    the President signs the bill, we get a letter saying the
    Department would not honor it.
        Secretary Riley. Well, Senator, I certainly will take a
    look at that and be back with you on it. I understand the
    technicalities that we are talking about, but I would strongly
    support the sentiment of what you are trying to do. Let me take
    a look at it and see if there is any earthly way that we could
    visit it.
        Senator Bumpers. Thank you, Mr. Chairman.
        Senator Specter. Thank you very much, Senator Bumpers.
        Senator Cochran had been here earlier, had propounded a
    series of questions, and the Secretary had wanted to know
    whether he should answer them earlier and I said you expected
    to be back. So, if it is your pleasure, he will proceed now to
    answer them.
        Senator Cochran. Thank you very much, Mr. Chairman. I
    appreciate that very much.
        Secretary Riley. Senator, I have gone through so much since
    you left.

                            America Reads Challenge

        Senator Cochran. I will refresh my memory and yours too. I
    discussed the reading research initiative at NIH.
        Secretary Riley. I think we are together on that. I do not
    have any problem with that, and I think we are together on that
    as far as the America Reads Challenge. It is a locally driven
    program, as you know, America Reads. We do not tell them what
    to do. OERI does work hard, though, to give out research
    findings like these, and I will assure you that that will be
    done. It will be disseminated and they will have it. Of course,
    as you point out, we do not control that and do not try to, but
    they will have that information.

                      Title I allocation formula revision

        Senator Cochran. The other subject was title I and the
    allocation formula. It looks to me like the money is now going
    where the votes are rather than where the needs are.
        Secretary Riley. Well, what we want the money to do is to
    go where the kids are, and if it is for disadvantaged kids,
    that is what we are trying to help develop, a formula to target
    the money to go where they are. That is our philosophy on it. I
    realize you differ with some of the census procedures as far as
    determining the allocation. But what I am trying to do--and of
    course, the National Academy of Sciences is advising us on
    that--is to try to have the money go where the poor children
    are.

                            National writing project

        Senator Cochran. The third topic that I broached was the
    writing project and the efficacy of that program as a national
    model for teacher training. You are spending money for teacher
    training, only a small amount, although I am glad you are
    suggesting that we spend some on the writing project. I am
    suggesting enlarging that as a national model and using it
    nationwide.
        Secretary Riley. Well, let me take a look at that. We agree
    with you on the writing project. I think that is a grand
    project and we recommended funding of it, as you point out, and
    I will look at further use of it. I think that is a good
    suggestion, but certainly we agree with you on the project.

                         ``Readline'' and ``Mathline''

        Senator Cochran. Some of the submitted questions include
    things like ``Readline.'' That is a televised program. WETA has
    pioneered an effort to help develop reading competence, and I
    hope you will look at that as a program that ought to be funded
    with Federal dollars by the Department of Education.
        Secretary Riley. All right, sir.
        Senator Cochran. And ``Mathline'' is a similar project.
    ``Readline'' and ``Mathline.'' Well, they are similar things
    but they are using the technique and the technology of
    television. We do know that children watch a lot of television,
    and we are trying to, in the process, help to educate by the
    use of that technology too, and these are new techniques for
    doing that.
        Senator Specter. Thank you very much, Senator Cochran.
        Senator Faircloth.
        Senator  Faircloth. Thank you, Mr. Chairman.

            Education funds going directly to students and teachers

        Secretary Riley, when will the Department submit to the
    Congress the report on how much money reaches the students and
    teachers that I requested in last year's appropriation?
        Secretary Riley. It is my understanding that April 1--is
    that right, Tom?
        Mr. Skelly. That is right. We plan on having our report,
    Senator, by April 1.
        Senator  Faircloth. You are going to have it by April 1.
        Secretary Riley. April 1.
        I am very interested in the subject, and I am glad you are.
    I really think it is worthy for us to be doing some work on.
    This idea of what gets down to the classroom I think is very
    important.
        Senator  Faircloth. We will get it in April.
        Secretary Riley. My estimate here is by April 1, yes, sir.
    I will try to get it to you by then.

                         interest rate on Student loans

        Senator  Faircloth. Mr. Secretary, as you know, after July
    1 of this year, there will be a decrease in the interest rates
    that banks and other institutions can charge for federally
    backed student loans. Banks have indicated that this will make
    student loans completely unprofitable for them, and they will
    significantly reduce their participation in the program unless
    there is an adjustment made, I assume leaving many students
    stranded for lack of loans.
        As a member of the subcommittee and as a member of the
    Banking Committee, I have been somewhat concerned about the
    matter and wanted to know if you would please comment as to
    where this is going and address the problem.
        Secretary Riley. Yes, sir, Senator. The Treasury Department
    has done substantial work on that. I think it is a very serious
    problem that needs to be dealt with. They have come up with a
    proposal and it was announced recently by the Vice President.
    It was a proposal that would use the 91-day Treasury bill,
    which is what they very much wanted. They wanted it to be
    consistent with the 91-day movement and not into the 10- to 20-
    year securities. That part I think would be a tremendous help,
    stabilizing help, for the lending institutions.
        The main part of the change that was made originally, of
    course, was to help students, to help them get a reduction in
    rate. The proposal that the Treasury Department comes up with
    protects the students with a low rate but changes the method
    around to where we think it would be a lot more appealing to
    the lenders.
        So, that is now into the process of discussion, but we have
    put a very substantive, which I think is a very good and fair
    proposal, on the table. I know some other committees are
    looking at that here. That discussion is now underway. Of
    course, we would like to get it resolved by the July 1 deadline
    and think that is very important. We do have what I think is a
    very responsible proposal on the table.
        Senator  Faircloth. Are you going to get it solved by July
    1?
        Secretary Riley. I think so. I think clearly we will. I
    think everybody is now coming together to try to get it
    resolved, and everybody wants to get it resolved. So, I think
    it will be resolved, yes, sir.

                                School uniforms

        Senator  Faircloth. Secretary, one time way back when--
    early on with President Clinton early in office, the Department
    put out a notice with a lot of material, pamphlets, on how
    schools could switch to school uniforms like Winthrop and what
    a great thing it would be. There was a lot of effort that went
    into it. I am interested in how many schools went to the
    uniform system.
        Secretary Riley. I do not know exactly. That is a very good
    question, and I will check that out and let you know. I will
    tell you this: a lot of them. I go around to a lot of schools
    and I am seeing more and more, especially elementary schools
    and a lot of middle schools, with children in uniform.
        What our information, which was an analysis of where school
    uniforms are used around the country successfully, like Long
    Beach--and I was just out there the other day, and it is very
    successful out there--said, is that the discipline is better.
    Crime is down. Violence is down, and so forth. It does not
    solve all problems, but in most places it is a help--and our
    data showed us if you go to the parents first and you get the
    parents to support uniforms, then you have kind of a collegial
    feeling about that and not a top-down attitude, saying to
    people, this is how it is going to be, you have to do it. If
    you get them involved in the decision, it seems to work better
    than if you do not. But those places that have done that, it
    seems like they have had very good success with it, and we are
    very positive about it.
        Senator  Faircloth. I think it is an excellent idea and I
    hope you will push it. Thank you.
        Secretary Riley. Thank you.
        Senator Specter. Thank you, Senator Faircloth.
        Senator Gorton.
        Senator Gorton. Mr. Secretary, because of this 5-minute
    rule, I am going to go through three subjects and see if I can
    get through all of them, and then ask you to answer.

                               Closed captioning

        The first one is simply a bit of advice. In the last couple
    of days, you have come into this controversy with respect to
    your grant programming for closed captioning of television by
    reason of a letter to you from Senators Lieberman and Coats.
    One of your assistants has said that it is perfectly
    appropriate to fund closed captioning for the ``Jerry Springer
    Show,'' described by the letter as the closest thing to
    pornography on broadcast television and by another as a show
    that puts on more fights than Don King because it is a part of
    the culture, according to your subordinate.
        Your other spokeswoman yesterday said that, well, these
    grants are given to people who then give the grants, so you are
    not responsible for what goes on after that, and you are not in
    the business of censoring.
        Now, I should remind you, Secretary Riley, this was exactly
    the way NEA got into problems with Maplethorpe by saying, well,
    we did not really do it, one of our grantees did it. I spent a
    lot of my time barely saving the existence of the National
    Endowment for the Arts, and I would strongly advise you that
    you do something about this one, rather than get into the kind
    of controversy NEA found itself in. That is pure advice. You
    can respond to it or not.
        Secretary Riley. Let me----
        Senator Gorton. I have got to go through all of this.
        Secretary Riley. Well, if you could have a little extra
    time, I would appreciate it because I would like to just give a
    response.
        Senator Gorton. Fine, but my light is going to go off. So,
    I am going to give you two other subjects now and then I will
    listen to your answer to all three of them.

                                 Local control

        You were in Seattle last month and you called for people to
    choose solutions instead of choosing sides, a statement that
    was quite consistent with your state of the education speech
    last year when you said that we should not--and I quote--
    ``cloud our children's future with silly arguments about
    Federal Government intrusion.''
        It seems to me--and you can comment on this if you think
    this is an erroneous interpretation--that agreeing with your
    philosophies is choosing solutions, and espousing a philosophy
    that states that educators, parents, teachers, administrators,
    and school board members in our local communities should have
    far more authority and you far less in choosing sides and
    making silly arguments about Federal Government intrusion.
        I would like your comment on that. Is this just rhetoric,
    or do you really believe that those who feel that these
    decisions should be centralized are making silly arguments and
    are choosing sides?
        And finally, with respect to the specifics of your budget,
    I find it interesting to note that those areas, the two major
    areas that provide the greatest degree of flexibility to local
    school districts to make their own choices, are the ones that
    are least favored in this appropriation.
        You simply wiped out the title VI block grant program,
    stating in your budget some States and districts funded the
    same activities year after year with little thought as to the
    most appropriate use of title VI funds. That seems to me
    consistent with the proposition that the locals do not know
    what they are doing but you do, so we wipe that out and put it
    into prescriptive forms of funding. That was cut out
    completely.
        The other area in which you have substantial reductions is
    impact aid where again school districts are able to make their
    own choices and are funded for the impact that the Federal
    Government has on them.
        Finally, IDEA. I have had several education seminars in the
    last few weeks, and the overwhelming reaction from the people
    who run our schools is utter frustration with IDEA. We passed
    the reauthorization of that law last year that we intended to
    be at least slightly less prescriptive on locals. Your proposed
    regulations make it more prescriptive, and at the same time
    that you make it more prescriptive, you effectively cut the
    budget, at least the student budget, for IDEA.
        Why is it, Mr. Secretary, that in a program like that with
    detailed regulations from the Federal Government, you propose
    to fund about 9 percent of the cost to school districts but to
    take all kinds of money, literally millions of dollars, and
    fund new programs with rules and regulations from the Federal
    Government? Should we not first fund the activities we have
    already mandated on school districts before we start a bunch of
    new programs?
        Senator Specter. I compliment my distinguished colleague,
    Senator Gorton--you are a very experienced questioner--for
    being within the 5-minute rule. [Laughter.]
        Now we will see how long the answers take.
        Secretary Riley. I will proceed to respond, but there are
    five or six very serious questions, Mr. Chairman, if I can
    respond to them.
        Senator Specter. You may respond.

                               Closed captioning

        Secretary Riley. First of all, on the closed caption issue,
    I think I would agree with you on the particular show. The
    ``Jerry Springer Show'' I have never seen. I do not care to see
    it. I have never heard anything about it that I liked.
        There is a process that we use for these captioning
    programs. We give the grants out. The grantees then bring in
    panels of deaf, hard-of-hearing people to say what they would
    like to have included.
        I will say that the closed captioning program, Senator, has
    done a lot of good. We funded 100 percent of captioning in the
    beginning and now private industry is picking some up. As you
    watch on television, a certain company will pay for it. Now we
    fund about 40 percent, and I hope to get that down to zero. We
    are moving that down very quickly, and I think it is.
    Captioning has gotten tremendously improved. So, it is a good
    thing.
        Picking the programs, we try not to do that. We let the
    grantees, through panels of deaf people, pick the programs to
    be captioned. This program happens to be the most popular talk
    show in daytime television. The FCC approves it for daytime
    television. That is what other people want to watch, and the
    fact that deaf people and hard-of-hearing people want to watch
    it, I think, is understandable. It becomes a censoring kind of
    problem.
        I will follow your advice and take another look at any way
    that we think we ought to get involved. I want to be honest
    with you. I want to be very, very careful about telling hard-
    of-hearing and deaf people what they ought and ought not want
    to see.
        One person told me today, when I was asking about that,
    that if there was a deaf parent who had speaking children who
    could hear, that parent would like to know what that program is
    about so they could say whether or not they wanted their child
    to watch it. I do not know how many other situations are like
    that.
        But it is quite different I think from the art situation.
    This is a group of people that have a right to see things on
    television and hear them just like we do.
        Senator Specter. Mr. Secretary, you have two more complex
    questions pending. If you could give an encapsulated answer to
    each and perhaps supplement it in writing, I would appreciate
    it.

                         Block grants and local control

        Secretary Riley. All right, sir. The question of block
    grants generally, let me speak to that, because I think that is
    a very important issue and it touches two of the things that
    you mentioned.
        I do not think that we should be prescriptive, but I do
    think that we should in the Federal Government, as far as the
    Federal role is concerned--that it makes very good sense for us
    to set focused, targeted priorities that are broad and
    measurable. This idea of being measurable I think is very
    important. Is there accountability? How can you judge whether a
    program is getting better or worse, whether it is performing a
    function or not? Or are the programs' funds just being moved
    into the general budget of the State or of the local school
    district?
        So, that is my general feeling, that the Federal role is
    not control but it should provide funds that are focused and
    targeted but measurable. I think taxpayers deserve to know how
    their dollars are being spent, and the dollars that are taxed
    at this level, I think they should have a directed purpose, but
    the control of that should be as flexible as it could possibly
    be.
        As you know, we have pushed for that. We have eliminated
    two-thirds of the regulations in elementary and secondary
    education since we have been here, over 5 years, two-thirds of
    them. We have recommended Ed Flex which is now in 12 States,
    and the President, as you know, recommended to the Governors
    the other day that it be extended to 50 States. With Ed Flex,
    the State then could handle a waiver of a program, but it would
    not change the overall focus of the program and the
    accountability of the program.
        So, that is my general feeling. We do not think the general
    revenue proposals of time past were successful, and we think
    that special areas of concern, whether it is poor children or
    disabled children or whatever, do deserve attention.
        Let me say this about the States also. Over one-half the
    States now are in legal controversy stemming from
    constitutional issues over the equity funding formulas within
    the States. The idea of sending large numbers of block grant
    funds into a situation that is really up in the air in a lot of
    States--as to whether their entire financing process is based
    on equity--must be carefully considered. I think that is an
    important point.

                           GAO study on Block grants

        Then finally, the GAO study that just came out the last
    couple of days certainly indicates that if money goes down to
    the States and the States spend the money as they have in the
    past, it would cause the poor to be the losers. The people that
    we often target funds to on this level would be the losers.
        Those are some of my general answers on that.

                                   Impact aid

        As you know, we favor funding part A programs and we have
    favored not funding part B programs, and that has been kind of
    an ongoing difference of opinion.

                       Special education budget increases

        IDEA gets into another whole matter of issues that I think
    are very, very important. As you know, in the last 2 years, we
    have had a 64-percent increase in IDEA, and that is very
    significant. I congratulate all of you for that and am pleased
    with it.
        If you look at a 64-percent increase in the last 2 years,
    this year we did not recommend an increase but level funding,
    but we do have $10 million in there for another 15 States to
    move forward with a State education reform strategy in terms of
    disabled children, and a $20 million increase for grants for
    the infants and families program.
        Then the main thing is that 80 percent of the special
    education children in America--80 percent of them--spend over
    40 percent of their time in regular classrooms. What we tried
    to do this year was to have a special emphasis on the regular
    classroom.
        The size of the classroom--if you reduce the pupil/teacher
    ratio in grades one, two, and three, and give those teachers
    special help in reading, it is amazing how that would help
    children who are borderline special education children. If they
    can have some special attention, individual attention from
    those teachers, many of them would not have to go into special
    education we think.
        So, we think title I, some of those other programs, the
    Eisenhower program, the reading program, the testing program--
    all of those things that we recommend for the general regular
    classroom--we think will be tremendously helpful to disabled
    children.
        Senator Specter. Senator Kohl.
        Senator Kohl. Thank you very much.

                             After-school programs

        Mr. Riley, one part of the President's program that I am
    very interested in is the demonstration project run by these
    three Departments, the Education Department, HHS, and Justice,
    that will coordinate Federal after-school programs. I
    understand that the purpose of this initiative is to designate
    three to five pilots for these and to prove that you can do a
    better job by coordinating these programs, the after-school
    programs.
        How are you going do to this? How are you going to select
    the pilot cities? What are you looking for?
        Secretary Riley. Well, Senator, we strongly support, by the
    way, the work that they are going to be doing. I think it makes
    a whole lot of sense for us to coordinate those programs.
        I think there will be what? Three target areas?
        Mr. Skelly. Three to five cities will be selected as pilot
    projects.
        Secretary Riley. One, I think, in there will be Washington,
    DC, so that leaves several. Whether Milwaukee will be chosen
    would be dependent on what information we have and the criteria
    we establish. But Education, HHS, Labor, and Justice are among
    a number of different agencies that have pieces of after-school
    programs, and we very strongly support the program.
        You would like to see Milwaukee as one of the test cities.
    I will see that they have that for their consideration. I do
    not know if you have already written us to that effect. If not,
    please submit that. I know your superintendent, Allen Brown. If
    you would ask him to submit why he thinks that would be----
        Senator Kohl. I will do it.
        Secretary Riley. We certainly will see that that goes to
    the people.
        Senator Kohl. Thank you. One more question.

                       Bilingual and immigrant education

        In the school district of Wausau, WI, we have 22 percent
    Hmong and Laotian students. We have 45,000 Hmong and Laotian in
    Wisconsin. It is the second largest in the country, and they
    desperately need programs, such as bilingual and immigration
    education.
        Now, I know that you have an account for bilingual and
    immigration education, and the President's budget increases
    that account. Could I ask you to take a special look at the
    situation in Wausau, particularly the 25 percent of Hmong and
    Laotian students in Wisconsin, and in Wisconsin, where there
    are 45,000, the second largest concentration in the country?
    Can we see whether we could not provide some special assistance
    to that population?
        Secretary Riley. I certainly will do that. I have been
    there with you at one time and heard those concerns, and they
    are real. The Hmong children are refugee children, are they
    not?
        Senator Kohl. Yes.
        Secretary Riley. Are the Laotian refugee children too?
        Senator Kohl. Yes.
        Secretary Riley. And they are in a different situation than
    other immigrants certainly. They are in a preferred situation.
        We are meeting with HHS on that today in fact. We are
    having some meetings on it.
        Another very important program for them, of course, is
    title I. With the title I increases in here, and better
    targeting, title I really makes a big difference.
        But we are meeting with HHS to take a look at that
    situation, and I will try to get you some information on that.
        Senator Kohl. I do appreciate it, Secretary Riley.
        Secretary Riley. Thank you.
        Senator Kohl. Thank you, Mr. Chairman.

                         Additional committee questions

        Senator Specter. Thank you very much. Secretary Riley,
    there will be some additional questions which will be submitted
    for your response in the record.
        [The following questions were not asked at the hearing, but
    were submitted to the Department for response subsequent to the
    hearing:]
                         Additional Committee Questions
     national test initiative--cost projections, participation, authority
                                 and oversight
        Question. How much of the fiscal year 1998 appropriations for the
    Fund for the Improvement of Education do you intend to use for
    development of national tests of 4th grade reading and 8th grade
    mathematics achievement?
        Answer. We are unsure at this time of the exact amount that will be
    needed in 1998 funds for the development of these national tests. We
    are awaiting a request from the National Assessment Governing Board,
    which now has exclusive control over the contract for development of
    the tests. Based on informal discussions with NAGB staff, we are
    expecting NAGB to request approximately $8 million in 1998 funding.
        Question. How much of the amount requested for fiscal year 1999 for
    the Fund for the Improvement of Education do you intend to use for
    future test development, field testing, etc., of the national tests, if
    you obtain authorization to continue this activity after the end of
    fiscal year 1998.
        Answer. Our current estimate, again based on informal discussions
    with NAGB staff, is that we will allot $13.5 million to NAGB in 1999
    for the test development contract.
        Question. What is your current position on authorization for
    national test development and implementation after the end of fiscal
    year 1998--do you believe that you have authority to proceed with this
    activity unless new restrictions are enacted, or do you believe that
    you need specific and explicit authority to continue with this activity
    beyond the actions and time period referred to in the fiscal year 1998
    appropriations act?
        Answer. We believe that we have authority, under the current
    authority for the Fund for the Improvement of Education, to proceed in
    1999 with the development and pilot testing of these voluntary national
    tests. Our proposed appropriations language would ensure that the
    National Assessment Governing Board continues to have exclusive
    authority and oversight with regard to the voluntary national tests.
    The NAGB schedule for the development of these tests calls for pilot
    testing in March of 1999 and field testing in March of 2000. Absent the
    enactment of new restrictions, funds provided to NAGB in 1999 would
    support item development and pilot testing. Funds provided in 1998
    cannot be used for pilot testing or field testing of the national
    tests.
        Question. How many States have committed themselves to participate
    in the national tests, should they ever be implemented?
        Answer. We no longer have a good count of the number of States
    committed to using these tests, given that the first administration of
    the tests is now scheduled for March of 2001.
        Question. Does the number of States agreeing to participate justify
    the planned level of expenditure for this activity?
        Answer. We believe that the costs of developing these tests is well
    justified. The annual cost of test development we estimate will be
    approximately $13 million. States and districts will bear the costs of
    administering the tests, which they will use on a voluntary basis. We
    expect that a large number of States, as well as many districts located
    in States that do not decide to use the tests on a statewide basis,
    will choose to use these tests when they become available in 2001.
        Question. Is there any reason why we should authorize any post-
    fiscal year 1998 activity on the national tests before receiving the
    recommendations of the National Academy of Sciences on this initiative
    and such possible alternatives as linking scores pupils receive on
    current State and national tests?
        Answer. We believe that the national test development activities
    should continue pending receipt of these recommendations from the
    National Academy. We should not risk discontinuing these activities
    when the Academy could conclude that linking is not a viable
    alternative.
        Question. What changes in the national test development contracts
    and schedule have been made since oversight responsibility was shifted
    to the National Assessment Governing Board under the fiscal year 1998
    appropriations act?
        Answer. The National Assessment Governing Board is in the best
    position to respond with regard to changes in the contract. We do know
    that they have adopted a new schedule, which calls for pilot testing of
    potential test items in March of 1999 and field testing of alternative
    test booklets in March of 2000, with the tests first available for use
    in March of 2001. The Administration's original proposal was for the
    tests to be available for use in March of 1999.
            children's literacy initiative--america reads challenge
        Question. As you are aware, the $210 million provided in the 1998
    appropriation for the Children's Literacy Initiative is contingent on
    the enactment of authorizing legislation by July 1, 1998; without that
    enactment, the funds transfer to the Special Education account. Given
    the lack of Senate action thus far on new reading legislation, should
    we ignore your request for $50 million in additional funding for
    Children's Literacy, or assume those funds should be appropriated for
    Special Education as well?
        Answer. The Chairman of the Senate Labor and Human Resources
    Committee has indicated that he will push forward with a children's
    literacy initiative after the Congressional Easter recess. In fact,
    hearings on the literacy bill have been tentatively scheduled for April
    28, 1998. Therefore, we fully anticipate the passage of a children's
    literacy initiative by July 1, 1998, and stand by our request of $50
    million in additional funding.
       administration's position on the reading excellence act--h.r. 2614
        Question. Do you support the provisions of H.R. 2614, the Reading
    Excellence Act, as passed by the House last fall? Do you have any
    concerns about provisions of H.R. 2614?
        Answer. On November 7, 1997, the President's Office of Management
    and Budget issued a Statement of Administration Policy (SAP) on the
    Reading Excellence Act. Following is a verbatim repetition of the SAP.
        The Administration supports House passage of H.R. 2614 if the
    anticipated amendments are included in the bill. The bill is consistent
    with the objectives of the President's America Reads Challenge insofar
    as it: (1) provides tutoring assistance to children who need it; (2)
    promotes family literacy programs to help parents be their child's
    first teacher; and (3) improves teachers' ability to teach reading
    effectively.
        The Administration does have concerns that need to be addressed in
    the Senate. First, while some progress has been made on the issue of
    tutorial assistance grants, the separate authority for these grants in
    the House bill should be deleted or substantially modified. In their
    current form, these grants are inadequately connected to, and
    supportive of, in-school reading programs and the local reading grants
    that the bill would also authorize.
        Second, the Administration objects to the bill's new mandate on
    colleges participating in the work-study program. The current approach
    of providing incentives to colleges to use voluntarily more of their
    work-study funds for reading tutors is working well, and a new Federal
    mandate is not needed.
        Third, the Administration objects to the bill's failure to include
    schools funded or operated by the Bureau of Indian Affairs (BIA) in the
    local reading improvement subgrant provisions of the bill. The BIA
    educates a considerable number of preschoolers and elementary school
    children, many of whom live in the poorest counties in the Nation and
    are in need of reading instruction assistance.
        Additionally, the bill's provisions relating to the peer-review
    panel to be created under the bill should be revised to place the
    convening authority in the hands of the Secretary of Education, who
    administers this new program, in order to ensure accountability in the
    award of Federal funds.
        Finally, the Administration is concerned that many of the
    provisions in the bill remain overly prescriptive and may limit the
    flexibility of local educational agencies in designing their programs.
       title i and the agostini decision--impact on privateschool pupil
                                 participation
        Question. Since the Supreme Court ruled, in the 1997 Agostini
    decision, that Title I services may be provided to eligible private
    school pupils in their own schools, has there been a significant
    increase in the number of private school pupils served under this
    program?
        Answer. We need to give the decision some time to take effect
    before we can gauge the effects on private-school student participation
    in Title I.
        The Court reversed its 1985 decision in June 1997, which means that
    LEA's and schools began planning and implementing new instructional
    arrangements beginning with the current school year (1997-98). We plan
    to collect data on private-school students' participation in Title I
    about mid-way into the 1998-99 school year, as part of the National
    Assessment of Title I. Since the Court has now removed a significant
    obstacle in serving private school children, we expect that
    participation will increase significantly.
               title i capital expenses and the agostini decision
        Question. Should we continue to provide funds for Capital Expenses
    related to serving private school pupils under Title I?
        Answer. We believe that the 1999 Capital Expenses funds should be
    substantially less than the 1998 appropriation of $41 million, but that
    it may be prudent to retain a small amount of funding in the program
    for districts that have legitimate needs for these resources. Our $10
    million request for 1999 would provide a third and final year of phase-
    out funding to districts that entered into long-term leases and other
    arrangements to comply with the Supreme Court's initial decision. In
    addition, school districts have use of the 1997 and 1998 Capital
    Expenses appropriations, totaling $82 million, to buy out leases,
    dispose of equipment, and make other less costly instructional
    arrangements to serve religious school students effectively.
        Since the new decision removes the legal necessity for school
    districts to maintain costly arrangements to serve religious school
    students at neutral sites, the need for Capital Expenses funds is
    already dropping, and the demand for funds can be expected to decline
    sharply by 1999. Data show that, in the fall of 1997 (only 3 months
    after the Felton reversal), 21 States turned back all or some of their
    funds to the Department, compared to 18 States the year before. Also, 5
    States requested additional funds, but 7 did the year before. The
    requests from New York and Pennsylvania, two of the States serving the
    largest numbers of private school children, both dropped by 40 percent
    from the previous year.
        Question. What has been the total amount spent for Capital Expenses
    related to serving private school pupils under Title I, under either
    Capital Expenses or general Part A funds, between the 1985 Aguilar
    decision and the reversal of Aguilar by Agostini in 1997?
        Answer. Before the Court's reversal of its 1985 decision on June
    23, 1997, the Congress provided $323 million in annual appropriations
    for the Capital Expenses program, which school districts used to create
    and maintain arrangements for providing Title I services to private-
    school students off the premises of religious schools. We have no
    information on the amount of Title I, Part A funds, that were also used
    for this purpose. Under Title I, the extra administrative costs of
    providing equitable Title I services for private school children must
    be taken ``off the top'' of a district's Title I allocation.
        Question. How can we avoid such an expensive flip-flop of national
    policy toward serving private school pupils in the future?
        Answer. We do not expect the Supreme Court to change its position
    on this issue. The Court reached the common sense result of permitting
    Title I supplemental services to be moved out of vans into school
    classrooms, with appropriate safeguards to ensure there is no improper
    appearance of State endorsement of religion.
        The Administration argued for and strongly supports the Court's
    decision because it eliminates the legal necessity for costly and often
    less educationally effective alternative arrangements for providing
    Title I services to private school students. For more than 10 years,
    the Department, and State, local, and private school officials,
    struggled with the problems created by the 1985 decision. That decision
    made it much more difficult to provide Title I services to
    educationally disadvantaged religious school students, since those
    students had to leave their buildings in order to be served, and time
    was lost getting those children to and from Title I programs. It was
    hard to provide equitable access when instruction for public school
    children takes place in their school building, while private school
    students had to leave their schools in order to be served.
            updated census data and title i allocations to counties
        Question. Have you made a formal decision regarding use of census
    population update estimates for counties in the allocation of fiscal
    year 1998 appropriations for Title I?
        Answer. Yes. We were able to make a decision early this year,
    thanks to the splendid work by the Census Bureau and the Committee on
    National Statistics' Panel on Estimates of Poverty for Small Geographic
    Areas, convened under the auspices of the National Academy of Sciences.
        To give you some background, in making Title I allocations, the
    Department (by statute) is required to use the Census Bureau's updated
    poverty data at the county and school-district levels, unless the
    Secretaries of Education and Commerce determine that these data would
    be inappropriate or unreliable for this purpose. In making this
    determination, the Secretaries must consider the recommendations of the
    National Academy of Sciences.
        Between June and October 1997, the Census Bureau carried out
    extensive evaluations of its model for updating the number of school-
    age children from low-income families in counties. On the basis of
    those evaluations, the Bureau revised its model and prepared a revised
    set of 1993 county estimates. After conducting a full assessment of the
    Census Bureau's work and its evaluation results, the Academy, in
    January 1998, published its findings and recommendations on the
    Bureau's model for producing updated county-level estimates of poor
    school-aged children. This report, entitled ``Interim Report 2,
    Evaluation of Revised 1993 County Estimates for Title I Allocations,''
    concluded that the updated estimates are superior to those from the
    outdated 1990 census, and that the revised estimates should not be
    averaged with estimates from the 1990 census, as was done for last
    year's allocations.
        Secretary Daley and I have accepted the Academy's recommendations.
    The Department will allocate the 1998 Title I appropriation on the
    basis of the Census Bureau's updated county-level estimates.
            updated census data estimates for local school districts
        Question. Are you, the Census Bureau, and the National Academy of
    Sciences on schedule to produce and evaluate population updates for
    local school districts, as required under the Title I statute to be
    used in allocating fiscal year 1999 appropriations?
        Answer. While we have a workable schedule for producing and
    evaluating the Bureau's current approach for updating poverty
    estimates, both the Commerce and Education Departments continue to have
    major uncertainty about the feasibility of producing reliable estimates
    at the school-district level. As the National Academy of Sciences notes
    in its January 1998 report, creating poverty estimates at the local
    educational agency (LEA) level is far more complex than making
    estimates for counties, because of limitations in the data available
    for producing these estimates and because of the physical
    characteristics of school districts. For example, most districts are
    very small, most have boundaries that do not conform to any other
    boundary or administrative unit, and some districts overlap counties.
    Using the Census Bureau's model for updating county-level poverty
    estimates is not an option, since that model relied on data on food
    stamp recipients, income taxes, and population that do not exist at the
    school district level. In addition, Department staff believe that other
    problems, such as changes in school district boundaries and the
    unavailability of the required noncensus counts of children at the LEA
    level, may also hamper fiscal year 1999 implementation of LEA
    allocations.
        The current schedule calls for the Bureau to transmit its LEA-level
    estimates to the National Academy of Sciences for review and evaluation
    by October 1998. The Academy is required to issue a report 90 days
    later outlining its recommendations with regard to the use of the LEA
    data for fiscal year 1999 Title I allocations. Based on the Academy's
    recommendations, the Secretaries of Commerce and Education expect to be
    able to make a decision by January 1999 about whether to use the data
    for fiscal year 1999 Title I allocations.
        Question. What is your view of the reliability of the population
    update process at Census thus far?
        Answer. We agree with the National Academy of Sciences that the
    Census Bureau's process produced updated county poverty estimates that
    are demonstrably superior to estimates from the outdated 1990 census
    and that they are appropriate and reliable for making fiscal year 1998
    Title I allocations.
            impact of census updates on title i formula allocations
        Question. Why have the updates produced thus far appeared to be
    biased against certain high poverty parts of the Nation, such as
    several Southern states, and in favor of certain low poverty areas,
    such as many fast-growing suburban counties?
        Answer. The updates reflect large demographic shifts in poverty and
    population that took place between 1989 and 1993.
        Through the operation of the Title I formula, States and counties
    with above-average increases in their number of poor children gain
    funds, while States and counties with reductions in poor children (or
    increases lower than the national average increase of 28.2 percent)
    lose funds. Indeed, most States and counties that lose Title I funds do
    so because of below-average increases in poverty rather than actual
    decreases. High-poverty areas that receive reductions, using the
    updated estimates, in their Title I funds do so because they have a
    smaller proportion of the Nation's poor children compared to where they
    were four years earlier.
        High-poverty school districts will continue to receive larger
    allocations per poor child due to the Concentration Grant formula. In
    fact, the fairest and most effective way to increase targeting is by
    directing more funds through the Concentration and Targeted Grants
    formulas, not by using out-of-date poverty data. The President's budget
    request for fiscal year 1999 would direct almost all the increase ($391
    million) through these two formulas.
        High-poverty counties and school districts also receive protection
    through the statutory ``hold-harmless'' provision, which ensures that
    those with poverty rates of 30 percent or more receive at least 95
    percent of their prior year allocation.
     innovative education program strategies--goals 2000: educate america
                            act and title vi of esea
        Question. For the fifth year in a row, the Administration is
    proposing termination of funding for the education block grant, the
    State grant program for Innovative Education Program Strategies
    authorized under Title VI of the Elementary and Secondary Education
    Act. How do you justify the elimination of one of the most flexible and
    popular forms of Federal assistance for elementary and secondary
    education?
        Answer. The Administration believes that the Title VI program is
    not well designed to support the types of State and local efforts that
    can result in real improvements in teaching and learning. Findings from
    the most recent evaluation of the former Chapter 2 program, Title VI's
    predecessor, suggest that programs that provide greater accountability,
    but offer the flexibility of Title VI, have a better chance of
    effecting real change in the classroom. For example, the evaluation
    found that program funds were used by fewer than half of the States to
    support reform efforts such as revising and developing standards for
    student performance, developing alternative measures of student
    achievement, or encouraging public-private partnerships. Districts were
    even less likely than States to use Chapter 2 funds to support
    education reform efforts. Although more than half of all districts
    reported some systemic reform efforts, fewer than one-fourth of them
    used Chapter 2 funds to support these activities.
        The Department believes that a more effective way to utilize scarce
    resources lies in targeting funds on comprehensive systemic reform and
    areas of high need. For example, programs under the Goals 2000: Educate
    America Act provide almost the same flexibility as Title VI, but make
    the critical link between expenditures and educational reform that
    Title VI does not. States are using Goals 2000 funds to establish
    challenging academic standards and to coordinate their curriculum
    frameworks, student assessment programs, and other aspects of their
    educational systems to help children achieve to the State standards.
        States distribute at least 90 percent of their Goals 2000 funds
    directly to local educational agencies (LEA's) for local reform, the
    improvement of preservice teacher education programs, and professional
    development. At least half of the money for local reform goes to LEA's
    that have a greater percentage or number of disadvantaged children than
    the statewide average. LEA's must ensure that at least 75 percent of
    their first-year money and at least 85 percent of subsequent years'
    funds go to individual schools so that schools can tailor their own
    improvement plans to help students meet the State or local standards.
                      evaluation of title vi, esea program
        Question. The education block grant program appears to achieve its
    popularity through being one of the few sources of funds that can be
    used for educational improvement purposes as determined by local
    educational agencies. For what school year did you last conduct an
    evaluation of the accomplishments of this program at the local level?
        Answer. The 1994 evaluation of Chapter 2, ``How Chapter 2 Operates
    at the Federal, State, and Local Levels,'' which collected data in the
    1991-1992 school year, is the most recent evaluation of the program.
    Several findings from the evaluation have prompted the Administration
    to question the effectiveness of the Title VI program. For example, the
    evaluation found that LEA's tended to concentrate their Chapter 2
    expenditures on instructional materials rather than educational reform
    activities. In addition, States and LEA's sometimes used Chapter 2
    funds for activities and programs that were not directly related to
    classroom instruction; for example, LEA's often purchased equipment for
    administrative use, and SEA's also used Chapter 2 funds for various
    administrative activities. The evaluation also found that the majority
    of activities supported by Chapter 2 funds would have continued without
    Chapter 2, because these funds typically constituted a small percentage
    of any program's funding.
        The 1994 evaluation determined that, because States had a wide
    latitude in how they conducted their self-evaluations for effectiveness
    and in how they used accountability mechanisms for LEA's to access
    compliance with Federal and State regulations and fiscal matters, there
    was a problem across Chapter 2 programs regarding the lack of good
    evaluations. Almost one-fourth of LEA's conducted no evaluations of
    their Chapter 2 activities, and those that did tended to collect
    informal feedback or anecdotal evidence about program outcomes.
        The Department has not followed up the 1994 study with another
    stand-alone evaluation of Title VI. This course of action has seemed
    wise, given limited evaluation resources, because the 1994
    reauthorization did not make significant changes to the statute, and
    there is little reason to believe that State and local program
    practices have changed since the early 1990's. However, the Department
    will collect data on the uses of funds under Title VI (as well as
    Titles I, II, III, IV, and Goals 2000) through the forthcoming
    ``Targeting and Resource Allocation Study.'' This study should be
    completed in early 1999.
                 program evaluations and innovation priorities
        Question. Do your program evaluations show the extent to which
    local schools have any other source of funds to meet locally determined
    improvement and innovation priorities?
        Answer. Goals 2000 provides assistance for States to develop their
    own strategies for comprehensive reform of elementary and secondary
    education. With the help of Goals 2000, States are establishing
    academic standards and coordinating their curriculum frameworks,
    student assessment programs, teacher preparation and licensure
    requirements, parental and community involvement activities, and other
    aspects of their education system to help children achieve the State
    standards. As mentioned above, States must distribute at least 90
    percent of their Goals 2000 funds directly to LEA's, and at least 75
    percent of the LEA's' first-year money and at least 85 percent of
    subsequent years' funds go to individual schools so the schools can
    tailor their own improvement plans to help students meet the State or
    local standards.
        In addition, beginning in 1995, more schools became eligible to
    operate schoolwide programs, which allow high-poverty schools to use
    Title I funds, in combination with other Federal, State, and local
    funds, to improve the overall instructional program for all children in
    a school. About 25,000 schools receiving Title I funds are now eligible
    to implement the schoolwide approach, compared to about 10,400 under
    the previous law.
        Finally, Congress appropriated $120 million to support
    comprehensive reform in schools eligible for Title I funds in fiscal
    year 1998. An additional $25 million is available to all public
    schools, including those eligible for Title I. The Comprehensive School
    Reform Demonstration program (CSRD) is focused on assisting schoolwide
    changes in schools where there is the greatest need to substantially
    improve student achievement. CSRD funds are intended to help schools
    improve their entire educational operation through curriculum changes,
    sustained professional development, enhanced involvement of parents,
    and other reforms, based on a careful identification of local needs.
       block grants and other federal regulatory and paperwork reduction
                                    efforts
        Question. The education block grant program has reduced Federal
    regulatory and paperwork burdens to a minimum. Have you considered
    modifying other Federal education programs to be more like it, rather
    than proposing block grant termination?
        Answer. In addition to the programs mentioned above, which provide
    considerable flexibility to States and LEA's, the Department offers
    other means to keep paperwork and regulatory burdens to a minimum,
    including the Education Flexibility Partnership Demonstration Program
    (Ed-Flex) and the waiver authorities under the Elementary and Secondary
    Education Act, the Carl D. Perkins Vocational and Applied Technology
    Act, and Goals 2000.
        Question. As you can see last year from the Senate passage of the
    Gorton amendment to the 1998 appropriations that would have created a
    $13.4 billion elementary and secondary education block grant, the
    Congress continues to give considerable support for reducing the number
    of education programs, and reducing the administrative and paperwork
    burdens associated with such programs. What steps are you taking that
    might increase State and local flexibility while streamlining the
    administrative procedures connected with the current array of Federal
    education programs?
        Answer. In addition to the programs and activities that provide
    State and local flexibility mentioned above, Goals 2000 allows the
    Secretary the authority to: (1) waive certain Federal regulatory and
    statutory provisions that may impede State or local reform efforts; (2)
    delegate up to 12 States the authority to waive these provisions
    without having to secure additional Federal approval through Ed-Flex;
    and (3) distribute Goals 2000 funds directly, on a competitive basis,
    to LEA's in States that choose not to participate in Goals 2000.
        The Department has worked hard to ensure that States and LEA's can
    benefit fully from these authorities. For example, the Department has
    granted Ed-Flex status to 12 States and will seek congressional
    approval to expand the authority so that all States are eligible. In
    addition to Goals 2000, the Department can grant waivers under the Carl
    D. Perkins Vocational and Applied Technology Act and the Elementary and
    Secondary Education Act, including most of the requirements of major
    Federal education programs such as Title I, Even Start, Eisenhower
    Professional Development, and Safe and Drug-Free Schools. To date, the
    Department's Waiver Board has granted over 200 waivers to States and
    LEA's to provide increased flexibility in exchange for increased
    accountability for raising student achievement. This flexibility allows
    States and LEA's to address local needs with locally designed
    solutions. Finally, only two States, Oklahoma and Montana, have chosen
    not to participate in Goals 2000, and the Department will award grants
    to LEA's in those States in early summer, following a competition.
        In its program reauthorization proposals, the Department has
    proposed statutory revisions to increase State and local flexibility
    and reduce administrative overhead. For example, our vocational
    education proposal would eliminate numerous set-asides and provide
    States with flexibility by eliminating many requirements and providing
    for Federal waivers. For the reauthorization of the Adult Education
    Act, the Department has proposed to streamline numerous existing
    authorizations and provide States with flexibility provisions similar
    to those in our vocational education proposal. The Department will look
    for similar opportunities in the Elementary and Secondary Education
    Act, which comes up for reauthorization next year.
               funds used for classroom and administrative costs
        Question. One of the issues frequently heard in support of
    education block grants is that too great a portion of each Federal
    program dollar never reaches the actual classroom. Do you have any data
    showing the allocation between classroom and non-classroom uses of
    funds under the major elementary and secondary education programs
    administered by the Department?
        Answer. The Department recently prepared a report, The Use of
    Federal Education Funds for Administrative Costs, that provides the
    most up-to-date information about the amount of Federal elementary and
    secondary funds that are used by States and LEA's for classroom
    instruction, instructional materials, and other programs and services
    that benefit teachers and students directly, and the extent to which
    those funds are used for administrative purposes. The report summarizes
    data obtained from several sources, including: (1) the GEPA 424 report,
    a Department of Education data collection report with information on
    the distribution of Federal funds for a wide range of Federal programs
    supporting elementary and secondary education for fiscal year 1995; (2)
    data from a Coopers & Lybrand Financial Analysis Model provided by
    Milwaukee, by South Carolina for 33 of its school districts, and by
    Rhode Island for seven of its districts, as well as published data for
    13 other school districts for earlier school years; and (3) GAO
    reports.
        Major findings include the following:
      --For programs under the Elementary and Secondary Education Act, the
            percent retained at the State level is about 2 percent; for
            Title I, the percent is 1 percent.
      --In general, States retain substantially less money at the State
            level than is permitted by law. For example, in fiscal year
            1995, States were permitted to retain up to 20 percent of Title
            VI (Chapter 2) money, but only retained 9 percent in actual
            practice.
      --At the local level, about four-fifths of Title I funds are used for
            instruction, with additional funds used for supporting
            activities, such as professional development, curriculum
            development, counseling, and other activities that have a
            direct impact on teachers and students. Local administrative
            expenses appear to range from 4 to 13 percent of local
            expenses, depending on the location and the data base
            considered.
      --Across all Federal elementary and secondary programs, instruction
            and instructional support account for 88 percent of local
            expenditures.
        Question. To what extent do the non-classroom uses of Federal
    education dollars meet important national education objectives?
        Answer. States and LEA's use Federal funds to support a range of
    non-classroom activities that directly support instruction, including
    the development and implementation of standards and assessments,
    professional development, curriculum development, parent and community
    involvement programs, and technical assistance.
             class size reduction and teacher financing initiative
        Question. Why would the proposed Class Size Reduction initiative be
    funded through mandatory budget authority?
        Answer. The initiative is proposed for mandatory funding because it
    is intended to be funded through tobacco settlement revenue. In
    addition, the Administration believes that the annual discretionary
    appropriations process would not provide districts with the necessary
    certainty that funds will be available, and that the program requires
    the firm commitment provided through a mandatory appropriation.
        Question. For school districts who hire new teachers with funding
    from the proposed Class Size Reduction initiative, there are
    potentially significant long-term financial costs as these teachers
    gain experience and further training, and move up their respective pay
    scales. Does the Administration intend that the Class Size Reduction
    initiative continue beyond the 7-year time period cited in the budget
    request in order to assure participating districts that the burden of
    those long-term costs does not fall solely upon them?
        Answer. Yes, the Department does intend for the Class Size
    Reduction initiative to continue beyond the 7-year time period. The
    initiative is to be financed through revenues from a tobacco
    settlement, and any settlement is likely to provide revenues for at
    least 25 years.
        Question. Why are States' average class sizes in grades 1 through 3
    not used at all in determining State shares of funds under the Class
    Size Reduction initiative?
        Answer. The Title I formula allows funds to be targeted to the
    States with the highest levels of poverty and the greatest financial
    need. For within-State allocations, States would be required to
    distribute funds based on each local educational agencies class sizes
    and their relative ability and effort to finance class-size reductions
    with their own resources.
                  achievement gains from class size reductions
        Question. The proposed Class Size Reduction is intended to reduce
    the average class nationwide in grades 1 through 3 from 22 students to
    18 students. How do you respond to critics who state that a reduction
    of this size is not sufficient to generate student achievement gains
    commensurate with the cost of the initiative?
        Answer. Two recent research studies have found that smaller classes
    can mean higher levels of student achievement, at least through the
    elementary school grades, particularly for minority, poor, and inner-
    city children.
        One study examined the results on the 1992 National Assessment of
    Educational Progress (NAEP) mathematics assessment for 10,000 fourth-
    and eighth-graders. The study found that students in small classes,
    those classes with fewer than 20 students, performed better than
    students in large classes for both grade levels, even taking into
    account student demographics, overall resource levels, and the cost of
    living.
        Studies of the Tennessee Student-Teacher Achievement Ratio (STAR)
    project have also found that students in small classes performed better
    than students in large classes in each grade from kindergarten through
    third, and that the achievement benefits persisted through at least the
    eighth grade. The same benefits from small classes were found for boys
    and girls alike. While all types of school districts--inner-city,
    urban, suburban, and rural--realized significant gains from small
    classes, the gains were greatest for minority and inner-city students
    in each grade. Further analyses of the results have found that students
    in small classes are less disruptive and less likely to be retained
    than their peers in larger classes.
        One of the biggest advantages to reduced class sizes is that it
    provides teachers with an opportunity to better gauge their students'
    strengths and weaknesses and get to know them as individuals. Research
    verifies this by demonstrating that classroom structures that allow
    teachers to know students and their families well are associated with
    increased achievement, more positive feelings toward school, and more
    positive behavior.
        In addition, reduced class size allows teachers to work more
    closely with their students and, as a result, they are better able to
    identify students with learning disabilities. Potentially, early
    identification of, and remediation for, children with learning
    disabilities can reduce the need for special education services in the
    later grades and eliminate, or substantially reduce, the costs
    associated with such services.
           size reduction and other strategies to improve achievement
        Question. Are there other kinds of improvement strategies that
    promise as much or more achievement gain, but at a lower cost?
        Answer. The Department believes that reducing average class sizes
    in grades 1 through 3 is an essential component of any strategy to
    raise the educational achievement of all students. Rigorous research
    has shown the benefits of small classes for all children, but
    particularly for minority and inner-city students. If the benefits of
    small classes are to be fully realized, this strategy must be a part of
    comprehensive educational reforms.
        In order for the benefits of small classes to be fully realized
    children cannot simply be placed in smaller classes, but must also be:
    expected to achieve to challenging content and performance standards,
    and have their progress measured by tests aligned to those standards;
    attend schools that are able to recruit and retain a qualified teaching
    staff; and taught in environments conducive to high achievement.
                    21st century community learning centers
        Question. The Administration's fiscal year 1999 budget request of
    $200 million for 21st Century Community Learning Centers represents a
    400 percent increase above the fiscal year 1998 appropriation. At the
    proposed level, the program would support extended-day activities in
    approximately 4,000 schools serving up to half a million school
    children. What evaluations and program outcomes justify such an
    increase?
        Answer. The importance of these programs has been demonstrated
    through various studies, including FBI statistics that show the
    greatest rates of crime and violence to be between the hours of 2 to 8
    p.m. Additionally, research clearly shows that positive and sustained
    interactions with adults contribute to the overall development of young
    people and their achievement in school. Research also indicates that in
    high-quality programs--where student to staff ratios are low, staff are
    well-trained, and a wide variety of activities are offered--students
    have more positive interactions with staff, better peer relations, and
    better grades and conduct in school than their peers in other care
    arrangements. These outcomes are particularly beneficial for
    disadvantaged or low-achieving students, who typically lack resources
    such as technology and outside tutoring.
        The six current 21st Century Community Learning Centers projects,
    now in their final year, have successfully established community
    centers offering important services to students, families, and low-
    income adults, provided through the development of partnerships between
    schools and local agencies, organizations, businesses, and colleges.
    Because the projects are completing their final year of funding, the
    Department will not have specific outcome data until the final reports
    are received. However, we do have information on what each project has
    accomplished thus far.
        For example, the Clinton County 21st Century Community Learning
    Center created a GED program for high-school drop-outs. Its initial
    goal was to enroll 20 students; ultimately it enrolled 72 students.
    During its second year, the project expanded to include distance
    learning and technology classes for 150 participants. The Center also
    served over 100 individuals in professional development and continuing
    education courses. This project involved such community groups as the
    Western Kentucky University, the Bank of Clinton County, Berea College,
    and the Department of Social Services.
        Another project administered by the Chicago Public Schools involved
    37 school principals, in conjunction with parents, community
    organizations, municipal service providers and local agencies.
    Together, these groups established literacy, GED, and tutoring
    programs, as well as workshops on computer skills, nutrition, and
    parenting. A series of Saturday sessions promoted family involvement by
    providing instruction to both parents and children together.
                     after-school centers a federal concern
        Question. Why should a program of after-school services become a
    Federal rather than State or local concern?
        Answer. It has become a Federal concern because of the demonstrated
    need for these centers in communities across the Nation and the
    potential of these centers to improve achievement and safety in
    schools. Recent studies estimate that 5 million children are left
    unsupervised after school. The requested funds would provide services
    for only a percentage of these children. The majority of schools do not
    currently have such programs. The most recent survey from the National
    Center for Education Statistics (NCES) revealed that in 1993-94, 30
    percent of all public elementary schools had centers. In urban areas,
    more than 40 percent of schools had centers, and in rural areas, only
    18 percent. Availability in high-poverty schools was similar to that of
    low-poverty schools, but high-poverty schools showed greater
    participation rates.
        This year, over 5,000 people attended the information sessions on
    the 1998 competition that were sponsored by the C.S. Mott Foundation.
    The Department received nearly 2,000 applications, and many more
    requests for applications and information.
                administration of 21st century learning centers
        Question. Why should the Department of Education administer this
    program rather than the Department of Health and Human Services (HHS)?
        Answer. This question was carefully considered by the
    Administration before submitting its request. The Department of
    Education is administering this program because this enables us to
    emphasize educational services and the use of schools as community
    centers.
        HHS currently administers the Child Care and Development Block
    Grant (CCDBG) which provides, through the States, direct support to
    low-income parents to help them pay for child care; it also provides
    funding to providers of after-school programs to subsidize the
    participation of children from poor families. As a complement to the
    CCDBG focus on meeting demand by helping poor parents pay for child
    care, the 21st Century Community Learning Centers addresses the supply
    issue by providing seed money to establish or expand programs that
    utilize public school buildings cost-effectively to serve school-age
    children.
        School-based programs also providealong with recreational and
    nutritional programsunique opportunities to link out-of-school learning
    activities with the core curriculum, providing advancement, enrichment
    or extra help that can make a difference in each student's academic
    success. Schools are convenient and accessible to students and parents
    and have much of the resources needed for such programs. Also, school-
    based centers can result in increased community and parent involvement
    in the school. Yet, despite high demand from parents and overwhelming
    support from educators for school-based programs, the majority of the
    Nation's elementary and middle schools still do not offer after-school
    programs.
                      education opportunity zones proposal
        Question. Why do you propose another new program targeted at high-
    poverty areas when we already have not only the Title I, Elementary and
    Secondary Education Act program but also the new Comprehensive School
    Reform program initiated in the fiscal year 1998 appropriations act?
        Answer. The Education Opportunities Zones program would differ in
    emphasis from both Title I and the Comprehensive School Reform
    Demonstrations. While Title I and the Comprehensive School Reform
    Demonstrations focus on improving achievement at individual schools,
    the Education Opportunity Zones program would emphasize implementation
    of policies that improve student achievement district-wide. These
    programs would be complementary, and all three would focus on assisting
    students to achieve to high standards.
        The Education Opportunity Zones program would distribute
    comparatively large grants to a limited number of competitively
    selected, high-poverty urban and rural school districts. To be eligible
    for a grant, the district would have to demonstrate that it had already
    begun to implement educational reforms and raise student achievement,
    at least in some schools. The purpose of the program would be to
    demonstrate that districts that expect all students to achieve to high
    standards and hold students, teachers, and schools accountable for
    achieving to those standards, can help raise achievement across an
    entire district.
        The Comprehensive School Reform Demonstration program provides
    funds by formula to States which then distribute the funds
    competitively to districts on behalf of individual schools. The program
    focuses exclusively on comprehensive school-level reform programs that
    have a strong research basis and have been successfully replicated. The
    program can help bring together Title I schoolwide funds, and other
    Federal, State, local, and private resources to support an integrated
    strategy to enable all children in a school to reach challenging
    academic standards. Comprehensive School Reform funds can help schools
    in Education Opportunity Zones implement proven models of reform, and
    can provide additional resources for Education Opportunity Zones to use
    for turning around failing schools.
                 unique features of education opportunity zones
        Question. What would be the unique contribution of the Education
    Opportunity Zones initiative?
        Answer. The Education Opportunity Zones initiative would have a
    focus on district-wide reforms, rather than the focus on school-level
    reform efforts contained in Title I and the Comprehensive School Reform
    Demonstrations. The Zones initiative would differ from other programs
    in that it would provide support only to high-poverty urban and rural
    school districts that have already begun to implement accountability-
    based, comprehensive educational reform policies, and have begun to
    show significant improvement, in at least some of their schools, in the
    educational achievement of all students. The grants would enable
    selected districts to expand the scope and accelerate the pace of their
    reforms, so that they can achieve, in more schools, the kinds of
    successes realized in some schools in these districts. Districts could
    use their funds for such activities as: (1) implementing a school-
    performance-information system to measure the performance of schools in
    educating their students to high standards; (2) increasing public
    school choice through such strategies as open enrollment policies or
    charter schools; or (3) improving teaching through the development of a
    system for identifying ineffective teachers, providing them with
    assistance to improve their performance, and removing those teachers
    whose performance does not improve.
        Question. Why should we not focus on expanding and improving the
    existing programs aimed at the same problems?
        Answer. The Administration has requested funds to expand current
    programs like Title I, Goals 2000, and the Comprehensive School Reform
    Demonstrations. However, for the reasons outlined above, we believe the
    Education Opportunity Zones program will address a unique and difficult
    mission, and strongly support its enactment and funding as well.
        Question. When do you anticipate that legislative language for this
    proposal might be transmitted to the Congress?
        Answer. The Secretary transmitted the Education Opportunity Zones
    proposal to Congress on March 3, 1998.
           california ballot initiative ``english for the children''
        Question. A State ballot initiative entitled ``English for the
    Children'' will go before California voters in June 1998. The
    initiative would significantly alter instructional services for limited
    English proficient (LEP) children in California elementary and
    secondary schools. Among other things, the initiative calls for
    programs of sheltered English immersion as the primary means to teach
    English to LEP students. Would there be any conflict between the
    initiative, if enacted, and Federal civil rights laws enforced by the
    Department of Education?
        Answer. The Departments of Education and Justice are currently
    reviewing the language of the ``English for the Children'' initiative
    to determine if it would conflict with civil rights law. We are not yet
    ready to make a judgement on this issue, but expect to be able to do so
    in the near future.
        Question. Could sheltered English immersion programs as specified
    in the initiative qualify for assistance under the Bilingual Education
    Act?
        Answer. A significant number of the projects funded under the
    Bilingual Education Act employ instructional methods that use only
    English. At first glance, it seems likely that such projects would not
    conflict with the ``English for the Children'' ballot initiative,
    although the one-year timeframe specified in the initiative could be a
    problem.
       ensuring english language acquisition through bilingual education
        Question. Public Law 105-78, the Departments of Labor, Health and
    Human Services, and Education and Related Agencies Appropriations Act,
    1998, includes a requirement that the Department of Education only
    support Bilingual Education Act instructional services grants that
    ``ensure that students completely master English in a timely fashion (a
    period of 3 to 5 years) while meeting rigorous achievement standards in
    the academic content areas.'' (111 Stat. 1500) How is the Department of
    Education implementing this requirement in the grant-making process?
        Answer. This language, which was first included in the fiscal year
    1996 appropriations act, reinforces language in the authorizing
    statute. The authorization makes it clear that helping limited English
    proficient students learn English and meet challenging State academic
    standards is the primary goal of all bilingual education projects
    funded under the statute. While the authorizing statute does not
    include a specific time frame for these goals, the appropriations
    language is fully consistent with the language in the statute.
        Applications for new awards are rated by outside peer reviewers who
    are given training in how to rank applications in accord with statutory
    and Departmental requirements. Departmental officials brief the
    reviewers on the statutory requirements for these projects, and on each
    of the published selection criteria. One of the criteria is ``quality
    of the project design'' and another is ``proficiency in English and
    another language.''
        Once the peer reviewers complete their ratings, staff from the
    Office of Bilingual Education and Minority Languages Affairs review the
    applications to make sure that they comply with statutory requirements,
    including that they are designed to ensure that students completely
    master English in a timely fashion (a period of 3 to 5 years) while
    meeting rigorous achievement standards in the academic content areas.
        The statute requires grantees to submit evaluations every two
    years. These evaluations must include information on the progress of
    students served by the program in attaining English proficiency.
                          year 2000 computer concerns
        Question. There has been lots of public speculation that many
    computer systems, including mainframes and desktops and many of the
    software programs as well, will become unworkable on January 1, 2000.
    What are the major uses of computers within the Department, both for
    management activities and program operations?
        Answer. The Department uses mainframes and desktops for many of its
    management activities and program operations. Computers are used to
    operate the Department's delivery systems dealing with student
    financial aid and Impact Aid programs, to foster communications
    internally and externally through the Internet and e-mail, and to
    operate the Department's accounting system. Many of these systems have
    been identified as mission- critical for Year 2000 purposes.
    Mission-critical department computer systems
        Following is a list of the 14 mission-critical systems along with a
    description of each system's purpose:
      --Campus-Based Program System--receives summary data from
            participating schools, determines institutional awards,
            allocates funds and reconciles institutional accounts.
      --Central Processing System--confirms applicants' eligibility for
            Federal student financial assistance.
      --Direct Loan Central Database--functions as the central repository
            for summary-level data on Federal Direct Loan Program (FDLP)
            loans, including aggregated financial data reported from the
            FDLP servicer(s).
      --Direct Loan Origination System--supports FDLP loan origination to
            book loans, reconciles with schools, and receives disbursement
            information from schools as each loan is disbursed to a
            recipient.
      --Direct Loan Servicing System--services FDLP loans while the
            borrower is in school, in deferment status, or in repayment.
      --Federal Family Education Loan System--pays interest and special
            allowances to lenders.
      --Multiple Data Entry System--receives paper applications for Federal
            student financial assistance.
      --National Student Loan Data System--functions as a national database
            of loan/grant-level data on the Title IV programs. Among its
            many purposes, it is used to prescreen Title IV applicants for
            eligibility.
      --Pell Grant Recipient Financial Management System--supports delivery
            of aid under the Federal Pell Grant program.
      --Postsecondary Education Participants System--maintains data on
            school participation. These data include eligibility,
            certification, and program participation information.
      --Title IV Wide Area Network (TIVWAN)--a value-added network that
            functions as a participant management system through which
            users indicate which services they want to use from the systems
            TIVWAN supports.
      --Education Central Administrative Processing System--(EDCAPS) the
            redesign of the Department's core financial functions, work
            processes and procedures. (This system is Year 2000 compliant.)
      --Education Central Network--the Department's hardware/software
            infrastructure.
      --Impact Aid System--receives summary data from participating school
            districts, determines awards, allocates funds and reconciles
            school district accounts.
     gao plan for minimizing or eliminating the year 2000 computer problem
        Question. What steps has the Department taken to eliminate or
    minimize the ``Year 2000'' computer problem from these activities and
    operations, and, how much additional work, if any, remains to be done?
        Answer. The Department follows the five-phase approach recommended
    by the General Accounting Office and the Office of Management and
    Budget. The five phases are: awareness, assessment, renovation,
    validation and implementation.
        The awareness phase is an ongoing activity to help the Department's
    customers inside and outside the Federal government and the education
    community understand the scope of the Year 2000 problem. During this
    phase, customers are advised of the steps needed to be taken to ensure
    that their systems are Year 2000 compliant.
        The assessment phase, completed in February 1998, resulted in an
    inventory of the information technology systems used at the Department,
    the classification of each system by criticality, and the determination
    of the appropriate compliance strategy or disposition for each system.
    Criticality, expressed as ``mission-critical'' (most critical),
    ``mission-important'' and ``mission-supportive'' (least critical)
    indicates which of the Department's systems are most essential to its
    functions.
        The dispositions determined from the assessment phase--compliance,
    repair, replacement or retirement--form the basis of the renovation
    phase. A system determined to be compliant can skip to the validation
    phase. If a system needs repair, modifications are scheduled to bring
    it into compliance. If a system needs to be replaced, a new compliant
    system will be developed to serve its function. Finally, a system will
    be retired if its functions can be eliminated or assumed by another
    system that is compliant.
        During the validation phase, compliant systems and those with
    completed renovations are tested to prove compliance. An independent
    third party will verify and validate each of the mission-critical and
    high risk mission-important systems.
        The implementation phase will assure that all data exchange
    agreements are in place and that non-compliant systems are replaced
    with the renovated compliant systems. This phase requires a relatively
    short period of time compared to the others.
        Currently, the assessment phase is complete, renovations are in
    process for non-compliant systems, and validations are in process for
    compliant and renovated systems. Several systems have been validated
    and implemented. Overall there are 14 mission-critical, 30 mission-
    important, and 144 mission-supportive systems at the Department, most
    of which will require additional renovation, validation and
    implementation efforts.
                  contracted departmental computer activities
        Question. What major computerized activities does the Department
    have under contract?
        Answer. All of the Department's mission-critical computer systems
    are under contract. They include the following: Campus-Based Program
    System; Central Processing System; Direct Loan Central Database; Direct
    Loan Origination System; Direct Loan Servicing System; Federal Family
    Education Loan System; Multiple Data Entry System; National Student
    Loan Data System; Pell Grant Recipient Financial Management System;
    Postsecondary Education Participants System; Title IV Wide Area
    Network; Education Central Administrative Processing System; Education
    Central Network; and Impact Aid System.
        In addition, a number of mission-important systems are under
    contract. An example of a mission-important system is the Department's
    payroll processing system, maintained by the Department of the
    Interior.
        ensuring year 2000 compliant systems for departmental programs
                         dependent on computer systems
        Question. Which major programs, such as the National Assessment of
    Educational Progress, are heavily dependent on computers?
        Answer. The programs most dependent on computers in the Department
    include those that are directly supported by one or more of its
    mission-critical systems. These programs are the Federal Family
    Education Loan Program, the William D. Ford Direct Loan Program, the
    Pell Grant Program, Campus Based programs and the Impact Aid Program.
    In addition, all programs within the National Center for Educational
    Statistics (NCES), including the National Assessment of Educational
    Progress depend on computer processing due to the large amount of data
    that needs to be analyzed. Please note, however, that in addition to
    validation procedures, none of the computer programs used to support
    NCES perform date calculations.
        Question. What steps have you taken to ensure that these various
    contracted systems will survive the ``Year 2000'' problem?
        Answer. To ensure that the Department's systems operated by
    contractors will be Year 2000 compliant, each step of the renovation
    and validation phases of the project is closely monitored and tracked
    by the Department's Year 2000 staff and experts from the firm of Booz-
    Allen and Hamilton. Status reports on each system are provided to the
    Year 2000 Steering Committee on a weekly basis. The Steering Committee
    is chaired by the Deputy Secretary, and includes the Chief Financial
    and Chief Information Officer and senior executives from program and
    staff offices responsible for major systems and Year 2000 renovations.
        As each mission-critical system is renovated, a qualified third
    party will conduct an independent verification and validation (IV&V) on
    the system to confirm that it is Year 2000 compliant. Results of each
    IV and V analysis will be reported to the Steering Committee.
        In addition, the Department is developing contingency plans for
    each mission-critical system. These plans will provide for continued
    delivery of services in the event of a system failure.
             year 2000 departmental outreach efforts to the states
        Question. What steps have you taken to find out what education
    activities at the State level are dependent on computerized activities?
        Answer. The Department is conducting an inventory of all of its
    data exchanges with the States. Once the inventory is completed, the
    Department will provide States with points of contact and any new data
    formats to ensure that all future data exchanges are Year 2000
    compliant.
        Numerous written communications have been made with the
    Department's data exchange partners and customers regarding Year 2000.
    For example, in January 1998, the Deputy Secretary and the Executive
    Director of the Council of Chief State School Officers sent a Dear
    Colleague Letter to the Chief and Deputy Chief State School Officers in
    the 50 States, the District of Columbia, and the territories. In the
    same month, the Deputy Assistant Secretary for Student Financial
    Assistance sent a Dear Colleague Letter to the 7,000 postsecondary
    education institutions participating in the Department's student aid
    programs.
        The Year 2000 Project Management Team has made telephone contact
    with several State Year 2000 coordinators and various constituent
    groups, including the Council of Great City Schools and the District of
    Columbia School System.
    Year 2000 outreach efforts
        Examples of other Year 2000 outreach efforts that have been
    conducted include:
      --In July 1997, the Department briefed the National Association of
            Student Financial Aid Administrators on the need to address the
            Year 2000 issue;
      --In October 1997, the Deputy Assistant Secretary for Student
            Financial Assistance programs sent a Dear Colleague Letter to
            all State and private college and university presidents and
            financial aid administrators that included a clear message
            about Year 2000 compliance;
      --In December 1997, the Department briefed the National Council of
            Higher Education Loan Programs on Year 2000 issues. The Council
            includes representatives from the lending and guaranty agency
            community, secondary markets, and third party servicers;
      --In December 1997, the Assistant Secretary for Special Education and
            Rehabilitative Services sent a Dear Colleague Letter on Year
            2000 issues to all National Institute on Disability and
            Rehabilitation Research grantees, Special Education Program
            Resource Centers, and Rehabilitation Services Administration
            Independent Living Centers;
      --In January 1998, the Department met with the National Association
            of College and University Business Officers to discuss Year
            2000 issues;
      --In February 1998, a Dear Colleague letter was sent to all State
            higher education executive officers from the Assistant
            Secretary for Postsecondary Education and the Executive
            Director of the State Higher Education Executive Officers;
      --In March 1998, a Dear Colleague Letter was sent to each of the 36
            State and private non-profit guaranty agencies participating in
            the Federal Family Education Loan Program; and
      --In March 1998, a Dear Colleague Letter from the Deputy Assistant
            Secretary for Postsecondary Education was sent to the
            approximately 7,000 lenders in the Federal Family Education
            Loan Program.
        Over the weeks ahead, Department officials will continue to
    participate in education association meetings and conferences, issue
    Dear Colleague Letters, and use the electronic media to contact and
    consult with the education community on Year 2000.
        The Department also works with over 30 boards, commissions,
    councils, and independent agencies that serve the education community.
    To ensure that all of these organizations develop a Year 2000
    compliance strategy, principal office coordinators are consulting
    closely with their constituent entities. In addition, the Department's
    Office of Intergovernmental and Interagency Affairs is working with
    Project management Team to facilitate communication with these
    organizations.
       provision of technical assistance to states on year 2000 computer
                                    problems
        Question. To what extent is the Department providing technical
    assistance to the States for Year 2000 computer problems?
        Answer. The Department has taken several steps to provide technical
    assistance to the States regarding Year 2000 computer problems. One
    initiative is a series of ``Dear Colleague'' letters sent to officials
    in the education community. The letters provide information and
    guidance on how to ensure that computer systems are Year 2000
    compliant. Other steps include consultations with State information
    technology officials and the distribution of outreach materials that
    provide information on best practices and tools that are useful in
    addressing the Year 2000 challenge.
        In addition, the Department has widely distributed an informational
    brochure on year 2000 to the education community, set up a Year 2000
    web site (www.ed.gov/y2k/), and opened two Year 2000 electronic
    mailboxes (y2k@ed.gov and ope--y2k@ed.gov) to answer questions.
                                     ______

                   Questions Submitted by Senator Ted Stevens
                              education technology
        Question. The Administration is proposing a new $75 million program
    for Teacher Training in Technology intended to increase new teachers'
    ability to apply technology in their classrooms. To what extent are
    funds authorized to be spent, and already being spent, on preservice
    training in technology under the following programs: Regional
    Technology in Education Consortia, Technology Literacy Challenge Fund,
    and Eisenhower Professional Development State grants?
        Answer. The Department cannot provide the amounts that the two
    State-formula grant programs, the Technology Literacy Challenge Fund
    and the Eisenhower Professional Development State Grants, are spending
    on preservice training in technology. The Regional Technology in
    Education Consortia currently spend approximately 5 percent of their
    funding, or $500,000, on preservice activities. However, the Department
    does not feel that any of the programs listed is well-suited to
    increase dramatically the percentage of new teachers prepared to use
    technology effectively in their classrooms.
        The Regional Technology in Education Consortia (RTEC's) do assist
    institutions of higher education to establish programs that prepare
    teachers to use educational technology in their classrooms. That is
    just one aspect of the RTEC's broad mandate to provide technical advice
    and training to States, schools, districts, adult literacy centers, and
    other educational institutions about the use of advanced technologies
    to improve teaching and student achievement.
        The Technology Literacy Challenge Fund provides formula grants to
    States for competitive grants to local educational agencies, to fund a
    wide range of technology needs. The strength of this program is that it
    allows States to determine their own needs and provides comprehensive
    funding for educational services. Funding for preservice education is
    not specifically authorized. For this reason, it would not be the best
    funding source for training new teachers.
        The Eisenhower Professional Development State Grants may be used to
    fund preservice training; however, the vast majority of Eisenhower
    funds flow to local school districts and are used primarily to fund
    inservice professional development activities. Sixteen percent of
    program funds are allocated to State agencies for higher education to
    award competitive grants to institutions of higher education or
    nonprofit organizations. The majority of these funds are also used for
    inservice professional development. In addition, the first $250 million
    of any funds appropriated for the program are to be used for
    professional development activities in mathematics and science.
                       spending on educational technology
        Question. How much is the Department spending on technology for
    education?
        Answer. The Department has several programs dedicated specifically
    to supporting educational technology. These programs are:
        The Technology Literacy Challenge Fund is helping States and local
    school districts integrate technology into school curricula. The fiscal
    year 1998 appropriation is $425 million.
        The Technology Innovation Challenge Grants support public-private
    partnerships that generate new learning content and instructional
    practices that may be adopted by schools and communities across the
    country. The fiscal year 1998 appropriation is $106 million.
        The Regional Technology in Education Consortia provide technical
    assistance to State and local educational agencies on the use of
    advanced technologies to improve teaching and student achievement. The
    fiscal year 1998 appropriation is $10 million.
        Star Schools supports innovative projects in distance learning
    education for elementary and secondary education, providing courses and
    professional development through telecommunications technology. The
    fiscal year 1998 appropriation is $34 million.
        Ready to Learn Television supports the development of educational
    programming centered on school readiness, as well as grants for local
    educational and community outreach activities related to school
    readiness. The fiscal year 1998 appropriation is $7 million.
        The Telecommunications Demonstration Project for Mathematics
    provides support for PBS ``Mathline,'' a year-long course of
    professional development in mathematics based on the standards
    developed by the National Council for Teachers of Mathematics. The
    fiscal year 1998 appropriation is $2.035 million.
        The total for appropriation for programs that specifically support
    educational technology is $584.035 million. In addition to the programs
    listed above, funds from Title I, Goals 2000, Special Education State
    Grants, and other programs, can also be used for educational
    technology.
                                technology plan
        Question. Have you completed and submitted the overall education
    technology plan that the Congress requested in the fiscal year 1998
    appropriations?
        Answer. No, the Department has not yet completed this plan that
    Congress requested in the fiscal year 1998 appropriation. We intend to
    submit such a plan to the Committee later this spring.
            idea amendments of 1997--regulations benefits and costs
        Question. On June 4, 1997, President Clinton signed into law the
    Individuals with Disabilities Education Act (IDEA) Amendments of 1997,
    Public Law 105-17. On October 22, 1997, the Department of Education
    issued a Notice of Proposed Rulemaking (NPRM) to implement the
    Amendments. The NPRM, as required, discussed the potential costs and
    benefits of the proposed regulations (62 FR 55054). Through the public
    comment period, has the Department of Education gained any additional
    information concerning the costs and benefits of the regulatory
    package?
        Answer. The Department received over 4,500 comments on the proposed
    regulations. Many comments addressed the benefits to families and
    children of various changes and the potential impact of the proposals
    on teachers and schools. However, virtually none of the comments
    provided specific cost information that could be used in refining the
    Department's analysis of the costs and benefits of the regulations.
                         special education expenditures
        Question. Special education expenditures in the United States are
    estimated at approximately $36 billion. What portion of special
    education expenditures are devoted to costs not directly related to
    special education and related services such as attorneys' fees/
    litigation and administrative expenses?
        Answer. We do not currently collect information from the States on
    special education expenditures. However, a study conducted by Decision
    Resources in 1988 indicated that about 7 percent of the funds used for
    special education services are used for administrative costs. We do not
    know how much money is used for costs associated with litigation or
    attorney's fees, but we believe that it is very small. A study by the
    General Accounting Office found that there were 73 civil actions in
    1988. Attorneys are also frequently present at due process hearings,
    which are held for about one out every 1,000 children each year.
           state administration and local program funding under idea
        Question. What percentage of the Federal appropriation reaches the
    classroom?
        Answer. We do not know what percentage of the Grants to States
    appropriation reaches the classroom. From funds appropriated in fiscal
    year 1997, States may use up to 25 percent of the funds they receive
    for State level activities and at least 75 percent of the funds must be
    passed through to local educational agencies. Data reported by the
    Department in response to a directive in the fiscal year 1998
    appropriations conference report indicate that States actually retain
    only about 8 percent of their funding for State level activities.
    Because of changes made in the authorizing legislation by the
    Individuals with Disabilities Education Act Amendments of 1997, from
    fiscal year 1998 appropriations, States will be allowed to retain an
    average of only up to 21 percent of the funds they receive for State
    level activities and at least 79 percent must be passed through to
    local educational agencies. The percentage of funds that can be
    retained for State level activities will continue to decline to the
    extent that State allocations increase by amounts greater than
    inflation.
        Local educational agencies may use the funds they receive for a
    wide range of purposes including salaries for special education
    teachers, specialized instructional materials, and training personnel.
    We do not have information on the extent to which local educational
    agencies use Federal funds for in-class purposes. South Carolina, which
    has compiled a detailed break-down of expenditures for a variety of
    programs, has data that indicate that instruction and instructional
    support account for 83 percent of the Federal special education funds
    used by local school districts.
     proposed expansion of the education flexibility demonstration program
        Question. In a speech to the National Governors' Association on
    February 23, 1998, you proposed eliminating the 12 State cap under the
    Education Flexibility Demonstration Program (Ed-Flex) authority. When
    will legislative language be introduced for this proposal?
        Answer. The Department is currently preparing legislative language
    to make all States eligible to receive the authority to waive certain
    Federal statutory and regulatory requirements. The Department
    anticipates that legislative language will be ready for introduction in
    late spring.
             requirements for participation in the ed-flex program
        Question. Do you propose adding any new requirements for States to
    participate in Ed-Flex?
        Answer. The Department intends to propose that, before a State may
    receive the authority to waive certain Federal statutory and regulatory
    requirements, it have in place the content and performance standards
    and aligned assessments required by Title I of the Elementary and
    Secondary Education Act of 1965, and also have in place procedures for
    holding local school districts and schools accountable for meeting
    academic performance goals. Though the 12 States currently
    participating in the Education Flexibility Demonstration Program were
    not required to have their content and performance standards or aligned
    assessments and accountability procedures in place before receiving the
    waiver authority, an analysis of how these States have used their
    waiver authority indicates that well-developed State assessment and
    accountability systems allow for a more effective implementation of the
    waiver authority. For example, Texas, a State that has developed a
    statewide assessment and accountability system that provides
    disaggregated student achievement data, has made more extensive and
    effective use of the waiver authority than other States with the waiver
    authority.
        When the Ed-Flex authority was created under Goals 2000, the Title
    I performance requirements did not yet exist. Our proposals would thus
    align Ed-Flex with the current Elementary and Secondary Education Act
    requirements.
        Question. Would you continue to require that States participate in
    the Goals 2000 program in order to be eligible for Ed-Flex?
        Answer. No, States would not have to participate in the Goals 2000
    program to be eligible. To receive the waiver authority, States would
    have to have in place the content and performance standards and aligned
    assessments required by Title I, and provide their State educational
    agency with the authority to waive State statutory or regulatory
    requirements while continuing to hold the local educational agencies
    that receive waivers accountable for the performance of students
    affected by the waivers.
          proposed expansion of programs eligible for ed-flex waivers
        Question. Currently, the number of programs under which
    requirements can be waived is substantially fewer under Ed-Flex than
    under most other Federal education waiver authorities, such as the
    authority covering all of the Elementary and Secondary Act. Do you
    propose that the number of programs covered by Ed-Flex be expanded?
        Answer. Yes, the Department is proposing to expand the number of
    programs for which States could waive certain Federal statutory and
    regulatory requirements so that it is more closely aligned with the
    waiver authority provided under the Elementary and Secondary Education
    Act of 1965. The authority would extend to all of the Department's
    major State formula programs for elementary and secondary education,
    except those under the Individuals with Disabilities Act.
              experience with ed-flex and other waiver authorities
        Question. What has been your experience thus far with Ed-Flex, and
    with other waiver authorities relevant to Federal elementary and
    secondary education programs?
        Answer. The Department's experience with waivers has been that
    relatively few waivers have been requested from the Department and the
    Ed-Flex States, and that the range of provisions requested to be waived
    is similarly small. This would seem to indicate that Federal laws and
    regulations are not acting as significant barriers to State and local
    improvement initiatives, and that most States, local school districts,
    and schools already possess the flexibility needed to accomplish their
    objectives without waivers of Federal requirements.
        The States that are making the most extensive and effective use of
    the waivers are those with well-developed assessment and accountability
    systems. The data provided by such systems allows the State to
    determine whether the waiver is promoting increased achievement among
    all students affected by the waiver. The absence of strong assessment
    and accountability systems makes it nearly impossible for a State to
    ensure that there is adequate accountability for the flexibility
    provided.
        Question. Are the authorities being extensively exercised?
        Answer. No, the authorities are not being extensively used. From
    school year 1994-95 until the beginning of the 1997-98 school year, the
    Department received 435 waiver requests from State educational agencies
    and local school districts in 48 States. State educational agencies had
    submitted 60 waiver requests. The remaining 375 requests were from
    school districts, representing less than 3 percent of school districts
    nationally.
        The majority of Ed-Flex States are also not using the waiver
    authority extensively. Ten of the 12 approved States have received
    fewer than 35 waiver requests. Oregon, which was the first State
    granted the authority in February of 1995, has received only 20
    requests for waivers since then. The waiver authority is being used
    most extensively by Texas, which has received 4,248 waiver requests
    since obtaining the authority in January of 1996. The great majority of
    Texas waivers, 89 percent, have been for statewide waivers of
    administrative requirements.
                        range of provisions being waived
        Question. What sorts of requirements are being waived?
        Answer. The experience of both the Department and the Ed-Flex
    States indicates that the range of provisions being waived is
    relatively small, and waivers of similar provisions are being requested
    of the Department and the Ed-Flex States.
        The waivers requested of the Department fall into 5 general
    categories: (1) waivers granted to State educational agencies that help
    to strengthen State school reform efforts and increase the flexibility
    available to school districts within the State; (2) waivers of the
    minimum poverty threshold for implementing schoolwide programs under
    Title I of the Elementary and Secondary Education Act of 1965; (3)
    waivers of provisions for targeting Title I funds within a school
    district; (4) transition waivers to accommodate temporary situations
    during periods of change; and (5) waivers of the mathematics and
    science priority under Eisenhower Professional Development program.
        Similarly, in the Ed-Flex States, the great majority of
    programmatic waivers have been to waive some of the requirements of
    Title I, such as the minimum poverty threshold for implementing a
    schoolwide program or provisions for targeting Title I funds within a
    school district. As does the Department, Ed-Flex States receive
    requests for waivers of the Title II mathematics and science
    requirement.
        Question. Are there types of requirements that many States or local
    school districts would like to waive but they may not do so under
    existing waiver authorities?
        Answer. The requirements that some States and local school
    districts would like to waive, but which currently may not be waived,
    are certain provisions of the Individuals with Disabilities Education
    Act (IDEA), particularly the reporting requirements. However, the
    Department does not feel that this authority is the appropriate place
    to address these issues.
                        rationale for ed-flex expansion
        Question. Is Ed-Flex expansion being proposed now primarily to
    counter the increasing interest--on the part of many Members of
    Congress, Governors, and others--in consolidating many Federal
    education programs into block grants?
        Answer. No, we are not proposing the Ed-Flex expansion in order to
    counter the consolidation proposals. The Department is committed to
    providing States, local school districts, and schools with flexibility
    in implementing the educational reforms necessary to ensure that all
    children are able to achieve to high standards. The Elementary and
    Secondary Education Act already provides States and local educational
    agencies with a great deal of flexibility. Examples of the increased
    flexibility provided under the 1994 reauthorization include the
    authority to use a consolidated State plan to apply for Federal program
    funds, the ability to consolidate administrative funds from several
    different programs, and the authorization for greater numbers of
    schools to implement Title I schoolwide programs.
        The Department's experience with waivers indicates that the current
    legislation provides much of the flexibility needed by State and local
    educators to implement their school reform efforts. Often, the barriers
    to local reform are created by State statutory or regulatory
    restrictions. The Department feels that, in exchange for gaining the
    ability to waive many Federal statutory and regulatory requirements,
    States will be willing to provide their State educational agencies with
    the authority to waive many State requirements. The Department also
    believes that providing greater numbers of local school districts and
    schools with waivers of certain Federal and State statutory and
    regulatory requirements will provide them with an environment that
    promotes creative and innovative school improvement plans that lead to
    increased achievement for all students.
        Question. Beyond the 12 States already participating in Ed-Flex,
    how many other States are you aware of that might be prepared to offer
    waivers of their own requirements and meet the other conditions of Ed-
    Flex participation?
        Answer. The Department believes that all States will eventually
    meet the conditions necessary to receive the authority to waive certain
    Federal statutory and regulatory requirements. The requirements to have
    in place content and performance standards along with an aligned
    assessment system and procedures to hold local school districts and
    schools accountable for student academic performance are already
    contained in the Elementary and Secondary Education Act of 1965. In
    addition, as it is often the case that State requirements serve as a
    the major barrier to the successful implementation of local reform
    efforts, the Department expects that States will be willing to provide
    the authority to waive State requirements that impede reform in return
    for the ability to waive some Federal requirements.
                         effect of impact aid policies
        Question. While you are requesting about 5 percent less for Impact
    Aid basic support payments (a $36 million reduction), payments to LEA's
    in some States decrease by substantially higher percentages. For
    example, overall payments to LEA's in Alaska would decrease by over 50
    percent according to estimates in your table on page C-47 of the
    Justification. To what extent does each of your three proposed changes
    in the Impact Aid formula account for these shifts in funding?
        Answer. The table below indicates the amount of funds that would
    shift due to each of the proposed changes in the Basic Support Payments
    formula. The table displays these results separately for Alaska and for
    all States combined. These numbers were determined by simulating the
    formula in current law for 1999 at the requested appropriation level of
    $626 million. Then the formula was simulated three additional times at
    $626 million using current law and one of the three proposed changes in
    the formula: (1) the weighted child count; (2) the Learning Opportunity
    Threshold (LOT); and (3) the calculation of maximum payments. The
    figures in the table represent the gross dollars that shift due to each
    change in the formula. Because the Basic Support Payments formula is
    ``non-linear,'' the changes in the components of the formula do not
    necessarily add to the net change for a State when all three proposed
    changes to the formula are included together.

        EFFECT OF PROPOSED CHANGES IN THE BASIC SUPPORT PAYMENTS FORMULA
      [Estimates of the number of dollars by which impact aid basic support
        payments change, by formula component, for fiscal year 1999 at an
                         appropriation of $626 million]
    ------------------------------------------------------------------------
                                           Dollars lost or       Dollars
                                              gained by       transferring
                                                Alaska      among States \1\
    ------------------------------------------------------------------------
    Weighted child count.................     $15,543,663        $94,205,848
    Learning opportunity threshold [LOT].     (18,921,824)       143,744,371
    Maximum payments.....................     (34,535,155)        98,499,296
    ------------------------------------------------------------------------
    \1\ These dollars reflect the amount of funds that shift among States
      due to changes in formula components. For instance, the change in the
      weighted child count would cause all States that gain funds under the
      formula change to gain a total of $94,205,848 and all of the States
      that lose funds to lose a total of $94,205,848.

       impact aid--proposed learning opportunity threshold formula change
        Question. You have justified changes in the calculation of the
    learning opportunity threshold (LOT) in part because current law
    encourages LEA's to decrease their tax efforts. What evidence do you
    have that current law has had this effect?
        Answer. We have proposed the change in calculating LOT in part
    because it would eliminate a pernicious effect of current law--the
    potential reward for LEA's that reduce local tax effort. We are not
    aware of any LEA that has actually reduced local tax effort for this
    reason.
        The current LOT potentially benefits LEA's that reduce their tax
    effort because the LOT percentage is the sum of: (1) the percentage of
    federally connected students and (2) the percentage of the maximum
    payment under the Basic Support Payments formula as a percentage of
    total current expenditures. The sum of these two percentages may not
    exceed 100 percent.
        An LEA could reduce its tax effort and its total current
    expenditures, which would increase the latter of the two components of
    the LOT percentage. The LOT percentage is an important component of the
    Basic Support Payments formula. The LOT percentage is multiplied by the
    maximum payment to determine the LOT payment when funds are
    insufficient to fully fund maximum payments. LOT payments have been the
    basis for calculating actual payments because the formula has not been
    fully funded since its inception.
            number of impact aid lea's decreasing their tax efforts
        Question. How many LEA's receiving Impact Aid payments have
    substantially decreased their efforts since 1992?
        Answer. We do not know how many LEA's have substantially decreased
    their tax effort since 1992. However, as noted above, we know that a
    potential reward exists for LEA's that decrease their tax effort. As
    part of an effort to minimize paperwork burden on LEA's, we do not
    require LEA's to submit data on tax effort when they apply for Basic
    Support Payments.
         impact aid reductions resulting from proposed formula changes
        Question. How many LEA's would receive payments that are less than
    85 percent of their prior year Impact Aid payment (the current-law hold
    harmless requirement) as a result of your proposed formula changes?
        Answer. Among those LEA's that would receive funds in 1999, we
    estimate that (under the Administration's proposed budget and formula)
    228 would receive payments that are less than 85 percent of their
    prior-year Impact Aid payment.
        Question. How will these LEA's make up for the sudden reduction in
    Federal aid?
        Answer. We do not know specifically how these LEA's will make up
    for the decrease in Federal aid, but they should be the best positioned
    to absorb the loss of funds. We have proposed the formula changes
    because we are concerned that Basic Support Payments are not being
    directed to those LEA's with the greatest need for these funds: (1)
    LEA's with students living on Indian lands and children of members of
    the uniformed services who live on Federal property; (2) LEA's that are
    responsible for funding a large proportion of the cost of educating
    their students; and (3) LEA's with large percentages of federally
    affected students. LEA's that lose funds under our proposed formula do
    not meet these criteria and should be able to more easily absorb the
    cost of educating their federally connected students than other LEA's.
        Question. Can you assure the Subcommittee that there will be no
    negative impacts on the quality of education in those LEA's?
        Answer. We cannot assure the Subcommittee that there would be no
    negative impacts on the quality of education in LEA's with smaller
    Basic Support Payments in 1999 than 1998. As indicated under the
    preceding question, however, we believe that these LEA's can more
    easily absorb the cost of educating federally affected students than
    can other districts.
                              the cost of college
        Question. The Federal investment in higher education through the
    student aid programs administered by the U.S. Department of Education
    has grown markedly over the past century, as has the price of college.
    Has this increased Federal support of student financial assistance
    prompted increases in the prices charged students and their families?
        Answer. We also are concerned about the rise in college tuition
    costs in recent years. We do not believe, however, that the increase in
    college prices can be attributed in any significant way to the
    increased availability and amount of Federal student aid. A number of
    recent studies have examined this issue, including those performed by
    the National Commission on the Cost of Higher Education, Professors
    McPherson and Shapiro, and the National Association of Independent
    Colleges and Universities and have failed to find a correlation between
    the growth of Federal student aid programs and the increase in college
    tuitions. In fact, the NAICU study showed the opposite effect. NAICU
    found that Federal grant aid actually helps to slow the rate of tuition
    growth at independent colleges and universities.
        Question. What impact will the new Hope Scholarships and Lifetime
    Learning credits have on college prices?
        Answer. We do not anticipate that the new Hope Scholarships and
    Lifetime Learning tax credits will provide have any effect on college
    prices. There is no evidence of a relationship between the presence of
    Federal student aid and tuition increases. Institutions cannot easily
    raise tuitions when only a portion of their students, many of them
    part-time, receive education tax benefits or Federal grants. State
    institutions have a particularly difficult time raising tuitions since
    their services are viewed as a public benefit to their citizens and
    they must typically go through the State legislature for approval of
    tuition increases.
                   percent of cost covered by federal grants
        Question. What is the percentage of the average cost of education
    that can currently be covered by the maximum and average Pell Grant or
    Supplemental Educational Opportunity Grant?
        Answer. Below is a chart comparing the average tuition, fees, and
    room and board to the maximum and average Pell Grant and Supplemental
    Educational Opportunity Grant (SEOG) programs for the 1996-97 award
    year. In general, the maximum Pell Grant of $2,470 in 1996-97 was
    sufficient to cover approximately 27 percent of the average cost of
    education at all schools. However, the average Pell Grant was
    approximately $900 lower than the maximum, so that the average Pell
    Grant was sufficient to cover about 17 percent of the average cost of
    attendance. These percentages, as expected, are higher for public
    institutions, and generally lower at more expensive private
    institutions.
        The maximum SEOG of $4,000 would cover approximately 44 percent of
    the average college cost. However, the average SEOG in 1996-97 was
    significantly lower than the maximum ($701 versus $4,000), so the
    amount of college cost covered by the average SEOG was less than 8
    percent.

                                                    PELL GRANT AND SEOG AWARDS AND COST OF EDUCATION--1996-97
    --------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                         Average   Maximum   Percent  Average  Percent   Maximum   Percent  Average  Percent
                                                                        cost \1\     Pell    of cost    Pell   of cost     SEOG    of cost    SEOG   of cost
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    Total.............................................................    $9,199     $2,470     26.9   $1,574     17.1     $4,000     43.5     $701      7.6
    Public 4-year.....................................................     7,331      2,470     33.7    1,668     22.8      4,000     54.6      743     10.1
    Public 2-year.....................................................     4,412      2,470     56.0    1,493     33.8      4,000     90.7      404      9.2
    Private 4-year....................................................    18,476      2,470     13.4    1,673      9.1      4,000     21.6    1,131      6.1
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    \1\ Cost includes tuition, fees, room and board.

    Sources: ``Digest of Education Statistics'', 1997, NCES; Pell Grant: Pell grant cost estimation model, OPE; SEOG: ``Federal Campus-Based Programs
      Distribution of Awards 1996-97'', OPE.

                          impact of budget proposal on
        Question. What impact on these statistics will your budget request
    or your proposal for reauthorization of the Higher Education Act have?
        Answer. In our fiscal year 1999 Budget, we are proposing an
    increase of $100 in the maximum Pell Grant from $3,000 to $3,100. This
    maximum award increase builds on the two years of unprecedented growth
    in the maximum Pell Grant for 1997-98 and again for 1998-99, when the
    maximum grants increased 9.3 percent and 11.1 percent, respectively.
    The large increases in the maximum Pell Grant between 1997-98 and 1998-
    99, coupled with the increase we propose in 1999-2000, will increase
    the percent of college cost covered by the maximum Pell Grant by over 2
    percent, to slightly over 29 percent, and the percent of cost covered
    by the average Pell Grant from 17 percent to 18 percent.

                                 PELL GRANTS AND COST OF EDUCATION--1996-97 TO 1999-2000
    ----------------------------------------------------------------------------------------------------------------
                                                       Estimate                               Estimate
                       Award year                      average      Maximum     Percent of    average     Percent of
                                                         cost         Pell         cost         Pell         cost
    ----------------------------------------------------------------------------------------------------------------
    1996-97........................................       $9,199       $2,470         26.9       $1,574         17.1
    1997-98........................................        9,659        2,700         28.0        1,699         17.6
    1998-99........................................       10,142        3,000         29.6        1,894         18.7
    1999-2000......................................       10,649        3,100         29.1        1,936         18.2
    ----------------------------------------------------------------------------------------------------------------
    Source: Pell grant cost estimation model, OPE.

                            access to student loans
        Question. The Administration's proposal for addressing issues
    arising from the reduction in the Federal Family Education Loan's
    interest rate, scheduled to occur on July 1, 1998, would lead to a
    significant reduction in lender returns. To what extent will this
    reduction cause some lenders to stop making loans under the FFEL
    program?
        Answer. Based on a Department of Treasury analysis, the
    Administration proposed an interest rate formula that would ensure an
    adequate rate of return to lenders at little or no net cost to
    students. Therefore, the Administration believes that lenders would not
    stop making loans under its proposal which the Treasury study showed
    provided sufficient profits to maintain FFEL lender participation.
                    ensuring continued access to ffel loans
        Question. How will the Department deal with any access problems
    that result?
        Answer. We are taking steps to implement the broad authority
    granted by Congress to ensure continued access to FFEL loans. We are
    committed to assuring that no student is denied the financial help he
    or she needs to go to college.
        As part of the effort to ensure uninterrupted access to college
    student loans, we have held discussions with the Student Loan Marketing
    Association (Sallie Mae) and have contacted all 36 guaranty agencies
    about their capacity to fulfill their statutory obligation to issue
    loans if necessary. Of the 36 guaranty agencies contacted, nearly all
    indicated they could serve in some capacity as lender of last resort.
        One of these guaranty agencies, the Pennsylvania Higher Education
    Assistance Agency, has already informed the department that it could be
    available right away to make at least one million student loans to
    assist students across the nation. This is triple the number it
    currently makes and about one-fifth of all FFEL loans made nationwide.
    Nearly all of the guaranty agencies have indicated that they are ready
    to make loans if necessary to ensure loan access.
                   student financial aid information systems
        Question. What steps has the Department taken to address the recent
    criticisms by the GAO of the accuracy and efficiency of its information
    systems used in determining student eligibility for financial aid,
    processing aid applications, and informing students and institutions
    about the status of grants and loans?
        Answer. In 1995, the Department recognized the need to use cutting-
    edge technology and business processes to transform the administration
    of student financial aid and improve customer access to information and
    funding for education beyond high school, and began to work with our
    partners in the postsecondary education community to design, integrate
    and develop a comprehensive student financial aid delivery system using
    state-of-the-art information technology.
        The effort has become known as Project EASI (Easy Access for
    Students and Institutions). The following is an update on this
    important project:
    Delivery of Systems Architecture Report--Completed
        The Department developed the Technical Vision and Target
    Architecture Report in September 1997. This presents a conceptual
    framework for EASI's technical environment but is only one component of
    an overall architecture.
    Development of Standard Data Formats and Definitions--In process
        A data model is being developed for Project EASI. This will contain
    standard data definitions and formats. ED has met with the
    Postsecondary Education Standards Council (PESC) to solicit their
    support in reviewing these standards. Our goal is to obtain buy-in from
    the higher education community on EASI's data model.
        As additional steps toward data standardization, we are also
    working on two projects to pilot EDI technology. These include allowing
    lenders to submits requests for interest and special allowance on FFEL
    loans in an EDI format and allowing schools to submit Pell Grant
    origination records in an EDI format.
    Student Enrollment Verification--In process
        ED continues to work closely with schools, guarantee agencies and
    enrollment servicers to ensure that enrollment data is timely and
    accurate. In cases of schools not responding to our requests for data,
    ED has initiated fines as an enforcement mechanism. If this is not
    successful, ED will consider limitation, suspension and termination
    actions against the school.
    Development of a Multi-View Enterprise Architecture--In process
        SFA must develop an enterprise architecture that addresses more
    than just the technical environment. An enterprise architecture would
    describe four additional architectural views: (1) which organizations
    perform which pieces of work (this is called the work view); (2) what
    information these organizations need to do their work (the information
    view); (3) what software applications will be needed to perform the
    work (application view); and (4) the technical standards which will
    provide a framework for implementing EASI (technical infrastructure).
    We have hired an expert in this field who is working to provide the
    completed enterprise architecture by December 1998.
    Movement toward an Integrated Data System--In process
        In December 1997 Project EASI entered the definition phase of the
    system development life cycle. Specifically this stage involves: (1)
    defining what the Title IV delivery process will look like in the
    future; (2) establishing the standards for technology and data and (3)
    establishing a detailed implementation schedule. When current tasks for
    the definition phase are completed in September 1998, development work
    on the new system is expected to begin.
        Project EASI's vision of integrating the data processing systems
    that the Department uses has prompted ED to reconsider the student
    financial assistance programs' current contracting structure. Early in
    1997, ED identified an alternative way to structure the Title IV
    information technology and support services contracts. This contracting
    strategy introduces a functionally driven approach to procuring the
    services ED requires for the Title IV programs. Part of this approach
    is to consolidate all of the Title IV systems into a single data
    center. Through this approach we will gain economies of scale and
    reduce costs. This will also set the stage for a common operating
    environment that will facilitate system integration. During February of
    1998 we moved the National Student Loan Data System to the new data
    center and we plan to move the remaining systems during 1998 and 1999.
            performance based organization for student aid programs
        Question. Please share with the committee what steps the Department
    has taken to create a ``performance-based organization'' to administer
    student aid information, processing and delivery systems?
        Answer. The Department has taken several steps toward creating a
    performance based organization (PBO). I believe that the Student
    Financial Assistance (SFA) Programs meet many of the criteria
    identified by the National Partnership to Reinvent Government (NPRG)
    and is a good candidate to become a PBO because of its clear mission,
    measurable services to external customers and its opportunities for
    significant improvement.
        Acting Deputy Secretary Mike Smith is leading the overall effort.
    Our main vehicle for PBO planning is the SFA Action Plan. This tool was
    developed under Acting Deputy Assistant Secretary for Student Financial
    Assistance Diane Rogers' to guide the work of SFA, the PBO outreach,
    design, and transformation process. The Department is working with the
    SFA Modernization Board, the White House, the OMB, the Treasury and
    Congress.
        The PBO will be managed by a Chief Operating Officer (COO) with a
    demonstrated record of effective management. The COO will report to the
    Secretary and have a fixed contract and term. The COO's compensation
    will be tied to performance under an agreement with the Secretary. The
    COO will have authority to hire senior managers whose compensation will
    also be tied to the achievement of PBO performance goals. The
    Department's target is to identify a COO by the end of summer 1998.
        Question. Does the Department's action to date reflect the
    legislative proposal under consideration by the Congress?
        Answer. Yes, the Department's actions are generally consistent with
    the intent of the legislative proposals (S. 1182) and (H.R. 6) under
    consideration.
        Question. Do you believe that the Department needs any new
    statutory authority to establish such an organization?
        Answer. Generally, a PBO can be established without legislation.
    Legislation may be required in some instances to provide flexibility
    under existing statutes or to establish special reporting or
    consultation requirements. The Department is starting discussions now
    regarding how current authorities might be used to establish the PBO
    without legislation. The Department's goal is to use this new
    organizational tool in ways that are beneficial to students and
    families, taxpayers, schools, financial institutions, and employees.
          participation of hispanic-serving institutions in title iii
        Question. What is the universe of institutions potentially eligible
    to receive funding under the Hispanic-serving institutions program
    authorized by the Part A program of Title III of the Higher Education
    Act?
        Answer. The Department of Education estimates that about 135
    institutions of higher education are eligible Hispanic-serving
    institutions (HSI's).
        Question. To what extent are potentially eligible HSI's
    participating in the Hispanic-serving institutions program authorized
    by the Part A program of Title III of the Higher Education Act?
        Answer. In 1995, the first and only competition for the HSI
    program, 90 institutions applied for funding. Of those that applied, 37
    institutions received awards. Therefore, just over 25 percent of
    potentially eligible HSI's in 1995 participated in the HSI program.
      differences between hispanic-serving institutions and historically
                        black colleges and institutions
        Question. What are the differences in what constitutes an Hispanic-
    serving institution (HSI) under Part A of Title III and an historically
    black college or university (HBCU) under Part B of Title III?
        Answer. There are many differences in what constitutes an HSI and
    an HBCU under Title III. For the HSI program, eligible institutions
    must first have a high enrollment of needy students and low educational
    and general expenditures. Should they meet this criteria, then the
    institution must also have at least 25 percent Hispanic undergraduate
    full-time equivalent enrollment. Fifty percent of these Hispanic
    students must be low-income and first-generation college students and
    an additional 25 percent of these Hispanic students must be low-income
    or first-generation. Further, the program gives absolute priority in
    funding to institutions that have a collaborative arrangement with a
    local education agency to reduce the high Hispanic drop out rate,
    improve Hispanic rates of academic achievement, or increase the rates
    at which Hispanic students enroll in higher education.
        Eligibility for the HBCU program requires only that the institution
    be accredited and established prior to 1964 with a mission to educate
    black Americans. There are no student or financial criteria. In 1996,
    there were 96 HBCU's eligible under Title III statute, all of which
    receive annual funding.
        Question. Have these differences in what constitutes a Hispanic-
    serving institution under Title III Part A and a historically black
    college and university under Title III Part B lead to any significant
    or obvious inequities in the administration of the program?
        Answer. These differences do not create any obvious inequities in
    the administration of the programs. However, the statutory differences
    in eligibility between the HSI's and HBCU's programs do require that
    they be administered differently.
        The HBCU program awards grants to all eligible institutions and the
    amount of each award is based on a formula allocation. In contrast, the
    HSI program is a competitive program--only the best applications are
    funded, not all eligible institutions.
        While both programs grant five year institutional aid awards, the
    minimum annual award for HBCU's is $500,000 while the maximum annual
    award for HSI's is $350,000. In fiscal year 1997, the average award for
    each HBCU was $1.1 million while for HSI's the average award was
    $292,000.
                    hbcu's without majority black enrollment
        Question. How many historically black colleges and universities no
    longer serve substantial black student populations, yet still receive
    assistance under the Title III program?
        Answer. Of the institutions that receive assistance under the Title
    III, Part B program, there are six HBCU's that have less than a 50
    percent black student population. Of these institutions, four HBCU's
    have less than 25 percent black student population.
               government performance and results act measurement
        Question. The Government Performance and Results Act of 1993
    (GPRA), Public Law 103-62, requires all Federal agencies to phase in a
    process that uses performance measures to set management and budgeting
    objectives. What is the current situation at the Department regarding
    full implementation?
        Answer. The Department has identified performance indicators for
    all the goals and objectives put forth in our cross-cutting Strategic
    Plan. Data systems are in place to collect required information for
    many of the indicators; and we are modifying existing data systems or
    developing new data systems for the others.
        In addition, each program in the Department now has a performance
    plan with objectives and performance indicators. The performance data
    for some programs are readily available and of high quality, but for
    others baseline data are under development or improvement is needed to
    ensure quality. Currently we are working to (1) align existing data
    collections including evaluations, statistical surveys, and grantee
    performance data systems; (2) establish new data collections as needed;
    and (3) verify and validate data by developing standards and quality
    assurance systems.
                         gpra implementation challenges
        Question. What problems have you encountered in the application of
    the GPRA procedures to date?
        Answer. Most of the challenges we face in the application of GPRA
    relate to collecting good performance data. These challenges include:
      --Gaining employee acceptance for taking responsibility to collect
            and use information on performance indicators when they have
            little or no control over the results;
      --Obtaining uniform performance measures across grantees;
      --Ensuring high-quality, timely performance data;
      --Improving self-reported information from grantees;
      --Developing intermediate performance indicators that provide early
            warning of problems; and
      --Obtaining valid measures for complex indicators.
        The other area with many challenges is how to make the Strategic
    Plan's goals and strategies meaningful to all ED employees. We are
    working on communication strategies, changes to employee evaluations,
    and internal reporting.
        Question. What changes if any, do you anticipate making in the
    coming year to your strategic goals and performance plans?
        Answer. Over the coming year the Department may make minor changes
    in Strategic Plan indicators, but we do not foresee making any changes
    to our Strategic Plan goals and objectives.
        The Annual Performance Plan for the Department's objectives and
    programs will be updated during the fiscal year 2000 budget development
    process, which begins this summer. We have a number of improvements
    already planned for the program plans in particular, including adding
    baseline data and setting performance goals for all the program plans.
                  gpra measures in the fiscal year 1999 budget
        Question. To what extent has the Department used GPRA measures in
    developing the fiscal year 1999 budget request?
        Answer. GPRA has provided a framework for performance planning in
    the Department, for developing both long-term and annual goals and
    objectives, and budget proposals to support them. The Department built
    GPRA into its internal budget process. In preparing their proposals,
    senior managers were instructed to relate their request to meeting the
    Strategic Plan priorities and objectives, to use performance
    information to support their request, to gear their proposals to
    implementing strategies to achieve their performance goals and
    objectives, and to identify resources to carry out the strategies in
    the performance plans including resources needed to collect and verify
    performance data.
        We have done extensive work on developing performance measures for
    all of the Department's programs and have incorporated performance
    measures and indicators into the Congressional Justifications as well
    as into individual program plans. In developing the fiscal year 1999
    budget request, GPRA helped us to focus in a more comprehensive way on
    the expected outcomes of our programs and benefits of future
    investments and to consider much more concretely the impact of our
    programs on our customers, particularly students.
        While the Department has included performance data in its budget
    requests in the past, with GPRA we will have data for all programs, the
    quality of data will be improved, and the information we receive will
    focus on results, not just processes. While we will not have outcome
    data for every program in every year, we will continue to collect data
    as it becomes available. It should be noted that fiscal year 1999
    funding would primarily support activities during the 1999-2000 school
    year. We will assess the impact of this funding in the next 2 years.
       impact of gpra on development of fiscal year 1999 budget decisions
        Question. For which programs have you requested major funding
    changes, either increases or decreases, because of the application of
    the GPRA procedures?
        Answer. The Department has long been committed to using performance
    data to inform decisions. In developing the fiscal year 1999 budget
    request, GPRA measures played a key role in our focusing on certain
    strategic goals and the resources needed to accomplish those goals. The
    following are some examples of fiscal year 1999 program budget requests
    that reflect funding changes that would help enable us to meet
    Strategic Plan and Annual Plan performance indicator goals.
      --The America Reads program ($260 million) supports Strategic Plan
            Objective 2.2: Third Grade Reading and is part of the
            Department's comprehensive strategy to increase the percentage
            of students performing at or above the basic level in reading
            on the National Assessment of Education Progress (NAEP).
          As reported in the Department's fiscal year 1999 annual plan, our
            goal is to increase the percentage of 4th graders reading at
            basic, proficient, or advanced levels in reading on NAEP from
            60 percent in 1994 to 65 percent in 1998, and to 68 percent in
            2000. In the most recent (1994) National Assessment of
            Educational Progress (NAEP), 60 percent of fourth graders
            scored at or above the ``basic'' level in reading. The NAEP is
            not administered to third graders, but the fourth-grade NAEP
            data capture reasonably well how students are reading at the
            end of the third grade.
      --Our proposed new Teacher Training in Technology program ($75
            million) supports Annual Plan Objectives 3.1: Training tied to
            certification and 3.3: Staff training. A recent report by the
            National Council of Accreditation for Teacher Education
            criticizes the majority of teacher education programs for
            teaching computer literacy rather than the application of
            technology in the classroom. While the current programs focus
            on training existing teachers, they are not well-suited to
            increasing dramatically the percentage of new teachers prepared
            to use technology effectively in their classrooms. This new
            program will help ensure that all new teachers can teach
            effectively with technology.
      --The Pell Grant program supports Strategic Plan Objective 3.2:
            Postsecondary students--financial aid and support. Under GPRA,
            the Department identified the Pell Grant program's primary
            objective as providing continuing access to postsecondary
            education for low-income students. Performance indicator data
            show that Pell Grants are successful in helping low-income
            students overcome financial barriers to postsecondary education
            and that low-income students who receive them have much higher
            participation and graduation rates than low-income students who
            do not. A key indicator of how well the program is doing in
            achieving this goal can be measured by the income distribution
            of students who benefit from the program. Our request of $7.594
            billion (+$249 million) for Pell Grants will benefit students
            with greatest financial need by targeting more of them and by
            increasing the maximum award.
      --The Work Study program also supports Strategic Plan Objective 3.2.
            Studies show that first-year students who work during the
            academic year are more likely to complete the academic year,
            and that work has an increased impact on students' academic
            performance when a job is more closely related to the course of
            study. Our request of $900 million for Work-Study (+$70
            million) will achieve the goal of expanding the program to one
            million students and improve the level of participation in
            community service by continuing to waive the 25 percent
            matching requirement for participating colleges.
      --The TRIO programs request (+$53 million) and two new program
            proposals, High Hopes for College (College-School Partnerships)
            ($140 million) and College Early Awareness Information ($15
            million), also support Strategic Plan Objective 3.2:
            Postsecondary students--financial aid and support, as well as
            3.1: Secondary students--information and support. Indicator
            data for postsecondary education enrollment rates continue to
            show that there is still a gap in college attendance rates
            between high and low-income students. Research demonstrates
            that early intervention programs that are sustained for a
            number of years are very successful, and that academic
            services, mentoring, counseling, and tutoring for students are
            critical. Both High Hopes and TRIO are designed to provide
            needed support services to a large population of disadvantaged
            students in order to motivate and prepare these young people
            for postsecondary education. High Hopes would operate quite
            differently from TRIO and would be coordinated with, complement
            and enhance services received by participating schools and
            students under the TRIO programs and other related Federal and
            non-Federal programs.
      --Research also shows that students, especially low-income students,
            often do not aspire to higher education, do not discuss college
            with their parents, think about college at an early enough age,
            or take the proper courses to ensure college entrance. Many who
            do manage to attend college are not fully prepared and require
            remedial courses. This lack of information and awareness would
            be addressed by the College Early Awareness Information
            program.
            consultation on development of 1998-2002 strategic plan
        Question. The development of GPRA measures requires extensive
    consultation with stakeholders and the Congress regarding the
    development of strategic goals and performance plans. How extensive an
    undertaking have these activities been to date, and to what degree will
    these activities be continued during the current year?
        Answer. The Department consulted extensively with outside
    interested parties on the 1998-2002 Strategic Plan, and made changes as
    a result of those consultations.
        The Department met with and received feedback on the Strategic Plan
    goals, objectives and indicators from: Staff from Congressional
    authorizing, appropriations, budget, and government operations
    committees; General Accounting Office (GAO); Office of Management and
    Budget (OMB); and The Council for Excellence in Government.
        The Department consulted with relevant Federal agencies on our
    respective strategic plans, including the Departments of Health and
    Human Services, Labor; and Treasury; National Science Foundation;
    Social Security Administration; and the Office of National Drug Control
    Policy.
    Consultation on development of program level performance plans
        The Results Act only mandates consultation on the Strategic Plan.
    While the program indicator plans are part of our Annual Plan (in
    Volume 2) and therefore consultation isn't required, in many cases,
    assistant secretaries and heads of program offices have discussed the
    program level performance plans with grantee and stakeholder groups.
    For example:
      --The assistant secretary for vocational and adult education shared
            the vocational and adult education plans with State directors
            to get feedback and suggestions for improvement.
      --The director for bilingual education and minority languages affairs
            presented the draft bilingual education program performance
            plans to the annual conference of the National Association for
            Bilingual Education.
      --The assistant secretary for postsecondary education has shared and
            discussed the set of student financial aid program performance
            plans at regular meetings with key stakeholders and had these
            program plans posted on the Office of Postsecondary Education
            web page to make them available to stakeholders and the general
            public.
      --The director of Indian education programs shared the program's plan
            and indicators at the National Indian Education Association
            conference in November 1997. This is after discussing them with
            State directors of Indian education in July 1997.
      --Other elementary and secondary education program directors have
            regularly presented program indicator plans at meetings with
            their State and local program directors, including State
            migrant education directors, Eisenhower professional
            development program directors, and the Title VI State grant
            program directors.
        We have found the consultation process to be very helpful in
    identifying areas of stakeholder interest, areas for coordination, and
    ways to improve the quality of our strategic plan and performance
    measurement. The Department will continue to present information on and
    engage in discussions around the Department's goals and objectives at
    conferences for stakeholders like the National Association of Federal
    Education Program Administrators. Many of our program managers are now
    routinely presenting their plans to key stakeholders and constituent
    groups as well. Finally, the fiscal year 1999 Annual Plan (Volume 1 on
    Strategic Plan objectives and Volume 2, program performance plans) is
    being placed on ED's website--the Strategic Plan is already there. We
    will continue to seek and respond to inquiries and suggestions.
                            cost to comply with gpra
        Question. What have been the administrative costs for the
    Department necessary to comply with the GPRA requirements?
        Answer. The Department views GPRA requirements as key elements of
    good management practice and not separate from other administrative
    costs. We are striving to have all levels of the agency fully
    performance-driven. Managers at all levels have participated in
    activities that support GPRA/good management practices, including
    developing strategic and annual plans; revising or developing data
    collection systems; and assuring data quality. Specifically:
        Developing strategic and annual plans.--Senior leadership in the
    Department was involved in developing the four goals and twenty-two
    objectives set forth in our strategic plan. Program managers were
    heavily involved in developing performance plans for the Department's
    programs. Some of these program performance plans were updated versions
    of existing performance plans, but for other program managers this was
    the first time they had developed program performance plans.
        Revising or developing data collection systems.--Effectively
    reporting the Department's performance in achieving its Strategic Plan
    goals and objectives requires developing some new data systems and
    fixing old ones. Existing data systems need to be strengthened to
    ensure the Department receives high quality and timely data on its
    programs and their effects. Our efforts include:
      --Reviewing existing data collections, administrative record sharing,
            questionnaires, etc. to align with performance indicators; and
      --Develop new collections. The new systems will seek to redirect data
            collections toward gathering performance information of the
            accomplishment of Department-wide and program goals.
          An example of a new collection is the planned survey to determine
            the percentage of teachers and principals across the Nation who
            are rated as very effective. This survey would establish the
            baseline and be the sole source of data for this indicator
            (indicator 25, objective 1.4).
        Assuring data quality.--To ensure the quality of performance
    indicator data, the Department is following a four-part improvement
    strategy.
      --Develop Department-wide standards for performance indicator
            measurements.
      --Develop employee training in the application of the data standards
            for performance measurement.
      --Monitor data quality.
      --Have managers attest to the reliability and validity of their
            performance measures or submit plans for data improvement.
        Over the next year the Department will be strengthening its two
    major data performance indicator systems, one for the elementary and
    secondary education and a second for student aid. In addition, the
    Department plans on extending its independent evaluations to include
    management evaluations.
          full-time equivalent staff needed to conduct gpra activities
        Question. Do you have an estimate of the full-time equivalent staff
    needed to conduct GPRA activities?
        Answer. The Department views GPRA requirements as key elements of
    good management practice and does not have an estimate of the full-time
    equivalent (FTE) associated with GPRA activities. The core offices
    responsible for coordinating implementation are the Office of the Under
    Secretary (OUS) and the Office of Management (OM). However, managers
    and senior staff throughout the agency participate in at least some
    GPRA activities. As we move toward being a performance-driven agency,
    we fully expect all employees to be focused on performance and using
    performance information. Developing strategic plans, whether at the
    agency or office/program level, should be a standard management
    function for managers, not an add-on done only to comply with
    legislation.
        Question. What administrative activities, if any, have been
    curtailed or eliminated to undertake GPRA?
        Answer. GPRA and the Department's Strategic Plan have provided the
    Department with a framework and a focus for its activities. It has
    required additional effort on the part of staff, but we are not aware
    of any activities that have been curtailed or eliminated during our
    implementation of GPRA.

                              subcommittee recess

        Senator Specter. The subcommittee will stand in recess to
    reconvene at 2 p.m., Tuesday, March 10 in room SD-192. At that
    time we will hear testimony from the Secretary of Health and
    Human Services, Hon. Donna Shalala, and from Hon. Nancy Ann
    DeParle, Administrator, Health Care Financing Administration.
        We are going to proceed now to panel 2, but I would like
    you to stay for just a moment, Mr. Secretary.
        [Whereupon, at 3:25 p.m., Thursday, March 5, the
    subcommittee was recessed, to reconvene at 2 p.m., Tuesday,
    March 10.]

      DEPARTMENTS OF LABOR, HEALTH AND HUMAN SERVICES, AND EDUCATION, AND
              RELATED AGENCIES APPROPRIATIONS FOR FISCAL YEAR 1999

                                  ----------

                            TUESDAY, MARCH 10, 1998

                                           U.S. Senate,
               Subcommittee of the Committee on Appropriations,
                                                        Washington, DC.
        The subcommittee met at 2 p.m., in room SD-192, Dirksen
    Senate Office Building, Hon. Arlen Specter (chairman)
    presiding.
        Present: Senators Specter, Cochran, Gorton, Gregg,
    Faircloth, Bumpers, and Kohl.

                    DEPARTMENT OF HEALTH AND HUMAN SERVICES

                            Office of the Secretary

    STATEMENT OF HON. DONNA SHALALA, SECRETARY

                      Health Care Financing Administration

    STATEMENT OF NANCY-ANN MIN DePARLE, ADMINISTRATOR

                       opening remarks of senator specter

        Senator Specter. Good afternoon, ladies and gentlemen. The
    hour of 2 o'clock has arrived.
        Senator Gorton and I were talking on the subway on the way
    over, after we left our caucus a little early, that we wanted
    to be on time. We have the distinguished Secretary of Health
    and Human Services.
        Today the Subcommittee on Labor, Health and Human Services,
    and Education continues our hearings. The Department of Health
    and Human Services has become even more important than its
    former lofty position of importance as health care has emerged
    as an issue which is second to none in controversy and
    importance in America. Health spending constitutes about $1
    trillion, or one-seventh of our gross national product.
    Enormous changes have occurred in the health care field, since
    the President's plan came forward in 1993, and while not
    accepted, it stimulated enormous debate and there have been
    enormous changes in health care delivery. This Department is at
    the center of all of these changes.
        One of the concerns which our subcommittee and the entire
    Congress has is where we find the funding for the President's
    programs. And there is a gap of $1.9 billion, as the chart to
    my right shows, which comes from user fees which are not yet
    authorized and from projected settlements which are highly,
    highly speculative at this time.

                               prepared statement

        The Senators are still in their caucuses. Most of my
    colleagues are still in their caucuses. And I expect we will
    have very substantial representation before the hearing is
    over. And there are quite a number of topics which we will need
    to cover in the dialog, the Q&A. So I am going to put my full
    statement in the record and ask you at this time to proceed
    Secretary Shalala.
        [The statement follows:]

                  Prepared Statement of Senator Arlen Specter

        Today we will continue the fiscal year 1999 hearings of the
    Subcommittee on Labor, Health and Human Services and Education.
    This afternoon, we are delighted to have before the
    subcommittee the distinguished Secretary of Health and Human
    Services, the Honorable Donna Shalala, and welcome her once
    again to our hearing.
        Madam Secretary, your department is charged with a
    formidable task: overseeing over $380 billion in entitlement
    and discretionary programs that Congress appropriates to your
    department for meeting the health and human service needs of
    the nation.
        You can see from the chart to my right the difficulty
    facing this subcommittee by the President's assumption that
    savings will be realized through enactment of user fees or new
    taxes.
        In fiscal year 1997, discretionary spending for this
    subcommittee totaled $74.7 billion.
        In fiscal year 1998, discretionary spending increased to a
    total of $80.4 billion.
        For fiscal year 1999, the President has requested $84.5
    billion, but $1.9 billion of this amount would be financed by
    new user fees and assumed receipts from tobacco legislation.
        Madam Secretary, the administration's budget request has
    put us in a real spot, basically $1.9 billion in the hole, and
    I fully expect that you will work closely with this committee
    as we try to resolve this dilemma.
        We will be taking a careful look at your budget
    recommendations, with their implications for the future health
    and well-being of our citizens.
        One of the top priorities will be expanding biomedical
    research. A fair target is to double NIH's budget over five
    years. Last year we made good progress toward that goal and I,
    along with Senator Harkin, will again work this year to improve
    that record.
        Following Secretary Shalala's panel, we will have a second
    panel with the Administrator of HCFA that will discuss
    important issues regarding physician reimbursement policies
    under medicare.
        We face difficult tradeoffs in the coming months, Madam
    Secretary. I look forward to working with you to craft an
    appropriations bill that maintains the commitment to fiscal
    restraint while preserving funding for high priority programs
    like NIH.
        I will now turn to Senator Harkin for any comments or
    opening statements that he may wish to make.

                    summary statement of hon. donna shalala

        Secretary Shalala. Thank you, Mr. Chairman. I am pleased to
    be here.
        I have a few words at the beginning of my testimony, in
    tribute to Senator Bumpers, but I think I will wait for his
    appearance here before I make my statement.
        Senator Specter. Well, I think anything good about Senator
    Bumpers ought to be said behind his back. [Laughter.]
        Of course.
        Secretary Shalala. Mr. Chairman, I am pleased to appear
    before you today to discuss the President's fiscal year 1999
    budget for the Department of Health and Human Services. Last
    year we spoke at great length about the need to balance the
    budget. The President's 1999 budget achieves that goal, thanks
    to extensive cooperation between the Congress and the
    administration last year. We proved that by working together,
    working out innovative solutions, and working every dollar
    harder, we can guarantee a better fiscal future.
        And the President's new budget for the Department of Health
    and Human Services provides that, with fiscal discipline, we
    can address the needs of America's families in the context of a
    balanced budget. Let me just touch on the highlights, beginning
    with our three new initiatives.
        Last month, the President announced the 21st century
    research fund, to launch a new era of path-breaking scientific
    inquiry. HHS will play the largest role, with new resources for
    our constellation of stellar research agencies: the Centers for
    Disease Control and Prevention, the Agency for Health Care
    Policy and Research, and the National Institutes of Health.
    Indeed, the NIH will receive its single largest budget increase
    in its history, $1.1 billion, next year, a down payment on an
    historic 5-year, 50 percent expansion.
        The new resources will allow NIH, CDC, and AHCPR to attack
    our most defiant diseases in a coordinated, integrated way, and
    to speed research results from labs into clinics and hospitals.
    We also propose giving every Medicare patient the chance to
    participate in a cancer clinical trial, so each can benefit and
    perhaps benefit others.
        The second new initiative in this budget is the President's
    child care initiative. In millions of families, both parents
    must work to support their children. In millions of other
    families, single parents work doubly hard to support their
    children. The President's child care initiative will help
    families find and afford the quality child care they need. It
    includes $24 billion over 5 years in block grants to States,
    tax credits for families, tax incentives to businesses, and
    resources to help States enforce child care quality standards.
        This budget also advances the President's commitment to
    bring 1 million children into Head Start by the year 2000, and
    more infants and toddlers into early Head Start.
        The third new initiative in this budget is the Medicare
    buy-in plan. It answers the question troubling millions of
    aging Americans: What if I lose my health coverage before I am
    65? The buy-in plan would allow those age 55 and over to
    breathe a little easier.
        In addition to these new initiatives, this budget advances
    the fight against our most pressing public health challenges,
    requesting $165 million new dollars for Ryan White treatment
    activities for HIV and AIDS, $200 million new dollars for the
    substance abuse performance partnership block grant to help
    States and communications strengthen their control and
    treatment efforts, and $200 million new dollars to fight
    tobacco's impact on public health and to keep it out of
    children's hands.
        Mr. Chairman, this budget also focuses new attention and
    resources on the challenge of ensuring the safety of our food.
    Each year, millions of Americans get sick from food-borne
    diseases. Some die. I have heard a great deal about the food
    safety challenge yesterday, when I attended the CDC's
    International Conference on Infectious Diseases in Atlanta. The
    problems are new and varied. There are new food-borne microbes.
    Americans are eating more food prepared outside the home. And,
    ironically, healthier diets often mean Americans are eating
    more imported fruits and vegetables that need careful washing
    or preparation.
        This budget will help protect Americans from food-borne
    illnesses, with a $55 million increase in food safety efforts
    by both the FDA and the CDC. This increase will expand our new
    national early-warning surveillance system for monitoring,
    detecting, and stopping outbreaks of food-borne illnesses. It
    will also further improve seafood inspections and boost the
    President's initiative to ensure the safety of imported
    produce.
        Mr. Chairman, let me also take this opportunity to voice
    the President's strong desire to work with the Congress to
    protect our children from tobacco. To do that, we must have
    comprehensive, not piecemeal, tobacco control legislation that
    includes the President's five principles, including a very
    large price increase.
        As we advance our public health promises, the President's
    budget for the first time addresses the serious inequities in
    health services and health status for minorities. This budget
    includes $80 million to address several areas of disparity:
    diabetes, infant mortality, breast and cervical cancer, heart
    disease and stroke, HIV/AIDS, and child and adult immunization.
    We must correct these disparities so that all Americans have
    equal opportunities for healthy futures.
        Finally, Mr. Chairman, I am proud of how this budget makes
    every dollar work harder. First, there is no better investment
    than busting fraud. Last year, our inspector general's
    crackdown on Medicare fraud returned almost $1 billion to the
    Medicare trust fund. Our new budget includes another $138
    million to fight fraud. Moreover, we are offering new fraud-
    busting legislation that would return another $2.4 billion to
    Medicare.
        In addition to fraud busting, we are proposing $264.5
    million in new user fees. Not only are these user fees smart
    Government, they are also crucial for HCFA to meet its
    obligations under the balanced budget agreement, and the Health
    Insurance Portability and Accountability Act. Speaking of smart
    Government, we sent you our first GPRA annual performance
    plans, which we developed in collaboration with Congress,
    States, local and tribal governments, as well as private
    partners. To us, GPRA is more than an acronym. It is a way to
    ensure that the line items in our budget truly bring America's
    promise to all Americans.

                               prepared statement

        Mr. Chairman, Senator Kohl, I believe this is a historic
    budget for HHS which launches a new era for health and social
    policy at the Department. It proves that with innovation and
    discipline, we can take strong steps for family and fiscal
    health and well-being. We have accomplished a lot together. I
    would be happy to address any questions you may have.
        [The statement follows:]
                  Prepared Statement of Hon. Donna E. Shalala
        Good afternoon, Chairman Specter, Senator Harkin, and members of
    the Subcommittee. I am pleased to appear before you today to discuss
    the President's fiscal year 1999 budget for the Department of Health
    and Human Services.
                              balancing the budget
        Last year we spoke at great length about the need to balance the
    budget. I am pleased to inform you that the President's 1999 budget
    achieves that goal. But we were able to meet this challenge only
    because of the extensive cooperation between the Congress and the
    Administration last year. We proved that by working together, seeking
    innovative solutions, and squeezing every dollar from our budget, we
    can put our fiscal house in order. Emerson once said that ``success is
    leaving the world a bit better than you found it.'' We have left the
    budget much better than we found it and in doing so we have provided
    our children with a path to a better fiscal future. This budget proves
    that we can take on new initiatives in the context of a balanced
    budget--if we are innovative and disciplined. I am very proud of our
    collective accomplishment, and I'm sure each of you shares my pride.
        Because of our success in achieving a balanced budget, we can now
    turn renewed attention to the pressing problems of tomorrow:
    strengthening the public health and human services, continuing strong
    fiscal management and preparing for the 21st Century.
                         preparing for the 21st century
        This is the last budget we will prepare for this millennium, and it
    sets forth the priorities for the next century, ranging from major
    increases in health research to promising child care for a million
    additional children to ending the scourge of youth tobacco use.
    The 21st century research fund
        The President announced the 21st Century Research Fund to launch a
    new era of path-breaking scientific inquiry. HHS will play the largest
    role, with new resources for our constellation of stellar research
    agencies--including the National Institutes of Health (NIH), the
    Centers for Disease Control and Prevention (CDC), and the Agency for
    Health Care Policy and Research.
        First, the 21st Century Research Fund provides the resources
    necessary to combat cancer, heart disease, diabetes, AIDS, Alzheimer's,
    cancer, Parkinson's, Hepatitis C and other diseases. The President's
    budget includes an additional $1.2 billion increase to put us on a path
    to double our investment in medical knowledge, bridge the gap between
    scientific knowledge and health care delivery and prevent the spread of
    disease. By increasing by nearly 50 percent over five years our
    nation's commitment to NIH at the same time that we increase our
    commitment to CDC and AHCPR, this fund provides the resources necessary
    to achieve a better integrated system of health research.
        We believe that a coordinated system of health research is the best
    way to achieve significant results in battling complicated diseases. We
    must continue to coordinate the efforts of NIH, CDC and AHCPR to attack
    these serious health threats.
        To make our investment worthwhile, we must move our research from
    the laboratories into the clinics and hospitals. To illustrate this
    point, consider diabetes. Untreated diabetes is the sixth leading cause
    of death from disease and the leading cause of adult blindness, kidney
    failure and non-traumatic amputations. It also is a risk factor for
    stroke and heart attack. It is estimated that thirty-three percent of
    people with diabetes--over 8 million people--have gone undiagnosed. The
    incidence of diabetes is growing in the American population. Medical
    research alone will not cure this problem. In order to attack diabetes,
    we need the coordinated efforts of NIH, CDC, and AHCPR.
        NIH focuses basic research on the causes of diabetes, including the
    genetic ones, and researches possible new avenues for treatment. Yet,
    NIH cannot alleviate diabetes alone. We need CDC's efforts in
    identifying those with diabetes and persuading them to seek treatment
    and to educate physicians on how to better detect this disease. We also
    need AHCPR's research which focuses on finding the most economic and
    least intrusive methods to screen individuals for diabetes. Without the
    essential research of NIH and the prevention services of CDC and AHCPR
    we will not likely reduce the serious threat that diabetes poses to our
    society.
        The 21st Century Research Fund solidifies the foundation for a
    coordinated biomedical research system, providing $25 million for CDC's
    prevention research programs, increasing AHCPR's funding by $25 million
    in fiscal year 1999 alone, and setting the course to increase NIH
    funding by nearly half by 2003.
    Cancer research and clinical trials
        Cancer has been one of the cruelest killers of this generation. The
    President's budget moves dramatically on this front. The NIH budget,
    for example, pays special attention to cancer research, increasing
    funding across NIH by 10 percent in 1999 and 65 percent by 2003. The
    President also seeks $750 million for a three year demonstration to
    enable Medicare patients to participate in cancer clinical trials.
    Medicare patients represent 50 percent of all cancer patients and are
    ten times more likely to get cancer. It is therefore appropriate to
    undertake this demonstration for those eligible for Medicare. This
    demonstration is fully financed by revenues which would result from
    passage of tobacco legislation.
        Vice President Gore has lead the Administration's effort to step up
    our fight against cancer, and I am personally grateful for his tireless
    efforts to achieve these historic increases for cancer research.
    Child care
        We live in changing times. Families are not the same as they were
    30 years ago, the last time we balanced the budget. In millions of
    American families, both parents must work to support their children,
    and in millions of other families, single parents work doubly hard to
    support their children. Building on the Earned Income Tax Credit, the
    Child Tax Credit, the Family and Medical Leave Act, minimum wage
    increases and the new child health insurance program, the President's
    Child Care Initiative is another critical step in this Administration's
    commitment to our nation's families.
        Our fiscal year 1999 budget proposes new child care investments
    that will support parents' choices, so that they will be able to find
    and afford quality child care for their children while they work. It
    will answer their most troubling questions about child care: Can I get
    it? Can I afford it? And can I trust it for my children's safety and
    development?
        At the center of the President's Child Care Initiative is our
    proposal to expand the Child Care and Development Block Grant by $7.5
    billion over five years (an increase of $1.2 billion in fiscal year
    1999). This will provide funds to the states to serve over 2 million
    children by 2003.
        The budget also grants tax credits to 3 million working families
    for child care and tax incentives for businesses that provide child
    care for their workers. Moreover, this budget includes $3 billion over
    five years to improve the quality of child care by providing challenge
    grants distributed by states to communities to improve early childhood
    education and the quality and safety of child care for children under
    five years old. In addition, the budget includes $250 million for
    investing in the education of child care workers and $500 million to
    help states enforce child care standards, and $150 million for research
    and consumer education.
    Head Start
        One of the President's top priorities has been and continues to be
    investing in Head Start. The President's budget contains $3.8 billion
    over five years. Because early investment in children gives them the
    best chance of continued success, by the year 2002 we will serve one
    million children in Head Start, including doubling to 80,000 the number
    of children 0-3 served by the Early Head Start Program.
    Medicare buy-in
        Our Medicare buy-in program provides solutions to one of the most
    troubling problems our aging population faces: what happens if I lose
    my health coverage before I'm 65? The President's budget allows
    individuals aged 55 and over without access to health insurance to
    breathe a little easier. The budget proposes a three-pronged solution.
    First, it enables Americans ages 62 to 65 to buy into Medicare, through
    a premium designed so that the policy is self-financing. It also
    provides displaced workers who are ages 55 to 61 with an option to
    purchase Medicare. Finally, the President's proposal gives individuals
    who retired early and whose companies have reneged on their health
    benefits the option to buy into their former employers' health care.
                  public health challenges of the 21st century
        Public Health services affect every single American every day of
    their life. From AIDS prevention and treatment to tobacco control for
    our youth, our fiscal year 1999 budget builds on and expands our
    commitment to programs that will make all Americans more health
    conscious and protect them from traditional and emerging threats to our
    public health.
    Ryan White
        We have seen significant progress in the fight against HIV and
    AIDS. In the first half of 1997, AIDS deaths decreased by 44 percent.
    Nonetheless, more progress must be achieved. In 1997, the Department of
    Health and Human Services and the Henry K. Kaiser Family Foundation
    issued new guidelines for standardizing and improving the quality of
    care for HIV-infected persons. The quest to ensure access to new
    methods of treatment must continue. The President's budget addresses
    this issue and provides $1.3 billion, an increase of $165 million, for
    Ryan White treatment activities. The AIDS Drug Assistance Program
    (ADAP) will receive $100 million of this increase for helping
    individuals gain access to combination drug therapies consistent with
    the new guidelines.
    Food Safety and Emerging Infectious Diseases
        The President's budget includes an additional $25 million for a
    combined effort by CDC to develop and expand national early warning
    systems for unsafe food and emerging infectious diseases. We must make
    certain that food-borne diseases don't affect our families. Similarly,
    we need to closely monitor infectious diseases. Our budget develops an
    effective national surveillance network and expands the geographic
    coverage of this early warning network to 30 states. The food safety
    initiative improves the quality and scope of food-borne disease
    surveillance in eight FoodNet sites, links the federal and state health
    laboratories with computer technology that will enhance data sharing,
    and provides training to detect food-borne diseases in exports from
    foreign countries, including Mexico and some Latin American countries.
    In addition, FDA is seeking $50 million to complement efforts in food
    safety.
    Racial disparities
        We have already talked of the serious threat diabetes poses to
    Americans. Yet, there is another disturbing statistic associated with
    diabetes. Between 1980 and 1994, the number of African-Americans with
    diabetes rose 33 percent, 3 times the rate of increase for all other
    Americans. Native Americans also suffer from diabetes at extremely high
    rates. If we are to ensure a better future, we must find the answers to
    this disparity and correct this problem and the many other racial
    health disparities that exist. The President's budget includes $400
    million over five years as part of a broader initiative to find new
    targeted means of reducing the health disparities that persist among
    minorities. This money is intended to target health outcomes in six
    areas where minorities experience serious inequalities in health
    services and health status. These include: infant mortality, breast and
    cervical cancer, heart disease and stroke, diabetes, HIV/AIDS, and
    child and adult immunization. This effort will be Department-wide and
    will be coordinated by the Centers for Disease Control and Prevention
    and will be supplemented by a host of non-budget activities that
    involve the community and experts in this area to help solve this
    urgent problem.
    Substance abuse
        We must continue our efforts at all levels of government and in the
    private sector to eliminate substance abuse. Consequently, the
    President's fiscal year 1999 budget provides an additional $200 million
    in funds for the Substance Abuse Performance Partnership Block Grant. A
    total of $1.5 billion will enable states and local communities to
    enhance their treatment capacity and continue efforts to control and
    treat substance abuse. We also are concentrating our research efforts
    in the biological basis of addiction, enhancing prevention techniques,
    and assessing prevention intervention approaches. With a coordinated
    effort, we can end this destructive plague.
    Tobacco
        Our budget request reflects the strong commitment of this
    Administration and all Americans to ending the tragic and destructive
    use of tobacco products by children and teenagers. We also are
    committed to finding the most effective methods for adults who want to
    quit the addiction that tobacco use creates. For example, CDC and FDA
    tobacco education and control programs will receive $200 million from
    the President's budget proposal. CDC will direct a total of $51 million
    to fund state-based prevention and control activities, including:
    training and programmatic support for school-based smoking cessation
    programs; national surveillance activities; state prevention and
    control plans to protect nonsmokers from exposure to environmental
    smoke; and state programs to address oral cancer.
        The President has made clear his strong desire to work with the
    Congress to protect our children from the disease and death caused by
    tobacco use. To do that, we must have comprehensive legislation. Five
    key elements must be included in such legislation: (1) a significant
    price increase to reduce teen smoking, including tough penalties if
    targets are not met; (2) full authority for FDA to regulate tobacco
    products; (3) changes in the way the tobacco industry does business;
    (4) progress toward other public health goals; and (5) protection for
    tobacco farmers and their communities. The President has called for
    tobacco legislation that will raise the price of cigarettes by up to
    $1.50 per pack over ten years and curtail tobacco use among youth. We
    estimate that the President's budget proposal, coupled with sales and
    advertising restrictions, would reduce underage tobacco use by 39
    percent to 46 percent in 2003 and spare almost one million of today's
    young people from the premature deaths related to tobacco use.
                    innovative program and fiscal management
        In describing our budget, we must not forget that this committee
    played a major role in achieving balanced budget savings. It is
    important to note that our Department played a significant role, as
    well, in balancing the budget and will contribute $150 billion over the
    next five years in Medicare and Medicaid savings. After all, at HHS, we
    believe in responsible, innovative management. In this budget, we have
    developed innovative solutions to squeeze every ounce of productivity
    from our taxpayer dollars. We also intend to add additional non-federal
    resources to meet our program obligations in the years ahead. We need
    your support for new legislation on many of these proposals. We will
    work closely with the Congress and this subcommittee to enact this
    necessary legislation.
    Fraud-busting
        While I have just mentioned future management efforts, I would like
    to mention briefly one of our most recent success stories. It's no
    secret--it's called fraud-busting. In 1997 alone, thanks to the
    outstanding efforts of the Office of the Inspector General, we returned
    almost $1 billion to the Medicare Trust Fund in our aggressive pursuit
    of those organizations and individuals who steal from the Medicare
    system. When you steal from the Medicare system, you steal from our
    most vulnerable citizens and we will not tolerate it. New HCFA
    legislation that we are offering will return an additional $2.4 billion
    in savings to the Medicare system. We also are proposing a new audit
    user fee within the Medicare Integrity Program (MIP) that will allow us
    to double our audit and medical review spending.
        The Administration on Aging (AoA), with its vast network of state
    and area agencies on aging and community-based services, is another
    partner in the long-term federal effort to fight and prevent fraud and
    abuse in the Medicare and Medicaid programs. AoA uses the funds
    allocated under the Health Insurance Portability and Accountability Act
    (HIPAA) to train and educate both paid and volunteer staff in the aging
    network. The results are in--fraud-busting is a smart investment.
    User fees
        With the passage of Balanced Budget Act (BBA) and HIPAA, the Health
    Care Financing Administration (HCFA) has acquired substantial new
    responsibilities. Without adequate resources these responsibilities
    simply cannot be accomplished. Given the tight limitations of the BBA,
    we have sought out alternative fiscal resources. We have proposed
    $264.5 million in new user fees for services that we furnish our
    nation's health care providers. I ask the Congress to enact these
    essential user fees. Our proposed user fees provide for more efficient
    administration of the Medicare program while allowing greater control
    against fraud, waste and abuse. Without such fees, HCFA's ability to
    implement the BBA and HIPAA requirements would be hindered. Our total
    program level, including user fees, would allow us to implement the new
    legislative requirements and help ensure millennium compliance of
    internal and external computer systems.
    Government Performance and Results Act (GPRA)
        The budget we have presented highlights the incremental changes
    that HHS is proposing through its programs. Along with the fiscal year
    1999 budget, we also sent to you our first GPRA annual performance
    plans. These plans focus on the Department's stewardship of all of the
    resources entrusted to HHS. Our performance plans have been developed
    in partnership with the states, local and tribal governments, and non-
    governmental partners who use these resources efficiently.
        For example, to help improve health outcomes for individuals in
    need, particularly children, we have set a performance goal for
    community health centers to serve an additional 150,000 uninsured and
    under-served persons in fiscal year 1999.
        Similarly, we plan in fiscal year 1999 to increase to 59 percent
    the proportion of Medicare beneficiaries age 65 and older who will have
    received a screening mammogram in a 2-year period. As you know, a
    mammogram is a safe, effective means of detecting breast cancer at an
    early and treatable stage. This common-sense goal will lead to improved
    health outcomes for Medicare beneficiaries and avoid the financing of
    unnecessary, high-cost medical services.
        These are brief illustrations of the results that HHS and its
    partners want to achieve through all of our programs, but they are
    representative of the goals presented throughout our performance plans
    for fiscal year 1999. In the coming years, we believe that the focus on
    results that is fostered by GPRA will enable us to improve our ability
    to match the most effective forms of service delivery with populations
    that have the greatest need. GPRA will be an ongoing process. It is
    neither a quick management fix nor a vague management plan. It can and
    will work to improve our programs as long as there is a clear and
    continuing cooperation between the executive and legislative branches
    on the means to improve programs once the GPRA results are in.
        We have proposed our blueprint for the next millennium and I
    believe it is an excellent drawing.
                                   conclusion
        Mr. Chairman, we share many common goals in this budget. Most
    importantly, our concern for a balanced budget continues. We share the
    common goal of the best health research program ever. We want to end
    the tragedy of underage tobacco use. We want to expand safe,
    affordable, high quality child care to another million children. We
    want to sustain our commitment to Head Start. We want to improve food
    safety and curb emerging infectious diseases. And, we most assuredly
    want to maintain a vigorous attack on health care fraud.
        Chairman Specter, Senator Harkin and members of the subcommittee: I
    want to join you in meeting the health and human resource challenges
    before us in this budget. We have much to accomplish together. I would
    be happy to address any questions you may have.

                           tribute to Senator Bumpers

        Secretary Shalala. Mr. Chairman, with your permission,
    rather than speaking behind his back, I would like to make a
    few comments about a departing Senator.
        Senator Specter. We would be delighted to hear your
    comments as to our distinguished colleague, Senator Bumpers.
        Senator Bumpers. You have the rest of the afternoon, Madam
    Secretary. [Laughter.]
        Senator Specter. Madam Secretary, he is right to cite the
    timing. I think you have about 40 seconds left. [Laughter.]
        Secretary Shalala. Mr. Chairman, before I begin to answer
    questions, I would like to pay tribute to a beloved and highly
    respected member of this subcommittee, a man who the National
    Journal has called a ``Senator to whom other Senators pay
    attention,'' Senator Dale Bumpers of Arkansas.
        I am fortunate to count Senator Bumpers as my friend and a
    true supporter of Government's role to help those who need
    help: our children, our seniors, and the disabled. Senator
    Bumpers and his wife, Betty, have vividly demonstrated over so
    many years devotion, to child immunization. He recently stood
    up for David Satcher in his nomination to be Surgeon General.
    When I look across the span of Senator Bumpers' quarter century
    of public service, I am reminded of the words of the poet Maya
    Angelou, who grew up in Arkansas: ``If you are for the right
    things,'' she said, ``then you could do it without thinking.''
        Senator Bumpers has always been among the most thoughtful
    Members of the Senate. Doing the right thing clearly has been
    second nature to him. Last fall, in paying tribute to the
    Little Rock Nine, Senator Bumpers said: ``Sometimes we worry
    that there are no heroes in our country today, no one for our
    children to look up to, no one to inspire us to be our best
    selves.'' Well, when we see Senator Bumpers, we know there are
    heroes in our country today, leaders to inspire our children,
    all of us, and our better selves. Thank you, Senator Bumpers,
    from all of us.
        Senator Bumpers. Donna, thank you very much.
        Thank you, Mr. Chairman.

                               two HCFA concerns

        Senator Specter. Madam Secretary, there are a great many
    subjects that I want to take up with you today--the gap in
    funding which we have to find an answer to--but perhaps the
    most important issue which faces this subcommittee, perhaps the
    country, on the question of health care is the destruction of
    the doctor-patient relationship. And that is something which
    has been emphasized by the President. I know it has been
    something you have articulated. It is something that is
    obviously extraordinarily fundamental in our society. And it is
    rock bed on health care.
        But we see disintegration of that relationship, as there
    are so many intervenors, people between the doctor and the
    patient. That has come up with the gag rule, where we had
    hearings on November 13, 1996, and finally got some HCFA
    changes. It came up as we legislated on drive-by deliveries,
    where the Congress got into the business of micromanaging
    medical decisions. Legislation is pending on drive-by
    mastectomies. There is a capitation issue, where doctors are
    motivated to not refer to specialists. And one item of great
    importance that I had written to you about on two occasions.
        On November 25, I wrote to you about the issue of EPO. I
    got back what I consider to be a pretty perfunctory letter from
    Administrator Nancy-Ann Min DeParle. She will be before us
    later today. And then I wrote to you with some great
    specification about that issue earlier this month. I had called
    you last week about it. And I know you returned the call a
    little before 1 o'clock today; we were in our conference.
        But in Administrator DeParle's letter, she said that in
    September, based on concerns about evidence that such physician
    justifications were being routinely submitted, resulting in
    overutilization of EPO, we decided to eliminate this exception
    from our coverage policy. Today I received a letter dated March
    9, yesterday, from Chairman Archer, of Ways and Means; and
    chairman of the subcommittee, Thomas; and the ranking member,
    Peter Stark, raising the same issue about the drug EPO with the
    Health Care Financing Administration.
        And I have two points that I would like your responses on
    the specifics here, that there is an urgent necessity to have a
    broader use of this drug and, second, the disregard of
    physician justifications.
        Secretary Shalala. Let me answer both parts of your
    question. We share Congress' concern about interference in
    physicians' judgment in evidence-based health care, which is
    where we want the health care system to go. In the President's
    support of the consumer bill of rights proposed by the
    Commission that I chair are a set of rules for which we hope
    there will be bipartisan support. They make orderly access to
    physicians, access to information people need in their health
    care system, help people understand what their appeal rights
    are, and ensure that people have access to emergency rooms when
    they are needed.
        On the specific question of the provision of Epogen [EPO]
    to dialysis patients, we are going to revise the EPO policy as
    of April 1. I am sorry that we did not connect earlier on the
    phone, but let me announce it here to you. Under the revised
    policy, with which I think that those who have raised an issue
    about this policy will be pleased, we will replace the current
    full denial for exceeding the thresholds with a partial denial.
    I can go into that in some detail or provide it for the record.

                            reduction in EPO dosage

        We agree that the revised policy needs to create incentives
    for a gradual reduction in EPO dosage if the patient is above
    the target range, consistent with the appropriate medical
    practice and FDA recommendations. And I think that this
    revision, as of April 1, will satisfy the concerns that you,
    other Members of Congress, and members of the medical community
    have raised to me.
        Senator Specter. Well, I think this is important enough to
    take it up in some detail. The level for reimbursement was
    changed from a single monthly fixed limit to a rolling average
    over a 3-month period of 36.5 percent. And that percentage was
    viewed by the physicians as being too low because of the
    hematocrit variability of each patient. The nephrologists have
    made generalized complaints from all over the country that the
    36.5-percent level needs to be raised for the natural
    fluctuation of the patient's hematocrit.
        The technical information that has been provided to me
    requires that there be a number of changes. First, to reinstate
    the medical justification, to allow for physician discretion
    for selected patients, as needed, raising the hematocrit to at
    least 37.5, and replacing HCFA's current practice of total
    reimbursement denial with a partial denial. And my question to
    you specifically is, are all three of those items addressed on
    the change of policy as of April 1?
        Secretary Shalala. I believe they are. Nancy-Ann Min
    DeParle can answer that in more detail when she testifies after
    me. But if you would like me to march through what we are going
    to do, I would be happy to do that.
        Senator Specter. What I would like you to do is to respond
    to these three elements which have been raised to me.
        Secretary Shalala. OK.
        Senator Specter. Is Ms. DeParle here? Let her come join us
    now. And let us resolve this issue.
        Secretary Shalala. She comes at 3 o'clock. But we could do
    it at the end of this session, and we can call her and ask her
    to come up right now, if you would like that.
        Senator Specter. OK. Let us do that.
        Secretary Shalala. And if we could have the three
    questions, then we will answer them on the record for you
    before the hearing is completed.
        Senator Specter. OK, we will await her arrival.
        But before she comes, why April 1? Why not March 10 or
    March 1?
        Secretary Shalala. Well, it is going to take us a few
    months to modify our computer systems. And we are making the
    policy effective for services provided on or after April 1. I
    think this is probably a notification question, and we will
    check with Ms. DeParle, again, on that question.
        Senator Specter. Will you have somebody check that out? You
    say probably a notification question, maybe yes, maybe no?
        Secretary Shalala. It may be a notification question, but
    let me ask the question so I can give you an accurate answer.
        Senator Specter. Let us find out about that. And let us
    find out about the computerization. Because a lot of people are
    suffering every day, from the avalanche of complaints which I
    have heard.
        Secretary Shalala. Well, we will make payment adjustments
    retrospective to April 1. So while it takes a few months to
    modify the computer systems to reflect the new policy, the
    policy will be effective for services provided on or after
    April 1. We will make payment adjustments retrospective to that
    date.
        Senator Specter. That is 21 days away.
        Secretary Shalala. That is right.
        Senator Specter. I would like to have it today.
        Secretary Shalala. Let me have the Administrator answer
    that question.
        Senator Specter. Well, let us see if we can find a way to
    do it effective today.
        Senator Kohl.

                          Federal After-school program

        Senator Kohl. Thank you very much, Senator Specter.
        And, Madam Secretary, it is good to see you. And we
    appreciate your coming down to talk to us.
        Secretary Shalala, one part of the President's budget that
    I am interested in is a demonstration project run by the
    Education, Health and Human Services, and Justice Departments
    that would coordinate Federal after-school programs. I
    understand that this initiative is to designate three to five
    pilot cities, and show how they can coordinate all the various
    government programs that serve children after school.
        I have three inquiries. No. 1, how do you intend to ensure
    that these programs are educational and not just custodial? No.
    2, how are these pilot cities to be chosen? And, No. 3, can I
    request that my home city of Milwaukee be seriously considered?
        Secretary Shalala. You certainly can request that any city
    in Wisconsin be seriously considered.
        The answer to your questions about our selection process
    and the coordination, I will have to provide for the record.
        [The information follows:]

                             Child Care Initiative

        The initiative you are referring to was part of the Child
    Care Initiative announced by the President on January 7, 1998.
    The President announced at that time a collaborative effort
    involving numerous federal agencies to eliminate duplication
    and better coordinate existing federal funding for after-school
    programs in three to five pilot cities, including the District
    of Columbia. A working group within the Administration has been
    formed to put this collaborative effort in motion. It comprises
    representatives from HHS, Department of Education, the Justice
    Department, as well as other interested federal agencies. This
    working group will be looking at previous collaborative efforts
    to gain some lessons learned as criteria is developed for
    considering other cities that may be included as part of this
    effort. The key goal of this initiative is healthy development
    and learning, and not custodial. I will communicate to the
    working group your interest to have Milwaukee be considered as
    one of the possible sites and your concern that this effort not
    be focused on custodial issues.

                             After-school programs

        Secretary Shalala. But let me make a substantive point
    about what is expected. We obviously want an educational
    component in after-school programs. But there really is a
    difference between dealing with after-school programs for young
    children and for older children. One of the ways to keep
    adolescents in after-school programs is to give them some
    choices--certainly getting their homework done--which have an
    educational component, perhaps combined with something else.
        What has been cut out of schools in this country are
    extracurricular activities, for example, sports after school.
    We would suggest some choices for young people which include an
    educational component, but also make an investment in their
    health and exercise and all the other things that will keep
    them emotionally and physically healthy in an integrated manner
    to certainly make a difference.
        The point, I think, of the demonstration is to make sure
    that communications have a strategy, so that no child is left
    out from these kind of choices, particularly for adolescents,
    and make sure communications use schools and boys and girls
    clubs and other kinds of organizations as part of this
    strategy, so that no child is left without a program, so that
    no parent is left without a program. Parents should identify
    what is convenient for them, and what that can occupy usefully
    and have an educational component for their child after school.
        Senator Kohl. All right. Thank you.

                                  Elder abuse

        Madam Secretary, last year the Milwaukee Journal Sentinel
    ran a series of articles, focusing on the prevalence of elder
    abuse by health care workers, many of whom had prior criminal
    backgrounds. Similar stories have appeared nationwide, and
    abuse is not isolated just to nursing homes.
        To respond, I have introduced and continue to work on
    legislation that would create a national registry of abusive
    long-term care workers, and require criminal background checks
    for prospective employees of long-term care facilities. This,
    hopefully, will make sure that abusers cannot travel from State
    to State and continue to prey on vulnerable patients.
        Would you, Madam Secretary, support such a proposal and
    work with me to push for it this year? And would you help me
    move this along this year by also looking for a way to perhaps
    do this administratively?
        Secretary Shalala. Well, we certainly will work with you on
    anything that will strengthen our ability to reduce elder abuse
    in this country, and anything that will hold in particular the
    States' feet to the fire on doing the survey and certifications
    and make sure that they are regularly providing oversight for
    nursing homes and home care settings. We have already published
    regulations in this area. Obviously, there is still abuse going
    on in this country. So we would be pleased to have a
    conversation with you about what you are proposing.
        Senator Kohl. Well, unless you have something like a
    national registry, there is no way for facilities from one
    State to another to know what occurred in another State with
    respect to employees and abusive behavior. That is what a
    national registry would provide for long-term care facility
    operators. And our bill would provide for that national
    registry. And it is your opinion on that, the advisability and
    the desirability of that, that I am interested in.
        Secretary Shalala. What I would want to do is to look at
    the actual proposal itself and the administrative costs that
    are tied into it. But, in principle, we want to support
    anything that can strengthen the oversight of nursing homes in
    this country.
        Senator Kohl. All right. I thank you.

                       President's child care initiative

        Last question: The President's $20 billion child care
    proposal contains over $5 billion in spending that goes through
    this subcommittee, spending for programs like teacher
    scholarships, child care facility inspections, and after-school
    programs. Now, currently, that money is considered outside of
    our spending caps, and the President has suggested paying for
    it with part of the revenues from a new cigarette tax bill.
    Will the administration still stand by its child care proposal
    if we are unable to reach agreement on a new tobacco tax?
        Secretary Shalala. First, we believe that there is
    bipartisan support for a price increase and a comprehensive
    strategy to reduce children smoking in this country. So we
    believe that what the President has identified as a source of
    funds for the child care initiative will, in fact, be
    available. But, yes, the President, in all of his top
    priorities, will work with the committee, or appropriate
    committees, to find a source of funds if for some reason the
    source of funds we have identified does not come through. We
    have been willing to do that in the past and we certainly would
    be willing here.

                               prepared statement

        Let me add that your assumption that any of the President's
    proposals breaks the cap is not consistent with the way we have
    presented the budget. The President believes he has presented a
    budget that is paid for. He has identified sources of revenues.
    And we believe that is within the context of the balanced
    budget commitment which we all made last year.
        Senator Kohl. Thank you, Madam Secretary.
        Senator Specter. Thank you, Senator Kohl.
        [The statement follows:]

                    Prepared Statement of Senator Herb Kohl

        Thank you, Mr. Chairman. Secretary Shalala, it's good to
    see you again, and I look forward to your testimony today.
        This is a unique time in our nation where we have tight
    budget constraints and tremendous opportunities at the same
    time. Last year, we passed the Balanced Budget Act, which
    wisely requires Congress to comply with spending caps in order
    to get rid of the deficits of the past three decades. But we
    also have a strong economy, the deficits of the past are all
    but gone, and both OMB and CBO are projecting surpluses for the
    next several years. Many people in our country are doing well--
    it is now time to focus on those who are not, and give them the
    tools to live productive, safe and successful lives.
        I am pleased that the President's budget has taken
    advantage of these prosperous times by placing a high priority
    on child care programs. Both the public and private sectors
    must get involved in seeing that we have enough child care for
    working parents. The President's budget includes a proposal,
    which I have worked on for several years, to provide a tax
    credit to businesses who help their employees find quality
    child care. This benefits not only families, but businesses as
    well, as it will help reduce absenteeism and increase
    productivity. I look forward to working with the Administration
    to make this and other child care proposals a top priority.
        On the other end of the age spectrum, we must take a close
    look at the issue of how well we protect our elderly once they
    require long-term care arrangements. With 43 percent of
    Americans over the age of 65 likely to spend time in a nursing
    home, and the increasing utilization of home care arrangements,
    we have to make sure that facilities are safe and provide the
    best care possible. I have introduced legislation that would
    require background checks of long-term care workers, and I look
    forward to working with the Administration on other efforts to
    protect our nation's elderly and frail patients.
        Again, I thank you, Secretary Shalala, for coming here
    today to address the question of how we can strengthen our
    investment in programs for our most vulnerable populations
    while still complying with the budget constraints required to
    keep the budget in balance.

                            Patients' bill of rights

        Senator Specter. We will proceed in order of arrival.
    Senator Bumpers is next.
        Senator Bumpers. Thank you, Mr. Chairman.
        Madam Secretary, let me thank you again most profoundly and
    sincerely for your very kind, laudatory remarks, all of which
    are true, and more. [Laughter.]
        I am reminded of the widow, at her husband's funeral. The
    preacher just kept going on and on about what a great citizen
    he was. Finally she leaned over to one of her children and
    said, honey, you go up and look in that casket and make sure
    that is your daddy they are talking about. [Laughter.]
        I listened to the President's speech to the AMA on NPR last
    night on the way home. And every time he mentioned the
    patients' bill of rights he got the loudest applause. That
    coming from the AMA. And the applause is even louder, of
    course, when he is speaking to lay groups.
        But while there is a House bill dealing with the so-called
    patients' bill of rights, as far as I know, there is nothing
    pending in the Senate. Is the administration preparing a bill
    to be introduced in the Senate on this subject?
        Secretary Shalala. We have not sent a bill to the Senate.
    But we have sent a lot of detail to the Senate, including
    technical assistance on legislative language. It is not very
    complicated to provide technical assistance on legislative
    language. But we have sent up the specifics as a result of the
    commission which I chair with the Secretary of Labor. So we
    have articulated areas in which the President would like
    legislation as well as have provided technical assistance on
    the legislative language.
        Senator Bumpers. Well, people obviously have a very strong
    feeling that they are not only being neglected, but that their
    health is often jeopardized by the lack of options, and some
    gatekeeper who says, no, you are not eligible for this. And the
    President, yesterday--I am sure you heard it, too--gave the
    illustration of the youngster whose leg ultimately had to be
    amputated because he could not get permission for the treatment
    that might have saved his leg. People hear too much of that.
        Of course, some of that is embellished. In the coffee shop
    you hear stories like that. And I must say, in the few times I
    have been hospitalized in the last few years--sometimes I guess
    it is just lack of care--you wonder if they treat Senators like
    that, what does the poor guy who just walks in off the street
    get? But that is often a matter of care in particular
    institutions as opposed to managed care and lack of choices.
        But I would like to see the Finance Committee, if the
    administration is not going to submit such a proposal, I would
    like to see the Finance Committee take the suggestions and some
    of the information that you are going to forward over here, and
    get on this. I would like to see this--as you pointed out, this
    is my last year--I would like very much to see something happen
    on that this year.
        And let me just conclude, Madam Secretary, by saying you
    have now been on this job for a little over 5--almost 5 years.
    And I would like to reciprocate by saying I think you have done
    an outstanding job.
        Secretary Shalala. Thank you, sir.
        Senator Bumpers. Most of my dealings with you have been in
    the immunization area. And that is small potatoes, moneywise,
    compared to the budget you administer. But your tenacity and
    your determination on causes that really make people's life
    better has been most admirable. And certainly I am one of your
    biggest fans also. And I will miss being associated with you
    after I leave here.
        Secretary Shalala. Thank you, Senator.
        Senator Bumpers. Thank you, Mr. Chairman.
        Senator Specter. Thank you very much, Senator Bumpers.
        Senator Faircloth.

                               Nurse anesthetists

        Senator  Faircloth. Thank you, Mr. Chairman.
        And thank you, Secretary Shalala, for being with us today.
    And I thank you for your enthusiastic support of transferring
    some IRS agents to the drug control.
        Secretary Shalala. I apologize again, Senator.
        Senator  Faircloth. But I think it needs to be done. I
    think one is a bigger problem than the other. And I think that
    drugs are it.
        Madam Secretary, in December of last year, your group
    issued a proposed rule that would delete the current
    requirement that nurse anesthetists administer anesthesia only
    under the supervision of operating surgeons and
    anesthesiologists. Now, I have heard from a lot of individual
    groups of people who are raising a lot of concern about the
    effect of this and the quality of the service.
        Now, no one has greater respect for nurses and what they
    have done and what they mean to the medical profession than I
    do. Nurse midwives, nurse practitioners all come to mind. But I
    have a lot of concern about this change of rules. How can you
    document that this does not represent a compromise?
        Secretary Shalala. Senator, we actually are reinforcing
    State medical practice whatever the standard is in the State.
    Twenty-nine States actually allow that to take place. So in
    this case, the Department's rule reflects standard State
    medical practice since 29 States allow it. They are often
    States that have large rural populations, where they think this
    is an appropriate medical practice. So it is not as new or as
    dramatic a change, since so many States allow it.
        Senator  Faircloth. Well, the States besides, do you think
    it is an adequate way to do business?
        Secretary Shalala. Well, it is a proposed rule now. When we
    drafted the rule----
        Senator  Faircloth. Wait a minute now. What is the proposed
    rule?
        Secretary Shalala [continuing]. The proposed rule is to
    allow this to occur. And it has not in final----
        Senator  Faircloth. Well, we have not allowed it to occur
    before, is that right?
        Secretary Shalala [continuing]. Except in States where it
    is standard practice, which I indicated it was in 29 States.
        Senator Faircloth. But as I understand it, you are going to
    allow it in all States.
        Secretary Shalala. That is correct.
        Senator Faircloth. And that is what the problem is.
        Secretary Shalala. We are collecting comments now from
    individuals, organizations, and different States so we have not
    gone to the final rule. I do appreciate your comments on that.
        Senator  Faircloth. Well, I would be glad to give you
    comment. I think it is a terrible practice. And I do not think
    it should be allowed. And I do not think you should be into it.
        I think the standard question in opposition to it is very
    simple. If you had to have major surgery this afternoon in
    Walter Reed Hospital, do you think they would bring in a nurse
    to give you the anesthesia?
        Secretary Shalala. Well, Senator, I have made it a practice
    not to answer a hypothetical question, since I do not know what
    the standard practice is at Walter Reed. But let me say that 29
    States in which----
        Senator  Faircloth. All right, I will change my question.
    If you had all morning to decide if you were going to have an
    operation, would you request a nurse anesthetist or an
    anesthesiologist? That is not hypothetical.
        Secretary Shalala. Senator, I would defer to my physician
    as to what he or she thought was appropriate in my case, and
    would not second guess my physician if I were going into an
    operation.
        Senator  Faircloth. I will give you a pretty good idea of
    what he would say.

                               Disease prevention

        Now, we spend less than 1 percent of our budget on programs
    related to health prevention. We know that heart disease is a
    leading cause of death in this country. Yet CDC can only afford
    to fund prevention programs for cardiovascular diseases in 3 of
    the 50 States. If money talks, it is clear the message still
    focuses on treatment and not prevention.
        Would you give me your thoughts as to what we can do and
    how we might reverse this trend?
        Secretary Shalala. Well, as part of this budget, we have
    asked for two increases that are directly related. First,
    because cardiovascular disease disproportionately affects
    minorities, we have asked for resources for the CDC to help
    close gaps in terms of prevention as well as access to
    services, and also in helping people manage their own health
    situation. Second, we have asked for a new CDC prevention fund
    as part of this budget to help us expand our investment in
    prevention of diseases like cardiovascular disease. We would
    agree with you that we need additional investment. We believe
    this budget reflects that.
        Senator  Faircloth. Thank you. My time is up.
        Secretary Shalala. You are welcome, Senator.
        Senator Specter. Thank you very much, Senator Faircloth.
        Senator Cochran.
        Senator Cochran. Thank you, Mr. Chairman.
        Madam Secretary, welcome to our committee.
        Secretary Shalala. Thank you.

                                Fraud and abuse

        Senator Cochran. We appreciate very much your cooperation
    with our effort to understand the budget request and to deal
    with problems that may be presented at the Department of Health
    and Human Services.
        We have had an opportunity to look at some of the requests
    for additional funds and user fee imposition that is
    contemplated by the President's budget request to make up for
    some of the shortfalls in funding. And one thing struck me as
    interesting in talking to some of my constituents in my State
    is this new effort to deal with fraud and abuse of the program,
    which we applaud generally as a very important undertaking, is
    creating some obvious instances of abuse by the Government, it
    seems to me.
        And let me cite one example that was brought to my
    attention the other day. In early February, one of the small-
    town hospitals in our State received a letter from a U.S.
    attorney in the State of Pennsylvania. The letter, which I am
    going to put in the record, dated February 9, recites that this
    is coordinating office for Federal False Claim Act cases
    arising under the medicare program. And that as a result of an
    audit by the Office of Inspector General, this hospital had
    been found to have filed two claims for nonphysician outpatient
    services of $204.34, in 1990, between November 1, 1990, and
    December 31, 1991, and another for $220.92, between the dates
    December 1, 1987 and October 31, 1990. And after reciting the
    fact that they found that these were duplicate claims and
    should not have been filed, it pointed out all the penalties
    under the False Claim Act that can be visited upon this small-
    town hospital, and then says:
        The total financial exposure of your hospital arising from
    these reviews is $61,054.86.
        And then they go on to talk about the fact that if you
    would like to settle this case before litigation, please
    contact the undersigned in writing at the address indicated
    within 20 days of the date of this letter. And on and on. And
    just reading this letter that was handed to me is frightening,
    just in and of itself. But you can imagine a small-town
    hospital, with claims that they say they have gone back 10
    years, or thereabout, and they have had $400 in alleged false
    claims filed, and your exposure is $61,000.
        I know you are not the U.S. attorney in the Middle District
    of Pennsylvania.
        Secretary Shalala. I am not.
        Senator Cochran. But that is who signed the letter. And
    Yalobusha County Hospital, in north Mississippi, gets this
    letter. And, of course, the reaction has to be one of terror.
    Is this a terrorist state? What is going on here?
        My question is, what oversight is the Department, or HCFA,
    engaged in to monitor situations where alleged abuses are being
    handled in this fashion? Is there a Government policy, is there
    an administration policy to do this kind of thing to a small-
    town hospital?
        Secretary Shalala. As you indicated, Senator Cochran, I
    have no authority over U.S. attorneys or their decisions as to
    which part of the law applies to a fraud case. I would
    appreciate it if you would refer that letter, and ask that
    question, to my colleague, the Attorney General. And, in
    addition, I would like to have it myself. In general, we do
    audits. The inspector general has a conversation with the
    hospital. They work out a settlement. A lot of this is a
    routine relationship. Recently, some U.S. attorneys have been
    using the False Claims Act. These cases have been brought to my
    attention. But the way in which our responsibilities are
    divided, our responsibilities include the inspector general
    being the leader or being part of teams that are investigating
    fraud. And we certainly do a large number of audits in this
    area.
        Senator Cochran. We will send that to you and to HCFA as
    well. I wanted to bring it to your attention, to let you know
    what seems to be a case of clear abuse of power by the Federal
    Government against this small-town hospital in my State. And
    you are the head of the Department, and I am bringing it to
    your attention.
        Secretary Shalala. And I appreciate that.

                            Home health surety bond

        Senator Cochran. And I appreciate your consideration of it.
    And you are using up my time. I have got a little question I am
    going to ask you about, and that is the surety bond requirement
    on home health agencies. We have got a lot of small-town
    operations that are not connected with big hospitals or
    multistate corporations, that can afford 15 percent surety
    bonds. This is a requirement, as I understand it, you have to
    file to get Medicare eligibility for accepting authorized
    reimbursement. A surety bond that is the greater of $50,000 or
    15 percent of the annual amount paid to the HHA by the Medicare
    program.
        This is operating as a very difficult financial burden for
    a lot of small-town home health care operations. And I am just
    reporting that as something that has been brought to my
    attention. I hope that there is some way to review that and
    make exceptions if they are justified or, in some other way,
    keep from putting out of business the small-town operators, and
    preferring instead the massive, big corporations to run the
    home health service programs.
        Secretary Shalala. We have given these agencies more time
    to comply with the law, and we still are not clear what the
    final rule will look like. So, I delayed the deadline for
    agencies to have bonds so that we could respond to some of the
    comments that we received in this area, particularly from small
    companies from the home health care business.
        Let me also say that this was clearly an effort by the
    Congress and by the administration to try to reduce the amount
    of fraud in the system. In particular, it was an effort to keep
    fly-by-night providers out of these programs. But there was no
    interest in keeping appropriate small businesses out, nor to
    put them out of business. So, certainly we have looked at this.
    And the industry itself, the surety bond industry, has made
    comments in this area, because they are also concerned.
        Senator Cochran. Thank you.
        Senator Specter. Thank you very much, Senator Cochran.
        Senator Gregg.
        Senator Gregg. Thank you.
        Madam Secretary, it is a pleasure to see you today.
        Secretary Shalala. Thank you.

                               Child immunization

        Senator Gregg. The immunization program in New Hampshire is
    projected to receive a 46-percent cut this year and a bigger
    cut next year. New Hampshire has the highest percentage of
    immunized children in the country. It has the best program in
    the country, I believe. And yet if it is subjected to these
    types of cuts, the program will be thrown into chaos,
    especially the relationship it now has with Maine.
        I would not presume you would be familiar with a unique New
    Hampshire situation, but I would ask that you go back to CDC
    and find out what is going on.
        Secretary Shalala. I will go back and look at that. We did
    indeed cut back, because States, in many places, were not
    drawing down the money that was available, and we reallocated
    some of that money.
        Senator Gregg. That ran out. What happened was there was an
    $80 million carryover. And we ran through that over the last 2
    years. And I think that that has affected the budgeting
    process, so that we are working off a baseline that is not
    compatible with what the reality is.
        Secretary Shalala. That may be what occurred. What I have
    said, Senator, is that we do not intend to underfund the
    vaccine program if we need to adjust that decision. We also do
    not want to leave money sitting around that is not being used.
        Senator Gregg. I understand that.
        Secretary Shalala. So we are attempting to find a balance.
        Senator Gregg. I think this was that. I think the pendulum
    went one way, and now it has swung back the other way.
        Secretary Shalala. We will be happy to look at that. As we
    continue in the appropriations process, we will want to make
    sure that our number is correct.
        Senator Gregg. Well, I am concerned about other States, but
    I am specifically concerned about the New Hampshire situation.
    Because it is a program that has worked extremely well.

                              Tobacco legislation

        On the tobacco settlement, why should we give these
    companies, these tobacco companies, any immunity at all from
    lawsuits? I mean, their action has been pretty reprehensible
    here, especially as we see this documentation coming out, that
    reflects the fact that they have produced a product that they
    knew was addictive, and targeted it on children. I cannot see,
    from my standpoint, why we should have any settlement around
    here that deals with giving immunity at all. And I am
    interested in why the administration has signed on to the
    Conrad bill, which, while it does not specifically state
    immunity, but obviously it presumes immunity, because it
    presumes the tobacco companies will sign off on it.
        Secretary Shalala. Senator, I did not assume that the
    Conrad bill had a large section on immunity.
        Senator Gregg. No; it does not. But it is going to have
    immunity in the end, because it has an unconstitutional
    advertising language in it. So that the only way you are going
    to get that is by a contract agreement with the tobacco
    companies, which requires immunity.
        Secretary Shalala. The reason the President endorsed that
    bill was that it covered the principles which he laid out that
    he would have to have in any comprehensive tobacco legislation.
    And that bill clearly does, from the price increase to----
        Senator Gregg. Well, OK, but let us go back to just the
    immunity issue. What is the position on that?
        Secretary Shalala. What the President has said on the issue
    of immunity is that not until all of the issues--principles--
    that he has outlined are covered in a piece of legislation does
    he believe that any other issue ought to be considered. And
    that would obviously include immunity or any other issue that
    anyone wanted to bring up at that time.
        But, first, we want to see a comprehensive piece of
    legislation with a significant price increase. Plus, we want
    provisions that care for tobacco farmers and their
    communications, and stop tobacco companies from doing business
    as usual, and which keeps the FDA a nimble, clear organization
    with oversight over tobacco. We have outlined our principles.
    And we have not spoken to any other issues other than those
    covered in what the President considers to be critical parts of
    comprehensive tobacco legislation.
        Senator Gregg. So the administration has no position on
    immunity?
        Secretary Shalala. The administration has said repeatedly
    that we want a comprehensive piece of legislation, with a
    significant price increase, which covers the major issues the
    President has recommended. If all of those are covered, and
    Congress, working in a bipartisan manner, then wants to bring
    up other issues, we would be happy to consider them at that
    time.
        At this moment, we will endorse only comprehensive packages
    which cover all of the issues the President has outlined.
        Senator Gregg. So if we pass a bill that addresses those
    issues which you have just addressed, and include in it that
    there will be no immunity, you would accept that?
        Secretary Shalala. The President has outlined the critical
    issues. He would be happy to support a comprehensive piece of
    legislation that covers all of those issues. But we also have
    reiterated over and over again that it must have a price
    increase as part of it. We think that is critical.
        Senator Gregg. But what I am saying is if we passed a bill
    that had all the elements that you wanted--a price increase,
    FDA unilateral authority--I have forgotten the other ones--and
    then included in that bill that there be no immunity, that
    would be acceptable, because you have gotten everything you
    wanted, and a no immunity, no immunity language would then,
    therefore, be acceptable?
        Secretary Shalala. He will endorse a comprehensive bill,
    which covers his issues, that has bipartisan support. He just
    did that in the case of the Senator Conrad's bill. He indicated
    that he would support that bill and would be prepared to sign
    it.
        Senator Gregg. All right. Thank you.
        Secretary Shalala. You are welcome.
        Senator Specter. Thank you very much, Senator Gregg.
        Ms. DeParle is in the room. Would you please join the
    Secretary at the witness table.

                           revisions to Epogen policy

        Secretary Shalala. We want to talk about the revisions to
    the EPO policy.
        Senator Specter. Let me revisit the chronology, review the
    bidding here for just a minute. In the legislation passed last
    year, the bill expressed concern that HCFA's new Medicare
    payment policy for EPO may negatively impact on the quality of
    care received by patients with end stage renal disease, and may
    increase overall health costs. And I then wrote to you,
    especially about it, Secretary Shalala.
        And I got back a response, dated February 13, from Ms.
    DeParle. And the first question I have is, why does it take us
    so long--almost 3 months--to get a response to a letter like
    that?
        Ms. DeParle. Mr. Chairman, thank you for the opportunity to
    testify today. The question of how long things take is a big
    struggle for me, in Government, and I am sure for the
    Secretary, in the Department. I am particularly aware of this
    issue because, as you may know, I was confirmed in November.
    And in December, I became aware of this problem, primarily from
    letters I was getting from Members on both sides of the aisle.
    They seemed to be concerned about this policy.
        Senator Specter. You got a lot of letters?
        Ms. DeParle. Yes, sir; I did.
        Senator Specter. How many, roughly?
        Ms. DeParle. I do not know how many, but I will tell you
    the thing that struck me was that, over the holidays, the
    Christmas holidays, I read all the congressional
    correspondence--I started doing that--and I remember one night
    I took home a letter from Senator Connie Mack and a letter from
    Congressman Pete Stark that both said the same thing, that they
    were concerned about the new policy, thought we ought to look
    at it again, and particularly they were concerned about the
    lack of an exceptions policy, physician justification, which
    had been the case before.
        And I was not familiar with this issue at all. And so what
    I undertook to do--and this was around the holidays, so late
    December--was to ask my staff to provide me with background on
    it. What had the policy been? What was the problem? Why had we
    changed it? And they probably held up a response to you during
    the time that we were looking at it.
        My staff told me, Senator, that there had been problems
    with, they felt, overutilization of the drug Epogen. I do not
    know how to pronounce it. Epoiten, I suppose, is the hormone.
        Senator Specter. Well, in your letter, dated February 13,
    1998, says that in September, based on concerns about evidence
    that such physician justifications were being routinely
    submitted, resulting in overutilization of EPO, we decided to
    eliminate this exception.
        What I would like you to do is to respond in writing to the
    subcommittee as to what took so long, from November 25 to
    February 13. According to your letter, it is based upon
    information you had prior to that time, before September. So
    without going through the specifics, I would like you to give
    us a response in writing as to what happened.
        Now, you have talked about letters from Congressman Stark
    and Senator Mack. How about my letter of November 25?
        Ms. DeParle. Sir, I did not particularly remember your
    letter, but I did say that I had seen a lot of letters on this.
    And what I was trying to say was that we had a problem, the
    staff informed me, with overutilization. And also, apparently,
    there was some problems with there were some studies that
    indicate that, with some patients, the use that--keeping them
    at a hematocrit that is about 36 can be a problem. And that was
    why they had chosen to go with a new policy.
        Senator Specter. Well, that is a matter for the doctors.
    That is a matter I was raising with Secretary Shalala before
    you walked in, as to what is being eroded here is the doctor-
    patient relationship.
        Ms. DeParle. I agree with you. And that is why I personally
    looked at this. There was a lot of disagreement within our
    agency about this, frankly.
        It appeared to me, two things, Senator. One was my instinct
    was that it was not correct to have a policy that did not allow
    for a physician exception, which had been the policy we had
    before. Second, it was my impression, Senator, that the
    decision to change the policy had been made rather hastily. And
    I wanted to be sure that I had a chance to look at the data. So
    I asked the staff to give me the data on the impact of the new
    policy.
        The good news is, I think, that it does not appear, from
    the data, that it has had a negative effect on people. But I
    still think the policy was not well founded. And that is why,
    today, I wanted to advise you that I want to change the policy.
    And, in fact, I did look at your most recent letter, which I
    saw over the weekend. And, in general, I think you and I agree.
        There is only one area where I think there is a bit of a
    difference between what you are recommending and where I came
    out. But I think, actually, because I am saying we need to look
    at the hematocrit levels, that we are closer than you may think
    or that it may appear.
        Senator Specter. Well, I am going to come to that in just a
    minute. But what I am trying to ascertain is why it takes so
    much congressional oversight. You are going to get for me the
    sequence of events as to why it took from November 25 to
    February 13 to respond to the letter. Then the next question I
    have for you is, you are now saying that you are concerned
    about the doctor's evaluation. But in the letter of September
    13, you talk about evidence that such physicians'
    justifications were being routinely submitted.
        Is that to suggest that the physicians' justifications are
    wrong?
        Ms. DeParle. Not necessarily. And I do not have evidence to
    say that, sir.

                             overutilization of EPO

        Senator Specter. Well, that is why I wonder why you say
    resulting in overutilization of EPO. I am trying to find out
    what the basis is for your conclusion that there is
    overutilization, as you put it, because physician
    justifications were being routinely submitted.
        I would like you to tell me what that means. I would like
    you to tell me what evidence you had to say that. Because you
    are denigrating the physicians' recommendations by saying that
    they are routinely submitted, which is to suggest that they are
    not thoughtfully submitted.
        Ms. DeParle. No, sir; I would not want to do that.
        Senator Specter. Well, I would like to know why you say
    routinely submitted. This is a recurrent problem that we have
    with HCFA, where there is a fury out there in the medical
    community as to what you are doing. So I want to find out what
    you did in this case, because we have taken a lot of time and a
    lot of effort on this particular matter. So I would like you to
    tell me in writing what led you to say that there was
    overutilization and that the physicians' justifications were
    being routinely submitted.
        I do not want to take any more time with it now.
        Ms. DeParle. I will be happy to do that.
        Senator Specter. We have a lot of ground to cover. And I do
    not think you can really do it without referring to your files.
        [The information follows:]
                       Letter From Nancy-Ann Min DeParle
               Department of Health and Human Services,
                          Health Care Financing Administration,
                                        Washington, DC, March 13, 1998.
    Hon. Arlen Specter,
    U.S. Senate,
    Washington, DC.
        Dear Senator Specter: I appreciated the opportunity to appear
    before your subcommittee on Tuesday to discuss a number of issues
    relating to HCFA's work in developing a proposed rule on physician
    practice expense. At the hearing you raised several questions in regard
    to HCFA's policy concerning EPO and our coverage of the Salitron System
    for treating disorders associated with Sjogren's syndrome. You also
    inquired whether it is possible to waive the salary equivalency
    guidelines in certain circumstances, or for certain providers. This
    letter responds to those questions.
        First, in your letter to the Secretary about EPO, you asked for a
    justification of our original policy and urged us to revise that
    policy. At the hearing, you also asked for the reason for the delay in
    the revision of the policy.
        HCFA altered Medicare's national coverage policy for EPO in the
    ESRD population effective September 1, 1997 in an effort to promote
    national consistency in application of EPO coverage policy and to
    protect beneficiaries from the potential adverse consequences of over-
    administration of EPO. Under that policy, Medicare moved from an
    absolute limit of a hematocrit reading of 36 percent to a rolling 90-
    day average hematocrit of 36.5 percent. In addition, the exception
    providing physicians with discretion to exceed the 36 percent level was
    eliminated based on a lack of evidence in the medical literature of any
    benefit for exceeding the target range (31-36 percent). In fact, there
    was evidence of the potential for harm to patients with cardiac
    conditions if hematocrits were maintained above that range. In
    implementing this new policy, HCFA committed to closely monitor the
    hematocrit data reported through the claims processing system to assure
    that the new policy did not result in adverse consequences.
        Our staff did not consult with the renal community before
    announcing the new policy. In hindsight, I believe this was a serious
    mistake. However, during the period of time between announcement of the
    policy and implementation staff met several times with representatives
    from Amgen, the National Renal Administrators Association, the Renal
    Physician Association, and the Renal Coalition. Since that time, HCFA
    staff have had three meetings with researchers from Amgen or associated
    with Amgen. At one of these meetings, other representatives from the
    renal community were also present. In addition, this issue was also
    raised informally by members of the renal community at nearly every
    discussion where other items were the main agenda topic.
        Upon receiving your earlier letter, and numerous others, and based
    on concerns raised by the renal community, in December, I asked our
    staff to review the impact of the new policy. Given normal time lags in
    submitting and processing claims, we did not have even preliminary data
    on the impact of the new policy until December. That preliminary data
    did not indicate any negative impact. Additional data that became
    available in February, while still not indicating any negative impact,
    did appear to show that the steady improvement in the percentage of
    patients within the target hematocrit range (30-36 percent) had
    stopped. Fostering improvement in this area was a major focus of joint
    quality improvement efforts by the renal community and HCFA. The fact
    that there appeared to be no further improvement since the revised
    coverage policy was implemented caused us to reexamine this policy and
    develop alternatives.
        As you are aware, on March 10, I announced a revised policy with
    two components. First, we have reinstated a medical justification
    policy to allow physicians discretion to exceed the 36 percent level
    for selected patients as needed. Second, in the absence of medical
    justification, if the hematocrit level for a given month exceeds 36
    percent and the 90-day rolling average exceeds 36.5 percent, payment
    for that month will be reduced rather than denied (i.e., a ``partial''
    denial rather than a complete denial for the whole month). Payment will
    be made at the lower of the actual dosage administered or 80 percent of
    the allowable dosage for the previous month. As you requested, we made
    the new policy effective on March 10, and payment adjustments will be
    made retrospectively to that date. (I have attached a copy of the
    Program Instruction effecting this change. This instruction was faxed
    to your office on Thursday). In the months ahead, HCFA will work with
    the renal community to develop guidelines regarding when it is
    medically appropriate for patients to exceed the 36 percent standard in
    order to assure that the medical justification policy is not subject to
    abuse.
        Our revised policy creates incentives for a gradual reduction in
    EPO dosage, if the patient is above the target range, consistent with
    the appropriate medical practice for titration of drugs and FDA
    recommendations. The revised policy also allows the 36 percent level to
    be exceeded according to physician discretion. By promoting the
    maintenance of patients at as high a level within the target range as
    possible, the revised policy is consistent with the National Kidney
    Foundation's Dialysis Outcomes Quality Initiative. Recommendations of
    the Anemia Work Group included in the Dialysis Outcomes Quality
    Initiative indicate that hematocrit be maintained between 33 percent
    and 36 percent. I recently met with a representative from the American
    Association of Kidney Patients, and they fully supported this policy
    change.
        Second, in regard to HCFA's coverage of the Salitron System, in
    1994, HCFA published a notice in the Federal Register indicating an
    intent not to cover Salitron based upon a 1990 technology assessment
    that HCFA had commissioned. As your February 12 letter points out, no
    final rule was ever published.
        We received very few comments on that notice. In the meantime, the
    Durable Medical Equipment Regional Carriers (DMERC's) have had
    discretion regarding coverage.
        On Monday, March 9, based on your continued interest in this
    device, I directed staff to request the Agency for Health Care Policy
    and Research (AHCPR) to conduct a new technology assessment. We will
    ask the manufacturer to submit any significant data to AHCPR. We will
    publish a Federal Register notice outlining this course of action (and
    withdrawing the 1994 notice).
        Finally, you asked me to address my review of the incoming letters
    from you on these issues. In regard to your letter of February 12,
    about the Salitron System, I did not see that letter, even though I
    have instructed staff to provide me with copies of all correspondence
    from Members of Congress. Unfortunately, a mistake was made within our
    correspondence control system. Please consider this letter a response
    to your February 12 letter.
        In regard to your letter of November 25, I responded with a letter
    in February which said that staff were monitoring the data but did not
    convey the fact that I was actively revisiting the EPO policy and in
    fact, was on the verge of announcing a new policy. We should have moved
    more quickly on revising this policy and provided you with a more
    responsive answer. Such an answer would have obviated the need for your
    second letter to the Secretary dated March 5.
        In the hearing on Tuesday, you also inquired whether it is possible
    to waive the salary equivalency guidelines in certain circumstances, or
    for certain providers. The salary equivalency guidelines regulation was
    published with an effective date of April 10, and we believe that we do
    not have the authority to change or waive that date for one provider or
    a group of providers. Existing regulations do provide for exceptions to
    the guidelines for unique circumstances or special labor market
    conditions although any exceptions may reduce the savings from these
    guidelines. These exceptions are available to providers of services as
    I'll explain below.
        The guidelines apply to payments that the Medicare program makes to
    skilled nursing facilities, home health agencies, and other providers,
    for therapy services provided under arrangement, HCFA pays the entity
    (the provider) that claims the therapy costs in its cost report. This
    means a provider can apply for an exception if (1) that provider files
    the cost report with HCFA and (2) it contracts with another entity to
    provide therapy services, because the guidelines do not apply to
    therapists directly employed by the provider.
        I thank you for the opportunity to appear before the committee and
    I trust that I have answered your questions. I look forward to
    continuing to work with you on these and other issues in the future.
                Sincerely,
                                         Nancy-Ann Min DeParle,
                                                         Administrator.

                                  HCFA action

        Senator Specter. The point I want to come to now is the
    minimum HCFA action, which has been presented to me--and I am
    prepared to get into the details of it, to find out what is
    involved--but there are three items which have been articulated
    in my letter to you, to reinstate the medical justification, to
    allow physician discretion for selected patients as needed. My
    question to you is: Is that part of your new policy?
        Ms. DeParle. Yes, sir; it is. This is your letter of March
    5, last week?
        Senator Specter. That is right.
        Ms. DeParle. Yes, sir; it is.
        Senator Specter. OK. The second point is raising the
    hematocrit to 37.5 at least. Is that part of your new policy?
        Ms. DeParle. No, sir; it is not.
        Senator Specter. And why not?
        Ms. DeParle. Because, sir, our policy in the past, as you
    know, was to keep it at 36 percent. And the package insert that
    goes with this drug, that was approved by the FDA, indicates
    that patients should be kept in a range of 30 to 36 percent.
        Our policy now, as revised, as I understand it, is that we
    look at a rolling 3-month average. And if the patient is around
    36.5 percent, that is judged to be appropriate. And I did not
    have a basis, based on the evidence and data that we have, to
    change that number, although I am happy to work with the
    nephrologists and with the renal community to see if they can
    provide data for a different number. But I did not have a basis
    for the number you suggested, sir, which was 37.5.
        Senator Specter. Well, have not the physicians in this
    field asked you to raise that level to 37.5?
        Ms. DeParle. Sir, I am not aware that they have.
        Senator Specter. Well, I believe they have. I believe that
    is the point. I believe the point is that in the rolling
    averages, as you take them, they go low. And there are very,
    very serious consequences when you have the percentage of blood
    taken up by the red blood cells is lowered--weakness, fatigue,
    poor oxygenation of tissues. It generally leaves the patient in
    a condition where they just cannot function.
        Ms. DeParle. Sir, as I understand it, this policy was, in
    fact, an improvement on our earlier policy, which held things
    to 36. And especially now, when you reinstate the medical
    justification policy, I think there should be room here to
    maintain the hematocrit at the levels that are recommended in
    the package insert that was approved by the FDA. That was the
    basis for this decision. I will be happy to meet with anyone
    you want me to meet with in the nephrology community who thinks
    otherwise. But what I was aware of was that evidence.
        Senator Specter. Well, we are meeting right now. This is
    the meeting.
        Are you aware that the National Kidney Foundation's
    dialysis outcome quality initiative guidelines recommended that
    there be a 37.5 level to ensure that a majority of patients are
    targeted in the 33 to 36 percent range?
        Ms. DeParle. No, sir; I am not.
        Senator Specter. Well, what have you considered, in terms
    of medical evidence, in reaching the decision not to use the
    37.5 level?
        Ms. DeParle. Sir, the staff in our Office of Clinical
    Standards and Quality, which worked on this, it is my
    understanding, met with a number of representatives of the
    nephrology community, including a number of medical
    specialists, as well as the carrier medical directors, who
    administer this policy for us. And in that office there are a
    number of physicians. And I personally have talked to other
    Members of Congress and their staffs, as well as, as I said,
    reviewed your letters and the memoranda and other documents
    from our staff. That is what I have looked at.
        I just did not have a basis, based on what I was presented
    with, to make a decision to go higher than what the package
    insert recommended.
        Senator Specter. Ms. DeParle, what is your level of
    expertise in this field? What is your background and training?
        Ms. DeParle. I am a lawyer, sir.
        Senator Specter. So there is no special level of expertise
    that you have to make this kind of an evaluation?
        Ms. DeParle. Sir, I do not have a special level of
    expertise to make a medical evaluation, but my staff does--the
    staff at the Health Care Financing Administration, including a
    number of medical professionals, as well as--as I said, this
    decision, as I understand it, which was--the initial decision
    was made before I was there--but, as I said, it was made in
    consult with many doctors who work in HCFA, as well as those
    who work for our carriers.
        Senator Specter. Well, I think you and I have gone about as
    far as we can go on this issue. And the experts who were
    complaining to me will have to sit down with the experts who
    are advising you and try to figure it out. And if necessary,
    you and I will join them. But I have heard a lot of complaints
    about the levels that you have attached here.
        The third requirement that we have here is to replace
    HCFA's current practice of total reimbursement denial with a
    partial denial. Do your new regulations include that?
        Ms. DeParle. Yes, they do. I agree with you on that.
        Senator Specter. And what else do your new regulations
    include, if anything?
        Ms. DeParle. Well, there really is not a new regulation,
    sir. What happened was I just made this decision over the
    weekend, and instructed staff to get working on implementing
    it. And I wanted to advise you of it today at our hearing. So
    the next step will be to do a program instruction, it is my
    understanding, so that those who administer our policies in the
    field will know that, in the future, this is the policy.
        Senator Specter. So could we put that policy into effect
    today?
        Ms. DeParle. Yes, sir; I can try. I bet they cannot get it
    written until tomorrow, but I can say that it is effective
    today.
        Senator Specter. Well, there is a fair amount of time left
    today. Let us try to get it done today.
        Ms. DeParle. I will try.
        Senator Specter. OK, we have quite a few more questions in
    the second panel, Ms. DeParle, so we will proceed now with
    Secretary Shalala.
        Senator Faircloth, I would yield to you. I finished that
    one subject. I regret taking a little extra time on it.
        Senator  Faircloth. That is all right. I could tell you
    were interested in the subject. [Laughter.]
        Senator Specter. I have that bad habit.
        Senator  Faircloth. No; that is fine. Thank you, Mr.
    Chairman.
        I have two questions I wanted to bring up, Madam Secretary.
    And one of them is the recent decision that seniors no longer
    qualify for home health care benefits solely on the need to
    have blood drawn. No; in North Carolina, we are--and I am sure
    in a lot of the rural parts of this country--are pretty far
    removed from lab technicians or people with the capability of
    withdrawing blood.
        Now, I understand that this was done because of fraud. But
    HCFA has so far not identified to any Member of Congress how
    big the problem is of fraud here, and documented its abuse.
    Could you do so? And what level of infraction is appropriate
    and compelling to stop this practice?
        Secretary Shalala. I would provide whatever we have free
    trade, Senator Faircloth. I think the rule was changed--it was
    eliminated as something that required a skilled practitioner,
    under the Medicare law. And I would be happy to provide
    whatever information that we had related to fraud and this
    issue to you for the record.
        Senator  Faircloth. All right. Well, if you would, have
    somebody send it over.
        Secretary Shalala. Yes, sir.
        Senator  Faircloth. Like as in the morning or this
    afternoon.
        Secretary Shalala. Right.
        [The information follows:]

                            Operation Restore Trust

        During Operation Restore Trust, the 5-State demonstration
    jointly conducted by the Health Care Financing Administration
    (HCFA), OIG, and the Department of Justice, we saw numerous
    situations where beneficiaries who needed blood draws but did
    not need other skilled treatment, were nevertheless receiving a
    full array of home health services. Home health claims reviews
    under Operation Restore Trust uncovered clinical examples of
    the problems associated with venipuncture. Examples include
    patients with atrial fibrillation who were using a blood
    thinning drug, coumadin, but needed no other skilled treatment.
    Physicians ordered skilled nursing visits to draw blood for
    laboratory testing treatment. Physicians ordered skilled
    nursing visits to draw blood for laboratory testing (for
    adjustment of coumadin dose), and home health aide services for
    these individuals. In one case, even though there was no
    evidence that the patient needed skilled treatment, skilled
    nursing visits were prescribed 1-2 times per week, and a home
    health aide was ordered for 12 hours a day, 7 days a week to
    assist in showering, meal preparation, shopping, laundry,
    housekeeping, safety supervision, and escorting. The
    venipuncture provision targets this inappropriate use of home
    health services and ensures that individuals receive care that
    is medically necessary.

                                    Viruses

        Senator  Faircloth. Here is one of those love in bloom
    statements, but it concerns. Incidentally, I thank you for your
    support for tobacco farmers. I was glad to hear you come out
    with that.
        But there has been a lot in the news, in Time magazine, in
    different places about the speed with which very, very deadly
    and very new viruses can spread around the world. I do not know
    whether you read the report or not. But I do not remember the
    exact dates. But in World War II, it took roughly 90 days for
    the flu virus to encircle the globe. Of course, now it can do
    it almost immediately.
        These potential epidemics are extremely challenging to
    everyone. And most people were absolutely shocked to learn that
    the first line of defense against these threats, the 3,000
    health departments scattered across the United States, are in
    most cases not in any way linked with a computer setup. And
    only 40 percent of our health departments are online. The
    remainder need computer training, manpower, and all of those
    things.
        What are we doing about that? And what should we be doing?
    And should we have the--can we demand--a lot of these are not
    funded by the Federal Government, these health departments. I
    mean, local funding is involved. Can we demand that they do it?
    I think it is totally necessary. When you read that, it is
    absolutely frightening how quick a catastrophe can move around
    the world.
        Secretary Shalala. What we are talking about is the public
    health infrastructure in this country, the core of which is
    State public health departments and State epidemiologists. I,
    in fact, just returned from a major meeting the CDC is hosting
    in Atlanta specifically on the subjects that you bring up. It
    is on emerging infectious diseases, on the new flus in
    particular, and the need to both rebuild and to strengthen the
    role of the epidemiologists and the public health
    infrastructure in this country. This is something we have been
    addressing since the beginning of this administration,
    including putting new surveillance systems in place that have
    quicker turnaround.
        The story of Hong Kong, in fact, is a story of a very good
    health department that did the right thing from the beginning,
    that routinely took swabs from individuals who were willing.
    And when they found something they did not understand, they
    sent it immediately to the CDC. That is what good public health
    departments in the United States do. They send the sample
    immediately--if they do not have the capacity themselves to
    make the diagnosis, they send it immediately to the CDC.
        In this budget is a new investment in the U.S.
    infrastructure, particularly. Some of it is related to food-
    borne illnesses, some of it is related to these emerging and
    infectious diseases. This is part of the effort to rebuild our
    ability to quickly identify an outbreak and to quickly contain
    it. But as you point out, it does us little good to make these
    huge U.S. investments unless we simultaneously have
    surveillance systems around the world. Ships come in, people
    come to visit; these diseases know no boundaries. And it is, in
    fact, significantly cheaper for us to deal with tuberculosis in
    India rather than deal with that same case here in the United
    States, where it might cost us $100,000, and $50 there in
    India. So these multiple investments of our international aid
    budget, plus the HHS investments for the CDC to rebuild and
    strengthen our oversight and our surveillance systems are, in
    our judgment, critical.

                                  Flu outbreak

        The lesson of the 1918 flu outbreak is a lesson that it can
    happen again. We were frightened by Hong Kong. It turned out
    not to have human-to-human transmission, but Hong Kong has just
    started their flu season. And as far as I am concerned, we need
    to continue to make significant investments in the Centers for
    Disease Control and in our national systems. The States have to
    take this seriously at the same time, they have to make
    investments at the same time in their own public health
    structures.
        Senator  Faircloth. All right. If you will make the demands
    on them to do it. And I thank you.
        And thank you, Mr. Chairman.
        Senator Specter. Thank you very much, Senator Faircloth.
        Madam Secretary, I want to cover a number of points with
    you that may deal more specifically with Dr. Varmus at NIH, but
    these are matters of real concern. I have heard from Dr.
    Varmus, in response to my letter, that NIH is not doing the so-
    called professional judgment budget, which represents an
    estimate for optimal funding levels, irrespective of economic
    conditions, that those have been done in the past, and the
    levels range from 20 to 30 percent higher, sometimes as much as
    50 percent, and what the NIH has done now is to balance
    extraordinary scientific opportunity against the budget
    limitations facing both the administration and the Congress.
        When I talked to Dr. Varmus at Senator Hatfield's ceremony,
    dedicating the building at NIH for Senator Hatfield, I told him
    that this subcommittee wanted to see the druthers list. And we
    do want to see that.
        The Senate went on record as favoring a doubling of the NIH
    budget over 5 years, in the sense of the Senate last year. When
    it came time for the budget, the health account was cut by $100
    million. And Senator Harkin and I offered an amendment to
    increase NIH by $1.1 billion, which was defeated 63 to 37. But
    I believe there may be sentiment within the Congress to do more
    for NIH if we see exactly what NIH says can be done. And I am
    going to press Dr. Varmus for that professional judgment
    budget, so we have their judgment as to optimal funding levels,
    irrespective of economic constraints.
        And my question to you is, will you recommend to him or
    instruct him, whatever you do, that he complies with that
    request?
        Secretary Shalala. Well, as you know, the National Cancer
    Institute and the Office of AIDS Research do this as a matter
    of statute. NIH did not do that for the 1999 budget. I think
    this may reflect the significant increase that they did get.
    But my view is that the National Institutes of Health and the
    rest of us ought to answer whatever questions Congress has. And
    while they have a very large increase, I am well aware that
    Congress may consider some additional funding. I think that you
    will find that the Director of the National Institutes of
    Health is quite enthusiastic about the budget the President did
    propose and about the range of opportunities that it provides.
        Senator Specter. Well, I accept this enthusiasm for the
    President's budget. He has probably been enthusiastic about the
    previous President's budgets, before President Clinton,
    although he was not here before President Clinton. But I think
    he has been even more enthusiastic about what the Congress has
    done, in putting up more than the President has.
        And that is our decision as to how we allocate the $1.7
    trillion. So I appreciate your support, as you say, for getting
    us the information which the Congress wants.
        Secretary Shalala. Yes; though, Senator, you do understand
    that all of us that work for the President are expected to
    support the President's recommendations once we have our
    internal discussions within the administration. We have kept to
    that. I fully understand that the Congress has additional
    questions and will ask the scientists for their professional
    judgment. But I simply want to reiterate our own support for
    the President's historic recommendations that he made.
        Senator Specter. Madam Secretary, I understand that you
    support what the chief executive officer has said, your
    appointor. But that is not really relevant to the congressional
    function to make an independent judgment as to how we allocate
    the resources. And that is why we want the judgment of NIH as
    to what is optimal. That is what we are asking for.
        We know that he will support the President. We expect that.
    And sometimes I support the President, too.
        Secretary Shalala. I know that. And we appreciate it,
    Senator.
        Senator Specter. We are going to press on this clinical
    aspect with Dr. Varmus, and I will not take up any time here.
    We have a tough issue on ergonomics, where I had written to Dr.
    Varmus concerning a study which had been requested by some on
    the House side.

                                Ergonomics issue

        Coincidentally, on February 4, a letter was submitted by
    other House Members, where Ms. Taylor, my deputy here, talked
    to Dr. Varmus. He said that he did not agree to this type of
    study. And the ergonomics issue has been debated very heavily
    in the committee. And we have an arrangement where no
    regulations were to be published in this fiscal year. And we
    are hopeful that we have put that matter to rest without having
    another very protracted study on the matter. But, again, we
    will take that up in detail with Dr. Varmus, unless you have
    any comment which you would like to make.
        Secretary Shalala. No; what I have said to Dr. Varmus is
    that until there is a resolution on this issue between both
    Houses of Congress, plans for any activity ought to be on hold.
    And I did see your letter to Dr. Varmus. So we will be happy to
    work with you, Senator.
        Senator Specter. Madam Secretary, if the tobacco agreement
    is not reached, how are we going to fund the Department of
    Health and Human Services?
        Secretary Shalala. Senator, we believe that there is no
    reason why a bipartisan group of Members of Congress, working
    with the President, cannot agree on a comprehensive piece of
    tobacco legislation. We believe it is possible to get consensus
    on that legislation. We have outlined the major principles. We
    have already endorsed one bill on the Senate side, and are
    providing technical assistance. So we are very enthusiastic
    about this huge public health step, which will also obviously
    provide resources for some of the public health investments we
    want to make.
        But what I have said consistently on the President's
    priorities--and NIH is clearly at the top of that list--is that
    if the resources that we have identified, whether they are user
    fees or whether it is legislation that must be passed, are not
    there, we are going to have to work with the committee to make
    sure that these priorities are passed.
        Senator Specter. Are you prepared to give the tobacco
    companies immunity from future liability and class actions for
    the settlement?
        Secretary Shalala. Senator, the President has said that any
    legislation he will support must have a significant price
    increase, be comprehensive, change the behavior of the tobacco
    companies, leave FDA in place, work with the farmers and with
    their communications to make sure that they are not hurt by the
    legislation, and fundamentally change behavior and hold tobacco
    companies accountable. If all those things are in place, if
    there are other issues that are raised as part of an overall
    comprehensive piece of legislation, we will consider them. But
    until we see a bipartisan effort and a bill that is put
    together and has the support of the vast majority that we can
    endorse, we are not prepared to discuss additional issues.
        Senator Specter. Madam Secretary, what you have articulated
    is a little bit of something for everybody, and make a lot of
    people happy. But the reality is there is not going to be a
    settlement unless there is a release of the tobacco companies
    from future liability and class actions. And unless someone is
    prepared to step up to the table and say yes, I am prepared to
    do that, I think that any inclusion of funds from the tobacco
    companies is really totally illusory.
        Secretary Shalala. Senator, what we have consistently said
    is that we are talking about a major piece of legislation that
    would be a huge public health step toward reducing youth
    smoking in this country. We are going to keep our eye on the
    ball. And if we see a comprehensive piece of legislation that
    has all of the elements the President has recommended--in
    particular, the price increase, which we know will have an
    effect on children smoking in this country--then we are
    prepared to discuss other issues.

                               Class action suits

        Senator Specter. Well, the best that I take from that
    answer is that you would not rule out a release from liability
    from class action suits in the future.
        Secretary Shalala. Senator, we will consider any other
    issue that anyone wants to put on the table once we see the
    comprehensive piece of legislation.
        Senator Specter. Including release of liability from future
    class action suits?
        Secretary Shalala. Senator, we are not taking a position on
    anything specific, other than that on which we have already
    taken a position: a comprehensive piece of legislation that
    focuses on reducing children smoking. Once we see that
    comprehensive piece of legislation which we believe there is a
    bipartisan majority to pass, that will be a huge public health
    step, then we would be happy to discuss any additional issues.
        Senator Specter. Including a release of liability for
    future class actions? [Laughter.]
        If you repeat the same answer and do not answer the
    question, and you do not want to answer the question, I will
    not ask it again.
        Secretary Shalala. Senator, I think I have answered the
    question. The President will support a comprehensive piece of
    legislation.
        Senator Specter. I know what you said.
        Secretary Shalala. If there are other issues----
        Senator Specter. Like a release of future liability from
    class actions. [Laughter.]
        Secretary Shalala [continuing]. That could be discussed, we
    would be happy to look at them at that time. First, we want to
    see the public health package.
        Senator Specter. Well, we cannot be happy to look at your
    budget when it has $1.9 billion which is predicated on what is
    really illusory and pie in the sky. But I think I understand
    your position.
        Thank you very much, Madam Secretary.
        Secretary Shalala. Senator, if I may, since you are going
    to hear from Nancy-Ann Min DeParle, I want to make clear both
    my support for her and my enthusiasm about her willingness to
    take on the toughest job in the Department. We were lucky to
    attract a young woman like Nancy-Ann Min DeParle to take on
    this responsibility. I have full faith in her ability to lead
    the Health Care Financing Administration, and I think she is an
    outstanding professional. Thank you, Senator.

                         Additional committee questions

        Senator Specter. Thank you very much. There will be some
    additional questions which will be submitted for your response
    in the record.
        [The following questions were not asked at the hearing, but
    were submitted to the Department for response subsequent to the
    hearing:]
                    Department of Health and Human Services
                         Additional Committee Questions
                                    cloning
        Question. The adult-cell technique used to create the sheep
    ``Dolly'' is very powerful and could be used someday to meet legitimate
    medical needs, such as the production of scarce replacement organs,
    skin, or blood. FDA has said they hold regulatory jurisdiction over
    cloning. How will the agency assure that the technique is used for
    legitimate research and not for cloning of a human being?
        If this cloning technique does support useful purposes, are there
    steps in the cloning process that could be monitored or regulated?
        Answer. On March 4, 1997, President Clinton issued an Executive
    Order which prohibits federal financing of human cloning, and has
    repeatedly encouraged Congress to pass legislation to ban human
    cloning. In July 1997, President Clinton submitted legislation which
    would ban cloning of a human, whether publicly or privately funded, for
    a period of five years. In February 1998, Senator Feinstein introduced
    a similar bill with a 10 year ban on cloning a human.
        Independent of future legislation regarding the cloning of humans,
    FDA has the jurisdictional authority to regulate human cloning,
    including cloning of organs, under the Public Health Service Act
    (regulating biological products) and the Federal Food, Drug and
    Cosmetic Act (regulating drugs). Under these statutes and implementing
    FDA regulations, clinical research on the creation of a human being
    using cloning technology may proceed only when an investigational new
    drug application (IND) is authorized by the FDA. Before such research
    may begin, the sponsor of the research is required to submit to FDA an
    IND describing the proposed research plan, to obtain authorization from
    an independent institutional review board, and to obtain the informed
    consent of all participating individuals. FDA may prohibit a sponsor
    from conducting the study (often referred to as placing the study on
    ``clinical hold'') for a variety of reasons, including if the Agency
    finds that ``human subjects are or would be exposed to an unreasonable
    and significant risk of illness or injury,'' ``the IND does not contain
    sufficient information required * * * to assess the risks to subjects
    of the proposed studies,'' or ``the clinical investigators * * * are
    not qualified by reason of their scientific training and experience to
    conduct the investigation.''
        In the case of attempts to create a human being using cloning
    technology, there are major unresolved safety questions. Until those
    questions are appropriately addressed, the Agency would not permit any
    such investigation to proceed.
                       liver transplant allocation policy
        Question. Madame Secretary, you recently notified the Senate that
    HHS intends to change the current liver allocation policy. Now, donated
    livers are first offered to patients ranked on a local list prior to
    being made available nationally. I understand that your new policy will
    begin to implement a nationwide severity of illness policy. Could you
    elaborate on why the current liver allocation policy needs to be
    changed.
        Answer. We continue to have a serious shortage of organs for
    transplantation, and indeed in recent years, the shortage has grown
    worse. We have also not yet achieved many of the important benefits of
    a national organ-sharing network that were envisioned by the National
    Organ Transplant Act of 1984 (NOTA). The most visible short-coming is
    the wide span in average waiting times for those on transplantation
    waiting lists. In some areas of our Nation, patients wait 5 times
    longer or more for an organ than in other areas. Less visible but more
    important are the resulting inequities in who receives organs. Where
    waiting times are shortest, organs may go to patients who are less ill;
    while at the same moment, in areas where patients wait longer, organs
    often are not offered to patients with greater medical need. In the
    worst case, patients die in areas where waiting times are long, while
    at the same time organs are being made available to less ill patients
    in areas with shorter waiting times. Even as technology has improved,
    making it possible to preserve organs longer and hence offer them over
    a wider geographic area, the allocation scheme of the Organ Procurement
    Transplant Network (OPTN) has continued to give preference to local use
    of organs even if such organs could be used to save the lives of sicker
    patients located further away.
        Question. It is my understanding that the administration will soon
    issue new regulations regarding liver allocation policy. Can you share
    with us what will be the key elements?
        Answer. HHS will establish broad performance standards and make
    clear the desired outcomes which will best serve the Nation. In
    preparing the regulation, we are developing performance and outcome
    standards which would be applied to the policies developed by the OPTN.
    The goal of the performance standards would be to make it possible for
    patients with the greatest medical need for transplantation to be more
    accurately identified by the national network and to be put at the head
    of the list for a suitable organ. This means the development of
    standard patient listing criteria and medical urgency categories that
    would enable our transplant network to reliably assess the medical
    condition and need of all patients awaiting transplantation. The
    regulation would look to OPTN to develop the specific, medically-sound
    policies for achieving goals such as uniform criteria among centers and
    the development of allocation policies that would make waiting times
    more equal in the various regions of the Nation. HHS does not seek to
    develop the policies and would not do so unless the OPTN failed to
    develop satisfactory policies of its own.
                            healthy start initiative
        Question. What have been the accomplishments of the Healthy Start
    program? In your opinion, is the program serving its core purpose of
    identifying the contributing factors to infant mortality and low-birth
    weights?
        Answer. We believe that many important lessons were learned through
    the original Healthy Start communities and their successes should be
    passed on and replicated in other interested communities. The purpose
    of the Healthy Start Demonstration was to create and implement
    community-based strategy targeted at improving birth outcomes among
    underserved women. The demonstration phase of the Healthy Start
    Initiative concluded in September 1997. An interim report, Interim
    Findings: Impact of Healthy Start on Infant Mortality and Other Birth
    Outcomes, found that infant mortality declined substantially in the
    Healthy Start project areas between the baseline period prior to
    Healthy Start and the early years of Healthy Start. Across all of the
    projects in the interim evaluation there was a 21 percent reduction in
    infant mortality. There was also a 20 percent national decline in
    infant mortality over the same period. The Detroit Healthy Start
    program significantly reduced the infant mortality rate from 27.2 to
    22.5 infant deaths per 1,000 live births, a 17 percent reduction. The
    Philadelphia Healthy Start program significantly reduced its post
    neonatal mortality rate from 7.7 to 4.5 postneonatal deaths per 1000
    live births. The Healthy Start program was also associated with
    increases in the percentage of women who received adequate or better
    prenatal care.
        In addition, the Healthy Start Communities have reported positive
    progress towards increasing the number of women entering prenatal care
    early, increasing utilization of services, increased public awareness
    of the contributing factors of infant mortality, and improved family
    and community support.
        Question. How might the program be improved or extended in ways
    that would further the lessons learned up to now from the original 15
    Healthy Start sites?
        Answer. Fiscal year 1999 funding will provide for a continuing
    opportunity to reduce infant mortality by replication of successful
    Healthy Start models of intervention in urban and rural communities
    with high rates of infant mortality. In fiscal year 1999, $35 million
    will be awarded to up to 20 mentoring projects for continued support of
    successful strategies and the utilization of these projects as peer
    mentors to new Healthy Start communities and other health care
    providers, thereby maximizing the lessons learned to date in the
    reduction of infant mortality and low birth weight infants. In
    addition, $51 million will be awarded to up to 42 communities which
    have begun to replicate successful strategies of infant mortality
    reduction in fiscal year 1998.
                president's commission's consumer bill of rights
        Question. Last month the President issued an Executive Order which,
    among other things, directs HHS to ensure that Medicare complies with
    the Quality Commission's Consumer Bill of Rights by 1999, including
    providing access to specialists and ensuring adequate levels of
    beneficiary participation in treatment decisions. What specific steps
    does HHS plan to take to implement the Executive Order?
        Answer. The President has directed all Federal agencies with
    jurisdiction over health programs to ensure that all of these programs
    come into compliance with the Consumer Bill of Rights by 1999. With
    regard to HHS implementation of this order for Medicare, our analysis
    shows that Medicare is already largely in compliance. Our current plan
    is to take the following steps to ensure compliance with the order for
    Medicare (there may also be areas where we will need additional
    statutory authority):
      --Establish the new ``www.medicare.gov'' website as well as the
            Medicare Compare database included in the website. These
            innovations will help beneficiaries and relatives understand
            the options available under Medicare. This helps to fulfill the
            Information Disclosure Right. The website is live.
      --HCFA will issue a policy directive, based on current statutory
            authority, that will ensure that health plans will be in
            compliance with the Access to Specialty Care Right.
      --The BBA included a number of provisions related to complaints and
            appeals that will be applicable to Medicare + Choice plans, and
            we are in the process of implementing them. These provisions
            will strengthen Medicare's existing protections for managed
            care enrollees.
      --HIPAA requires HHS to promulgate standards for a specified set of
            electronic health care transactions which is part of a broader
            effort to protect the confidentiality of medical records. We
            have undertaken this effort which will help to fulfill the
            Confidentiality of Information Right.
      --Additional statutory authority is needed to bring the program into
            full compliance with regard to confidentiality and choice of
            provider rights.
        Question. Has the Department estimated the administrative costs, if
    any, of implementing these changes?
        Answer. While we have not made any formal estimation of the
    administrative costs involved with implementing these changes, we
    strongly believe that any costs will be minimal.
                   agency for health care policy and research
        Question. Dr. Eisenberg, I understand that a conference was held in
    October 1997 which looked at ``Early Childhood Caries.'' The conference
    concluded that in many low-income preschool children--dental caries is
    under-treated. First tell me, if you can, why this is the situation?
    Especially with the existence of such programs as the Child Health
    Insurance Program and the State Medicaid program.
        Answer. Research conducted by the Agency's first dental Scholar-in-
    Residence, in collaboration with individuals from the National Center
    for Health Statistics and the Health Care Financing Administration, and
    by the National Institute of Dental Research has identified the
    sociodemographic distribution of pediatric dental caries (cavities) in
    different age, ethnic and income groups. Once an almost universal
    condition of childhood, extensive caries afflicts disproportionately
    more low-income children today. The prevalence of untreated dental
    decay is approximately 4 times higher for the poor as it is for
    children from economically comfortable families, a situation which
    exists for very young children, older children, and adolescents.
        Care delivery issues are complex. Although both physicians and
    dentists have opportunities to prevent, intercept, and treat early
    childhood caries, oral health services are not well integrated with
    other services and assessments. Even if a physician detects the
    condition and refers the mother to seek dental care for her child, she
    faces other barriers to having her child actually receive care. Very
    young children present management challenges that reduce still further
    the number of dentists willing to schedule appointments for them. Low-
    income parents frequently have not experienced regular dental care
    themselves, and many have not developed the skills nor awareness that
    allow them to assume responsibility for appropriate visits and recall
    appointments. Painful emergency treatment experiences that are common
    for low-income recipients of dental care often result in the
    development of permanent fears and avoidance of dental care.
        The October 1997 Early Childhood Caries Conference recommended that
    more research is needed to identify effective means of preventing and
    treating this problem, and it is clear that health services,
    behavioral, and biomedical research each have a role in identifying
    solutions. Only multifaceted approaches to address this problem are
    likely to be successful. Solutions depend upon synthesis and transfer
    of research findings, provider and public education, expanded provider
    base through effective extender utilization, coordination with primary
    pediatric medical care, and development of quality performance measures
    for health plans and population-based oral health care. Evaluation of
    demonstration programs can identify elements associated with success.
    Development and implementation of improved quality measures to assess
    the performance of outreach and care delivery components of future
    programs should create incentives for providers and plans to engage in
    coordinated care and be held responsible for the outcomes.
        Question. The Early Childhood Caries conference recommended that
    more research is needed to identify effective means of preventing and
    treating this problem. How much do you have in your 1999 budget to
    research this problem?
        Answer. Although the Agency has not specifically designated a
    portion of its budget for dental health services research in general,
    or to early childhood caries in particular, research on children's
    health has been designated a priority area in the fiscal year 1999
    budget. It is expected that up to $2 million will be devoted to
    improving the quality of children's health care. The general topic of
    quality also has been designated as a priority area in the fiscal year
    1999 budget, including development and implementation of improved
    quality measures.
        Research conducted by the Agency's first dental Scholar-in-
    Residence, in collaboration with individuals from the National Center
    for Health Statistics and the Health Care Financing Administration, has
    identified the sociodemographic distribution of pediatric dental caries
    in different age, ethnic and income groups. Care delivery issues are
    complex. Although both physicians and dentists have opportunities to
    prevent, intercept, and treat early childhood caries, oral health
    services are not well integrated with other services and assessments.
        Question. As the U.S. population gets older, are there some special
    dental care problems faced by our senior citizens?
        Answer. Despite appreciable gains in oral health, certain groups
    still carry an extensive burden of oral disease. Among these are older
    adults and minority populations. Older adults who were born and spent
    their early years without the benefit of fluorides and other preventive
    therapies and who became acclimated to a pre-World War II delivery
    system exhibit an oral health status different from that of younger
    adults. Similarly, these older adults' values, beliefs and behaviors,
    despite formal education and sufficient income, may make them more
    vulnerable to oral diseases and their sequelae. Addressing the dental
    care needs of the elderly population is becoming more complex, as
    younger cohorts have more, often heavily repaired, teeth than earlier
    cohorts, and the maintenance of this health presents different
    challenges.
        The elderly have problems of untreated dental disease, problems
    with deterioration of previously repaired teeth and supporting
    structures, problems of complications of multiple chronic medical
    diseases, and problems associated with some of the treatments of those
    diseases, such as the many medications which cause ``dry mouth'' and
    increase the risk of dental diseases. The continued prevention and
    control of oral diseases and conditions in those groups of individuals
    who bear the burden of most of the problems requires a broad approach,
    involving numerous strategies, as well as the efforts and resources of
    many groups, organizations, and individuals.
        Having a regular source of care and/or regular dental visits and
    improved oral hygiene practices appears to be a promising avenue for
    the promotion of better perceived and clinically evaluated oral health
    status among most older ethnic groups. New initiatives may be required
    to reach those who may never have had a pattern of regular dental care,
    particularly minority and low-income elderly. However, even those who
    enter their senior years following regular receipt of care face new
    challenges associated with income, mobility, and other social factors.
    Complicating their situation further is the fact that many common
    dental treatment procedures for older adults are rendered in the
    absence of comprehensive knowledge of their expected results along most
    dimensions of treatment outcome, which limits the information available
    to practitioners. At a time in their life when financial resources
    become limited, many senior citizens are faced with treatment options
    whose benefits, relative to the costs, are difficult to assess without
    this information. If patients face financial barriers to receipt of
    necessary dental care, the outcomes of care for some medical conditions
    may be compromised.
        Question. Does your research agenda include addressing the special
    dental care needs of the seniors?
        Answer. In the early years of AHCPR, a series of studies was
    supported that addressed special dental care needs of the elderly,
    providing information for the health care professionals who care for
    them, and policy makers. Some studies looked at issues related to
    access to care, such as evaluation of a Medicare demonstration program
    to provide access to dental care for low income minority seniors, and
    evaluation of the effectiveness of a community-based geriatric nurse
    practitioner intervention targeting older-old adults (age 75+) to
    stimulate appropriate dental service utilization and improve oral
    health. Another study focused on methods to be used for outcomes
    research, specifically a self-reporting instrument to measure patient
    satisfaction and outcomes with dental implant procedures. Recently,
    findings were reported from a study addressing ethnicity, aging, and
    oral health outcomes, which included assessment of predisposing and
    enabling factors, dental care delivery systems, and sociodemographic
    population characteristics. This study suggests characteristics, such
    as an individual's care seeking attitudes, of people at highest risk
    for poor oral health outcomes and the kinds of policies that might
    improve those outcomes.
        Further research is needed to determine which measures work best to
    prevent and treat dental diseases that disproportionately affect older
    adults, such as root surface cavities, as well as technologies and
    approaches to screen for early stages of oral cancer. Research
    addressing the value of treatment for oral conditions on the outcomes
    of care for medical conditions is also needed.
        The Agency has funded NMES and MEPS providing important information
    on dental care. NMES and MEPS data are especially useful to better
    understand the dental needs for vulnerable populations such as children
    and the elderly. Specifically, NMES data collected in 1987 established
    a baseline level of use, expenditures and sources of payment for dental
    care for the U.S. population. MEPS data collected in 1996 and 1997 will
    be used to establish more current estimates for dental care utilization
    and make possible the identification of changes that have occurred
    during the previous ten years. Since NMES and MEPS are nationally
    representative data, analyses are very useful to describe dental access
    for vulnerable populations.
        Analyses of MEPS data will make possible estimates of the impact of
    retirement on the use, expenditures and sources of payment for dental
    care. Since dentistry is generally not covered by Medicare, retirement
    can result in the loss of dental coverage for many Americans. The
    impact of this loss of coverage has been difficult to estimate because
    panel data for a sufficiently large population has not been available.
    MEPS is a panel survey with data collected over two years. Sample size
    permitting, analyses of MEPS will allow for a description of the
    elderly as they move in one year from working to the next year into
    retirement. Also, as the population ages it is important to update
    current data for older Americans of different cohorts. MEPS will
    provide the most current and comprehensive data for each cohort within
    the elderly population.
           substance abuse and mental health administration [samhsa]
                              block grant formula
        Question. Last year's Labor/HHS Appropriations Act prohibited
    SAMHSA from implementing a proposed change in the way it allocates
    block grant funds to the States and the Conference Report indicated
    that this Committee would not increase funds for either of the State
    block grants until the authorizing Committees, SAMHSA, and the
    substance abuse and mental health communities have implemented a
    consensus policy regarding block grant formulas.
        What is the current status of the block grant formulas, and has a
    consensus been reached?
        Answer. It should be noted that the Secretary has no authority to
    change the Block Grant formula, except that which is granted in section
    1918 of the Public Health Service Act which applies only to the cost of
    service index. The House Committee on Commerce and the Senate Committee
    on Labor and Human Resources have jurisdiction over SAMHSA programs
    including the Block Grants, and they have the responsibility and
    authority to change the formula in statute should changes be necessary.
        In an effort to help forge a consensus, SAMHSA met with majority
    and minority staff of both Committees and explained the changes that
    the Secretary was making. At the request of Senator Frist, we, along
    with GAO, briefed staff of the members of the Labor and Human Resources
    Committee on the formula and the change from manufacturing to non-
    manufacturing that the Secretary had authorized.
        On January 20 and 21, SAMHSA provided technical and financial
    assistance to a meeting of several State Directors of Substance Abuse
    and/or Mental Health Services to discuss the formula. In early
    February, we provided the same technical assistance to members of the
    National Coalition of State Alcohol and Drug Prevention and Treatment
    Associations at their annual conference. We have been and will continue
    to be available to brief any group who would like to become familiar
    with the formula and the issues involved.
        While various changes are being considered in both the House and
    Senate, no consensus has been reached.
        Question. If not, what are the major stumbling blocks?
        Answer. As members review the formula, they are trying to balance
    the need of their home State for funds and what makes good policy. We
    have confidence that an agreement will be reached, especially since the
    President has requested an additional $200 million for the SAPT Block
    Grant.
        Question. What do you believe is the most equitable way of
    implementing any new formula so that no State experiences an
    inordinately large decline in federal funding?
        Answer. The Secretary has recommended to Congress that new
    statutory authority be passed to phase in the changes caused by the
    shift from the use of manufacturing to non-manufacturing wage data over
    three or five years.
        Question. What assistance will SAMHSA provide to states which would
    lose significant funding?
        Answer. As pointed out earlier, it is our hope that the Department
    will be given authority to phase the change from the use of
    manufacturing to non-manufacturing wage data in over 3 or 5 years. The
    advantage of this is that States will be able to plan how they will
    make up for the loss of Federal funds. SAMHSA will assist them in
    prioritizing their activities. Moreover, the additional $200 million
    requested for the Substance Abuse Block Grant program will help prevent
    significant funding losses.
              knowledge development and application [kda] program
        Question. Madame Secretary, the new Knowledge Development and
    Application (KDA) program in SAMHSA is designed to identify and address
    policy and service delivery questions of national concern, as opposed
    to SAMHSA's previous policy of funding local substance abuse and
    treatment demonstration programs. Is there overlap in the new KDA's
    with existing programs?
        Answer. The KDA Program is designated to identify and address
    policy and service delivery questions important to communities, and it
    does so in several different ways. For example, the State Incentive
    Grants (SIG's) are a major component of the HHS Secretary's Youth
    Substance Abuse Prevention Initiative and play a key role in helping to
    achieve the outcome targets associated with this Initiative. SIG's are
    competitive grants to Governor's office which help coordinate disparate
    funding streams and facilitate the development of proven effective,
    prevention strategies at the local level aimed at reducing drug use by
    youth. This program serves as an incentive for Governors to examine and
    synchronize State-wide comprehensive prevention strategy with private
    and community-based organizations. In the five states recently awarded
    a State Incentive Grant in fiscal year 1997, the Governors have
    committed themselves to becoming actively involved in substance abuse
    prevention by direct involvement and oversight of this project.
        Another example is the Targeted Treatment Capacity Expansion
    Program designed to create and expand comprehensive substance abuse
    treatment services, promote accountability and enhance the quality of
    and access to treatment services. CSAT will support State, city, and/or
    other partners in efforts to identify gaps in the alcohol and other
    drug service delivery system, and where current capacity within a
    treatment modality is insufficient, provide for expanded access to
    treatment.
        As these examples show, the KDA Program directs resources to
    improving service quality in communities. It does not duplicate any
    other federal efforts, and in fact, has been expressly designed by
    SAMHSA to complement existing programs. The program serves several
    distinct purposes: to ascertain whether approaches that have a basis in
    research are effective in actual service settings; to communicate best
    practice information through such mechanisms as treatment improvement
    protocols; to ensure that high quality services in targeted areas of
    national interest are implemented nationwide; and to translate
    knowledge into practice, in particular through the Block Grants and
    other service programs. In short, the program helps ensure that SAMHSA
    and other federal efforts work in an integrated way at the community
    level.
        An example of this is the relationship between federal research
    programs and SAMHSA KDA's. Research projects generally represent long-
    term studies of a wide variety of service topics, each inspired by an
    individual investigator. The results are of course immensely valuable
    in contributing to the knowledge base. However, given the variety and
    ever-changing dynamics of service delivery, practitioners may be
    unfamiliar with new research results, find them less relevant to their
    particular service needs, or be unable to change their practices for a
    wide variety of reasons. SAMHSA communicates continually with the field
    to assess their needs; an excellent example of how this is accomplished
    is through feedback from the extensive Block Grant technical assistance
    program. This feedback permits SAMHSA to design and develop shorter
    term, focused evaluations and knowledge application projects. They are
    coordinated to ensure that proven practices not only work when employed
    in public sector programs, but that these programs are implementing
    effective practices. No other federal programs have this as their
    mission. Similarly, other KDA-supported projects such as national
    clearinghouses and sponsorship of national information and public
    communication programs either represent a unique SAMHSA role, or are
    conducted jointly with other federal sponsors to prevent any overlap.
        Question. How is demonstration funding being phased out and KDA
    funding phased in?
        Answer. Consistent with the guidance received from the Committee,
    SAMHSA's former demonstration projects are being continued through
    their initial federal project period, which was up to five fiscal
    years. No new demonstration projects have been awarded since 1995. In
    the fiscal year following completion of a demonstration continuation
    project, a comparable amount of funds within the resource base is
    available to initiate new and more focused KDA projects targeted to the
    highest priority service issues. This phase in can of course be
    accomplished only if the overall KDA funding level remains level.
        Question. Which demonstration grant programs still receive funding?
        Answer. The Center for Mental Health Services (CMHS) will fund
    continuations for the Service System Improvement grants and AIDS
    Education I in fiscal year 1998. CMHS will fund only one Service System
    Improvement grant in fiscal year 1999. The Center for Substance Abuse
    Prevention (CSAP) will support 18 continuation grants funded under the
    Community Partnership program and 3 continuation grants funded under
    the old High Risk Youth program in fiscal year 1998. While we are
    phasing out the old High Risk Youth demonstration grants, the new High
    Risk Youth services grants will continue. For most of these projects,
    fiscal year 1999 reflects their last year of federal support for the
    grants.
        The Center for Substance Abuse Treatment has four demonstration
    programs continuing in fiscal year 1998. These are the Residential
    Treatment Program for Women and Their Children (RWC-15 grants), the
    Pregnant and Postpartum Women and Children Program (PPW-3 grants), the
    Criminal Justice Treatment Networks (7 grants), and the Rural Remote
    and Culturally Distinct Populations Program (3 grants). The majority of
    the grants for the Women's programs (RWC and PPW) and all of the
    Criminal Justice Treatment Network grants are planned to continue in
    1999. That will be the final year of funding for those programs.
        Question. How are the substance abuse and mental health
    communities' needs and concerns taken into account by SAMHSA in
    developing the new KDA's?
        Answer. Given the direct relevance of the KDA program to current
    service needs, continuing input from mental health and substance abuse
    service providers is vital to the success of the program. This is
    accomplished both through the active solicitation of input from the
    service field, as well as through information gained by the Agency as
    part of our continual involvement in service delivery issues. The
    former usually occurs through suggestions received from national
    organizations representing States, consumers and their families,
    service providers, and others. Their suggestions are factored into
    SAMHSA's agenda-setting process as potential grant announcements are
    considered each year.
        The second, more indirect aspect of field input regarding needs and
    concerns occurs during SAMHSA's continual communication with the field
    throughout the year. Information from State Needs Assessments, concerns
    raised during technical assistance visits to help implement Block Grant
    programs, views expressed in national meetings, information
    clearinghouse inquiries, and a wide variety of other communications
    help identify the most salient issues. Since there are many more needs
    identified than resources to address them, the final KDA agenda
    represents SAMHSA's careful selection of issues deemed to be of
    greatest need and broadest value to the field.
        Question. Do KDA's unnecessarily duplicate research efforts being
    conducted by the National Institutes on Drug Abuse (NIDA), Alcoholism
    and Alcohol Abuse (NIAAA), or Mental Health (NIMH)?
        Answer. We do not expect that there will be any duplication of
    research efforts being conducted by the former ADAMHA research
    Institutes. Our KD projects are based upon specific situations where
    the fact that approaches have not been tested in certain service
    settings creates an important gap in knowledge. We would not expect
    that NIH research projects would be based upon such very specific,
    highly applied research questions; that would be inconsistent with the
    NIH approach, where specific research questions generally are
    investigator-initiated. In addition, we meet regularly with the staff
    of the three Institutes to share information and identify areas of
    mutual interest for collaboration.
        Question. Would the purpose of the KDA's be better served by having
    the ``development'' portion administered by NIH instead of SAMHSA so
    that more of SAMHSA's discretionary funding could be used to provide
    direct assistance?
        Answer. As expressed above, SAMHSA has a unique role to play in
    knowledge development and application because of its extensive,
    continuing link to day-to-day issues of service delivery. Agency staff
    understand community service delivery programs; barriers to developing
    better service integration and linkage; problems faced by State, city
    and local governments in developing and managing comprehensive
    prevention and treatment programs; challenges posed by co-occurring
    disorders, homelessness, HIV/AIDS, and similar problems; and numerous
    other impediments to quality improvement in the service system and to
    achievement of better system-wide outcomes. This knowledge is essential
    to effective ``development'' activities. It is particularly important
    since the service field is not as well developed as it is in some areas
    of primary health care. While NIH plays an important role in the mental
    health and substance abuse areas, it is a quite different one. It is
    unlikely that an organization with a strong research orientation can be
    as effective in translating knowledge into practice, if de-coupled from
    service delivery programs and the understanding which derives from
    managing them.
                      programs in rural/native communities
        Question. A 1994 RAND Corporation study showed that living in a
    nonmetropolitan area was associated with higher needs for substance
    abuse treatment, especially in the areas of alcohol abuse. Substance
    abuse is a leading contributor to health problems among American
    Indians and Alaska Natives. Last year the Committee earmarked $10
    million for programs in rural and Native communities. What steps is
    SAMHSA taking to address the special needs of rural and Native
    populations?
        Answer. The fiscal year 1998 Senate Appropriations Report earmarked
    $4,000,000 for programs in rural and Native communities. CSAP has
    targeted these funds to provide continued substance abuse prevention
    support for ongoing native and rural programs. These programs
    constitute 10 percent of CSAP's continuation grant portfolio in fiscal
    year 1998. In addition, CSAP is providing targeted technical assistance
    and outreach to areas with rural and native focused programs, in
    particular Alaska, and encourage these programs to apply for new fiscal
    year 1998 substance abuse prevention initiatives.
        CSAP's fiscal year 1998 appropriation and fiscal year 1999 Budget
    request also supports new awards under the State Incentive Grant (SIG)
    program. The SIG program calls upon Governors to develop a statewide
    comprehensive prevention system directed at reducing youth substance
    abuse, including under-served populations in rural and Native
    communities. The program is designed to coordinate, leverage and/or
    redirect as appropriate and legally permissible, all Federal and State
    substance abuse prevention resources directed at communities, families,
    schools and workplaces. Community involvement is key to the success of
    these grants. Eighty-five percent of the grant funds will be directed
    to community based programs. These programs will be required to utilize
    scientifically defensible prevention practices. CSAP has awarded 5
    State Incentive Grants for fiscal year 1997: Illinois, Kansas,
    Kentucky, Oregon and Vermont. Approximately 15 more states will be
    funded in fiscal year 1998. The fiscal year 1999 budget request calls
    for an additional 2 new State Incentive Grants.
        There are two new programs for 1998, Exemplary Treatment Programs
    and Targeted Capacity Expansion, which will target the additional $3
    million for rural and Native American populations in the grant
    application process.
        Question. Are health care professionals being trained to treat
    these needs, and is there sufficient access to care in these
    communities?
        Answer. CSAT's Addiction Technology Transfer Centers (ATTC's) focus
    on the training needs most critical to the effectiveness of addiction
    treatment and recovery programs within each ATTC catchment area. They
    all focus on developing practitioners who are qualified to work with
    one or more special populations groups.
        While current routine reporting from the ATTC's does not include
    information on the number of trainees from rural or remote areas, the
    data indicate that nearly 220 Native Americans were trained in 1997.
    All of the ATTC's focus on reaching minority students and those
    individuals living in rural areas. In 1996, three ATTC's developed new
    training programs to address rural needs.
        There is a need to increase treatment availability for all
    substance abusing populations. It is for this reason that the
    Administration has requested a $200 million increase for fiscal year
    1999 in the SAPT Block Grant, in an effort to help close the treatment
    gap. Rural and Native populations present an array of challenges for
    service delivery including treatment availability and access and
    cultural differences. In order to address these and other types of
    treatment gap and comprehensive service issues, CSAT will continue the
    Targeted Capacity Expansion Program in 1999. This program allows
    States, cities and other governmental entities to create capacity and
    expand substance abuse treatment services where there are gaps in
    treatment availability. Rural and Native populations are being targeted
    for this program during the grant application process.
                            tobacco budget proposal
        Question. Elements of the tobacco settlement may involve major
    constitutional questions, especially with regard to advertising
    restrictions. If there is reason to believe that this proposed
    settlement may not pass or be sustained on a constitutional issue, then
    why should this Subcommittee base its important spending decisions on
    conditions that may not come to pass?
        Answer. We fully believe that a comprehensive bipartisan tobacco
    legislative package will be enacted by Congress this year, and that
    this legislation will contain the revenues needed to expand NIH
    research and the health research of CDC and AHCPR. These increases are
    a priority of the President, and we will work closely with the Congress
    to assure that the revenue source we have identified, comprehensive
    bipartisan tobacco legislation, will be in place this year to fund the
    President's priority for research into the twenty-first century.
        Question. If the tobacco settlement does not pass this session,
    which programs would you designate as your top priorities? How would
    you rearrange your priorities?
        Answer. The budget request includes the largest increase ever
    proposed for the National Institute of Health--a $1.15 billion, or 8.4
    percent, increase for fiscal year 1999. This is a long-term commitment.
    We propose to increase NIH funding by nearly half by 2003. Like every
    other priority of the President, we will work with the Congress to pay
    for these increases in spending. We fully believe that a comprehensive
    bipartisan legislative package on tobacco will be passed by the
    Congress, and that this legislation will provide the resources to
    expand NIH research spending, as well as the expanded health research
    efforts of CDC and AHCPR.
        Question. A constituent of mine, Hilary Koprowski of the
    Biotechnology Foundation, proposed to establish a research effort into
    using tobacco plants for healthier purposes, namely the production of
    vaccines. I understand that he has met with several government
    officials, including those from your department. Do you believe that
    such a proposal may be worth investigating?
        Answer. The field of biotechnology is expanding rapidly. Through
    advances in our understanding of genetic and other processes in
    molecular biology, there will soon be a variety of new products and new
    methods for producing useful products. Certainly a variety of plants,
    including the tobacco plant, should be examined in this research
    endeavor. Scientists like your constituent will ultimately provide
    information as to which plants will be most useful for vaccine
    development and other purposes. I would encourage your constituent to
    continue his research, in the hope that the tobacco plant, which has
    done so much harm to human health, could one day be used to promote
    health.
                                     ______

                 Questions Submitted by Senator Lauch Faircloth
        Question. Both the FDA tobacco regulation and the Synar Amendment
    are directed at reducing minors' ability to purchase tobacco products.
    The Administration repeatedly refers to these efforts as
    ``complementary.'' Will you explain to the Committee why two federal
    agencies are needed to enforce the prohibition against state sales to
    minors?
        Answer. It has been the intent of the Department for the SAMHSA and
    FDA efforts to provide a multi-level approach to addressing youth
    access to and availability of tobacco products. The SAMHSA Synar
    regulation is one piece in a comprehensive effort to reduce youth
    tobacco use. For such an effort to be successful, the Department must
    address issues of tobacco access, availability and appeal. While the
    FDA and SAMHSA regulations both address access and availability, Synar
    is not an enforcement program and Synar monitoring is not substitute
    for active enforcement of the FDA rule. The HHS response to youth
    tobacco use provides resources for enforcement activities, as well as a
    method of monitoring the success of State and Federal efforts. FDA rule
    enforcement is required to achieve the Administration's goal of
    reducing, by 50 percent over the next seven years, the young people who
    use cigarettes and smokeless tobacco.
        Under the Synar amendment States are required to conduct random,
    unannounced inspections of a representative sample of the State's
    tobacco vendors to assess their compliance with State access laws.
    States that fail to meet the goal of reducing violation rates to no
    more than 20 percent can lose a percentage of their federal Substance
    Abuse Prevention and Treatment Block Grant funds. The Synar activities
    are specifically designed to measure if stores are selling to minors,
    and this measurement provides SAMHSA with concrete evidence of the
    success of State enforcement efforts of their own State laws. The Synar
    provisions, although requiring the States to enforce their youth
    tobacco access laws, offer no specific financial support to States for
    such efforts.
        The FDA rule makes it a federal violation to sell cigarettes or
    spit tobacco to anyone younger than age 18 and requires retailers to
    ask for photo identification from anyone younger than 27. FDA
    activities are designed to actually enforce, not measure. The FDA
    regulations complement on-going State and local activities and
    establish mandatory conditions on the sale and distribution of tobacco
    products. The State agency administering the FDA rule must be an agent
    of FDA and funds are needed to pay State agencies. FDA needs
    flexibility to select non-Synar agencies to act as FDA agents,
    especially in poorly performing States. Enforcement of the FDA rule can
    only be done through compliance checks separate from SAMHSA, backed by
    fines, administered through FDA.
        Question. The Administration's budget calls for a $100 million
    increase in FDA funding for tobacco enforcement--and a $46 million
    increase for CDC's existing state tobacco-prevention activities. Please
    detail for the Committee the differences in these two programs, and
    what procedures HHS has in place to ensure that these programs are not
    duplicative?
        Answer. FDA's tobacco programs seek to restrict access to tobacco
    products, while CDC programs are targeted to reduce the demand for
    cigarettes. As FDA fully implements the tobacco rule and expands their
    activities to the full extent of the law, there will be increased
    workload and a need for increasing appropriations, $100 million in
    fiscal year 1999. The fiscal year 1999 goals for the FDA tobacco
    program include a significant expansion of the outreach and enforcement
    activities initiated in fiscal year 1998. With this increased funding,
    FDA can ensure fundamental progress in all States, through partnerships
    with States and local authorities, to reduce use of tobacco products
    among our nation's youth. FDA will primarily engage in enforcement,
    outreach, and product regulation.
        FDA has developed a general enforcement strategy aimed at
    conducting compliance checks in a significant percentage of the roughly
    400,000 retail outlets that sell tobacco products. FDA will commission
    State and local officials to conduct unannounced purchase attempts
    using young people under the age of 18. FDA follow-up enforcement
    includes special monitoring projects, demonstration projects, and an
    enforcement strategy for national chains. Evaluation activities include
    an inquiries and reporting system and other legal requirements. The
    outreach activities include compliance outreach, trade advertising and
    direct mail targeted to retailers and clerks, advertising, and media
    and public education. A strong outreach program is one of the most
    effective ways of increasing compliance with this rule. In fiscal year
    1999 FDA plans to intensify its advertising campaign and use community
    organizations, parent groups, voluntary health groups, and the media to
    raise awareness of the tobacco rule and encourage compliance. FDA will
    design and, to the fullest extent permitted under law, begin to
    implement a regulatory program for cigarettes and smokeless tobacco
    products under the Food, Drug, Cosmetic Act. This includes a procedure
    for the classification of devices to determine the level of controls
    required by the products' characteristics to provide a reasonable level
    of safety, a process of reviewing and analyzing ingredients used in
    cigarettes and smokeless tobacco, establishing a framework for the
    evaluation and review of new and existing cigarette and smokeless
    tobacco products, and beginning the inspection process by reviewing the
    practices of tobacco companies.
        The CDC increase of $46 million for tobacco prevention programs
    will fund a nationwide program that recognizes prevention and reduction
    of tobacco use is a core public health function. This will replace and
    expand CDC's Initiative to Mobilize for the Prevention and Control of
    Tobacco Use (IMPACT) program to include all 50 States and the District
    of Columbia. The IMPACT program funds a number of prevention and
    control activities which include training and programmatic support for
    school-based smoking cessation programs, national surveillance
    activities, state prevention and control plans to protect nonsmokers
    from exposure to environmental tobacco smoke, and state programs to
    address oral cancer in high risk populations. This will also replace
    the NIH's American Stop Smoking Intervention Study (ASSIST). Of the CDC
    increase, $22 million of the $46 million funds NIH had been granting to
    States through the ASSIST program.
                                     ______

                   Questions Submitted by Senator Larry Craig
        Question. It has been said that most states aren't using all of the
    monies they are allotted through the Child Care and Development Block
    Grants. Could you please comment on why you think the states aren't
    utilizing the money that is being sent to them? And in view of that,
    why is the Administration proposing an increase in spending in this
    area?
        Answer. In fact, States are utilizing the money that is being sent
    to them and we do project that the States will spend virtually all of
    their child care funds. The State financial reports received thus far
    are very encouraging and show that States have obligated over 99
    percent of the fiscal year 1997 child care funds available to them
    under the new welfare law. States have outlayed 90 percent of their
    child care funds for fiscal year 1997 and we project they will expend
    all their funds within the time frame allotted. The outlay rates for
    1998 are also quite strong and we project that States will expend all
    their funds within the two years as required.
        The passage of the Personal Responsibility and Work Opportunity
    Reconciliation Act made major changes in the funding for State child
    care programs, and it was expected that States would require some time
    to make the transition. However, despite these significant reforms in
    the program, States reacted quickly and have drawn down the vast
    majority of child care money.
        There is a tremendous need for child care assistance, particularly
    among low income working families. While our most recent data from 1995
    indicates that funds in that year allowed us to serve over about 1
    million children, that is a small percentage of those eligible since
    there are approximately 10 million children eligible for the Child Care
    and Development Block Grant. Further, without assistance, working
    families with annual incomes under $14,400 who pay for care for
    children under five spend 25 percent of their incomes on child care--
    even then, it's difficult to find accessible, high-quality care.
        Question. Doesn't the Administration's child care proposal amount
    to a return to categorical programs in essence saying we shouldn't
    trust the states with block grants? Does the Administration have a
    complaint with how the states are handling block grants?
        Answer. The Administration's child care proposal does not return to
    categorical programs and we continue to support the consolidation of
    child care that took place in the Personal Responsibility and Work
    Opportunity Reconciliation Act. We do not have problems with how States
    are handling block grants, and that is partially why the President has
    proposed an increase in the block grant program of $7.5 billion over 5
    years. We feel like States are working hard to provide child care for
    working families and continue to want to support them and provide for
    the additional funds they need.
        The President's Child Care Initiative does not create a lot of new
    programs; it builds on three of its primary programs: Child Care
    Development Block Grant and child care entitlement money, Head Start,
    and Child and Dependent Care Tax Credit. All of the components of the
    President Initiative would be included in the Child Care Development
    Block Grant so that States have more funds to assist working families
    in finding and keeping higher quality child care. Over 95 percent of
    the funds in the President's initiative go to States, communities,
    businesses and families to support their choices.
        Question. Data clearly show that low- and middle-income families
    are just as likely as, if not more likely than, higher income families
    to have one spouse in the paid work force and the other in the home.
    Stay-at-home spouses work full time as care givers, schedulers, travel
    managers, culinary experts, home repair engineers, and home economists
    and frequently volunteer many additional hours in school and community
    activities. In short, all moms work. Why, then, do the Administration's
    child care proposals target assistance to two-earner families, and
    neglect the one-earner families who are, if anything, more economically
    overburdened?
        Answer. Our child care initiative builds on President Clinton's
    record of providing real choices and opportunities for parents--
    including the choice to stay home with their children. He has worked to
    enact: a $500 per child tax credit that provides $98 billion in tax
    benefits over the next 5 years for 26 million families with children
    including those with stay-at-home mothers; the Earned Income Tax Credit
    also helps stay-at-home mothers and gives 15 million working families
    $150 billion over the next five years in tax relief; health insurance
    for children; increases in the minimum wage; and the Family and Medical
    Leave Act. The Administration is committed to helping parents make the
    choices that are right for their families, whether that means working
    or staying home to care for their children.
        The President's Child Care Initiative is primarily oriented toward
    families with a single parent who works or two parents who both work,
    usually for reasons of financial necessity. According to the March 1997
    Current Population Survey, only 26 percent of families with children
    under age 14 have a stay-at-home mother. Seven out of every 10 mothers
    of children under age 6 spent some time in the labor force during the
    past year. The initiative is designed to ensure that children in these
    families receive quality care while their parents are working.
        The President believes strongly, however, that we should support
    parents who have sufficient resources and who choose to stay home. The
    Administration's proposal includes provisions that will help parents
    who stay at home. It will support demonstration projects in States and
    communities to test policies to help new parents who choose to stay
    home to care for their newborns and newly adopted children. In
    addition, the President's Early Learning Fund supports parents who stay
    at home through home visits and parent education.
        Question. Why did the President suggest that surpluses be dedicated
    to protecting Social Security when everyone knows that Medicare is
    facing a more imminent crisis?
        Answer. The President is committed to addressing the long-term
    needs of the Medicare program and has worked hard to protect and
    strengthen this vital program. The Balanced Budget Act enacted last
    year by the President and Congress saves $150 billion over 5 years and
    extends the life of the Medicare Trust Fund for more than a decade.
        In addition, the Medicare Commission agreed to as part of the
    Balanced Budget Act has begun its work and will present recommendations
    for addressing Medicare's long-term financing needs by the Spring of
    1999. The President has appointed a distinguished group of individuals
    as his representatives to the Medicare Commission. The President is
    committed to working with the Commission to find ways for the program
    to meet the longer-term financing challenges that confront it.
        At the same time we are addressing Medicare's future, the President
    recognizes the long-term needs of the Social Security program, which
    without any changes, will become insolvent after 2029. That is why in
    his last State of the Union address, he asked the Congress to set aside
    every penny of any budget surplus until the President and Congress deal
    with Social Security first In January of 1999, the President intends to
    convene the leaders of Congress to draft a plan to save Social
    Security. The Administration is encouraged by the favorable response
    from both parties in Congress to the President's call to address Social
    Security before spending any future surplus.
        If we act now, we can ensure strong retirement benefits for the
    Baby Boom generation without placing an undue burden on our children
    and grandchildren. And, if we act now, any changes will be far simpler
    and easier than if we wait until the problem is closer at hand. For
    example, a $100 billion budget surplus, if used for Social Security,
    would add a year or more to the solvency of the Social Security Trust
    Fund with no other changes being made. Other changes enacted now could
    be phased-in over time, thereby minimizing their immediate impact.
    Small changes made now will have huge impacts in 30 years.
        The President understands that there are many worthy programs and
    initiatives on which to spend any budget surplus. He welcomes such a
    dialogue. However, he believes that before a dime of any surplus is
    spent, the Administration and Congress should develop a plan to save
    Social Security for generations to come.
        Question. Instead of dedicating potential revenues from a tobacco
    settlement to the immediate gratification of new domestic spending,
    wouldn't it be more responsible to set aside any new revenues in this
    area to the long-term need of protecting Medicare?
        Answer. The President's investment priorities for tobacco
    legislation are aimed at protecting children from diseases and
    investing in their future through health care coverage, child care, and
    education; improving the lives of current smokers through health
    research and smoking cessation programs; and protecting farmers. The
    Administration believes that these investments have a natural link to
    tobacco receipts.
        The President shares the Republicans' concerns about the Medicare
    program. No President has done more to protect and strengthen this
    vital program. Just last year, working with the Congress, the President
    signed into law a package of unprecedented savings--$150 billion over 5
    years--and structural reforms that extended the life of the Medicare
    Trust Fund for the next decade. He recently appointed a distinguished
    group of individuals as his members of the Medicare Commission. The
    President is committed to working with the Commission to find ways for
    the program to meet the longer-term financing challenges that confront
    it.
                                     ______

              Questions Submitted by Senator Kay Bailey Hutchison
        Question. Secretary Shalala, when do you anticipate that the final
    Temporary Assistance for Needy Families (TANF) regulations will be
    issued?
        Answer. We are planning to publish final rules in August of this
    year.
        Question. Proposed TANF reporting regulations would require States
    to make significant changes in their reporting and data collection
    systems, diverting limited resources from client services. Will the
    final rules ensure that only the minimum amount of data is required and
    that States be given an adequate time to come into full compliance with
    final reporting requirements?
        Answer. We have received numerous comments on the proposed scope of
    the TANF data reporting. We are currently analyzing the comments we
    received. While it would not be appropriate to speculate on the nature
    of data collection under the final rule, we are re-evaluating each data
    element to determine if it is necessary to carry out our
    responsibilities under the statute to monitor the program, determine
    work participation rates, assess penalties, and provide information to
    Congress on the impact of welfare reform under the TANF program. We are
    aware of the burden this new data system places on States and will look
    for ways to streamline these reporting requirements.
        Question. Many States, including Texas, operate their TANF programs
    under waivers approved by the Secretary. These States have relied upon
    the integrity of their waivers while setting overall program strategy
    and operational policies. Section 415(c) of the Personal Responsibility
    and Work Opportunity Reconciliation Act asserts that the Secretary
    ``shall encourage'' States to continue such waivers. Many States argue
    that the proposed rules actively discourage States from continuing
    waivers by narrowly defining waiver inconsistencies. Does the
    Department agree with the clear intent of the PRWORA to allow States to
    fully maintain their waiver-driven programs? Will the final rules
    reflect that legislative intent?
        Answer. Section 415 of PRWORA allows States to delay applying
    provisions of TANF ``to the extent such amendments are inconsistent
    with'' their waivers. In drafting the Notice of Proposed Rulemaking
    (NPRM), we sought to propose rules defining waiver inconsistencies that
    would allow States the flexibility to continue IV-A program policies to
    the extent they were inherent to their waivers while assuring
    accountability to meeting TANF requirements established under the law.
        The comment period on the TANF NPRM has just closed and we are in
    the process of reviewing the comments we received at this time. We will
    carefully consider comments like you have cited in making decisions
    concerning the final rules.
        It is our intention to issue final rules that will be entirely
    consistent with the law and with Congressional intent. We are currently
    reviewing all the comments we received on the proposed rules and will
    give them full consideration as we draft final rules.
        Question. States operating under an approved waiver may desire to
    gradually move their waiver-based initiatives and program rules closer
    to those found explicitly in federal statutes. Would the Department
    allow such a State to move gradually toward federal law on a voluntary
    basis without invalidating the rest of the State's waiver?
        Answer. There is no mechanism for modifying IV-A waivers approved
    prior to a State's enactment of TANF.
        However, we have advised States that they have full discretion
    concerning decisions to terminate any specific waiver at any time. For
    example, a State could choose to retain a waiver related to time-
    limited assistance, but terminate a waiver allowing a particular work
    activity not otherwise countable under TANF.
        Similarly, we have advised States that they may unilaterally modify
    a specific waiver to the extent the modification brings the waiver into
    closer compliance with TANF. For example, they could decide that one of
    the classes of recipients now exempt from time-limited assistance under
    their waiver will henceforth be subject to the time limit; or, in
    conjunction with allowing devolution of program policies to counties,
    allow counties to decide whether to continue to count a specific work
    activity allowed under the waivers.
        On the other hand, they could not modify their waiver to exempt a
    new class of recipients subject to the time limit under their waiver as
    that would increase the inconsistency; nor allow waiver policies
    inconsistent with TANF approved for application in a pilot site to be
    expanded statewide, as this would serve to increase inconsistencies
    with TANF.
        Question. Original communication from the Department indicated that
    States would be allowed to develop an alternative participation rate
    methodology to account for State initiatives that expanded TANF program
    eligibility. The proposed rules did not contain such a clause. Will the
    final rules ensure that States are not penalized in terms of their
    participation rates for TANF program eligibility expansions?
        Answer. The comment period on the TANF NPRM has just closed and we
    are in the process of reviewing the comments we received at this time.
    We will carefully consider comments like the ones you have cited in
    making decisions concerning the final rules.
        Question. In 1994, Congress authorized a Border Health Commission
    to address health problems that affect the population of the U.S./
    Mexico Border. In last year's Labor/HHS appropriations bill we
    appropriated $800,000 to fund this vital commission. When do you intend
    to move forward with establishing this commission?
        Answer. I am pleased to inform you that we are moving forward
    toward establishing the U.S.-Mexico Border Health Commission. The
    Office of Public Health and Science's Office of International and
    Refugee Health has been working with the four U.S. border States to
    establish the U.S. side of the Commission. On March 3, the White House
    forwarded letters to the Governors of these States, requesting
    nominations of individuals to serve as Commission members. In addition,
    we are in the process of contacting the Health Commissioners of these
    States about also serving as members of the Commission. In fact, the
    Commission was discussed during a recent meeting between the Health
    Commissioner of Texas and the Assistant Secretary for Health/Surgeon
    General. We consider the Health Commissioners and their respective
    Border Health Offices to be key participants in the Commission's
    development process.
        The primary goals of the Commission are to institutionalize a
    domestic focus on border health which can transcend political changes,
    and to create an effective venue for bi-national discussion to address
    public health issues and problems which affect our U.S.-Mexico border
    populations. To realize these goals, HHS has also proceeded on several
    fronts regarding Mexico's involvement: we have re-opened informal
    dialogue with officials from Mexico's Ministry of Health regarding
    their critical partnership in the development of the Commission, and we
    have formally requested the Department of State to initiate discussions
    with the government of Mexico regarding their potential participation
    in the Commission.
                                     ______

                   Questions Submitted by Senator Tom Harkin
        Question. Our fiscal year 1998 appropriations bill included
    additional funds for the Early Head Start program. I am glad to see
    that the President's budget also increases funding for Early Head
    Start. Madame Secretary, can you tell something about what you have
    been doing with those additional funds?
        Answer. Early Head Start programs provide early, continuous,
    intensive, and comprehensive child development and family support
    services on a year-round basis to low-income families with children
    under the age of three and pregnant women. In fiscal year 1999 Early
    Head Start (EHS) spending will total $350 million, an increase of +$71
    million over fiscal year 1998. This spending will be used to increase
    projected enrollment by an additional +10,000 children for a projected
    total of 49,000 children in fiscal year 1999. Funding will also allow
    EHS to focus on four cornerstones of providing quality programs: child
    development, family development, community building and staff
    development. EHS technical assistance includes on-site training for
    teachers and staff and regional office staff. In addition, Head Start
    will monitor all EHS programs in their first year of operation with
    teams consisting of experts in the field and Federal staff.
        Question. Last year, this Committee provided an additional $50
    million in the Child Care Block Grant to activities that improve the
    quality of care for infants. What has your Department done to make sure
    that those funds go to increasing quality and not just supply?
        Answer. This March the Department has sent a letter to all Child
    Care Development Block Grant (CCDBG) State administrators explaining
    that in fiscal year 1998 Congress appropriated an additional $65.139
    million for CCDF and that $50 million is earmarked for quality and
    $18.59 million for resource and referral activities. The letter
    included a table of State allocations, including the minimum amounts
    States must spend on quality and resource and referral activities. It
    was also noted that these funds are in addition to any expenditures
    necessary to meet the ``not less than 4 percent quality requirement.''
    While we cannot specify what type of quality activities are undertaken,
    we have also provided CCDBG Agencies with a list of suggestions for
    activities in such areas as monitoring of child care programs, training
    curriculum, child care networks, and scholarships/grants as well as a
    summary of innovative programs already in existence.
        Question. As you know, the President's budget essentially pays for
    the NIH increase with tobacco proceeds. I have been saying for years
    that we need another source of funding for biomedical research. Madame
    Secretary, what advice do you have for us on how to get those tobacco
    proceeds available to this Committee to fund a NIH increase?
        Answer. We fully believe that a comprehensive bipartisan tobacco
    legislative package will be enacted by Congress this year, and that
    this legislation will contain the revenues needed to expand NIH
    research and the health research of CDC and AHCPR. These increases are
    a priority of the President, and we will work closely with the Congress
    to assure that the revenue source we have identified, comprehensive
    bipartisan tobacco legislation, will be in place this year to fund the
    President's priority for research into the twenty-first century.
                                     ______

                    Questions Submitted by Senator Herb Kohl
        Question. Secretary Shalala, one part of the President's budget
    that I am interested in is a demonstration project run by the
    Education, Health and Human Services, and Justice Departments that
    would coordinate Federal after-school programs. I understand that this
    initiative is to designate three to five pilot cities and show how we
    can coordinate all the various government programs that serve children
    after school. How will the pilot cities be chosen? Obviously, I believe
    Milwaukee would be a great site for this project. Will you help guide
    them through the process and make sure they receive serious
    consideration?
        Answer. The initiative you are referring to was part of the Child
    Care Initiative announced by the President on January 7, 1998. The
    President announced at that time a collaborative effort involving
    numerous federal agencies to eliminate duplication and better
    coordinate existing federal funding for after-school programs in three
    to five pilot cities, including the District of Columbia. A working
    group within the Administration has been formed to put this
    collaborative effort in motion. It comprises of representatives from
    HHS, Department of Education, the Justice Department, as well as other
    interested federal agencies. This working group will be looking at
    previous collaborative efforts to gain some lessons learned as criteria
    is developed for considering other cities that may be included as part
    of this effort. The key goal of this initiative is healthy development
    and learning, and not custodial. I will communicate to the working
    group your interest to have Milwaukee be considered as one of the
    possible sites and your concern that this effort not be focused on
    custodial issues.
        Question. Last year, the Milwaukee Journal-Sentinel ran a series of
    articles focusing on the prevalence of elder abuse by health care
    workers, many of whom had prior criminal histories. Similar stories
    have appeared nationwide, and abuse is not isolated to nursing homes.
    To respond, I have introduced and continue to work on legislation that
    would create a national registry of abusive long-term health care
    workers, and require criminal background checks for prospective
    employees of long-term care facilities. This will make sure that
    abusers cannot travel from state to state and continue to prey on
    vulnerable patients. Would you support such a proposal and work with me
    to push for its passage? Will you help me move this along this year by
    also looking for a way to do this administratively?
        Answer. We would be happy to review your proposed legislation when
    it is completed. As you are aware, this Department is in the forefront
    of weeding out poor health care providers from the Medicare and
    Medicaid programs using the tools provided by Health Insurance
    Portability and Accountability Act of 1996 (HIPAA) and the Balanced
    Budget Act of 1997. We are currently working on developing the
    Healthcare Integrity and Protection Data Bank established in HIPAA
    which will eventually catalogue all health care providers with adverse
    actions against them. Regarding criminal background checks of health
    care workers, the HHS Office of Inspector General (OIG) performed two
    State audits with supplemental work in nursing homes and several other
    States to get a sense of the value of performing background checks for
    nurse aides. Based on the OIG's information which is not statistically
    valid for projecting nationwide, they believe that background checks
    may have merit and that their application to nursing home aides and
    perhaps others who have access to patients in long term care facilities
    should be seriously considered. A number of nursing home officials
    indicated that background checks were especially helpful in screening
    prospective employees. Further, they believed checks reduced instances
    of abuse by deterring applicants with criminal histories.
        As you are also aware, nurse aide registries were established by
    OBRA 87. The law required that States maintain a registry of all nurse
    aides who have satisfactorily completed a nurse aide training and
    competency evaluation program. It also required that the registry
    should include specific documented findings by a State of resident
    neglect, abuse, or misappropriation of resident property involving an
    individual listed in the registry. The registry, however, is for nurse
    aides only, and does not apply to all long term health care workers.
    OBRA 97 also did not mandate criminal background checks for prospective
    employees of long term care facilities. We would be happy to discuss
    this important matter with you and your staff.
        Question. The President's $20 billion child care proposal contains
    over $5 billion in spending that goes through this Subcommittee
    spending for programs like teacher scholarships, child care facility
    inspections, and after-school programs. Currently, that money is
    considered outside of our spending caps, and the President has
    suggested paying for it with part of the revenues from a new cigarette
    tax. Will the Administration still stand by its child care proposal if
    we are unable to reach agreement on a new tobacco tax?
        Will you suggest some offsets to help this Subcommittee find the
    money to fund your child care priorities?
        Answer. As the President has said, every initiative in his budget
    submission, including the child care proposals, will be paid for within
    the context of a balanced budget. The budget we send to Congress will
    have a number of proposals to pay for new initiatives like this one--
    including tax proposals and other spending offsets. The child care
    package is funded in a variety of ways--some on the mandatory side and
    others on the discretionary side of the budget. Of the President's 5
    year, $21.7 billion request, $7.5 billion is funded out of expected
    tobacco revenue and is requested for a mandatory increase in child care
    subsidies.
        The proposed $5.1 billion fiscal year 1999 program level for child
    care includes an appropriation request of $1.182 billion in
    discretionary funds, $2.167 billion in pre-appropriated mandatory funds
    for the child care entitlement, $1.755 billion in mandatory increases
    for subsidies and the Early Learning Fund. Of this $1.755 billion,
    $1.155 billion is for subsidies funded out of tobacco revenue.
        Our budget does assume that Congress will pass tobacco legislation,
    and we believe that they will. It is a top priority for the President,
    and it has bipartisan support. We are committed to working with
    Congress to pass this important legislation.
        As noted above, we support the Presidential priority of finding
    child care funds and will work with Congress to find other offsets if
    tobacco legislation is not passed.
        Question. Last October, Time Magazine published a disturbing
    article describing how few nursing homes that are cited for
    deficiencies are actually penalized. I understand that the
    Administration is requesting $167 million for Survey and Certification
    activities, which are responsible for inspecting facilities to make
    sure they comply with health and safety standards; and impose penalties
    on those who violate standards. However, I am concerned that $62
    million of this would be available only if legislation is passed to
    require user fees. Does the Administration have a contingency plan in
    the event that user fees are not accepted by Congress? Do you agree
    that we should make this increase a priority regardless of the passage
    of user fees?
        Answer. In order to effectively perform Medicare survey and
    certification activities in fiscal year 1999, the Administration
    requests a program level of $167 million. This includes a $104.7
    million appropriation request plus $62.3 million in proposed
    discretionary user fees. The full $167 million funding level is needed
    to provide the necessary resources for us to keep pace with the
    continuous growth in this program. More specifically, the request will
    support inspections of all facilities seeking to participate in
    Medicare for the first time as well as re-inspections of all currently
    participating nursing homes and home health agencies that are
    statutorily mandated. Also, the request supports inspections of a
    minimum of 10 percent of non-statutorily mandated facilities.
        Full funding of our proposed discretionary user fees is crucial to
    our ability to maintain priority program operations, including survey
    and certification activities. Insufficient funding to conduct on-site
    inspections of health care facilities could jeopardize the quality of
    care provided and place beneficiary health at risk. Without a user fee
    to supplement our appropriations request, HCFA's ability to survey new
    providers will be compromised, as will its ability to perform all of
    the statutorily-mandated surveys for those providers that are already
    participating in our programs. The Administration is eager to work with
    both this Committee and the authorizing committees to fully enact our
    user fee request.
        Question. After the Time article was published, Senator Reid and I
    wrote to you expressing our outrage at the disparity between citations
    and penalties. To date, we have not received a reply. What has the
    Administration done to address the problems raised by the Time article?
        Answer. HCFA is currently developing initiatives to respond to the
    Time Magazine article, including better ways to target current poor
    performers, prevent and penalize resident abuse, and develop more
    focused survey guidance on nutrition and hydration requirements. We
    believe these activities will greatly improve the nursing home survey,
    certification and enforcement process.
        For the record, I have included a copy of the letter I wrote in
    response to Senator Reid; an identical copy of this letter was sent to
    your office as well.
        [A copy of the letter follows:]

               Department of Health and Human Services,
                                       Office of the Secretary,
                                        Washington, DC, March 10, 1998.
    Hon. Harry Reid,
    U.S. Senate,
    Washington, DC.
        Dear Senator Reid: Thank you for your letter of concern about
    nursing home enforcement. Let me preface my response by saying that I
    appreciate your deep concern for the nation's elderly nursing home
    residents and your offer to collaboratively improve the processes used
    to ensure quality care. I apologize for the delay in responding.
        I, too, am disturbed by the allegations and information that
    appeared in the October 27, 1997, issue of Time magazine. The General
    Accounting Office is investigating these charges, and we will, of
    course, fully cooperate with this effort.
        Regarding your broader concerns about the nursing home enforcement
    process, the Health Care Financing Administration (HCFA) is preparing a
    report to Congress that will examine these very questions. The report,
    which will be sent to Congress in the Spring, will include an analysis
    of the effectiveness of the survey and enforcement systems, a
    comparison of the current survey and accreditation process, and a
    discussion of the regulatory and non-regulatory incentives for
    improving care. The information in the report will provide us with a
    solid foundation for determining whether changes may be needed to the
    present survey, enforcement, and accreditation process, including any
    necessary Congressional action.
        You ask why so few citations are acted upon and what procedures are
    in place to process citations and recommendations. Under the current
    process, when a survey occurs and a facility is found out of compliance
    with nursing home requirements, most nursing homes are afforded an
    opportunity to correct their deficiencies. If the nursing home is
    unable to make the corrections within three months of being found out
    of compliance, the law requires that a sanction be imposed. Most
    nursing homes are able to make corrections and achieve substantial
    compliance within that three-month period. However, if a nursing home's
    care represents an immediate threat to the health and safety of nursing
    home residents or otherwise is considered a poor performer, sanctions
    are put in place immediately. The procedures for sanctioning a nursing
    home only occur after the state makes a recommendation for HCFA to take
    an action. This usually occurs after the nursing home has been given an
    opportunity to correct the deficiencies but failed to achieve
    compliance. When this happens, HCFA sends out an official notice and
    sanctions become effective after the notice period (between 2 to 15
    days after the date the notice is received).
        In answer to your question about how decisions are made as to which
    facilities are sanctioned, the state survey agency (HCFA's agent) makes
    recommendations for sanctions based on its inspection of the nursing
    home and subsequent follow-up visits to the nursing home. The final
    decision is made by the state Medicaid agency for Medicaid-only nursing
    homes and HCFA for all others. HCFA and the state Medicaid agency
    impose sanctions at the third month after the date noncompliance was
    found, and terminate a facility at the sixth month after the date
    noncompliance was found if a nursing home fails to achieve compliance.
        In addition, HCFA is developing initiatives that are aimed at
    specific issues raised in the Time magazine article. These initiatives
    include ways to target current poor performers, prevent and penalize
    resident abuse, and develop more focused survey guidance on nutrition
    and hydration requirements. We believe these activities will greatly
    improve the nursing home survey, certification, and enforcement
    process.
        Thank you for your interest in this aspect of the Medicare and
    Medicaid programs. I look forward to continuing to work with you to
    improve quality of care and life for the nation's elderly. A similar
    letter is being sent to Senator Herb Kohl who co-signed your letter.
                Sincerely,
                                              Donna E. Shalala,
                                Secretary of Health and Human Services.
                              balanced budget act
        Question. Last year's Balanced Budget Act included significant
    changes to the Medicare program which will ensure Medicare's solvency
    for the short-term. Included in these changes was an increase in
    payments to HMO's and other private plans under the Medicare+Choice
    program. The new $367 payment floor and blended rates are an
    improvement, but Wisconsin counties still have the fourth lowest
    payment rates per Medicare beneficiary in the nation. This will
    seriously limit choices for seniors in Wisconsin, as few HMO's or other
    plans will participate in Medicare in a State where the payment rate is
    so low. Does the Administration have a proposal to address this
    problem?
        Answer. As your question mentions, the new Medicare+Choice program,
    established under the BBA, changed the payment formula for managed care
    plans under Medicare. This change was an attempt to raise the payment
    levels in low-cost, mostly rural areas, in order to induce managed care
    companies to offer plans in these areas. Specifically, a new payment
    floor was established at $367 per member per month nationwide for 1998.
    This will mean that the lowest county payment has increased from $221
    to $367 per month. This figure will be adjusted upward in future years,
    primarily according to the growth in per-capita Medicare spending.
        In addition, a new blended county rate was also established under
    BBA. This new rate, as opposed to the old rate which was based 100
    percent on local costs, will blend national rates and local rates over
    a six year period. By 2003, the blend will be fully implemented at 50
    percent local and 50 percent national rates. Each local area will
    receive the highest of the possible rates produced by the payment
    floor, the 50/50 blend, or the minimum update for high cost areas. We
    believe that these higher rates for low-cost areas should have a
    positive effect on plan establishment in these areas. We will continue
    to monitor the developments in this area to see whether any
    recommendations to the Congress are warranted in the future.
        Question. The Long-term Care Ombudsman program serves as an
    advocate for the elderly by pursuing cases of abuse and neglect. Often,
    it is the Ombudsman program that serves as the only voice for frail and
    elderly people. The Administration has requested flat funding for the
    Ombudsman program; yet, the programs already do not have enough staff
    or resources to respond to existing inquiries. Shouldn't the
    Administration place a greater emphasis on the Ombudsman program?
        Answer. The Administration's funding requests are made within the
    context of the need to balance the budget and of larger funding
    priorities. Most of the funding for Ombudsman services comes from Title
    III monies which the State and area agencies commit to Ombudsman
    programs, rather than from designated Ombudsman money in Title VII.
    With the recent increase in total Title III funding, State and area
    agencies may commit additional funding to Ombudsman services, depending
    on their individual priorities.
        The Administration on Aging (AoA) works in partnership with the
    States' Long-Term Care Ombudsman Programs to emphasize the significant
    role provided by Ombudsman staff and volunteers. Through the provision
    of on-going training, guidance and reviews of best practices, AoA
    consistently focuses on maintaining and improving the quality and
    effectiveness of the Ombudsman program, and recognizes its important
    on-going efforts for HHS's Operation Restore Trust. Finally, AoA has
    proposed a consolidation of the Title VII programs that serve
    vulnerable elders. A base amount of this consolidated funding would be
    earmarked for Ombudsman services, so that their continued significance
    would be ensured even under level-funding.
                                     ______

                 Questions Submitted by Senator Robert C. Byrd
                                  venipuncture
        Question. A provision of the Balanced Budget Act of 1997 (BBA)
    eliminated qualification for home health care services based on the
    need for venipuncture, or blood draw, services. This provision has
    raised great concern in West Virginia and around the nation. Homebound,
    frail elderly Medicare beneficiaries are frightened that they will no
    longer receive the home health services they need to remain in their
    homes and to remain healthy. While I support efforts to combat Medicare
    fraud and abuse, I am concerned that the venipuncture provision was not
    well thought out and that homebound, elderly Medicare beneficiaries'
    health will be jeopardized by this provision. In some rural areas of
    West Virginia we do not have ``traveling labs'' that will go back into
    the hollows and up winding dirt roads. What will happen to these
    beneficiaries?
        Answer. These beneficiaries first should contact their physicians
    to determine whether, in the physician's medical judgement, they
    qualify for home health based on the need for another skilled nursing
    service besides venipuncture. The physician is responsible for
    assessing whether a patient requires Medicare home health care, and for
    establishing a patient's plan of care. The Health Care Financing
    Administration (HCFA) has stated that most beneficiaries will not be
    affected by the venipuncture provision because they require another
    skilled nursing service or physical or speech therapy.
        However, if the physician determines that a beneficiary no longer
    qualifies for Medicare home health, there are several other ways the
    beneficiary can receive blood tests. Home health agencies can take a
    blood sample at a beneficiary's residence and bill Medicare for the
    service using the appropriate codes for specimen collection and travel.
    Furthermore, agencies may conduct some of the less complex blood tests
    themselves, receive the collection and travel fee, plus receive a fee
    for performing the tests. These are called the Clinical Laboratory
    Improvement Amendments (CLIA)-waived tests. The CLIA-waived tests
    include among others, glucose (tests blood sugar levels for diabetic
    patients), and cholesterol/triglyceride (checks lipid levels, used for
    patients with cardiovascular disease).
        In addition to home health agencies performing venipuncture, a
    variety of other providers can take a blood sample at a beneficiary's
    home. The physician prescribing the blood tests can conduct a home
    visit for evaluation and management, and take a blood sample during the
    visit. The physician also can arrange for a nurse practitioner,
    physician assistant, or clinical nurse specialist to conduct a home
    visit and draw blood when they examine the beneficiary.
        Question. Can you tell me how many beneficiaries will be affected
    by the venipuncture provision of the BBA?
        Answer. HCFA does not have estimates on the number of beneficiaries
    affected by the venipuncture provision. Home health agencies report
    only to HCFA that a beneficiary qualifies for home health because s/he
    needs a skilled nursing service. Agencies do not specifically report
    which of the approximately 14 qualifying skilled nursing services the
    beneficiary needs.
        However, HCFA believes that most beneficiaries will continue to
    qualify for home health because they need another skilled nursing
    service, such as observation and assessment, monitoring effects and
    compliance with complex medications changes, wound care, or others. For
    example, severe diabetics generally qualify because they need another
    skilled nursing service besides blood draws. Stroke victims also may
    qualify for home health because they require physical therapy or speech
    language pathology services.
        Question. What assurances can you provide that the alternatives to
    care that HCFA has in place are sufficient to assist rural
    beneficiaries?
        Answer. While we believe that most beneficiaries will have no
    problem having blood samples taken, there may be some areas of the
    country where blood specimens are more difficult to collect. HCFA is
    continuing to study this issue.
        Question. What would be the cost of re-implementing the
    venipuncture benefit or of a grandfathering provision for those who
    received the benefit prior to February 1998?
        Answer. Although no one has estimated the cost of a grandfathering
    provision, the Congressional Budget Office has scored reinstating
    venipuncture as a qualifying skilled service to receive home health.
    Their cost estimates for repealing the venipuncture provision are $1
    billion for fiscal year 1999 to 2003 and $2.5 billion for fiscal year
    1999 to 2008.
                                    alcohol
        Question. Madame Secretary, would you please comment on the
    Department of Health and Human Services role in educating the nation
    about youth alcohol use and alcohol abuse?
        Answer. I agree with you that young people, specifically those
    underage, need a clear message that consuming alcohol has serious
    consequences and can result in destructive behavior. As I have traveled
    throughout the country and met with young people, I have been very
    clear the dangers of engaging in a variety of risky behaviors the use
    of drugs, including alcohol; smoking; and sexual activity. In the case
    of our message about the dangers of alcohol, we are still not getting
    through to thousands of older teens. We need to focus much more on
    early detection, timely intervention and comprehensive prevention.
        In a recent major speech I gave to the Annual Meeting of the
    National Collegiate Athletic Association, I called for greater action
    on the part of the universities about the major public health problem
    of alcohol abuse. I asked the schools to begin the process of severing
    the tie between college sports and drinking--completely, absolutely,
    and forever. I asked that schools consider: no alcohol advertising on
    the premises of an athletic event; no bringing alcohol to the site of
    the event; no turning a blind eye to underage drinking at tailgate
    parties and on campus; and no alcohol sponsorship of sporting events.
    Research suggests that advertising may influence adolescents to be more
    favorably disposed to drinking. These voluntary guidelines would remove
    that advertising at intercollegiate sporting events.
        In addition, the Center for Substance Abuse Prevention and the
    National Institute on Alcohol Abuse and Alcoholism (NIAAA) are
    collaborating on a joint Request for Application (RFA) titles ``Effects
    of Alcohol Advertising on Underage Drinking'' in fiscal year 1998. The
    RFA will support five-year grants which conduct complex longitudinal
    research to determine whether alcohol advertising affects both
    initiation and continued consumption among youth. Grants are expected
    to explore short an long term relationships among exposure to alcohol
    advertising, alcohol expectancies and other mediating variables, and
    actual consumption among youth.
        Another element of our education efforts is making available high
    quality materials that are used and accepted by young people, as well
    as adults. The NIAAA distributes brochures, helpful guides, video
    cassettes, and other types of information and materials on substance
    abuse through its National Clearing House for Alcohol and Drug
    Information. An especially popular publication has been Alcohol Alerts,
    covering such topics as ``Alcohol and Tobacco,'' ``Alcohol, Violence
    and Aggression,'' and ``Youth Drinking: Risk Factors and
    Consequences.'' NIAAA also works with the Department of Education's
    Safe and Drug Free School Program--preventing and reducing alcohol use
    among college students and modifying college environments that are
    conducive to alcohol abuse.
           appalachian laboratory for occupational safety and health
        Question. What is the number of Full-Time Equivalents (FTE) for the
    Division of Safety Research and the Division of Respiratory Disease
    Studies at this facility in fiscal year 1998 and the number projected
    for fiscal year 1999?
        Answer. The fiscal year 1998 FTE projection for the Division of
    Safety Research (DSR) is 107 and is projected to be the same in fiscal
    year 1999. For the Division of Respiratory Disease Studies (DRDS), the
    1998 plan is 135 with the same number projected for 1999.
        Question. Please provide the funding level for the above-mentioned
    Divisions in fiscal year 1998, and the projected level for fiscal year
    1999.
        Answer. The current fiscal year 1998 allocation for DSR is $11.891
    million and for DRDS $12.100 million. There are no changes for fiscal
    year 1999.
                 new occupational safety and health laboratory
        Question. How many FTE's are at this facility in fiscal year 1998,
    and what is the projected number of FTE's for fiscal year 1999?
        Answer. By September 30, 1998, 280 full time staff are projected to
    be on board at the new laboratory. The full compliment of 303 full time
    staff will be hired by December 31, 1998.
        Question. Please furnish the funding level required for staffing
    and research for fiscal year 1999 at this facility.
        Answer. Our current estimated level of funding for this facility in
    fiscal year 1998 is $33.725 million. We estimate that this same amount
    would be required for staff and research in fiscal year 1999.
        The fiscal year 1998 budget includes the funding for 23 FTE's.
    Strategic planning and targeted recruitment efforts to hire the top
    scientists and technicians in the field, where all recruitment efforts
    are necessary to compete with private industry, have somewhat delayed
    hiring processes. Since the FTE's are not yet on board, the fiscal year
    1998 funding has been used for the one-time purchase of start-up
    equipment and other related costs for laboratories. Once on board,
    FTE's will be supported through the fiscal year 1999 funding as
    planned. No budget increases are being requested for fiscal year 1999.
                                     ______

                      Health Care Financing Administration
                         Additional Committee Questions
                          cost of gao recommendations
        Question. Ms. DeParle, GAO and the Practice Expense Coalition have
    made a number of recommendations for your agency to further refine
    practice expense data during phase-in of the new fee schedule revision.
    Do you intend to implement these recommendations, and what will this
    cost?
        Answer. We are studying the recommendations but have not made a
    final decision about the process we will use to refine practice expense
    relative values. Consequently, it would be premature to estimate any
    associated costs.
        Question. Can these costs be financed within your agency's fiscal
    year 1999 budget request?
        Answer. We are confident that the agency's fiscal year 1999 budget
    request includes the necessary resources for this process.
                               meeting deadlines
        Question. I understand that the GAO and the physician community
    have raised a number of concerns about HCFA's work to date. In response
    you note that you are considering the suggestions of GAO and you have
    held numerous meetings with physician organizations, although no
    consensus among physicians has been reached. With all of these
    unresolved issues, how can your agency publish a proposed rule on May
    1st that responds to the mandates of the Balanced Budget Act of 1997,
    the recommendations of the GAO, and the concern of the physician
    community?
        Answer. We believe that we will be able to publish a proposed rule
    on May 1, and fully intend to do so. This is not to minimize the task
    ahead of us. Developing a resource-based practice expense methodology
    is a complex undertaking, and with $20 billion of Medicare spending at
    stake, it is a responsibility we take very seriously. As the question
    notes, we will need to balance the mandate of the Balanced Budget Act
    (BBA) of 1997, the recommendations of the General Accounting Office
    (GAO) and the concerns of the medical community, along with our own
    obligation to ensure that our proposal is methodologically sound.
        We were pleased to receive the recommendations from the GAO and
    were gratified by their general support of HCFA's work on practice
    expense to date and by their affirmation that generally accepted
    accounting principles were utilized. Most of the recommendations are
    medium to long range, and do not apply to our May proposed rule. The
    more immediate recommendations are still under consideration and are
    directly addressed, to some degree, by each of our optional
    methodologies. We also believe that whichever methodology we choose to
    propose in May will, to the maximum extent practicable, respond to the
    mandate of the BBA.
        As your question also notes, no consensus has been reached among
    physicians as to the preferred methodology for determining practice
    expense relative values. Given that any change in the current system
    will result in some degree of redistribution, and given that we are
    operating under the constraints of budget neutrality, it is not
    surprising that one specialty's gain would be viewed as another
    specialty's loss. However, from the beginning of the practice expense
    initiative, we have sought maximum input from the medical community and
    have attempted to find ways to address their concerns. We are now
    considering optional methodologies to respond to comments and concerns
    that have been raised.
        Question. If HCFA can't accomplish all that needs to be done by
    May, will you be able to complete your work by January 1, 1999?
        Answer. The rule we will publish in May is a proposed rule, with a
    90-day comment period. The final rule is due to be published by October
    31. We expect a large volume of comments on our proposal and will, as
    appropriate, make the needed changes. This will entail a great deal of
    analytical work on the part of our staff, but we fully anticipate that
    the final rule will be published in time for implementation of the new
    practice expense values to take place on January 1, 1999.
        Question. Dr. Day's prepared testimony suggest that the process for
    collecting physician practice expense information could be facilitated
    by convening a public/private partnership between HCFA and physician
    organizations. What do you think?
        Answer. We certainly do want to work cooperatively with physician
    organizations, now and in the future, in order to develop and then
    improve our practice expense methodology. We agree with the GAO report
    regarding the recommendation of several medical specialty groups that
    HCFA base practice expense values on data obtained from physician
    surveys or on-site data collection. The GAO believes that using such
    approaches as the primary means for developing direct expense estimates
    would needlessly increase costs and further delay implementation of the
    fee schedule revisions. We will, however, explore what additional data
    we will need for future refinements.
                               refinement process
        Question. You state that you are currently developing plans for
    refining the new system, once it's in place. Have you made any final
    decisions about this process? Are the resources necessary for this
    refinement contained in HCFA's fiscal year 1999 budget?
        Answer. We have not yet made any final decisions about the process
    we will use to refine practice expense relative values. To a large
    degree, the specifics of the process will depend on the option we
    finally choose to develop the initial relative value units. In
    addition, this is a topic on which we want to receive more input from
    the medical community, and we are planning to include in our proposed
    rule a specific solicitation of ideas, comments or advice on the
    refinement process. We believe that our fiscal year 1999 budget request
    includes sufficient resources for the refinement process.
                                 access to care
        Question. You note that you will continue to monitor indicators of
    beneficiary access to care. I am very concerned that if physicians
    experience the same level of reductions as were proposed by HCFA last
    year, Medicare beneficiaries will experience access problems. How does
    HCFA intend to monitor this potential problem?
        Answer. HCFA has a broad and varied approach to monitoring access
    to care. Much of our effort has focused on assessing the impact of
    specific program changes, such as implementation of the Medicare fee
    schedule (MFS), on access to health care services in the fee-for-
    service (FFS) sector. To date, our monitoring efforts have shown that
    implementation of the MFS has not negatively impacted on access. It is
    conceivable, however, that future program changes could negatively
    affect access. For this reason, we will continue to monitor the impact
    of program changes. As part of this ongoing effort, we will continue to
    monitor and report on the rate of referral sensitive surgeries, and the
    rate of hospitalizations for ambulatory care sensitive conditions, such
    as asthma and pneumonia. We will also use survey-based data, such as
    the Medicare Current Beneficiary Survey, to examine beneficiary self-
    reports of access problems. In addition, a major set of activities
    involves the development of new indicators for both Medicare and
    Medicaid. Examples include the development of clinically-based
    indicators of appropriate care for beneficiaries with chronic
    conditions, such as diabetes. Our analyses will focus on and highlight
    population subgroups for which there appear to be potential access
    problems.
        Question. Given that many private insurers, as well as other
    government programs are also using the Medicare fee schedule are you
    monitoring access to care for all our citizens?
        Answer. HCFA's current efforts to monitor access are not limited to
    the Medicare population. To illustrate, we are monitoring access for
    the Medicaid population. In particular, HCFA has 6 ongoing contracts to
    evaluate the section 1115 demonstrations. These evaluations examine the
    impacts of moving about 6 million Medicaid beneficiaries into managed
    care and expanding Medicaid eligibility in 12 States, and the District
    of Columbia. In each evaluation, a significant component is concerned
    with Medicaid beneficiaries' access to care. For the Medicaid
    population, we will examine such issues as the availability and use of
    primary care and specialty providers, travel and waiting time, and
    language barriers.
        Similarly, as part of the Children's Health Insurance Program,
    States are required to describe in their State Plan the methods that
    will be used, including monitoring, to ensure access to covered
    services. Following review and approval of the State Plan, States will
    be required to report to HCFA on an ongoing basis on their monitoring
    efforts and performance in the area of assuring access to covered
    services.
        Finally, attempting to monitor access throughout the entire health
    care industry demands comprehensive data sources. These issues are best
    addressed through national surveys of the entire population, such as
    those conducted by the Agency for Health Care Policy and Research
    (AHCPR). HCFA staff are actively working with private interests and
    other government agencies to establish additional standardized
    reporting efforts, such as Health Plan Employer Data Information Sets
    (HEDIS) and the Consumer Assessment of Health Plan Survey (CAHPS),
    which will give us new tools and different perspectives on access to
    care issues.
                                equipment costs
        Question. Many physician groups, according to GAO, state that
    HCFA's estimates greatly overstate the utilization of most equipment,
    which results in underestimating equipment expenses. Does HCFA plan to
    test the effects of different utilization rates on various specialties?
        Answer. HCFA does plan to perform sensitivity analyses to test the
    effects of varying equipment utilization rates on the different
    specialties. It should be noted that in our notice of pre-rulemaking,
    published in the Federal Register on October 31, 1997, we requested
    data on actual utilization rates. Unfortunately, we received only a few
    comments on equipment utilization with information on only a few
    specific pieces of equipment. We will welcome any additional data that
    the medical community wishes to share with us.
                             work done in hospitals
        Question. In last June's proposed regulations, your agency
    eliminated nearly all expenses associated with physician's staff,
    primary nurses, for work they do in hospitals. The rationale was that
    it is Medicare's policy to pay hospitals, rather than physicians, for
    these expenses.
        What evidence is there that this policy results in a major
    absorption of costs for surgical specialists?
        Answer. In comments and in our panels, many surgical specialty
    groups have complained about the elimination of most of the claimed
    expenses connected with work done by physicians' clinical staff in the
    hospital. In the same panels, many other physicians disputed the
    surgeons' claims that staff was typically brought into the hospital.
    The American Hospital Association conducted a survey of its members
    which indicated that, in the vast majority of hospitals, surgeons did
    not use their own staff with hospital patients. In addition, in the
    October 1997 notice of pre-rulemaking, we specifically requested
    information on this, asking commenters to send us the name of any
    hospital where this practice occurred. We did not receive the name of
    any hospital. However, we still continue to hear from surgical
    specialty societies that use of physicians' staff in the hospital is
    increasing. This may well be true, but we are not currently in receipt
    of hard evidence that indicates that our policy would result at this
    time in a major absorption of costs for surgical specialists. We will
    continue to collect as much data as we can on this for future
    refinement.
        Question. Ms. DeParle, will this matter be corrected in the May
    1998 regulations, or left for adjustments during the refinement
    process?
        Answer. We have not yet made a final decision on our treatment of
    physicians staff used in the hospital. In part, it will depend on which
    alternative methodology we choose. Each of our suggested options treats
    clinical staff costs in a different manner.
                                medicare+choice
        Question. Madame Secretary, you are requesting the full
    authorization level of $150 million for fiscal 1999 to administer the
    ``Medicare+Choice'' program enacted last year; this program greatly
    expands the options available to beneficiaries among fee-for-service
    and managed care plans. Why do you need an increase of this magnitude
    over the $95 million provided by Congress for the current fiscal year?
        Answer. The 1998 user fee money is being used mostly for start-up
    costs and building infrastructure, whereas the 1999 user fee money will
    be used to actually operationalize the new Medicare+Choice program.
        It is essential that HCFA receive the full $150 million
    authorization in fiscal year 1999. We expect most new plans will not be
    approved until after the fiscal year begins, which in turn will lead to
    an explosion of beneficiary inquires regarding their new plan choices.
        The $150 million in user fees we request for fiscal year 1999 will
    be used to distribute revised information on Medicare+Choice plans that
    are approved after the initial comparative handbook has been published.
    This updated information will be distributed via mail, libraries, and
    the Internet. In addition, the money will be used to staff the expected
    increase in calls to the new toll-free hotline, conduct health fairs
    and other dissemination activities across the country, and to continue
    our marketing research on how best to get information to our diverse
    beneficiary population.
        Question. Health plans invest considerable resources in becoming
    Medicare HMO's. It is not unusual for a plan to spend $100,000 to
    $150,000 just to prepare and submit an application to become a Medicare
    risk HMO. Today, 322 health plans participate in the Medicare HMO
    market. Assessing $37 million in new user fees for initial applications
    and contract renewals represents an additional assessment of almost
    $115,000 on each of these plans. Wouldn't this user fee represent a
    significant barrier to entry for new organizations such as PSO's?
        Answer. We estimate the cost per plan is much less than you state--
    for the processing of initial applications about $55,000 and
    approximately $41,000 per plan to renew and monitor existing plans. We
    do not feel that this will represent a significant barrier to entry for
    PSO's or any of the new Medicare+Choice plans. The proposed fee is to
    cover the costs of the Federal government associated with
    Medicare+Choice plans acquiring a Medicare contract; there is currently
    no charge for this benefit. These plans will directly benefit from the
    Medicare program and it is reasonable to expect them to pay the costs
    of doing business in the program.
        Question. Wouldn't this user fee strain the resources of health
    plans that have already reduced some of their additional benefits for
    seniors in response to the new payment methodology under the Balanced
    Budget Act of 1997?
        Answer. We believe that this user fee will not place too much of a
    burden on health plans. As beneficiaries options increase, competition
    amongst Medicare+Choice plans will continue to increase. The type of
    benefit package that plans offer will be used as a marketing tool.
    Plans will have a strong incentive to provide better benefit packages
    and a higher level of service to attract and retain Medicare
    beneficiaries.
        Due to the enactment of the BBA, we believe that the number of
    Medicare beneficiaries enrolled in Medicare+Choice plans will increase
    at a pace faster than would have occurred under the old 1876
    provisions. This will create a much larger market for these types of
    health plans. We feel that the overall impact on plan revenue will not
    have an adverse effect on the quality of services or benefit packages
    that plans provide.
        Question. Please describe the status of HCFA's beneficiary
    education and information campaign. Under the Balanced Budget Act of
    1997, a number of new health care delivery options become available to
    seniors in January 1999. Is HCFA's education campaign on schedule for
    informing beneficiaries regarding these options in a timely manner?
        Answer. Yes, HCFA is on schedule with the various initiatives
    included under the Medicare+Choice beneficiary education and
    information campaign. HCFA's new consumer information Internet site,
    ``www.medicare.gov,'' went live in March 1998. This web site includes
    ``Medicare Compare,'' the interactive database with the HMO comparison
    chart on benefits, premiums, and cost-sharing.
        We plan to have the majority of our implementation activities for
    the toll-free call center completed during fiscal year 1998, so the
    center can be fully operational in fiscal year 1999. This activity is
    very extensive and will require a lot of effort from HCFA and the
    private sector contractor which will operate the center. The call
    center will receive a lot of calls and it is crucial that
    representatives have adequate training to handle the different types of
    questions that Medicare beneficiaries will have.
        Publishing and mailing the Medicare+Choice comparative information
    is on schedule for a fall mailing. Compiling this type of information
    for the first time and having the information for specific areas is an
    important and complicated task. HCFA and a contractor will continue to
    explore effective and efficient dissemination strategies.
        HCFA has developed a plan for a national publicity and educational
    campaign to inform beneficiaries of their health plan options that will
    combine and coordinate the efforts of HCFA, including its regional
    offices, its partners and contractors, and community-based
    organizations throughout the country. The primary attributes of HCFA's
    campaign are: that it be interactive, i.e., that it will afford
    beneficiaries the opportunity to ask questions and/or obtain
    counseling; that it be conducted at local outlets that beneficiaries
    can access; and that it take place at the optimal time period of
    beneficiary information needs.
        This plan will incorporate and build upon existing locally-based
    interactive activities currently sponsored by these organizations
    either individually or in cooperation with others. Further, HCFA
    intends to work with large employers to assist it in sharing
    information about Medicare+Choice with their retirees. These activities
    may include participation in ``auditorium-type'' benefits fairs,
    presentations to beneficiaries and other interested parties at
    beneficiary gathering places, interactive television shows, radio call-
    in shows, strategically placed interactive information kiosks, Internet
    chat and news groups, and newspaper question and answer columns. These
    community based activities will begin with awareness building and will
    take place in late summer and continue through the fall.
        Question. HCFA has indicated that it intends to make the initial
    application process for existing Medicare health plans to convert to
    Medicare+Choice plans fairly simple and ``streamlined.'' At the same
    time, HCFA has requested $37 million in user fees from Medicare+Choice
    organizations for reviewing initial applications and contract renewals.
    Currently, HCFA does not charge an application or contract renewal fee.
    Please describe the initial application and renewal process for health
    plans wishing to become a Medicare+Choice organization and why that
    should necessitate $37 million in user fees.
        Answer. The purpose of this fee is to recover the costs incurred by
    HCFA to allow a managed care plan to obtain a Medicare contract and
    thus become a Medicare+Choice organization. Because these plans will
    benefit from this program, it is reasonable to expect them to pay the
    costs of doing business in the program.
        The costs associated with processing managed care plan
    applications, the annual renewal of contracts, and the monitoring of
    managed care plans, currently come out of HCFA's administrative budget.
    HCFA staff visit the organization to conduct a legal review of the
    entity and its administration. This includes monitoring for fiscal
    soundness and all other requirements that the plan must meet to
    participate in Medicare. We also conduct an in-depth review of the
    plan's health services delivery network, marketing materials, benefit
    packages, and enrollment and disenrollment procedures.
        The rate of growth in the number of managed care plans has averaged
    almost 23 percent in recent years, and the number of plans we contract
    with will increase significantly with the implementation of the
    Medicare+Choice program. Obtaining the resources necessary to deal with
    this increasing workload from a user fee to be paid by those
    organizations that benefit directly from HCFA's activities, seems both
    prudent and reasonable. The proposed fee is to cover the costs
    associated with Medicare+Choice plans acquiring a Medicare contract for
    which there is currently no charge.
        Question. Although HCFA currently conducts numerous beneficiary
    education and information dissemination activities, it has not
    elaborated on its plans to use its existing infrastructure in meeting
    the Balanced Budget Act requirements for a beneficiary education and
    information campaign. Will HCFA use some [of] its existing toll-free
    lines to offset the costs of its beneficiary education and information
    campaign?
        Answer. HCFA is exploring the most customer-centered, cost-
    effective solution to this effort. As part of the legislation, the
    Secretary must make available a toll-free number for inquiries on
    Medicare+Choice options. In this light, HCFA is developing a plan to
    deploy a single 1-800 number service to meet the Medicare+Choice
    information needs of Medicare beneficiaries. The Medicare+Choice toll-
    free line will be used as part of, and as a supplement to, the
    beneficiary education and information campaign, and will address many
    questions related to Medicare+Choice. Current toll-free lines are
    designated to address issues related to claims processing and payment,
    quality of care, and beneficiary protections and insurance counseling
    and assistance. Information about Medicare+Choice will also be made
    available through these 1-800 services.
        HCFA is also building an alliance network to enlist the aid of
    national, State, and local organizations in the public and private
    sectors. These organizations will be asked to serve as intermediaries--
    channels of transmission for program activities, messages, and
    materials in an awareness campaign and a large-scale national education
    effort. One objective of the alliance network is to leverage the
    existing expertise in the existing community based networks to lay the
    foundation of sustained support for a broad base of public, private,
    and volunteer community-level support. In addition to working with the
    States, advocacy groups, such as AARP, and some provider organizations,
    we are actively seeking employers to help share information about
    Medicare+Choice with their retirees--groups that share a common
    interest in informing and educating Medicare beneficiaries.
        HCFA has embarked on a team approach, using our existing
    information intermediaries to ensure that beneficiaries will have
    access to a readily-available network that is capable of providing
    Medicare+Choice information through existing phone networks, printed
    material, educational fairs, and other outreach activities. This
    network includes: Medicare carriers, Health Insurance Counseling and
    Assistance program (HICAP) staff, peer review organizations, and other
    agents and partners. All of these sources of information dissemination
    will leverage community resources to foster the Medicare+Choice
    campaign.
        Question. Has HCFA explored the capacity of some of its sister
    agencies that work with Medicare beneficiaries, such as Social Security
    Administration, in conducting education activities?
        Answer. HCFA is building an alliance network to enlist the aid of
    national, State, and local organizations in the public and private
    sectors. These organizations will be asked to serve as intermediaries--
    channels of transmission for program activities, messages and
    materials--in an awareness campaign and a large-scale national
    education effort. As part of this alliance network, HCFA will work with
    its sister agencies such as the Social Security Administration, the
    Administration on Aging, the Office of Personnel Management the Agency
    on Health Care Policy and Research, as well as other parts of the
    Public Health Service.
        Question. Does HCFA plan to work with State area Aging
    Organizations and other senior organizations as part of its beneficiary
    education and information campaign? The Balanced Budget Act of 1997
    introduced a number of new health care delivery system options for
    seniors. How will HCFA educate State and senior organizations regarding
    these new options?
        Answer. HCFA is building an alliance network to enlist the aid of
    national, State, and local organizations in the public and private
    sectors. These organizations will be asked to serve as intermediaries--
    channels of transmission for program activities, messages and
    materials--in an awareness campaign and a large-scale national
    education effort. One objective of the alliance network is to leverage
    the existing expertise in the community, as well as the existing
    community-based networks to lay the foundation of sustained support for
    a broad base of public, private and volunteer community-level support.
        As part of this network, HCFA will work with these organizations
    and many others as part of its campaign. In addition to working with
    the States, advocacy groups (such as AARP) and some provider
    organizations, we are actively seeking employers to help share
    information about Medicare+Choice with their retirees--groups that
    share a common interest in informing and educating Medicare
    beneficiaries.
        Extensive training of these organizations will be necessary to put
    these groups in a position to address beneficiary concerns. We plan to
    structure our overall campaign so it can be accessed by a variety of
    people, from a variety of sources, in a manner that will ensure
    reliable and accurate information is provided to beneficiaries.
        Question. Several health plans that operate toll-free lines to
    field pre- and post-enrollment questions reported a $5.50 or less per
    call estimate including phone calls, training, staffing and other
    overhead. How does this estimate compare with HCFA's per call estimate
    for its proposed toll-free call centers?
        Answer. There are many factors involved that will impact the cost
    per call of the Medicare+Choice Toll-Free Line, including: The length
    of time on the call; the degree of complexity of the incoming
    questions; and the cost premium associated with employing a highly
    skilled temporary workforce.
        The Medicare+Choice Toll-Free Line is being designed to provide
    specific information on approximately 500 different managed care plans,
    as well as information on Medicare+Choice in general, to a population
    base of approximately 39 million beneficiaries; therefore, the cost per
    call could exceed many individual health plan call center cost
    estimates. We are working closely with call center industry staff and
    our contractor, Arthur Andersen, to establish accurate costs associated
    with this initiative. We are currently conducting a procurement for the
    work, and will distribute the information to you once the procurement
    is completed.
        Question. You are requesting level funding of $10 million for
    fiscal year 1999 for the Health Insurance Counseling and Assistance
    Program, which is planned to be a part of the Medicare+Choice
    beneficiary information plan and which provides individualized
    counseling to Medicare beneficiaries mostly through a network of
    trained volunteers. In light of the high probability that the ICA
    program counselors will face substantial additional demands for
    individual counseling, do you believe this funding will be adequate in
    fiscal 1999?
        Answer. HCFA currently provides $10 million as the basic level of
    effort for beneficiary health insurance counseling and assistance
    services. This volunteer-based program provides a cost-effective and
    essential tool in the educating and counseling of beneficiaries in
    vital areas such as health plan choices, fraud and abuse prevention,
    basic Medicare coverage, and Medigap insurance.
        Due to enactment of the Medicare+Choice provisions of the Balanced
    Budget Act, HCFA will require additional resources to inform and
    educate beneficiaries about their available Medicare+Choice options. To
    meet this need in fiscal year 1998 and fiscal year 1999, HCFA will
    allocate an additional $5 million towards this effort. We expect that
    this need will continue and that the counseling role of our State
    partners will significantly increase. As awareness and interest in
    Medicare+Choice options increase, we anticipate that greater numbers of
    beneficiaries will depend on our State partners to assist them in
    making appropriate health plan choices.
                                   user fees
        Question. Congress has already enacted legislation authorizing up
    to $150 million in user fees for implementing the ``Medicare+Choice''
    program in fiscal 1999, and you are requesting the full amount. You are
    also requesting $265 million in new user fees to help finance an
    expansion of Program Management activities. Further, you are requesting
    legislation to collect an additional $395 million in user fees to
    augment audit activities. That's $810 million in user fees to be
    imposed in fiscal year 1999, more than 8 times the current level. What
    reaction are you getting from health care providers which would bear
    the brunt of these extra costs?
        Answer. We believe that charging these fees is reasonable and will
    not impose a burden on providers in light of the benefits they receive
    for affiliation/participation in the program. These fees will allow us
    to oversee the Medicare program, including the significant recent
    legislative changes, while minimizing the need for discretionary budget
    authority. The additional resources provided via these fees will also
    allow HCFA to greatly increase its fraud and abuse activities.
        Question. Your budget request for Program Management of the Health
    Care Financing Administration assumes enactment of user fee legislation
    totaling $264.5 million. Without these proposed user fees your
    ``current law'' appropriation request is actually a cut of $65,066,000
    below a freeze level. What would be the impact of a $65,066,000 cut?
        Answer. A $65.1 million cut in HCFA's baseline funding is
    unrealistic. Not only would many aspects of the HIPAA and the BBA not
    be implemented, but the agency's existing workloads--including
    mandatory requirements such as annual surveys of nursing homes--would
    be seriously impacted. These fees are meant to fund some of the
    agency's existing workloads, thus freeing up resources to be used to
    support implementation of the HIPAA and the BBA.
        Question. If the authorizing Committee does not enact your user fee
    legislation, what alternative would you propose?
        Answer. If the authorizing committee does not enact our user fee
    legislation, HCFA will be unable to accomplish critical workloads.
    During my appearance before the House Appropriations Subcommittee on
    March 4, Chairman Porter suggested that he would consider inclusion of
    user fee language in the appropriations bill in the absence of another
    bill to which these proposals could be added.
        Given the constrained discretionary budget environment we believed
    that funding the agency's required program level from user fees,
    charged to those individuals and organizations that benefit directly
    from HCFA's activities, is both reasonable and prudent.
                            cost of new legislation
        Question. According to your budget justification materials, you are
    requesting $30.5 million to cover costs of implementing new
    requirements under the Balanced Budget Act of 1997, and $15.5 million
    to implement recently enacted provisions of the Health Insurance
    Portability and Accountability Act. Why didn't you request user fees to
    cover this $46 million costs, instead of $264.5 million?
        Answer. It was not our intent that the proposed user fees cover
    only the incremental need for implementation of the HIPAA and the BBA.
    Given the current constraints on discretionary budget authority, our
    goal was to have those individuals and organizations that benefit
    directly from the Medicare program pay the costs associated with the
    activities HCFA undertakes on their behalf. This, along with the
    requested appropriation level, will enable the agency to fund not only
    existing workloads, but new workloads associated with the HIPAA and the
    BBA, while minimizing the level of appropriated discretionary budget
    authority.
                                  path audits
        Question. Last fall, I held a special hearing on the conduct of the
    Inspector General's PATH audit program (Physicians at Teaching
    Hospitals). In addition to representatives of the Office of Inspector
    General and the Health Care Financing Administration, I heard testimony
    from the Association of American Medical Colleges. How does HCFA intend
    to address the complaints from the teaching hospitals that they are
    being treated unfairly by overzealous auditors?
        Answer. I have been assured by OIG that its auditors are aware of
    the importance of treating teaching hospitals fairly and physicians
    respectfully. The OIG has said that the PATH audits are both
    appropriate and fair. The OIG provides teaching hospitals with ample
    opportunity to respond to auditors' findings and to furnish additional
    documentation and information on any aspect of a PATH audit at any time
    during the process. Nonetheless, if a hospital believes that it is not
    being treated fairly, it should make its concerns known.
        Question. Do you believe there is a serious enough problem with
    hospital double-billing and overcharging Medicare to warrant
    nationwide, comprehensive audits?
        Answer. Because the OIG has limited the PATH audits to locations
    where carriers, before December 30, 1992, issued clear explanations of
    the rules regarding reimbursement for the services of teaching
    physicians, the audits are limited in both scope and time. The OIG
    believes, however, that there is a serious enough problem to warrant
    targeted, comprehensive audits, and has the authority to pursue those
    audits under the Inspector General Act.
        Question. What is your assessment of the allegations that the
    Inspector General's office is applying vague regulations retroactively?
        Answer. The policy of the HHS Inspector General is to conduct PATH
    audits only where the Medicare contractor has provided long-standing
    (pre-Dec. 1992) unambiguous guidance to providers requiring the
    physical presence of the teaching physician.
        Question. How much has been recovered to date from the PATH
    initiative?
        Answer. To date, the government has recovered $67.6 million from
    the PATH initiative.
                                  gag clauses
        Question. In November of 1996, as the result of a hearing I held on
    quality of care issues under Medicare, the Health Care Financing
    Administration issued a directive specifically banning ``Gag'' clauses
    in all of its managed care contracts. Early in 1997, this ban was
    extended to Medicaid. However there is still no ban on efforts to
    restrict physician communication with patients about treatment options
    in the private health care sector. Do you support legislation to
    prohibit gag clauses in all health plans?
        Answer. Yes, we do support legislation that would prohibit gag
    clauses in all health plans. The President's proposed ``Consumer Bill
    of Rights'' prohibits gag clauses in the administration and management
    of all Federal health programs. The Administration is strongly
    committed to ensuring that all Americans enjoy the protections outlined
    in the Bill of Rights. We would like to see legislation that transforms
    the Bill of Rights into real protections for all Americans.
        Question. In a report issued by GAO in August 1997, about two-
    thirds of health plans were found to have had nondisparagement,
    nonsoliciation, or confidentiality clauses that providers might
    interpret as limiting communications about treatment options. How
    serious a threat are such contract provisions to restricting doctor-
    patient communications?
        Answer. HCFA's Operations Policy Letter (OPL) 96.044 addresses this
    issue. This OPL basically states that Medicare beneficiaries enrolled
    in Medicare contracting risk plans are entitled to the same benefits
    that they would be entitled to under the fee-for-service program. Among
    the benefits to which the fee for service beneficiaries are entitled is
    the advice and counsel from their physician on medically necessary
    treatment options that may be appropriate for their condition or
    disease. Beneficiaries enrolled in managed care plans are entitled to
    the same advice and counsel.
        The OPL continues to state that a physician providing care to a
    Medicare beneficiary who is enrolled in a Medicare contracting managed
    care plan may not be limited in counseling or advising the beneficiary
    on medically necessary treatment options that may be appropriate for
    the individual's condition or disease. The OPL then states that any
    contractual provisions that limit a physician's ability to do so are a
    violation of the law.
        Whether the clauses that GAO discovered truly limit the
    communications about treatment options would depend upon the wording of
    the clauses and the interpretation placed on them. HCFA's routine
    oversight procedures investigate the content of provider contracts to
    ensure the availability of the medical advice and counseling benefit to
    the contracting managed care members. Any contract wording that is
    thought to limit this benefit is to be removed from the contract.
                                   capitation
        Question. Secretary Shalala, I have had many health care providers
    tell me about major excesses and abuses under the payment system of
    capitation. The central focus of a health care system ought to be the
    doctor-patient relationship, but too often under managed care
    capitation, I have heard that the plan administration gets in the way
    and technicians interfere with medical decision making. What needs to
    be done to control the most serious abuses of managed care capitation,
    such as restricting communication on treatment options, referrals to
    specialists, emergency care, and appeal rights?
        Answer. These are very valid concerns regarding managed care versus
    the health care provider-patient relationship. One of the significant
    contributions to managed care of the BBA of 1997 is that for the first
    time, provider protections are addressed at the Federal level.
    Currently, most States have some form of protection in their laws
    governing managed care for the provider-patient relationship but none
    are as inclusive as the BBA of 1997. What has been done to address your
    concerns has been legislation, monitoring, and satisfaction surveys.
    Let me speak to each of these points:
        Section 4001 of the BBA 97 ``Establishment of Medicare+Choice
    Program'' addresses provider protections.
      --Anti-gag clauses are included so providers will not be restricted
            from discussing treatment options with their patients.
      --Anti-discrimination of providers is addressed so providers treating
            high-risk, high-cost beneficiaries will not be penalized or
            prevented from participating in the plan.
      --Prior plan approval for emergency services defined as emergent from
            a prudent layperson perspective is strictly prohibited.
      --Patients and health care providers have appeal rights for adverse
            decisions made by the plan.
      --Providers must be consulted in regards to medical treatment
            decisions and guidelines enforced by the plan.
      --Access to a full range of health services is not only included in
            the BBA of 1997, but President Clinton's Consumer Bill of
            Rights.
        Another significant difference in the BBA legislation is that HCFA
    is given a stronger monitoring role. Monitoring of these and other
    requirements will be done more frequently and more uniformly than in
    the past. Part of the monitoring process is interviewing providers who
    contract with a managed care plan. This is one of the most direct
    methods we have of ensuring these protections are adhered to. Another
    part of our monitoring process is a new set of monitoring standards
    much like standards set by accrediting organizations such as the Joint
    Commission on Accreditation of Health care Organizations. These Quality
    Improvement System for Managed Care (QISMC) standards will be monitored
    annually and include provider protection monitoring.
        We have in the past and will continue to conduct provider
    satisfaction surveys of Medicare HMO's, as well as consumer
    satisfaction surveys. The results of these surveys will be used for
    public education on plan comparisons and will certainly have a positive
    influence on relationships between plans and providers which then
    hopefully influences provider-patient relationships. All Medicare-
    approved plans will have to conduct consumer satisfaction surveys.
        Question. To what extent should Congress get involved in micro-
    managing managed care?
        Answer. We don't believe that (nor have we proposed) any laws
    should be passed that involve micro-managing any form of health care.
    The Consumer Bill of Rights, which the President has endorsed, would
    establish consistent consumer protections for all Americans, regardless
    of where they receive their care or who pays for it. The rights that
    would be established involve ensuring appropriate access to
    specialists, ensuring access to emergency services should the need
    arise, and ensuring full information disclosure for consumers, among
    other important rights. We believe that these rights strike an
    appropriate balance between the health of patients and the ability of
    health care providers and insurers to treat patients in an efficient
    and appropriate manner.
                        medicare customer service pilots
        Question. You are requesting $12.8 million for a Medicare customer
    service pilot program, which includes establishing toll-free telephone
    centers. How many customer service pilots do you intend to implement,
    and what will be the cost beyond fiscal year 1999?
        Answer. We currently fund over 150 different toll-free telephone
    lines at our various agents and partners. This has resulted in a
    patchwork of telephone service which has contributed to a significant
    amount of confusion within the beneficiary community about exactly whom
    to call for Medicare help and assistance.
        At the present time, we are conducting a limited one State
    (Maryland) pilot test referred to as the Medicare Customer Service
    Center (MCSC). Through the establishment of systems interfaces with all
    the multiple information systems containing data about a given
    beneficiary and their use of Medicare, we are testing the feasibility
    and implications of offering a single point of contact for Medicare.
    Our fiscal year 1999 request envisions expanding the geographic area
    covered by the MCSC's so that by the end of fiscal year 1999 it will be
    able to cover approximately half of the Medicare beneficiary
    population. The costs included in our request include the necessary
    hardware and software to support this expansion of the MCSC Pilot.
        Beyond fiscal year 1999, additional funds will be needed to
    purchase the hardware and software to cover the rest of the Medicare
    population, excluding any funding to cover additional requirements
    related to Medicare+Choice customer service requirements.
        Question. Why couldn't you use the existing Social Security
    Administration teleservice center?
        Answer. While we appreciate the marketing advantages of trading on
    a well established and widely known 1-800 telephone number, our
    experience has been that the missions and programs of the Social
    Security Administration (SSA) and HCFA are too diverse to benefit from
    a shared support arrangement, such as a common call center. Indeed,
    SSA's independence from the Department of Health and Human Services on
    March 31, 1995 evidences this diversity. Experience has indicated that
    the technical complexity of both agencies' programs, when combined, is
    well beyond the commonly accepted expectations and capacity of an
    average customer or teleservice center representative. Further, a
    separate and distinct systems infrastructure would have to be built at
    the SSA teleservice center to support the Medicare workload, offsetting
    any of the benefits gained from collocation.
        In that our existing toll-free lines are currently operated by our
    contracted agents and partners, we had envisioned continuing to
    contract for our telephone customer service activities. If we were to
    expand the SSA teleservice centers, we would be forced to request
    between 1,500 to 2,000 additional FTE's to handle the more than 17
    million calls our agents currently receive annually, as well one-time
    funding to pay the contract termination and severance costs incurred by
    our current contractors.
                      attendant care demonstration project
        Question. Madame Secretary, the Conference Report on the fiscal
    year 1998 appropriations bill earmarked $2 million for Medicaid
    attended care demonstrations. I see no mention of this matter in your
    fiscal year 1999 budget justification material. What is the status of
    conducting attendant care demonstration projects for persons with
    disabilities as an alternative to institutional care?
        Answer. During testimony on the MiCASA bill on March 12, we
    announced that we will soon be asking States to submit proposals to
    develop research designs for projects that would identify individuals
    who could successfully move out of nursing homes into the community and
    provide the services needed to support these individuals in the
    community. This solicitation is in response to the commitment made by
    President Clinton on this issue and to the report language accompanying
    the fiscal year 1998 Labor-HHS-Education appropriations bill. We
    believe that we will be able to fund research in 3 to 5 States. If
    further funding for discretionary activities is needed in fiscal year
    1999, we would expect to look to our general research request in the
    fiscal year 1999 President's Budget as a source for these funds.
                          children's health insurance
        Question. The State Children's Health Insurance Program (S-CHIP)
    was established in the Balanced Budget Act of 1997 as a State-federal
    partnership with $4.295 billion in federal funds authorized in fiscal
    year 1998 to provide health insurance for children not covered by
    Medicaid, but whose families cannot afford private insurance.
        A number of uninsured children now receive health care through
    community health centers, community mental health centers, or through
    the Maternal and Child Block Grant. The fiscal 1999 budget requests
    $841 million for community health centers (one-third of health centers
    revenue) and $683 million for the Maternal and Child Health Block
    grant. What impacts will S-CHIP have on funding and target populations
    served by these programs?
        Answer. The State Children's Health Insurance program (S-CHIP)
    represents a tremendous advance in serving the health care needs of
    underserved children. In 1996, 43 percent of the roughly 10 million
    patients seen by Health Centers and the National Health Service Corp
    (NHSC) providers were children, of whom, moreover, approximately 30
    percent--or 1.3 million--were uninsured. We estimate that fiscal year
    1999 sources of funding for Health Centers will include $29 million
    through S-CHIP. This is still a very rough estimate, however; the
    extent and nature of S-CHIP's impact on Health Centers will depend in
    large part upon decisions taken by the individual States and the Health
    Centers themselves. Most States have not yet submitted--or even
    finalized--their S-CHIP plans. Ongoing and intensified outreach and
    educational efforts, in particular, will be necessary to assure that
    all the children who are eligible under S-CHIP are enrolled. More than
    3 million of the over 10 million uninsured children prior to S-CHIP's
    passage were eligible for, but not enrolled in Medicaid. This was, and
    remains, largely due to enrollment barriers or lack of awareness.
        S-CHIP will impact the health insurance coverage of low-income
    children in the U.S. but is not likely to have a substantial impact on
    the mission of the Title V program, the Maternal and Child Health (MCH)
    Block grant. The MCH Block Grant is at its core a public health program
    that reaches across economic lines to improve the health of allwomen
    and children. Within broad State discretion, State Title V programs use
    appropriated, formula grant funds for resource development, capacity
    and systems building, and population-based functions such as public
    information and education, knowledge development, outreach and program
    linkage, technical assistance to communities and agencies, provider
    training, evaluation, implementation of model programs, support for
    newborn screening, lead poisoning and injury prevention, and promotion
    of health and safety in child care settings. Special efforts are made
    to build community capacity to deliver such enabling services as care
    coordination, transportation, home visiting, and nutrition counseling
    and where no services are available, States also use Title V funds to
    subsidize or provide direct care.
        The S-CHIP program, as well as the Medicaid program, is a health
    insurance program that pays for a defined set of benefits for low-
    income women and children who are in families meeting specific
    eligibility requirements. These programs, being payers rather than
    providers of services, rely on the public and private sectors to
    organize and provide the services for which they reimburse.
    Historically, State Medicaid programs have relied on State MCH programs
    for assistance in enrolling eligible women and children, developing
    policies, procedures and practice standards that help providers and
    other agencies work more effectively with Medicaid, and organizing and
    providing services not available or accessible in the private sector.
        The OBRA-89 amendments to Title V made clear that Congress did not
    intend to use these public health dollars to pay for direct services
    already covered by Medicaid or private insurers. Similarly, the S-CHIP
    funds available for Title V-type activities is strictly limited by a
    Congressionally imposed cap. States can only use 10 percent of the
    benefits spending under their S-CHIP for outreach, public health
    initiatives, administrative costs, and direct services. States have
    objected that this Cap is already too restrictive. Therefore, we
    believe that the Title V funds will continue to play an important role
    in protecting the health of the American public. However, S-CHIP may
    relieve some of the financial drain on Title V by insuring a group of
    previously uninsured children thereby allowing the funds to be
    refocused on needed public health capacity and resource building
    activities.
        Question. How will funding and services be coordinated between S-
    CHIP and these alternative sources of health care for uninsured
    children?
        Answer. Both the Title V Maternal and Child Health Block Grant and
    Community Health Centers (CHC) coordinate health and related services
    for children in Medicaid and WIC and provide outreach to enroll
    children in these programs. In addition, the MCH Block Grant also
    coordinates these and other related services for children with special
    health care needs. Both programs, working closely with Medicaid and the
    private sector, are already studying ways to expand and, in some cases,
    have already begun to expand of their outreach and coordination
    functions. HRSA has been coordinating with the regional, State, and
    local Title V and CHC programs, Primary Care Associations, as well as
    Federal and regional HCFA offices since the inception of the S-CHIP
    plans in order to assure coordination between programs to increase the
    interaction of these programs at all levels around S-CHIP. HRSA staff
    have also brought into these meetings contacts in disability, welfare,
    education, and WIC programs to further enhance cooperation at all
    levels. State MCH Directors have been meeting with their State Medicaid
    offices and the people responsible for developing the State CHIP
    applications to assure coordination of funds and services.
        Question. Will S-CHIP displace the need for some portions of these
    programs?
        Answer. S-CHIP is going to make a significant difference in the
    health coverage status of low-income children, but it will not displace
    a substantial portion of the services provided through the Title V, MCH
    Services Block Grant Program as well as Community Health Centers. The
    S-CHIP program enables States to fund services for uninsured children
    who are also low-income. The two groups of children left unserved by
    the S-CHIP program and still, therefore, requiring services supported
    through HRSA programs are (1) the partially or poorly insured who may
    have no usual sources of care and who seek publicly funded care on a
    regular basis; and (2) those children with special health needs whose
    insurance is nonexistent or inadequately covers those special needs
    necessary for them to function and learn successfully.
        While S-CHIP is a major advance, building capacity to provide
    medical and enabling services in underserved, low income communities is
    necessary to make the new insurance coverage a reality. Health Centers
    currently reach only one-fourth of the 43 million Americans who are
    identified as medically underserved. The number of Health Center
    patients seen increased from 5 million in 1980 to over 9.5 million in
    1995. More than half of the 2,091 U.S. counties identified in 1996 as
    having primary care access problems, moreover, remain unserved by a
    Health Center or an equivalent provider. In addition, in most States, a
    minority of Title V dollars are spent on services that can be financed
    under Title XXI. Both Federal and State Title V funds are already being
    used to leverage other funds and coordinate and administer State
    activities that further develop a seamless, comprehensive, system of
    care for children through initiatives which include technical
    assistance, resource support, and performance measurement, without
    which State CHIP plans will not be able to achieve their goals. The
    challenge of providing adequate primary health care to the underserved
    is greater than ever.
        Question. Are states being encouraged to include community health
    centers and community mental health centers as potential delivery sites
    in the health networks they establish for S-CHIP enrollees?
        Answer. While States are not required to included Community Health
    Centers and Community Mental Health Centers as potential delivery
    sites, HRSA in response to this historic opportunity, has charged every
    State and Regional Primary Care Association--non-profit membership
    organizations that Health Centers--with the responsibility of working
    with their members to ensure that: HRSA-supported programs in their
    States are effective participants in the design, development,
    implementation and operation of S-CHIP; HRSA-supported programs provide
    high-quality, cost-effective care to low-income and uninsured children;
    and, HRSA-supported programs serve significant numbers of children
    covered by S-CHIP.
        To assist Primary Care Associations (PCA's) in attaining these
    objectives, HRSA has implemented two primary initiatives. The first is
    the Five-State PCA S-CHIP Initiative. HRSA will work with PCA's in the
    five States receiving the largest S-CHIP allotments to assess S-CHIP
    opportunities, to collect and disseminate information and data about
    HRSA-supported programs and their services to children, and to document
    the impact of the S-CHIP design/implementation on HRSA-supported
    programs. Effective strategies for ensuring HRSA-supported program
    participation in S-CHIP will be identified, shared, and, as
    appropriate, replicated in other States. One of the designated PCA's,
    in Texas, was recently selected to coordinate all S-CHIP outreach
    efforts in the State. In fiscal year 1998, HRSA has also implemented a
    $1 million pilot program to expand the capacity to establish out-
    stationed Medicaid and S-CHIP eligibility workers in Health Centers.

                              subcommittee recess

        Senator Specter. Thank you. The subcommittee will stand in
    recess to reconvene at 2 p.m., Wednesday, March 18 in room SD-
    138. At that time we will hear testimony from Hon. Alexis
    Herman, Secretary of Labor on the 1999 budget request.
        [Whereupon, at 3:30 p.m., Tuesday, March 10, the
    subcommittee was recessed, to reconvene at 2 p.m., Wednesday,
    March 18.]

      DEPARTMENTS OF LABOR, HEALTH AND HUMAN SERVICES, AND EDUCATION, AND
              RELATED AGENCIES APPROPRIATIONS FOR FISCAL YEAR 1999

                                  ----------

                           WEDNESDAY, MARCH 18, 1998

                                           U.S. Senate,
               Subcommittee of the Committee on Appropriations,
                                                        Washington, DC.
        The subcommittee met at 2:08 p.m., in room SD-138, Dirksen
    Senate Office Building, Hon. Arlen Specter (chairman)
    presiding.
        Present: Senators Specter, Faircloth, Bumpers, and Kohl.

                              DEPARTMENT OF LABOR

                            Office of the Secretary

    STATEMENT OF HON. ALEXIS HERMAN, SECRETARY OF LABOR

                       opening remarks of senator specter

        Senator Specter. Good afternoon, ladies and gentlemen. We
    will commence the hearing of the Appropriations Subcommittee on
    Labor, Health and Human Services, and Education. Today we have
    the opportunity to hear from the distinguished Secretary of
    Labor, the Honorable Alexis Herman, on the fiscal year 1999
    appropriations requests.
        The Labor Department's budget totals $11.1 billion for
    discretionary programs. This is a net increase of $425 million
    or 4 percent above fiscal year 1998. In addition, the Labor
    Department has responsibility for administering a $3 billion
    multiyear Welfare-to-Work Program, with funding provided under
    the historic balanced budget legislation enacted last year.

                               prepared statement

        Madam Secretary, we have a chart which we have shown to
    Secretary Shalala and others, Secretary Riley, showing a $1.9
    billion gap in funding which is supposed to be accommodated by
    tobacco funds, which so far are tobacco in the sky, pie in the
    sky, we do not know where they are coming from, and
    unauthorized user fees. So that is a matter of real concern.
        Without objection, my full statement will be made a part of
    the record.
        [The statement follows:]

                  Prepared Statement of Senator Arlen Specter

        This afternoon, the Subcommittee on Labor, Health and Human
    Services and Education will hear testimony from Secretary of
    Labor Alexis Herman on the fiscal year 1999 appropriations
    requests.
        The Labor Department's budget totals $11.1 billion for
    discretionary programs. This is a net increase of $425 million
    or 4 percent above fiscal year 1998. In addition, the Labor
    Department has responsibility for administering a $3 billion
    multi-year Welfare-to-Work program, with funding provided under
    the historic Balanced Budget Act legislation, enacted by
    Congress last year. I have asked the Secretary to pay
    particular attention to the challenges imposed by this major
    new effort, which I intend to closely monitor. In the coming
    months, Madame Secretary, it is my hope that we can work
    together, with the Department of Health and Human Services and
    other agencies with responsibilities for certain welfare reform
    activities, to make sure this program is a resounding success.
        You can see from the chart to my right the difficulty
    facing this Subcommittee by the President's assumption that
    savings will be realized through enactment of user fees or new
    taxes.
        In fiscal year 1997, discretionary spending for this
    subcommittee totaled $74.4 billion.
        In fiscal year 1998, discretionary spending increased to a
    total of $80.4 billion.
        For fiscal year 1999, the President has requested $84.5
    billion, but $1.9 billion of this amount would be financed by
    new user fees and assumed receipts from tobacco legislation.
        Madame Secretary, the Administration's budget request has
    put us in a real spot, basically $1.9 billion in the hole, and
    I fully expect that you will work closely with this Committee
    as we try to resolve this dilemma.
        Madame Secretary, due to scheduling conflicts, we didn't
    have the opportunity to have you appear before the Subcommittee
    last year, although I must say we had occasion to meet in
    Pennsylvania on vital issues, including a conference on women
    in nontraditional occupations, and the announcement of job
    training support for the re-opening of the Philadelphia ship
    yard. I know we can continue to count on your cooperation and
    you can count on ours, in the year ahead.
        Madam Secretary we will be pleased to hear your opening
    remarks at this time.

                    summary statement of hon. alexis herman

        Senator Specter. We are pleased to welcome you here,
    Secretary Herman. You are the 23d Secretary of Labor. As
    President Clinton characterized you, quote, she understands the
    needs of workers and understands the challenges they face as we
    approach the 21st century. Welcome, and the floor is yours.
        Secretary Herman. Thank you very, very much, Mr. Chairman.
    I would like to ask that my full statement be submitted for the
    record. If you would permit me to make a few brief opening
    comments before responding to questions.
        Senator Specter. That is entirely acceptable. Without
    objection your entire statement will be made a part of the
    record, and we look forward to your highlighting it.
        Secretary Herman. Thank you very much. I am very pleased to
    be here today to discuss the work of the Labor Department and
    our fiscal year 1999 budget request.
        This is certainly an exciting and historic period for all
    of us who care about improving the lives of America's working
    families. Working together with Congress, we have made enormous
    strides. We have the healthiest economy in a generation. The
    misery rate--the combination of the unemployment rate and the
    inflation rate is at a 31-year low. And just this month the
    Labor Department reported that our economy has created over 15
    million new jobs in the last 5 years. We are entering the 21st
    century truly with opportunity on our side.
        But where there is opportunity, there also is challenge. I
    believe our challenge is to help every American not only secure
    the economic future that they so deserve, but to help them also
    to manage change for the better, to help transform change from
    an obstacle to an opportunity, from something to avoid to
    something to embrace. I see my job today as Labor Secretary as
    making sure that the Labor Department is an effective,
    efficient partner in helping Americans manage change that is
    inherent in today's global economy. As we do that, I want to
    make sure that our initiatives are results oriented and bottom
    line.
        The Department of Labor has made a lot of progress since
    our team came into office 10 months ago. We played a role in
    bringing together labor and management to settle the UPS
    strike. We attacked fraud and abuse in pension and health care
    plans, and recovered more than $360 million for hard working
    Americans.
        We are proud to report the fatality rate for coal mining
    injuries for 1997 was the lowest ever recorded. Similarly, the
    injury and illness rate in general industry for 1996, the
    latest year for which data is available, was the lowest since
    the Bureau of Labor Statistics began collecting the information
    23 years ago.
        Because we know that a paycheck is, in fact, the passport
    to dignity, we have worked diligently to make sure that the
    welfare recipients that we are working with today are
    integrated into the work force development system. As a result,
    we now have $3 billion in grants to distribute to help long-
    term welfare recipients secure lasting unsubsidized employment.
        Let me pause here briefly to say that our work force
    development reform is about fundamentally changing how we look
    at the future in a way that is good for workers and good for
    business. We are very hopeful that Senate bill 1186, the
    Workforce Investment Partnership Act, will be considered this
    week and that it will move quickly to conference. Our hope is
    to see a bill enacted before July 1, 1998. Let me say that I am
    pleased with the bipartisan support that this bill has received
    within Congress. As you know, the President has made public
    statements in support of this bill. I hope that you will agree
    with us, Mr. Chairman, that now is the time for action.

                              DOL strategic goals

        But now, in working to establish a unified Department of
    Labor, I have established three strategic goals which bridge
    the Department's many agencies and programs that serve the
    common purpose of helping America's workers meet the challenges
    they face today and in the future.
        The first goal is a prepared work force that enhances
    opportunities for America's workers. With the strategic goal of
    a prepared work force, the Department is committed to creating
    an environment where those new to the labor market or those
    wishing to improve their potential are provided the assistance
    and tools needed to achieve success in today's market, and
    where policy and decisionmakers and those seeking employment
    have access to information for making sound economic decisions.
        Our second strategic goal is a secure work force. We seek
    to promote the economic security of workers and families by
    protecting workers' hours, wages, and other conditions when on
    the job, providing unemployment and compensation benefits when
    workers are unable to work, retraining and adjustment services
    for workers who are permanently laid off from their jobs to
    help them return to work, and expanding, enhancing, and
    protecting workers' pension, health care, and other benefits.
        Our third and final strategic goal is quality work places
    that are safe, healthy, and fair, meaning free of
    discrimination. Since today's workplace is increasingly
    affected by global markets, we will increase our commitment to
    addressing core international labor standards and also child
    labor issues.
        Our fiscal year 1999 budget request of $11.1 billion and
    17,012 full-time equivalent staff is only 4 percent above the
    fiscal year 1998 level. This modest increase in our budget will
    allow us to build on what we are already doing to achieve my
    strategic goals that cut across the Department's agencies to
    serve the common purpose of helping American workers achieve
    economic security and manage change for the better.

                               prepared statement

        Mr. Chairman, I will be happy to discuss today the welfare-
    to-work issue that you raised in your letter, as well as any
    other questions from you or members of this committee. I thank
    you for the opportunity to appear before you today.
        [The statement follows:]
                     Prepared Statement of Alexis M. Herman
        Mr. Chairman and distinguished members of the subcommittee: I am
    pleased to be here today to discuss the work of the Labor Department
    and our 1999 fiscal year budget request.
    Managing Change in the 21st Century
        We have made great progress in helping America's working families
    build a better future for themselves. The President's budget is a truly
    historic document. It gives the American people the first balanced
    budget in 30 years. Because of tough choices and fiscal discipline, our
    deficit has gone from over $350 billion 5 years ago, to about $10
    billion today, and with this plan it will be zero in the next fiscal
    year.
        And these are also historic times. Thanks to the hard work of the
    American people, we have the healthiest economy in a generation. The
    misery index--the combination of the unemployment rate and the
    inflation rate--is at a 31 year-low. And just this month, the Labor
    Department reported that our economy has created over 15 million new
    jobs in the last five years. We are entering the 21st century with
    opportunity on our side.
        But where there is opportunity, there is also challenge. The
    workplace and the workforce are changing before our eyes. In the
    1950's, the workforce was 20 percent professional, 60 percent unskilled
    and 20 percent skilled. By 1996 it was 20 percent professional, 60
    percent skilled and 20 percent unskilled. Education and training matter
    as never before.
        The workforce of the future is changing in other ways. It will be
    older and more diverse. Our workplace is also changing. We are
    utilizing more technology, and more of us are using that technology.
    The proportion of workers using computers has more than doubled in the
    past ten years alone. And every day we are becoming more globally
    integrated--in the next 10 years up to half of all manufacturing jobs
    will be export-related.
        Our task is to help prepare every American worker for this changing
    world. And our challenge is to help every American manage change for
    the better. I know confronting change is never easy. I've faced a lot
    of change in my life. I've had many different jobs. I've lived in a
    number of cities. I've had a lot of obstacles thrown my way. But I also
    had something else--a solid foundation from which to draw strength--my
    faith, family, values.
        Just as that kind of support structure is integral to managing
    change in our own lives, it is also critical in our national life.
    Because it's that kind of support structure that transforms change from
    an obstacle to avoid to an opportunity to embrace.
        I see my job as making sure the Department of Labor is an
    effective, efficient partner in helping Americans manage the change
    that is inherent in today's global economy. And as we do that, I want
    to make sure our initiatives are bottom-line and results-oriented.
        The Department of Labor has made a lot of progress since our team
    started 8 months ago. We helped play a role in bringing labor and
    management together to settle the UPS Strike.
        We attacked fraud and abuse in pension and health plans and
    recovered over $360 million for hard working Americans.
        We were proud to report that the fatality rate for coal mining
    injuries for 1997 was the lowest ever recorded. Similarly, the injury
    and illness rate in general industry for 1996, the latest year in which
    data are available, were the lowest since the Bureau of Labor
    Statistics started collecting that information 23 years ago.
        And because we know a paycheck is the passport to dignity, we have
    worked diligently to make sure that welfare recipients are integrated
    into the workforce development system. As a result, we now have $3
    billion in grants to help long-term welfare recipients secure lasting,
    unsubsidized employment.
        We want to build on our record and our progress in helping American
    workers manage change for the better. And that's why the President is
    now proposing this year to do things such as raise the minimum wage,
    expand the Family and Medical Leave Act, and work closely with Congress
    to pass legislation to enact his GI Bill for America's Workers that
    will reform the entire job training system so anyone looking for work
    will be able to get the service and assistance they need to find and
    keep good jobs.
        This is all a part of fulfilling the Department of Labor's
    fundamental mission--to assist workers in their efforts to achieve
    economic security, with rising wages, pensions, health benefits and
    opportunities--and to improve their skills in safe and healthful
    workplaces free of discrimination.
        In order to succeed in this mission, the Department has developed
    an effective strategy for improving the lives of America's working
    families. It has been developed within the context of the Government
    Performance and Results Act (GPRA) and is reflected in the Department's
    fiscal year 1999 Annual Performance Plan which is tied directly to our
    budget request. This Performance Plan reflects a substantial revision
    and improvement on the Department's September Strategic Plan which was
    largely developed prior to my arrival. In working to promote a more
    unified Department of Labor, I have established three strategic goals
    which bridge the Department's many agencies and programs that serve the
    common purpose of helping America's workers meet the challenges they
    face today and in the future. Those three strategic goals are: A
    Prepared Workforce--to enhance opportunities for America's workforce; A
    Secure Workforce--to promote the economic security of workers and
    families; and, Quality Workplaces--to foster quality workplaces that
    are safe, healthy and fair.
        With the strategic goal of a Prepared Workforce, the Department is
    committed to creating an environment where those new to the labor
    force, or those wishing to improve their potential, are provided the
    assistance and tools needed to achieve success in today's job market.
    And where policy and decision-makers, and those seeking employment,
    have access to information for making sound economic decisions.
        With the strategic goal of a Secure Workforce, we seek to promote
    the economic security of workers and families by protecting workers'
    hours, wages and other conditions when on the job, providing
    unemployment and compensation benefits when workers are unable to work,
    retraining and adjustment services for workers who are permanently laid
    off from their jobs to help them return to work as quickly as possible,
    and expanding, enhancing, and protecting workers' pension, health care,
    and other benefits.
        With the strategic goal of Quality Workplaces, we will direct
    attention toward fostering workplaces that are safe, healthy, and fair.
    Today's workplace is increasingly affected by global markets so we will
    continue to address core international labor standards and child labor
    issues as they affect American workers. The Department is committed to
    working with employers to help them maintain safe and healthy
    workplaces. However, we will maintain a credible, targeted enforcement
    program to catch and punish the bad actors.
        This vision cannot be accomplished overnight. To accomplish these
    goals, we must make critical investments over a period of years that
    will promote programs to support the President's goals and accomplish
    this vision. Investments that begin with this fiscal year 1999 budget
    will move the Department toward accomplishing these goals for American
    workers, retirees and their families. Investments will continue over
    many years, but this budget request takes the first step on that
    journey.
        Our fiscal year 1999 budget--which amounts to $38.1 billion--will
    allow us to build on what we are already doing and begin new
    initiatives to meet these goals. The amount before the committee
    includes $12.7 billion and 17,012 full-time equivalent (FTE) staff.
    Each of the initiatives in our budget was developed to achieve my
    strategic goals that cross-cut the Department's agencies, programs and
    activities to serve the common purpose of helping American workers
    manage change for the better.
        I would like to discuss my initiatives arrayed by the goal they
    support.
      a prepared workforce--enhance opportunities for america's workforce
        The fiscal year 1999 request includes a continuation of a $250
    million advance appropriation for the Opportunity Areas for Out-of-
    School Youth program for Program Year 2000. With your leadership, Mr.
    Chairman, this Sub-Committee provided in the fiscal year 1998
    appropriation, a $250 million advance appropriation for the program for
    use in fiscal year 1999, contingent upon enactment of authorizing
    legislation. The Administration is working closely with Congress to
    enact job training legislation containing this authorization in early
    1998. These resources will be used to provide competitive, matching
    grants to 15 to 20 high poverty urban and rural communities including
    Empowerment Zones and Enterprise Communities, to train an estimated
    50,000 youth for jobs, as an alternative to welfare and crime.
        This is a high priority for me and a challenge that I have devoted
    a good part of my life to addressing. Almost thirty years ago, I worked
    for Catholic Charities in my hometown of Mobile, Alabama. I helped
    young men from the housing projects find apprenticeships and job
    opportunities in the shipyards near Pascagoula, Mississippi.
        There is one statistic that really sticks in my mind from twenty
    years ago when I was working at the Department of Labor. At that time,
    the unemployment rate for African-American teenagers was over 30
    percent. Two decades later, I am back at the Labor Department, and the
    unemployment rate for African-American teens is at 30 percent. This
    Department is about the work of moving a fact like this from the
    statistics books to the history books.
        What is the out-of-school youth initiative all about? Let me tell
    you about Hector Hernandez.
        Hector is from Bellflower, California, one of the barrios of Los
    Angeles. He grew up in one of the toughest neighborhoods in the
    country. His mom was a high school drop-out and survived on welfare.
    His dad--who he hardly ever saw--sold drugs.
        To Hector, school never really seemed important. And so he dropped
    out and joined a gang. One thing led to another, he committed a crime,
    got arrested, and served three years before he was paroled. As a
    condition of his parole, Hector was required to attend the Community
    Youth Corps program in Norwalk, California. This is a Job Training and
    Partnership Act (JTPA) initiative that provides education, training and
    job placement services to out-of-school youth.
        In January of 1997, he began courses for a GED. Hector worked
    hard--and earned his GED last May. Today he works full-time as a
    security guard at a local Nissan plant--and part-time at UPS. Last
    month, he enrolled in Cerritos Community College and hopes one day soon
    to work with youth in the California prison system.
        This story is one of many that demonstrates the kind of success we
    are having by investing in opportunity for our young people. The
    resources that the President's fiscal year 1999 budget contains for
    youth funding will allow us to build on that kind of success, reduce
    unemployment levels for the youth of our country, and make a real
    difference in the lives of young people and the life of our nation.
        The Summer Jobs Program gives hundreds of thousands of urban and
    rural disadvantaged youth their first work experience. The budget
    proposes $871 million which is sufficient to finance as many as 530,000
    job opportunities for the summer of 1999 if local areas use all of
    these resources for summer jobs. The budget also includes $130 million
    for the year-round program to help low-income youth, many of them in
    families on public assistance, who have dropped out of school or are at
    risk of doing so. The proposed budget would continue to permit local
    service delivery areas that receive both types of these funds to shift
    resources between the summer and year-round program, as local needs
    dictate.
        Another of our important programs for youth is the Job Corps, which
    will provide intensive skill training, academic and social education,
    and support to an estimated 69,700 seriously disadvantaged participants
    at 118 centers in fiscal year 1999. An increase of $61.4 million for
    fiscal year 1999, brings the total for the program to $1.3 billion.
    This increase includes funds to complete five new centers and to
    maintain the current program. Funds are also requested to continue the
    multi-year quality improvement initiatives to enhance Job Corps
    performance.
        The Welfare-to-Work Jobs initiative is already funded at $1.5
    billion in mandatory funding in each of fiscal year 1998 and fiscal
    year 1999. This initiative was enacted with bipartisan support in the
    Balanced Budget Act of 1997. The program provides formula grants to
    States; and Federally-administered competitive grants to Private
    Industry Councils, political subdivisions of States, and private
    entities to assist hard-to-employ welfare recipients to secure lasting,
    unsubsidized employment. Its success, however, depends on the formation
    of partnerships to allow leveraging of additional resources at the
    local level.
        I completed a national fact-finding welfare-to-work tour to put a
    human face on the framework we have developed to move people from
    welfare to work and have reported my findings to the President.
        There are a number of innovative programs out in the field that are
    making a real difference. Let me tell you about them.
        The Community Occupational Readiness and Placement Program (CORPP)
    Inc. serves people young and old, and even homeless, to help them
    realize their strengths and interests. CORPP provides a variety of
    programs to enable Philadelphia's urban poor gain employment. Over 90
    percent of all program graduates have gained employment and the
    retention rate is above 95 percent. Employed graduates are working an
    average of 33 hours per week with an hourly wage between $6-$8 per
    hour. CORPP gives participants the tools to take their first steps into
    the world of work.
        After having her first child at the age of 14, Sheree Smith
    enrolled in CORPP and was successfully placed in a job working as a
    receptionist for a State Senator earning $16,500 per year. She stayed
    for two years but continued to use the skills she learned at CORPP and
    to grow in her job. Last June, she went to work for a non-profit
    organization where she is the office manager for 16 employees and earns
    over $28,000 per year. I am pleased to report that Sheree is doing her
    part to contribute to the economy--she recently purchased a home.
        There are so many good programs, like those in South Carolina,
    Texas, Washington, Wisconsin, Iowa and Arkansas that have similar and
    innovative approaches to assisting people in moving from welfare-to-
    work.
        The Bridges to Work program in Baltimore, Maryland provides a
    transportation link between welfare recipients living in job-poor inner
    cities and suburban employers. But the program provides a lot more for
    their clients. Bridges, whose clients must be job-ready welfare
    recipients, helps their clients find jobs, counsels them once they are
    placed, and provides assistance with child care and other needed
    services. They help them manage the vital logistics of their lives.
        Transportation is a key link. Over the last decade, Baltimore has
    lost over 50,000 jobs to the suburbs, while the nearby suburban
    counties have added at least 70,000 jobs. The story is the same in
    Chicago, St. Louis, Milwaukee and Denver--other sites where Bridges
    runs this innovative federal demonstration project. The job creation
    boom is not taking place in the inner cities, it is taking place in the
    suburban corridors, while there is still chronically high unemployment
    in the inner cities. Recent figures from the Department of Housing and
    Urban Development reveal that 97 percent of new businesses in the U.S.
    were created in the suburbs between 1990 and 1993. Most inner cities
    across the country, like Philadelphia, are recognizing the need for
    transportation alternatives that offer reverse commutes so that those
    people who want to work and in many cases have worked hard to get the
    skills to get into the job market, have the access to take those jobs.
        Promise Jobs in Iowa represents the coordination necessary among
    agencies to successfully move people from welfare to work. This program
    is jointly operated by local offices of the Iowa Workforce Development
    and JTPA grantees. It operates in each of the State's sixteen Service
    Delivery Areas and funds are provided through contractual agreements
    with the State Department of Human Services. The Dubuque-Delaware
    Consortium regularly uses multiple programs to support the self-
    sufficiency plans of its participants. As they did in the case of
    Susan, a 30-year old single mother of 4 children, ranging in age from
    1-7 years old, with limited work history. The Consortium put together
    tuition, education, child care, transportation and job placement
    services, and Susan reached her goal of becoming a registered nurse.
    She is now making $12.50 an hour and is completely self-sufficient and
    off the welfare rolls.
        It is the dignity of work, as we move people from the welfare rolls
    to the payrolls, and the efforts of innovative programs and companies
    across the country, that will help to make the Welfare-to-Work
    initiative a success.
        Related to our Welfare-to-Work program, the budget proposes to
    extend, for one year through April 30, 2000, the Welfare-to-Work Tax
    Credit, which the President and Congress created as part of the
    Taxpayer Relief Act of 1997. It focuses on long-term welfare recipients
    by allowing employers to claim a tax credit of 35 percent on the first
    $10,000 of eligible wages in the first year of employment and 50
    percent of the first $10,000 in the second year of employment for
    workers they hire who were long-term welfare recipients. The budget
    also includes an extension of the Work Opportunity Tax Credit through
    April 30, 2000, which provides a credit of 40 percent on the first
    $6,000 of wages paid to members of eight target groups.
        Adult Training Grants provide formula grants to communities under
    authority of Job Training Partnership Act (JTPA) Title II-A for
    employment and training assistance to economically disadvantaged
    adults. This program also aids in our welfare-to-work efforts since two
    of every five participants is a welfare recipient. An increase of $45
    million, or nearly 5 percent above the fiscal year 1998 level, is
    proposed for fiscal year 1999 bringing the program's funding up to $1
    billion to support an estimated 401,100 participants.
        Legislation will be proposed in conjunction with the President's
    Budget that would authorize the Department of Veterans Affairs to
    transfer to the Department of Labor $100 million for the JTPA Veterans
    Employment program to reimburse activities designed to train, retrain,
    and provide employment assistance for unemployed and dislocated
    veterans. The program will provide outreach, assessment, counseling,
    on-the-job or classroom training, placement assistance and supportive
    services to help these veterans rejoin the American workforce.
        The Learning Anytime, Anywhere initiative is a joint Department of
    Education and Department of Labor program to emphasize the use of new
    technologies to enhance post-secondary learning by increasing access to
    and improving the quality of education and training delivery. The
    Department's $10 million request for fiscal year 1999 will allow the
    Department to explore removing some barriers faced by learning in non-
    traditional settings, such as uncertainty as to quality, the value of
    certificates or degrees, and the limited availability of some training.
    The Department will provide an Internet-based system (America's
    Learning Exchange) linking providers of and customers for training and
    education and including: a library of courseware, a database of
    education/training opportunities, and a directory of learning
    opportunities.
        A net increase of $18.3 million is proposed to support and improve
    economic indicators. New this year is a proposal for $3.3 million to
    start the National Job Opening and Labor Turnover Survey. Currently
    there is no economic indicator of the demand for labor with which to
    estimate labor shortages in the U.S. labor market. Information on labor
    shortages can only be inferred indirectly using labor supply
    information, such as the unemployment rate. Developing a demand-side
    indicator of labor shortages at the National level would greatly
    enhance policy makers' understanding of imbalances between the demand
    and supply of labor.
        As part of this increase, the Department also proposes an
    additional $9.1 million for the second year of the multi-year Consumer
    Price Index Improvement initiative. Last year this Subcommittee
    supported the launching of this effort, for which I am grateful. This
    initiative allows the Department to continue undertaking a series of
    steps to improve the CPI's timeliness and accuracy by strengthening the
    statistical and methodological infrastructures supporting the current
    CPI program.
        The Department proposes $1 million to continue the work of a
    Presidential Commission on Workers and Economic Change in the New
    Economy. This initiative is an important component of a comprehensive
    set of initiatives announced by the President last Fall to help ensure
    that all Americans share the benefits of free and open trade. As the
    new economic forces change the standards for economic competition, they
    also affect organizational structures, skill requirements, and jobs. As
    part of the Administration's effort to help workers and those not in
    the job market to take advantage of the opportunities of expanded
    trade, this Commission will explore a variety of strategies for
    upgrading the skills of existing and future workers.
        The Department is requesting $2.4 million to establish a National
    Task Force on the Employment of Adults with Disabilities. According to
    the Census Bureau 74 percent of persons with severe disabilities 21 to
    64 years of age were not employed as of the last year surveyed (1994).
    The Task Force would be charged with the development of a national
    policy to bring adults with disabilities into gainful employment at a
    rate that is as close as possible to that of the general population.
    The Task Force will study the barriers to employment faced by disabled
    individuals and report its findings and policy recommendations to the
    President on a periodic basis over its four-year life.
     a secure workforce--promote economic security of workers and families
        In the area of worker retraining, our budget includes an increase
    of $100 million, or 7 percent above last year's level, for a total of
    $1.45 billion to support an estimated 685,800 participants in the
    Dislocated Worker Assistance Program.
        With the support of this Committee, the funding for this program
    has doubled since the President took office. The President is committed
    to tripling it over the next five years. This is a high priority
    because we know a fundamental element of a secure workforce--and
    helping workers manage change--is providing access to training and
    assistance to those workers when they need it. We want to build on the
    success we've had with our rapid response teams to move this goal
    forward.
        Back in August, the Fruit-of-the-Loom company announced that about
    4,800 workers in plants in Louisiana, Texas, and Kentucky would face
    layoffs in 60 days. Our Dislocated Worker Unit Rapid Response teams
    immediately contacted the plants in their States--and within 48 hours
    made arrangements for on-site strategy meetings--in partnership with
    state and local economic development, workforce development, and
    elected officials--to begin the full range of rapid response
    assistance.
        The layoffs were announced on August 7, by August 11 meetings were
    held in Louisiana with all the various players--and the next day our
    dislocated worker staff was meeting with the workers.
        Layoffs are always painful. But the rapid response team mobilized
    quickly, got in place, and helped workers look ahead and plan for their
    future. They set up worker assistance workshops that covered everything
    from resume writing to interviewing skills. They set up job fairs,
    training (including community college courses), direct placement, and
    related skills and remedial assistance.
        This year's budget increase will not only allow the Department to
    continue to provide this type of rapid response but it will also
    increase the number of people to be served (40,000 or more) and allow
    us to provide training and income support for laid-off workers in
    secondary industries doing business with primary firms affected by
    trade.
        As the President said in his State of the Union address, we should
    provide the same response when a factory closes as we do when a
    military base closes. This Department is at the forefront of making
    that happen. And I am absolutely committed to increasing job placement
    and wage replacement for workers who permanently lose their jobs in a
    plant closing or mass layoff.
        In the North American Free Trade (NAFTA) and Trade Adjustment
    Assistance (TAA) programs, legislation will be proposed to extend the
    programs for 5 years; expand eligibility for TAA to those who lose
    their jobs due to a shift in production abroad, similar to shifts in
    production to Mexico and Canada covered under NAFTA-TAA; increase the
    training cap; make the requirements linking training and income support
    more consistent across both programs; and finally, create a contingency
    funding provision to assure that resources are available to pay for any
    unexpected increase in benefit costs to eligible workers. The fiscal
    year 1999 request, including the legislative proposal, is a $108
    million increase over the fiscal year 1998 appropriation.
        The Unemployment Insurance (UI) System also needs to be reformed in
    order to meet the challenges of a new economy. The President's Budget
    anticipates legislation for a UI Safety Net to assure the availability
    of benefits for more of America's workers in the event of a recession,
    to make the program more accessible to low-wage unemployed workers, to
    improve the solvency of the State Trust Funds, and to improve State
    administrative operations.
        In addition to this legislative proposal, the fiscal year 1999
    budget includes a request for $91 million to strengthen the integrity
    of the Unemployment Insurance System, as authorized in the Balanced
    Budget Act of 1997. Tight budgets for unemployment insurance
    administration over the past several years have caused State agencies
    to cut back their investments in program integrity activities which
    affect benefit payment accuracy, detection of overpayments, collection
    of overpayments, and collection of under-reported taxes. Funding this
    proposal will reduce unemployment insurance errors and overpayments,
    improve State tax collections, and result in anticipated savings of
    well over $100 million to the Unemployment Trust Fund in 1999 alone.
        The fiscal year 1999 Unemployment Insurance budget also proposes $8
    million for the one time cost of transition to the North American
    Industrial Classification System. This will allow the exchange of data
    among North American countries as well as provide for increased
    precision in identifying industries as a result of utilizing six rather
    than four digit codes. Similar investments were made in BLS for this
    project in fiscal year 1997 and fiscal year 1998.
        Another important part of promoting economic security for workers
    is to provide pensions. I can't overemphasize the importance of
    retirement security. Today Americans are living longer and are more
    concerned about saving enough money to maintain their standard of
    living throughout retirement. One of the basic problems is information
    and education.
        Many workers do not have access to basic retirement and savings
    information that can help improve their understanding of steps they can
    take for long-term financial security. We want to change that. That's
    why, working with the public-private American Savings Education
    Council, we have launched a Retirement Savings Education Campaign to
    inform Americans about the importance of saving for retirement and to
    encourage employers to establish pension plans for their workers. We
    already have over 250 campaign partners representing federal agencies,
    trade and professional associations, labor unions, community groups,
    financial entities, and private sector employers.
        I have held a series of roundtable discussions with owners of small
    business around the country to discuss barriers and the options
    available in offering retirement plans to workers. In Dallas, I met
    with women small business owners. There is no doubt that small business
    has a big role to play in improving the retirement security of workers.
    Our nation's small businesses employ 40 percent of the workforce--and
    32 million workers in small businesses do not have an employer-
    sponsored pension plan.
        I wanted to hear from these women about the obstacles they thought
    they faced to offering plans and to listen to some of the tips they
    picked up and lessons they have learned as small business owners. The
    goal of our education campaign is to change the way the American public
    thinks and acts about retirement needs. Americans need to reconsider
    how their personal finances are managed, begin saving early for
    retirement, save more and select retirement savings options that offer
    them the fullest advantage.
        With the funding provided in the President's fiscal year 1999
    Budget, the Department will develop new public service announcements
    for our targeted audiences, produce a video for small businesses to
    identify pension plan options and encourage them to establish a
    employer-sponsored plan and, of course, we will work in partnership
    with the President, members of Congress, and our private and public
    sector partners to conduct a National Summit on Retirement Savings this
    summer.
        All of this will help expand pension coverage to many of the 50
    million workers not covered by pension plans and enhance the security
    of pension plans already in existence. We must protect pensions and
    make them more portable.
        The Administration will be proposing legislation to expand pension
    coverage to some of the more than 50 million American workers who are
    not earning these benefits on their job by making payroll deduction
    arrangements more widely available, offering a tax credit for small
    businesses to defray the costs of starting a new plan, creating a new
    and simpler defined benefit plan for small businesses and requiring
    that workers more rapidly be vested in their employer contributions to
    401(k) accounts. These proposals will also enhance the security of
    pensions by requiring that better information be provided to workers
    about their benefits, improving the audit of plans, and extending the
    Federal government guarantee for certain types of plans.
        The Department's fiscal year 1999 request includes an increase of
    $7 million for pension plan protection activities. This includes an
    increase of $4.5 million for the transition to the new Form 5500 ERISA
    Filing Acceptance system (EFAST). For the past 2 years, this Committee
    has supported the Department's efforts to develop this new system,
    which will soon be in operation. Securing pension benefits, in part,
    occurs when plan officials and service providers understand the
    requirements of the Employment Retirement Income Security Act (ERISA)
    and meet their responsibilities under the statute, including their
    responsibility to file annual reports with the Department. With these
    funds, the Department will also establish a ``help desk'' operation and
    develop a program for direct filing entities. The new system will
    improve the quality and accuracy of processed data and speed their use
    in safeguarding pensions. The investment in the new system will yield a
    projected net savings to the Federal government of approximately $57
    million over the 5-year life cycle of the system.
        The Department also proposes an increase of $1.6 million for the
    Pension Plan Service Provider Investigative Probe to be conducted by
    the Office of Inspector General. This initiative will enhance
    retirement security by identifying and investigating racketeers and
    criminal enterprises who manipulate the investment of pension fund
    assets for their own benefit.
        The Department also has a role in private health benefit
    regulation. The fiscal year 1999 budget proposes $4.6 million to
    administer the Department's responsibilities related to implementation
    of health care reforms in the new health care laws. The Health
    Insurance Portability and Accountability Act of 1996, the Newborns' and
    Mothers' Health Protection Act of 1996, and the Mental Health Parity
    Act of 1996 establish many new protections for employee health
    benefits. These laws added new provisions to the Employment Retirement
    Income Security Act (ERISA) and demand additional regulatory,
    interpretative, enforcement, and disclosure efforts. The Department is
    working in conjunction with the Departments of Health and Human
    Services and Treasury on the implementation of these new laws.
        The President has proposed legislation to allow early retirees to
    buy into Medicare. The Administration is concerned about the plight of
    older workers who unexpectedly lose their health benefits when they
    lose their jobs or retirees whose benefits are eliminated. Too many
    Americans who have worked hard all their lives suddenly find themselves
    losing their health coverage just at the time when they need it most
    and can afford it least. The President's proposal would provide
    dislocated workers with an option to continue coverage under Medicare
    by buying into the program for as long as they need it, or until
    standard Medicare coverage becomes available. Retirees who lose their
    benefits will also be able to extend COBRA benefits in order to
    maintain access to the health care that is essential for them.
        There are several new proposals, totaling $17.2 million, in the
    Department's Workers' Compensation Programs in fiscal year 1999 to be
    drawn from the benefit funds established for these programs. One
    proposal is for an expansion of $3.2 million in the Periodic Roll
    Management (PRM) program that supports the Federal Employees'
    Compensation Act (FECA) program. This proposal is designed to reduce
    the costs of the Federal government's workers' compensation program by
    re-evaluating long-term disability cases. Also, there is a proposed
    financing shift of $3.5 million from general revenues to the fair share
    collections in the Special Benefits account. Funding the PRM from these
    employer-supplied ``Fair Share'' funds in the Special Benefits account
    properly ties these staff investments directly to the account which
    will accrue the resulting savings. With the expansion of the PRM
    project, the total estimated savings in benefit payments by the Federal
    government from fiscal year 1992 through fiscal year 2002 will be
    approximately $672 million. The Office of Workers' Compensation
    Programs has also proposed an additional $3.3 million for the Black
    Lung program to facilitate Year 2000 conversion.
     quality workplaces--foster quality workplaces that are safe, healthy,
                                    and fair
        The Administration proposes $37 million for a multi-faceted
    initiative to fight abusive child labor, both internationally and
    domestically. I would particularly like to recognize Senator Harkin's
    national leadership on this issue over the past 4 years.
        As America takes its place in the global economy, international
    labor standards, particularly prohibitions on forced labor and
    exploitative child labor, benefit all economies. To provide additional
    support for the International Labor Organization's International
    Programme for the Elimination of Child Labor (IPEC), the Department
    requests $27 million, increasing the total amount available in grants
    to $30 million. This increase would ensure continuity, expansion and
    sustainability of existing IPEC programs. This increased funding would
    allow the ILO to include more countries in their technical assistance
    programs, and conduct more detailed analyses of issues of child labor
    and exploitative labor practices worldwide. These additional funds
    would expand the program in a way that is consistent with the lead role
    the United States plays in the fight against child labor exploitation
    worldwide.
        We can't lead internationally unless we do all we can at home.
    Domestically, there has been considerable progress in reducing illegal
    child labor. However, problems persist--particularly in agriculture
    where working families face additional problems resulting from
    inadequate child care and illiteracy. An increase of $5 million in Job
    Training Partnership Act Pilots and Demonstrations is proposed to
    develop new models for work and learning opportunities, including
    mentoring, for young migrant farmworkers so that they may qualify for
    other job opportunities with career potential.
        The Department also proposes $4.1 million to increase compliance in
    targeted industries, including garment manufacturing, agriculture,
    health care and other low-wage industries. While maintaining planned
    education and outreach among agricultural employers and a near term
    focus on ``salad bowl'' commodities, these additional resources will
    enable the Department to double its current level of effort and
    specifically target those crops and regions where the data and
    experience suggest the prevalence of child labor violations. Also
    included in this amount is an additional $800,000 for expansion of the
    National Agricultural Workers survey to include significant data on
    child labor.
        In another area of child labor enforcement, the Department proposes
    a $1 million increase for a review and update of child labor hazardous
    occupational orders, which pertain to child safety in the workplace.
    These hazardous orders, the last of which were issued in the early
    1960's, will be updated to take into account new industries and
    technologies and address the needs and dangers of today's workplaces as
    they relate to young workers.
        Worker safety and health is essential to a quality workplace. The
    budget proposes $355 million, an increase of $18 million, for workplace
    safety and health programs. An increase of $2.8 million is proposed to
    support workplace safety and health enforcement in fiscal year 1999.
    This initiative builds upon the Department's commitment to focus on
    inspections on worksites with the highest lost work day injury and
    illness rates, either through the Cooperative Compliance Program or an
    alternative mechanism. Proposed funding will support front-line
    compliance officer penetration and expand the level of compliance
    assistance offered to employers choosing to partner with the
    Department. The Department also will highlight the construction trade
    in an effort to focus on the leading causes of fatalities in that
    industry. An increase of $1.3 million is included to enable State
    partners to meet new challenges and complement Federal program
    strategies. The budget proposals also include $4 million to enhance
    training capabilities offered by the Department and to direct outreach
    materials towards specific industries, work processes and localized
    safety and health issues. These funds also will allow for augmentation
    of state consultation programs which provide free on-site consultations
    to employers upon request.
        Continuing the work of the New OSHA which emphasizes a cooperative
    approach, balancing enforcement with compliance, is already making a
    big difference. You can talk with the owners and workers of EZ Paintr
    in Milwaukee, Wisconsin about that. Through its cooperation with OSHA
    in Wisconsin, EZ Paintr, a paint roller manufacturer, reduced its
    workplace injuries and illnesses by nearly 60 percent and cut its
    workers' compensation costs by more that 80 percent (from 1991 to
    1994).
        When OSHA inspected EZ Paintr in 1992, the company had a lost
    workday injury rate of 13.9; by 1996, it had dropped to 5.1. As the
    owners of EZ Paintr have noted, ``working together with our employees
    to provide a safe workplace makes monetary sense.'' Throughout the
    process, the company also worked closely with the United Steelworkers
    Union. Continuing on this common sense, cooperative approach will truly
    help us achieve my goal of reducing accidents, injuries and illnesses
    in the workplace.
        The budget also proposes $211 million, an increase of $8 million,
    for mine safety and health programs. To address concerns about the
    effectiveness of a major component of the Federal program to protect
    miners from exposure to respirable coal mine dust and quartz, the
    Department took steps in fiscal year 1997 and fiscal year 1998 to
    increase Federal monitoring of exposure limits to aid in restoring
    confidence in the Federal program. In fiscal year 1999, an increase of
    $2.7 million is proposed to target sampling inspections at coal mines.
        The Department is also proposing to increase resources by $1.2
    million for the analysis and resolution of difficult compliance
    problems for targeted hazards, while taking a cooperative approach with
    mine operators to encourage long-range solutions for a safer and
    healthier work environment.
        A fair workplace is also essential for a quality workplace. The
    Department proposes $67.8 million, an increase of $5.5 million, to
    implement a compliance assistance strategy in civil rights enforcement
    and to expand its Fair Enforcement Initiative to support the
    Administration's efforts to strengthen enforcement of civil rights
    laws. The compliance assistance strategy will implement technical
    assistance and training guides for contractors; encourage Federal
    contractors to self evaluate their EEO performance; and develop and
    deliver grass root technical assistance seminars. This proposal will
    help contractors comply more easily with their EEO obligations. The
    Fair Enforcement Initiative will increase the number of contractors
    brought into compliance while reducing burdens on contractors, such as
    paperwork requirements. This proposal allows the Department to continue
    a Fair Enforcement strategy which includes a tiered review process,
    upgraded information technology capabilities, and paperwork reduction.
        Finally, the Department proposes a $5 million Child Care initiative
    which will support the President's proposal to greatly improve the
    quality of services provided by day care providers. Quality child care
    service goes hand in glove with having an adequate supply of competent,
    professional child care providers. In fiscal year 1999, the Department
    proposes to expand the registered apprenticeship system using these
    funds to assist States in building their infrastructures and
    replicate--based on a nationally recognized West Virginia model--
    training for skilled Child Care Development Specialists in at least 10
    States. This initiative provides industry-recognized certification and
    development of career ladders in the child care field.
                 government performance and results act [gpra]
        Under my leadership, since my arrival in May, the Department has
    taken GPRA very seriously and I believe we have made considerable
    progress in meeting both the legal requirements and the spirit of the
    Act. We realize, however, that there is more work to be done as the
    Department continues to refine its strategic plan to move further
    toward an outcomes focus. The performance plan recently submitted with
    the budget request reflects my budget and program priorities, arrayed
    by the strategic goals, to achieve the results planned for the
    Department in fiscal year 1999. This Plan also responds to concerns
    raised by the Government Accounting Office (GAO) and Congressional
    staff during their review of the Department's Strategic Plan that it
    did not adequately reflect the integrated and cross-cutting nature of
    the Department's programs and activities. We are committed to working
    with the Office of the Inspector General (OIG) and GAO to improve our
    management systems and procedures. The OIG has agreed to work as a
    partner with the Department to provide the Congress and me with advice
    on how to attain the highest possible results from program performance.
        One of the primary aims of the Department's fiscal year 1999 Annual
    Performance Plan is to advance the Department toward achieving my
    vision of an integrated Department, one in which component agencies
    work together to achieve common goals. This plan represents a major
    step in that direction, as capitalizing on the commonalities and
    linkages between DOL's agencies is critical for successful plan
    accomplishment.
        A major management challenge in fiscal year 1999 will be to
    establish a process aimed to assure the Department's performance and
    level of accountability for program results. To oversee implementation
    of the Department's fiscal year 1999 and subsequent Performance Plans,
    and coordinate all the Department's programs as a unified Department of
    Labor, I will institutionalize a strategic management process to
    maintain a central focus and accountability of the Department's many
    programs and activities. This is in addition to current efforts
    designed to better align performance-based information systems,
    including a unified capital planning evaluation process for information
    technology systems, financial management integrity to obtain a clean
    audit opinion of the Department's Financial Statement on an annual
    basis, and human resource utilization.
        I believe that the fiscal year 1999 Annual Performance Plan, which
    is directly tied to my budget request, sends the American public a
    clear message of the purpose and mission of the Department and
    represents a commitment to the achievement of my strategic goals--a
    prepared workforce, a secure workforce, and quality workplaces. The
    Plan presents the programs, activities, and achievements that DOL will
    strive to accomplish in fiscal year 1999, the means by which its
    performance will be evaluated, and the standards to which it will be
    held accountable by Congress and the American public.
        I look forward to working with the committee and I thank you for
    the opportunity to appear before you. I will be happy to respond to any
    questions.

                             Job training programs

        Senator Specter. Thank you, Madam Secretary. I thank you
    for coming to Philadelphia shortly after you were confirmed and
    sworn in, where we took a look at one of the very important job
    training programs. There is an enormous need in America today
    for job training. We have a low unemployment rate, but within
    that group there remain people who could undertake work if they
    had the training and also if they were located in the right
    spots. So the transit bill which we passed last week with the
    reverse commute from, say, center city Philadelphia to
    Montgomery County, a suburban affluent county, and to Reading,
    PA, in Berks County, taking people from areas where people have
    no jobs to areas where they do have jobs, is a very important
    component.
        The tax break, where there is a fringe benefit which is not
    taxable where people can get transit fare up to $780, I just
    was discussing this with my distinguished colleague, Senator
    John Chafee, the author of that bill, could be very, very
    important.
        With respect to the Welfare-to-Work Grants Program, I would
    like to go over with you some of the components. But first
    could you share with the subcommittee what you have learned
    from your tours of local projects around the country? What are
    the biggest problems, and how successful have we been in
    involving the private sector?
        Secretary Herman. Let me respond to the question on two
    levels, Senator, first, as a result of my tour what were the
    key learnings, and second, what can we do more to involve the
    private sector. With regard to the tour, it was a 10-city tour
    for me commencing in October of last year and just ending in
    February of this year. Coming away from that tour I believe
    that we have several challenges if we are going to ensure that
    welfare-to-work is successful for the long haul this time
    around. If you would permit me for just a few moments to expand
    on some of those challenges.
        Senator Specter. By all means.

                                welfare to work

        Secretary Herman. The first I believe is a recognition that
    these individuals who are making the transition from welfare to
    work really want to be treated as workers. I call them new
    workers, especially today, because it is clear to me that they
    are suffering from the stigmatization of being labeled as ex-
    welfare recipients, and, therefore, they do not feel as though
    they have the ability to leave their past behind them and to
    really begin anew, and to really get a firm toe hold, if you
    will, in the labor market today with all of the rights and
    protections that other workers are entitled to. So I think a
    recognition, first of all, of these individuals as a new source
    of talent, as a new labor supply, is very important for us
    psychologically as a country, and not to label them under the
    old traditional stereotypes.
        Second, I repeatedly saw in all of the cities that I
    visited the three biggest barriers to maintaining a job today--
    child care, transportation, as you so correctly just pointed
    out, and housing. But I would have to say the biggest barrier
    is, in fact, child care, and then transportation. We are going
    to have to do a lot more to make sure that we can move workers
    to where the jobs are since we know today that three out of
    four jobs are in suburban communities. Two out of three of
    these individuals who are trying to make the transition are in
    inner cities, so there is a clear mismatch between where the
    workers are oftentimes and where the jobs are. So innovative
    strategies around transportation, as well as child care
    support, are going to be very important.
        Third, I would say historically we put a lot of emphasis on
    getting jobs. We have not put enough emphasis on keeping jobs.
    I believe that in order for this population, especially the
    hardest to serve that remain, to be successful we are going to
    have to do a lot more to stress mentoring and coaching and
    other kinds of support services to enable individuals to stay
    on the job, and to follow them for longer than the prescribed
    periods that we have in the past.
        I would also add parenthetically that while there is much
    that is being said today about the decrease in welfare roles,
    that I believe the biggest challenge really remains because the
    hardest to serve really still remain on the rolls, those with
    multiple barriers, poor work histories, low to no educational
    experience or work histories. I believe that we do not have a
    lot of experience, quite frankly, with serving that population.
        Last, I would just comment on a need for a focus on
    fathers. So much of our welfare attention has correctly been
    placed on mothers who are largely raising these children alone
    in their own families, but not enough is being said about
    fathers. While we have certainly beefed up our efforts in the
    criminal justice system to enforce child care payments, you
    need a job in order to pay child support. We have got to do a
    lot more, I believe, to bring fathers into the loop, to be
    responsible parents as well, as a part of this welfare-to-work
    initiative.

                          Welfare to work coordination

        Senator Specter. Madam Secretary, with respect to
    developing a plan to coordinate welfare implementation with
    other departments, Transportation, HUD, HHS, it is projected
    that HHS Secretary Shalala will have the chief oversight
    policy. When will you finalize your plans, and tell us, if you
    can, how it will function coordinated with those departments
    and perhaps the Department of Justice, particularly in the area
    for training for juvenile offenders who will have unique needs
    for shaping what they can do in the workplace?
        Secretary Herman. With regard to the coordination, we do
    have a staff working group representing various agencies who
    have responsibilities for the welfare-to-work initiative,
    looking at better coordination and how we can work more closely
    together to ensure success of our welfare-to-work initiatives.
    Specifically with the responsibilities that Congress gave to
    the Department of HHS and Secretary Shalala for the overall
    evaluation of this effort, we are working very closely with the
    HHS team on the inputs into that evaluation so that we can make
    sure that we are going to appropriately measure the right
    outcomes, the right results for this initiative. I am confident
    that the close relationship that we have with HHS is going to
    result in better coordination in the field as a result of it.
        As we look in particular at our efforts to coordinate with
    departments like Justice on juveniles, we see as you know,
    Senator, that many of these young kids today come from families
    who are on public assistance. So our efforts on the out-of-
    school youth initiative, as well as what we are doing to more
    intensely work with these young people, will also be
    coordinated.
        I was particularly struck by recent data which suggests
    that when we look at our out-of-school youth population, that
    we are focussed on as a part of welfare-to-work, that generally
    12 percent of them are juvenile delinquents. If you look in
    particular at African-Americans in this population, you are
    talking about 34 percent of that particular group. So we have
    to have greater coordination, in my view, if we are going to be
    successful in this area, with the Justice Department.

                      Youth offender demonstration grants

        Senator Specter. Madam Secretary, in the Judiciary
    Committee we are wrestling with a juvenile crime bill. We have
    had quite a battle, and we split 9 to 9 on whether the lion's
    share of the funding should be in prisons or whether there
    ought to be rehabilitation. My views are that we have to divide
    the criminal element into two parts, the career criminals,
    those are people who have committed three or more major
    offenses, and isolate them from society with life sentences.
    But as to others, where they are going to be released, and
    especially with juveniles, I believe we have to approach it
    with a so-called seamless web to try to move them through the
    educational process, and if they become delinquents to have
    literacy training and job training. If you release a functional
    illiterate without a trade or a skill, that individual goes
    back to a life of crime.
        Now, I am pleased that we were successful in providing your
    Department with $12,500,000 for youth offender demonstration
    training grants for the new program which starts July 1, 1998.
    Have you made any of those grants, and what do you project for
    the future on that subject?
        Secretary Herman. We have not made grants to date, Senator.
    The funds will be available, as you said, July of this year. We
    have been working, however, on developing the competitive
    guidelines that will go to States to make the appropriate
    requests for those funds. As a part of the guidance that we
    will be giving in this area, we intend to work very closely not
    only with our State and local work force development boards but
    also with correctional institutions and facilities to be able
    to target this population in particular.
        Senator Specter. When you move ahead on that program, Madam
    Secretary, I would be interested in your Department's
    evaluation as to what funding is really necessary on the
    training grants for juvenile offenders. My sense is that if we
    really were serious about violent crime, that we could cut it
    by about 50 percent, if we trained, literacy training and job
    training, those people who are going to be released. It is for
    public safety, No. 1, but obviously for the quality of life of
    those individuals. It has always seemed to me just ridiculous
    that we have not allocated the resources necessary for that
    kind of realistic rehabilitation.
        So as you work through the program, the subcommittee would
    appreciate it if you would give us your appraisal as to what
    really is necessary on a nationwide basis to do the job.
        We have been joined by the distinguished Senator from
    Arkansas, one of the distinguished Senators from Arkansas, one
    of the most distinguished Senators in the body, Senator
    Bumpers.

                        remarks of senator DALE BUMPERS

        Senator Bumpers. Thank you very much, Mr. Chairman.
    Secretary Herman, Tuesday morning my chief of staff and I were
    driving to work and I was telling her that during a speech I
    made the night before to 300 or 400 Arkansans who were in town,
    mostly business men and women, that as I closed out my remarks
    I talked about what a great country this was. I remarked on how
    fortunate we were to live in a civilized society under the
    magnificent organic law we call the Constitution, and how
    wonderful it was to know that when we sat down to eat we knew
    that the food had been inspected and was pure, that when we
    took medicine we knew that medicine had been tested over and
    over again, when we got on an airplane we knew that we were
    being handed off by a computer in Oberlin, OH, to a computer in
    Memphis, TN, and the security one feels with all of that.
        I grew up in the South, poor, during the Great Depression,
    and was the beneficiary of tremendous Government assistance.
    But while I was talking I saw a husband and wife in the back of
    the audience who were demonstrating through their facial
    expressions their contempt for what I was saying. When you have
    made as many speeches as I have you can pretty much tell what
    is on people's minds and whether they are agreeing or
    disagreeing with what you are saying. These two people were
    obviously disagreeing just by their motions and actions.
        She said is it not amazing how many people are irrational
    about their contempt and hatred of Government, and I said yes,
    but this guy may have just had a terrible experience with the
    IRS. He may have had a terrible experience with somebody else,
    like OSHA. It may be that while he thought he was running a
    good plant, treating his employees well, trying to comply with
    the laws as best he could, OSHA inspectors swooped down on him
    and the first thing you know he is being fined. After 3 months
    of harassment he is being fined, he is being abused,
    linguistically, as well as financially, and he thinks it is an
    unnecessary and unwarranted intrusion into a business which he
    feels he is running well and serving everybody's purposes.

                          training of OSHA inspectors

        Such was the case as far as I am concerned with Hudson
    Foods in Noah, MO. I am sure I do not know all there is to know
    about that, and I blame the Department of Agriculture for
    forcing the sale of Hudson Foods, which I believe was as
    innocent as innocent could be. The E.coli came into that plant
    from another federally inspected plant, but the owner of Hudson
    Foods bore the brunt of the whole thing. He had no choice. His
    name was in lights all over the Nation for 1 month, and his
    sales declined to nothing. He had no choice but to sell, and he
    sold the corporation for $300 million less than it would have
    brought 2 days before this happened.
        So if Mr. Hudson and his wife had been in the audience and
    they had been making those faces, I would have understood,
    whether I was talking about food inspection service or whether
    I was talking about OSHA.
        Just let me ask you this. What kind of training do these
    OSHA inspectors get so far as their conduct in a plant is
    concerned, not their technical skills at picking out violations
    of safety standards, but just their conduct, their attitude? I
    ask you this in the utmost good faith as one who has championed
    and voted for strict OSHA regulations ever since I have been in
    the Senate, and even when I was Governor and charged with the
    responsibility of administering a lot of them. What kind of
    instructions do these people get before they go into a plant
    about their conduct and their attitude toward the people in the
    company?
        Secretary Herman. Thank you very much for your comments and
    your questions, Senator Bumpers. They do get classroom training
    and they do get training in terms of how to approach businesses
    today. As you know, this is my second tour of duty at the
    Department of Labor. I was there 20 years ago, and I can
    honestly say that one of the things that has impressed me the
    most about coming back to the Department 20 years later is the
    attitude and the spirit of what I call the new OSHA, and the
    culture changes that OSHA really is trying to bring about today
    in terms of how it does business. That culture change involves
    the way it goes in today to conduct an inspection.
        If you will recall the old OSHA, they had random surveys.
    They were not necessarily targeted on the most hazardous
    industries. In the old OSHA you did not get any prenotification
    even that someone was coming in. It was always the surprise
    factor. In the old OSHA you had no chance to correct a finding
    or violation, the way you do now under the new OSHA with many
    of the changes that have been put in place.
        But the changes, the culture changes that are taking place
    in the new OSHA do require that we provide substantial training
    of our employees and of our inspectors, so that this new way of
    doing business, if you will, is felt more broadly in the
    organization. So I want you to know that we are on the road, I
    believe, to making positive changes for the better. I think we
    are working much more cooperatively with businesses, with small
    businesses in particular, and we have beefed up our own
    training requirements. That includes not only classroom
    training for our inspectors but on-the-job training as well.
        Senator Bumpers. Secretary Herman, I see my time is up, Mr.
    Chairman, and I am going to have to leave, but let me just
    remind----
        Senator Specter. If you would like to take a little longer,
    Senator Bumpers, go ahead. I am sure Senator Kohl would yield
    to you his time. [Laughter.]

                         targeting of Poultry industry

        Senator Bumpers. Thank you, Senator Kohl. Let me just say
    that I believe the stories I heard that came out of that plant
    about OSHA's conduct for 3 months. They were there for 3
    months. Not only did they check the payroll records, they
    checked everything. Bear in mind that this was a 2-year-old,
    state-of-the-art, $11 million plant. I saw some of the pictures
    of the things that were considered to be violations. I suppose
    from a superficial standpoint maybe that would stand up, but it
    certainly did not look to me like anything that would warrant 3
    months of activities by so many people in that particular
    plant.
        My closing question is this. At some point during Robert
    Reich's tenure as Secretary preceding you, there was an
    understanding, and you could never convince the poultry
    industry any differently, that they were being targeted by
    Labor because a lot of these plants are not unionized. You have
    seen those stories.
        Secretary Herman. Yes, I have, Senator.
        Senator Bumpers. They had no reason not to believe them. I
    am not sure exactly what Secretary Reich's statement was, but
    it was something to the effect that they were targeting this
    group. I am going to tell you something. I do not believe in
    targeting. I do not believe an entire industry in the United
    States deserves to be targeted. If you have a legitimate
    complaint that you consider credible from a credible source
    about violations in any kind of a plant, you will never hear a
    complaint from me if you investigate. But to take on the steel
    industry or the poultry industry or the beef industry or any
    other industry simply because you have heard rumors to a
    certain effect is absolutely unacceptable to me.
        You do not even have to respond to that, but I would like
    for you to respond to whether or not the Department of Labor
    has, in fact, started a lot of investigations based on the idea
    that this particular industry ought to be targeted?
        Secretary Herman. Well, I can certainly say, Senator, in
    regard to the poultry initiative, that I believed very strongly
    that we should engage in consultation, that I was not someone
    who wanted to play the ``gotcha'' game or have surprise raids,
    if you will. That is why we have reached out to the poultry
    industry. We did meet with more than 50 producers in the
    industry to talk about what the issues were and what the
    concerns were.
        Where we are at this point is that we have come back with a
    series of findings and recommendations, and the staff is
    presently engaged in putting those findings and recommendations
    back into the field so that everyone has the benefit of that
    knowledge and information to decide on appropriate steps and
    recommendations. I think, quite frankly, Senator, a lot of us
    were surprised at some of the information that did come back
    that I believe in the end will help not only the industry but
    all of us who are concerned about safety issues in the poultry
    industry. We are making that information generally available so
    that we all have the opportunity to see it and to examine it,
    and to ask ourselves what are the best corrective actions.
        One of the things, just parenthetically, that we found that
    was contributing to the most injuries in the industry were
    slips and falls resulting in back injuries that actually had to
    do with the chicken fat that was on the floor. That is not
    something that one would have thought would have manifested
    itself as the greatest finding in terms of the injury and
    accident rate, but that is one of the findings, for instance,
    that came out of the survey.
        But we are putting all of that information back into the
    field, and what we want to do is to continue to consult as to
    what we should do to correct these findings.
        Senator Bumpers. Well, it would be OK with me if you
    started a crash course over there on teaching some of those
    people what civilized conduct is.
        Secretary Herman. I can appreciate those comments, Senator.
        Senator Bumpers. Thank you, Mr. Chairman.
        Senator Specter. Thank you, Senator Bumpers. Senator Kohl,
    you have your full time, of course.

                          remarks of senator HERB KOHL

        Senator Kohl. Thank you, Senator Specter. Ms. Herman, I
    wanted to ask you about retiree health care coverage. In
    Milwaukee the employees of the Pabst Co., are not alone in
    this, but they, as you know, had their health care coverage
    eliminated by the employer as a result of a contract loophole.
    They were left stunned and disappointed, and in many cases
    unable to handle their health care coverage because their
    company, which had promised them in writing that their coverage
    would be maintained as retirees, simply decided it had become
    too expensive and they eliminated that benefit to these people.
        My question is what can you do for those people at the
    Pabst Co., and at other companies who have had this happen to
    them? And beyond that I would like to ask you whether or not
    there is legislation that you or we need to propose and enact
    to ensure this retiree health coverage?
        Secretary Herman. Thank you very much, Senator, for your
    question. President Clinton in his most recent announcements on
    Medicare buy-in took into consideration not only the issue of
    what happened with the workers at Pabst, but as you have
    correctly pointed out, other workers who have had promises
    broken to them by their employers for their health coverage as
    a part of their retirement benefits package. As you know, the
    Department has been a friend of the court in the Pabst
    situation, as with other situations, to try and get employers
    to maintain and to keep those promises.
        Recognizing that that is not happening, the President has
    proposed that we allow those workers, such as the workers in
    the Pabst Brewing Co., who had promises to them broken, to be
    able to purchase COBRA coverage for up to 125 percent of the
    average cost of active employees, and to have the option of
    extending that COBRA coverage until they are eligible for
    Medicare. The other consideration that the President put
    forward is the ability to buy into Medicare if you are 55 years
    of age and older, if you have been dislocated from your job so
    that you have that as a bridge, as a fall back, as some of
    these workers were also dislocated as a result of the actions
    that have been taken there and in other communities.
        So I am hopeful that both of these provisions will actually
    help workers, one, those who have had promises broken, and two,
    those who have been dislocated from their jobs, to have the
    ability to continue some kind of health coverage for
    themselves.

                       Pabst retiree health care coverage

        Senator Kohl. Is there anything in particular that you can
    offer these employees at the Pabst Co., now?
        Secretary Herman. Right now what we are looking at as a
    part of our own beefed up dislocated worker assistance program
    is going in with rapid response teams that are not only working
    to certify workers for new job situations, but also to look at
    what the benefit packages can be as a part of those new job
    environments that we are doing job search and job assistance
    with. This will not help the Pabst workers, but certainly it
    was instructive for us to see what those workers experienced,
    to know that we have to go in on a much faster pace to be able
    to act as an intermediary in the labor market and to be a
    bridge for them to other employment situations to get other
    opportunities, and not have the time lag in such a way that by
    the time that we do move in oftentimes we have either lost
    contact with the workers or certainly they have given up on any
    viable alternatives being available to them.
        Senator Kohl. I appreciate that. I know it is a knotty
    problem without an easy answer, but, you know, to those people
    in particular, and we are here to help people one by one, if we
    do that then we help everybody. Those people in particular at
    the Pabst Co., are out of luck right now. They are out of
    pocket and they are not able to cover their health insurance.
    The legislation that is being proposed, hopefully, will get
    passed, but it is not there right now.
        Is there something that you can suggest that your
    Department and we, working together, can devise to help those
    people?
        Secretary Herman. What I would be very interested in trying
    to do, and I have asked our team at Labor to look into this, is
    to actually go back and to track those workers basically to see
    where are they right now and what is the current state. We just
    had a very successful experience with that kind of an effort in
    the State of Louisiana with Fruit of the Loom plant closings
    there, because we were able to go back in with a better data
    tracking system to bring those workers, if you will, back into
    a matrix so that we could help facilitate not only training
    assistance but job search and job placement assistance. I am
    pleased to report that almost 70 percent of them have now been
    served, and I am hopeful that we will be able to get the other
    30 percent. What I would like to do is to go back and to take a
    look as well as to what has gone on with those workers in
    Milwaukee.
        Senator Kohl. I would appreciate that opportunity to work
    with you and your Department for those people to see if we
    cannot help them to get some kind of coverage.
        Secretary Herman. We will take a look at it, Senator.
        Senator Kohl. I do appreciate it. Thank you so much. Thank
    you, Mr. Chairman.
        Senator Specter. Thank you, Senator Kohl.
        [The statement follows:]

                    Prepared Statement of Senator Herb Kohl

        Thank you, Mr. Chairman. Madam Secretary, it is always a
    pleasure to see you. Thank you for giving us this opportunity
    to delve into some priorities addressed in the 1999 budget.
        In this new era of balanced budgets there are tight
    restraints on spending initiatives. Yet even though there are
    fewer funds to go around, the pressures of globalization on
    today's workers and businesses continue. While America leads
    the way in many industries, in other sectors consolidation is
    taking place and workers are being downsized. These people need
    to be given the skills to move from industries of the past to
    the technology of the future. The key to rising wages in
    today's economy is mastering innovative technology.
        Whenever I speak to young people I always stress to them
    the importance of learning a skill. Whether they go to college
    or vocational school, they have to enter the job market with a
    skill that the marketplace values. The job training
    opportunities offered by the Federal government are important
    tools used by many young people to gain these skills. I look
    forward to hearing how the Department of Labor's budget intends
    to expand opportunities for young people.
        While we are enjoying this time of economic growth, we must
    not forget those who have been left behind. Unemployment may be
    low, but it continues to burden too many individuals and
    families. Some of these workers have a long work history and
    will only be dislocated for a short period. Others, for
    instance those moving from welfare to work, are trying to find
    a job after being out of the work force for many years. These
    folks are the hardest and most expensive to serve. At the same
    time, the labor market is very tight and they have the best
    chance in a long while of finding a job. The stakes are high
    because if we cannot help these people find a job now, what
    will happen to them during an economic downturn? We have to do
    all we can to get them the job experience and skills they need
    so that when a recession occurs they have what it takes to keep
    their jobs and weather the storm.

                       remarks of senator LAUCH FAIRCLOTH

        Senator Specter. Senator Faircloth.
        Senator  Faircloth. Thank you, Mr. Chairman, and thank you
    for holding this hearing. Thank you, Madam Secretary, for being
    with us.
        I was elected to the Senate to create workfare and not
    welfare. That was what I ran on, and I notice that in Wisconsin
    Gov. Tommy Thompson says he has written his last welfare check.
    I hope he is right, because everyone who receives benefits now
    is required to work for those benefits. I am a great admirer of
    Governor Thompson and what he has done over the years. As a
    founder of the Senate to preserve a real welfare reform working
    group, I am particularly interested in hearing about your plans
    to successfully implement the new welfare-to-work programs so
    that we stay the course on welfare and not lapse into the old
    system.
        In your Department, $3 billion will be spent over the next
    2 years to provide grants for on-the-job training, job
    placement, job vouchers, and private sector wage subsidies.
    Most of these ideas have been tried many times before with very
    little success, as you well know. I would like to hear what you
    propose to do differently to make them work this time. I agree
    that the key is not only finding jobs, but in keeping them. I
    am very much aware that transportation and child care are two
    of the biggest obstacles facing workers today, and new workers
    entering from possibly a welfare role.
        But more and more jobs require basic skills in computer
    knowledge and training. This is one of the reasons that I have
    championed the community college tax credit last year.
    Community colleges and I have worked with them over the years
    and running the North Carolina Commerce Department, have been
    the best job training program we have ever had in the Nation,
    much more successful than Federal job training programs.
    Welfare caseloads are dropping, 30 percent in North Carolina
    alone, but I understand that your Department is seeing an
    increase in the number of people on welfare 3 years or longer,
    and an increase in those who have been on welfare before and
    are returning.
        I would be very much interested in your response when we
    get back to the question part of it, and I again thank you for
    being here.
        Secretary Herman. Thank you very much, Senator Faircloth.

                    Employee Retirement Income Security Act

        Senator Specter. Thank you very much, Senator Faircloth.
    Madam Secretary, there has been a lot of concern about the
    question of responsibility of HMO's for precluding ill people
    from getting certain specialist care because of their
    evaluation that the care was not needed. President Clinton
    recently made a reference to a specific case in speaking before
    the American Medical Association last week about a 12-year-old
    boy stricken by cancer who had his leg amputated after his
    managed care insurer balked at paying for the alternative
    treatment that might have saved the limb. Under 1974 Federal
    legislation, the young man and his parents were barred from
    suing the health plan for damages and have no case against the
    doctor because he urged the leg saving procedure.
        You are a member of the President's commission which is
    looking into the need for legislation to protect patients'
    rights under managed health care plans. This may be a little
    too early for you to make an assessment, this is a big
    question. I want to give you fair warning, because it is a very
    big question----
        Secretary Herman. It is a big issue.
        Senator Specter [continuing]. To impose liability on the
    HMO's, changing the Employee Retirement Income Security Act. It
    is a very unusual provision of Federal legislation to preclude
    a State cause of action, but that is where we are. Would you
    care to make a comment?
        Secretary Herman. We spent a great deal of time, Senator,
    examining this issue as a part of the work of our commission,
    and I believe that while there was general agreement and
    recognition that we have to do something to provide greater
    protection for patients, for citizens, in this area, since
    ERISA plans are not subject to remedies under State laws and,
    therefore, citizens do not have the right to sue, if you will,
    under State law because of ERISA preemption. Exactly what is
    the appropriate response is an issue that the commission itself
    did not reach a conclusion on. What it did say in its
    recommendations to the President was that we needed to have a
    national dialog on this issue, that it was important to begin
    this debate in earnest, that we had to have a balanced approach
    that took into account not only a patient's legitimate right
    for redress but the obvious employer concerns of the costs that
    would be attendant to expanding ERISA as one option, or just a
    whole question of what you do to impose remedies in this area.

                            cost of expanding ERISA

        I know that this is also something that the Congressional
    Budget Office is looking at in terms of scoring, as a part of
    our own recommendations to the President. They have not yet
    come back with whether or not increased remedies would
    necessarily be a burdensome cost to plans, and I know that we
    are all waiting to get a better handle on that cost data. But
    there have been other studies that have been done, and I see
    the red light is on, there have been other studies that have
    been done that do suggest that strengthening remedies in this
    area does not necessarily suggest that it would result in
    increased costs to plans, but we have not reached a formal
    recommendation in this area yet.
        Senator Specter. That is a splendid answer which would win
    you plaudits from any diplomatic post in the world.
        Secretary Herman. Thank you, Senator.
        Senator Specter. But what do you think?
        Secretary Herman. I think, speaking for the Department of
    Labor, that we have to have strengthened remedies in this area.
        Senator Specter. We have to have what?
        Secretary Herman. Strengthened remedies in this area. I
    think the loopholes that presently exist are loopholes that
    have to be closed in some way. I am not prepared, of course, to
    say exactly what is the best way to do that, but I do think
    that when you look at the loopholes that are there, that we
    have to have increased remedies in this area.
        Senator Specter. Well, it is going to be expensive beyond
    any question. I think there is no doubt about that. But the
    question is what is fair here? What this subcommittee is going
    to do, we are going to convene a hearing on this subject alone.
    This has received a lot of attention and a lot of notoriety. In
    my open house town meetings I hear the question all the time
    about the gag rule about capitation, and there is no doubt
    about the increase in cost. As the increase in costs go up, we
    also know the people lose their health benefits. So there is a
    tradeoff here, but I think it requires some greater analysis. I
    also think that if there were a little sharper focus in public
    attention, that there would be a little more care exercised by
    the HMO's in denying the extra care.
        This is an area where I think the President's bully pulpit,
    the Secretary's bully pulpit, you have a powerful bully pulpit,
    Madam Secretary, and so does Senator Faircloth, so we may just
    have to call some of that into action.
        Secretary Herman. I certainly would agree with you,
    Senator, and I would look forward to any efforts on the part of
    your work here to give greater attention to this issue because
    I think the more we can focus public attention and public
    debate on it, you are right, it does also build in I think more
    responsible actions.
        Senator Specter. We are going to submit quite a number of
    questions on this for the record. I will give Senator Faircloth
    the last word.
        Senator  Faircloth. I did not understand in your second
    answer to Senator Specter that you are going to have to have
    stricter what?
        Secretary Herman. He asked me what did I think personally,
    and I was making the statement on the part of the Department of
    Labor and not speaking broadly for the administration, because
    the President has not taken a position on this issue, but I
    said I thought we needed to have increased remedies,
    strengthened remedies in this area, but I was not prepared to
    say what those remedies, what form those remedies would take.

                      North Carolina formula grant waiver

        Senator  Faircloth. One question that pertains to my home
    State. I will ask that, and then I will be through. My State,
    North Carolina, submitted their plan recently, and in it we
    asked you to grant a waiver to allow us to administer our
    formula grant through our local job service employer committees
    rather than through the work force development boards. North
    Carolina is not trying to exclude work force development
    boards. We have been directed by State law passed by General
    Assembly to use our local employers, the job service employer
    committees. Do you have the authority to grant this waiver?
        Secretary Herman. Presently, Senator, I am very much aware
    of what has just happened in the State of North Carolina with
    regard to the actions that the State legislature took there. We
    are presently in consultation with the individuals in the State
    now, trying to determine exactly what is possible in terms of
    what has happened in North Carolina. This is the first time
    that this has happened. We have had 16 States that have come
    before us that we have approved their plans for formula grants.
    The legislation does require that the States work through the
    work force development boards. We have not had, quite frankly,
    a situation like this occur, and I must admit that I am not in
    a position at this point to answer the question directly
    because we are just beginning that consultation with the State
    now.
        Senator  Faircloth. Well, I was hoping you did have the
    authority to grant the waiver, and I think North Carolina
    should have the flexibility to set up a program that puts
    welfare recipients into jobs, and it not get hung up in the
    inevitable hang ups we can produce here in Washington, as you
    are well familiar with. If the law is not clear, then I would
    like to look at maybe offering a rider to the budget bill or
    somewhere to make it clear, because this is authority you
    should have. If you would please, in just the next few days, by
    the first of the week at least, if you or someone in your
    office would give me a call and tell me where we stand on this.
        Secretary Herman. I would be happy to get back with you on
    it, Senator, or have someone on our staff be in touch with your
    office.
        Senator  Faircloth. If you could this week, because they
    are pushing me on it in the State. Thank you so much.

                              NLRB budget request

        Senator Specter. Madam Secretary, one final question. Last
    year Congress froze funding for the NLRB which was nearly $12
    billion below the agency's request. Now this year the NLRB is
    the subject of a request for nearly a $10 million increase.
    From your perspective as Secretary of Labor, please give me
    your assessment of the workload and budgetary needs of the
    NLRB. Do you really need that increase?
        Secretary Herman. Well, Senator, as you know, the
    Department of Labor does not have direct responsibility for the
    NLRB, but I do know that the administration has put in a
    request of $9 million or $10 million, or a 5-percent increase
    in funding, due to the tremendous backlog of cases that the
    NLRB is experiencing. It was precisely because the budget of
    the NLRB was frozen in 1997, staff were laid off, that this
    backlog has now resulted. So, yes, I do believe that additional
    resources to the NLRB would certainly help with the tremendous
    administrative problems they are having right now in managing
    that backlog.

                         Additional committee questions

        Senator Specter. Madam Secretary, in addition to the
    questions we have asked for the record, would you provide the
    subcommittee with the details on backlog and the necessity as
    you see it for this increase? We would like to have some back
    up verification of that request.
        Secretary Herman. Yes, Senator, we would be glad to do
    that.
        [The information follows:]
            National Labor Relations Board--Fiscal Year 1999 Funding
                       president's request: $184,451,000
    Background: Limited funding and reduced staffing have led to growing
            backlogs
        Funding has not kept pace with inflation: The current funding
    level, adjusted for inflation, is 8.7 percent below the 1995 level and
    10.6 below the 1993 level; The requested amount, adjusted for
    inflation, would still be 7 percent below the 1993 level; and Current
    funding has imposed stringent limitations on Agency activities (see
    below).
    Agency staffing has been reduced to meet funding limitations
        By more than one-third since 1980--from about 2,950 to 1,900
    projected this year.
        By more than 15 percent since 1990 and more than 30 percent since
    1984.
        Field professional staffing has been reduced by 6 percent since
    1990, managerial staffing by 13 percent, and clerical staffing by 20
    percent.
        The staffing level (FTE) for fiscal 1996 and 1997 were the lowest
    since 1962, yet the case intake was nearly 60 percent higher.
    While intake has remained steady, workload has grown
        Because of reduced staffing, each employee must now handle 22
    percent more cases than in 1988 and almost 33 percent more than in
    1985.
        Cases have grown more complex due to corporate and workforce
    restructuring and other factors, increasing demands on resources.
    Information Officer program has also filtered frivolous charges, so
    that cases filed are more complex.
    Despite efforts to prioritize and be more efficient, case backlogs are
            growing
        Cases are piling up in the Regional Offices at the initial,
    investigative stage, where two thirds are dismissed or withdrawn:

    Situations pending initial investigation in regional offices

    September 30, 1988................................................ 2,891
    September 30, 1993................................................ 3,858
    December 31, 1997................................................. 7,151

        Cases are taking longer to investigate:

    Overage cases (more than 45 days) pending initial investigation

                                                                     Percent
    September 30, 1988................................................   3.8
    September 30, 1995................................................  21.2

        In 1996, to cope with rising backlogs, a new case prioritization
    program was implemented (see page on ``Impact Analysis'' below). Time
    targets were extended for lower priority cases. But even under new time
    targets, as of December 1997, 27.4 percent of all cases were overage at
    the investigative stage. Of the highest priority cases (14 percent of
    all cases), 17.4 percent were overage (pending more than 7 weeks).
        Delay in court enforcement of Board decisions has increased because
    of a shortage of attorneys to handle the cases.
        Issuance of complaints, review of Regional Director dismissals of
    unfair labor practice charges, and computation and collection of
    backpay are taking longer.
        Agency has taken extensive steps to operate more efficiently (see
    below). Without these, backlogs would be even greater.
    Funding at the administration requested level would reduce backlogs,
            promote efficiency
        Steady growth in backlogs would be halted.
        Backlogs would begin to be reduced by up to 10 percent or more.
        Hiring of more field staff, so that cases could be investigated
    quicker, yielding faster complaints, settlements, and dismissals.
        More consistency in ability to hold timely elections and promptly
    certify results.
        Improved quality of case handling from enhanced training in
    investigation and litigation.
        The NLRB promotes stable and productive labor relations. It is most
    effective when it can resolve disputes quickly. Budget reductions have
    led to growing case backlogs. Efficiency measures have slowed the
    growth of backlogs, but adequate funding is necessary to provide
    effective service and to invest in further improvements.
    Actions taken to meet current funding freeze
        Hiring freeze (Agency expects to lose 80 or more staff through
    attrition this year); Planned cancellation of all trials in September;
    Elimination of all training; Travel for elections, trials and other
    case handling drastically cut; Computer and other equipment
    acquisitions sharply reduced; and Automation program stretched out
    beyond 2000.
    ``Impact analysis'' program to maximize benefit of available resources
        Impact Analysis was implemented in 1996 to cope with rising
    inventory of uninvestigated cases, to ensure that more prompt attention
    and staff resources go to the cases with greater public impact.
        Under Impact Analysis, cases are classified at initial intake to
    determine time frame for investigation and resources to be applied.
    Previous system was essentially first-in, first-out.
        Cases receiving highest priority involve alleged unlawful activity
    having a demonstrable impact on the general public through disruptions
    of business activities, or significant impact on many employees.
        Cases are recategorized if necessary as investigation proceeds.
        Time targets for completion of investigative stage (previously 45
    days for all cases):

            Category                                                   Weeks
    III...............................................................     7
    II................................................................    11
    I.................................................................    15
                  nlrb automation program for fiscal year 1999
        Program is behind schedule due to funding limitations in fiscal
    year 1998; automation budget was scaled back from $11 million to $5
    million.
        On-time completion of system requires investment of $6.9 million in
    fiscal year 1999 to pay for:
      --Upgrading of desktop PC's capable of running new software;
      --Fileservers for database storage in headquarters and field offices
            Fileservers will also meet other data storage needs;
      --Installation in field and headquarters offices;
      --Continued development of software necessary to implement the
            system; and
      --Complete implementation of Year-2000 modifications.
        In addition to addressing the Year-2000 problem, new system will
    improve accuracy and availability of information for reports to
    Congress, public inquiries, GPRA compliance, FOIA compliance, internal
    management
        Failure to implement system as planned will necessitate increased
    costs in future years to solve Year-2000 problem
    Steps taken since 1994 to restructure and streamline NLRB operations
        Reduction of rental space by closing/reconfiguring field offices.
    Since 1994 and especially during the 1996 space reduction initiative,
    we reduced space in 28 field locations, including the Division of
    Judges. We also closed the El Paso, Texas Resident office and moved the
    D.C. Resident Office into Headquarters. The 1998 planned reductions
    include 4 regional offices and Headquarters. Our end of year space
    assignment is expected to be 721,269 square feet--a more than 10
    percent reduction from the 1994 level of 801,991 square feet. This
    represents a rental savings of $2.25 million.
        Streamlining of supervision throughout the Regional Offices and in
    the Headquarters divisions to reduce layers of review, delegate
    decisionmaking to the lowest practicable level, utilize supervisory
    staff flexibly to perform direct casehandling; and increase the ratio
    of line employees to supervisors. Field office supervisory positions
    have been reduced from 155 in 1994 to 123 today.
        Significant increase in the identification and transfer of
    ``portable'' work such as decision writing and telephonic
    investigations from a temporarily understaffed or backlogged region to
    one that can better handle the increased workload or to Headquarters.
    Savings come from moving work, not people.
        Streamlining oversight of Regional Offices by reducing the number
    of districts in the Division of Operations-Management at Headquarters
    by one-third, reducing the number of managers and increasing the
    managerial responsibility of each remaining district manager by 50
    percent in 1995.
        Eliminating administrative clearances and reviews. Delegation of
    additional casehandling and administrative authority to Regional
    Offices, eliminating requirements for clearance or approval from
    Washington.
        Reduction of investigative travel costs by asking parties who file
    ULP charges (charging parties) and are situated within a 120-mile
    radius of a field office to come to that office to provide their
    evidence; by increased use of affidavits taken by telephone and of
    questionnaires or requests for statements of facts; by clustering cases
    so that multiple cases can be handled on a single trip.
        Use of resident agents, working out of their homes in cities where
    there is no field office but where there is steady casehandling
    activity. Currently there are 3 resident agents, with one additional
    position posted and one more under consideration.
        Increasing the use of information technology (IT) to facilitate
    casehandling and management. In recent years, the Agency has made
    enormous strides in automation of all work processes. Computerized word
    processing and quantitative analysis and electronic communication have
    permeated the Agency's culture. Current projects include legal
    research, forms, case tracking, greater use of Internet technology.
        Streamlining of Office of Appeals by reducing layers of review,
    establishing time targets, and screening of cases. Case processing time
    reduced by more than half.
        Restructuring of compliance program by emphasizing more efficient
    methods of backpay computation and collection and improving
    coordination between Headquarters and Regional Offices.
        Reduction by 20 percent of FTE devoted to Board staff supervisory
    functions.
        Adoption of rules governing proceedings before ALJ's, designed to
    facilitate the expeditious resolution of unfair labor practice
    proceedings--including assigning judges to convene settlement
    conferences and permitting judges to dispense with full written briefs
    and to deliver ``bench decisions'' in some cases.
        Adoption of a ``Speed Team'' procedure to reduce amount of staff
    time devoted to cases where the Board is adopting recommended decisions
    of ALJ's.
      highlights of steps taken since 1994 to reform and prioritize-case
                                   processing
        Impact Analysis.--Implemented in 1996 to cope with rising inventory
    of uninvestigated cases, to ensure that more prompt attention and staff
    resources go to cases with greater public impact. Cases are now
    classified at initial intake to determine time frame for investigation
    and resources to be applied. Investigative approaches to cases can now
    be differentiated based on the categorization of the case. Previous
    system was essentially first-in, first-out.
        R case reinvention program.--There was an extensive examination of
    Regional Office practices to identify and resolve impediments to prompt
    union representation elections. All aspects of R-case processing were
    given higher priority. Particular attention is now paid to cases that
    take longer than average time to hold election. As a result,
    preelection issues are resolved sooner, whether by agreement or
    hearing/decision; time to holding elections has been reduced. Half of
    all elections are now held in 42 days compared to 50 days before
    reforms; 87 percent of elections are now held in 57 days compared to 75
    days before.
        10(j) Program.--The goal has been to promote uniform application of
    NLRA injunction provisions. A manual was produced and distributed to
    all field offices; training was conducted, with subsequent refresher
    sessions. Each Region named a 10(j) coordinator. Cases are now reviewed
    for 10(j) potential early in investigation.
        Compliance Program Reform.--Regional Office procedures for
    computing, collecting backpay and obtaining other remedies were
    extensively reviewed. The manual was updated and expanded. Regions may
    now use sampling, estimating techniques to simplify backpay
    computation. Compliance cases now prioritized under Impact Analysis
    principles.
                                     ______

                         Additional Committee Questions
                  programs for women reentering the workforce
        Question. Secretary Herman, what are your plans to provide
    training, technical assistance and resources on displaced homemaker
    services to employment and training programs that deal specifically
    with women re-entering the workforce.
        Answer. The Department of Labor's Women's Bureau has a long history
    of helping women, especially displaced homemakers, re-enter the labor
    force. This was the case during my tenure as Director of the Women's
    Bureau and continues under the leadership of Acting Director, Ida
    Castro. For fiscal year 1997, the Women's Bureau provided a grant for
    the continuation of training and technical assistance services to
    approximately 1,300 programs that work to assist close to 400,000
    displaced homemakers re-enter the workforce. The Women's Bureau is
    continuing funding for this program in the current year and has
    requested $600,000 to continue the program in fiscal year 1999.
        Eligible displaced homemakers, welfare recipients and other low-
    income women can access job training and related services under the Job
    Training Partnership Act (JTPA). About 40 percent of all participants
    in the JTPA Adult Training Program are welfare recipients. The
    Department of Labor's planning guidance for the JTPA program for
    economically disadvantaged adults identifies displaced homemakers as
    one target group whose needs should be addressed. To ensure that this
    occurs, the Employment and Training Administration (ETA) monitors JTPA
    State grantees each year. States and local communities have addressed
    the needs of displaced homemakers for many years. The Department also
    has funded a series of demonstration projects to explore ways to help
    displaced homemakers re-enter the labor market.
        Question. What actions will the Department take to help returning
    women workers enter occupations in the information technology field?
        Answer. The assistance the Department of Labor provides to job
    seekers, including women who are seeking new or better jobs, ensures
    that they have appropriate and relevant information about labor
    markets, job opportunities, and skill and other hiring requirements.
    The Department is responsible to make sure that the job training system
    it administers with State and local partners is responsive to the skill
    needs of the job market, including the information technology field.
        For example, the Department of Labor is helping States and local
    communities build One-Stop Career Center systems, and an integral part
    of One-Stop is the creation of America's Labor Market Information
    System (ALMIS). ALMIS is intended to help women and men exercise
    informed choice in their workforce decisions and to ensure that
    training is linked to occupations that are in demand in the communities
    in which they reside. Among its components are the America's Job Bank,
    which is the largest and most frequently visited job bank on the
    Internet, with 750,000 job openings posted daily; and America's Talent
    Bank, which allows registered employers to search a data-base of
    electronic resumes to find suitable candidates for their job openings.
    Many women will continue to benefit from these services. In addition,
    the Women's Bureau directly provides women returning to the labor force
    with information on occupations, projections, required education and
    training, and employment opportunities in the global economy.
        Job training programs are another avenue for providing American
    women with the skills they need for good jobs. The Women's Bureau will
    focus its Women in Apprenticeship and Non-Traditional Occupations Act
    (WANTO) technical assistance grants on community-based organizations
    that work with employers and labor unions in non-traditional
    industries, particularly computer-based industries in information
    technology and other computer-based manufacturing processes.
    Coordinated with the Bureau of Apprenticeship and Training, the effort
    will focus on women who are former welfare recipients who live in
    empowerment zones and enterprise communities and their employers. The
    Women's Bureau also plans to look for information technology and
    related employers and labor unions who want to work with community-
    based organizations that will deliver technical assistance services.
        In addition, Congress is currently considering legislation that
    would streamline and consolidate the web of job training programs and
    better prepare the American workforce for the 21st century. This
    legislation reflects key principles proposed by the President in his
    G.I. Bill for America's Workers. This job training reform will empower
    women with resources and information, helping those who seek training
    or retraining with control over their own careers. This empowerment
    will make the job training system more responsive to the skill needs of
    the market, including the information technology field.
        Finally, the Department also recently issued a solicitation for
    training individuals in high technology fields. We anticipate that a
    large number of women will benefit from job training under these
    grants.
                                  minimum wage
        Question. The President's budget proposes raising the Federal
    minimum wage, which now stands at $5.15 per hour, to $6.15 over the
    next two years. Would you expect this higher minimum wage to apply to
    welfare recipients engaged in work under the new welfare law.
        Answer. The minimum wage and other provisions of the Fair Labor
    Standards Act (FLSA) apply to working welfare recipients just as they
    apply to all other workers. If welfare recipients are employees under
    the FLSA's broad definition, and their job is covered by the FLSA, they
    must be paid the Federal minimum wage.
        Question. Do you expect the minimum wage requirement to act as a
    deterrent to employers' willingness to hire welfare recipients?
        Answer. As people move from welfare to work, one of the most
    important lessons they can learn is that work pays. Raising the minimum
    wage is a signal that the nation should reward--and not hold back--
    people who try their best to work hard and play by the rules. Welfare
    recipients should not be excepted from that deal.
        New block grant rules and declining caseloads have resulted in many
    States having more flexible resources and additional funds available
    per welfare household this fiscal year. A report by a House Ways and
    Means subcommittee shows that last year the typical State received a 56
    percent increase in available funding per recipient family over 1994
    levels. In addition, States may use their State-only welfare funds to
    serve a variety of needs and special populations. States have
    substantial available resources.
        The President proposed and won passage of the Welfare-to-Work Jobs
    Challenge which will make $3 billion available over the fiscal years
    1998 and 1999 to States and localities for the purpose of helping the
    hardest-to-serve recipients secure lasting, unsubsidized employment.
    The President also proposed and won passage of a ``super'' Work
    Opportunity Tax Credit (WOTC) for long-term recipients. Employers could
    receive a credit equal to 35 percent of the first $10,000 in wages in
    the first year and 50 percent of the first $10,000 of second year
    wages, making for a maximum credit to private sector employers of
    $8,500 as opposed to $2,400 under the regular WOTC.
        In light of these additional resources and incentives to employ
    welfare recipients, it will be difficult to argue that a modest
    increase in the minimum wage would act as a deterrent to employer's
    willingness to hire welfare recipients.
                                 job stability
        Question. A recent research study found that from half to two-
    thirds of the welfare recipients who leave welfare to work lose their
    first job within a year. Sixty percent of the job losses were initiated
    by the employees, in response to problems either on the job or at home.
        What have you learned about problems facing these former welfare
    recipients that need to be addressed to promote job retention?
        Answer. Krista Olson and LaDonna Pavetti of the Urban Institute
    estimate that almost 90 percent of welfare recipients between the ages
    of 27 and 35 experience at least one of five major potential barriers
    to employment--low basic skills, substance abuse, a physical health
    limitation, clinical depression, or a child with a chronic health
    problem. They estimate that almost half of welfare recipients
    experience a severe form of one of these barriers. Low basic skills is
    the most common of these barriers--about a third of welfare recipients
    score in the bottom decile of the women's distribution of the Air Force
    Qualifying Test (AFQT), and another third score in the 10th to 25th
    percentiles.
        About 10 percent of welfare recipients report having physical
    health problems that prevent them from seeking work; 22 percent report
    being depressed over 3 days a week; 5 percent report a serious drinking
    problem; 9 percent report heavy cocaine or crack use either currently
    or at some point in their life; and 21 percent have a child with a
    chronic medical condition. Of these various barriers, low basic skills
    appears to be a particularly strong barrier to employment--only 44
    percent of welfare recipients who score in the bottom decile of the
    AFQT report working at all in the current or previous year.
        Olson and Pavetti note that while welfare recipients with barriers
    to employment often work despite these barriers, these recipients
    seldom work for a full year. Of welfare recipients who worked despite
    having a serious barrier to employment, only 11 percent reported
    working the entire year. Olson and Pavetti suggest that a particularly
    at-risk group of welfare recipients are those that have a potentially
    serious barrier to employment and have no recent work experience. About
    a quarter of the welfare population fits this description. Further,
    because welfare recipients with serious barriers to employment seldom
    work throughout the year, Olson and Pavetti estimate that half of the
    welfare population will need fairly intensive levels of services if
    they are to fare well over the long-term.
        All of this suggests that it will be very difficult for a fair
    proportion of welfare recipients to maintain employment. Realistically,
    it will be extremely difficult for all welfare recipients to attain
    self-sufficiency, and perhaps the key issues as welfare reform plays
    itself out over the next few years are what proportion of welfare
    recipients may not be able to become self-sufficient and how States and
    the federal government deal with these persons and their children.
        To maximize the proportion of welfare recipients who maintain
    employment, there are four elements that can be built into welfare-to-
    work programs. First, there probably needs to be strong case management
    component that provides follow-up services for at least two years.
    Butte County has perhaps the strongest results in the California GAIN
    evaluation, and its program has a strong emphasis on case management.
    Second, part-time jobs may be a good compromise for welfare recipients
    who cannot maintain a full-time job. Third, work experience in the non-
    profit sector may also be appropriate for welfare recipients not ready
    for employment in the private for-profit sector. Finally, welfare-to-
    work programs could include a health component to address physical,
    mental, and family health problems that are barriers to sustained
    employment.
                           update on welfare-to-work
        Question. Concerns have been raised that placing welfare recipients
    in jobs would hurt the working poor. What is your assessment of this
    problem?
        Answer. We do need to be sensitive to the effects of welfare reform
    on the low wage labor market, but it is likely that the low wage labor
    market will be able to absorb the numbers of welfare recipients
    entering it.
      --In addition, we anticipate that creative State and local efforts
            (spurred by the broad flexibility of welfare-to-work (WTW)
            grants and the additional resources they are expected to
            leverage) will produce new and sustainable relationships (in
            areas such as public housing, transportation, child care and
            other support services) which will benefit the working poor as
            well as welfare recipients. Many innovative welfare reform
            efforts have already extended child care to the working poor to
            reduce the high marginal tax rates on low income individuals
            leaving welfare.
      --Both the Earned Income Tax Credit and transitional benefits such as
            child care, health care and transportation assistance can ease
            the difficult move into self-sufficiency. One of the
            assumptions of transitional benefits is that earning progress
            and job-related benefits will lessen the need for the
            transitional benefits.
      --The Department of Labor will encourage service providers, employers
            and other interested parties to avoid having low-wage American
            workers displaced by those who are hired from the welfare
            roles. Current low-wage workers need opportunities to acquire
            the skills necessary to move up the career ladder and make room
            at the entry level for job candidates who are on welfare.
      --Making this kind of room is the result of extensive job development
            not only for entry level jobs but for jobs on the rungs just
            above the working poor.
      --The Department and our State partners are taking steps to ensure
            that the products under America's Labor Market Information
            System (ALMIS) are available to welfare recipients and the
            working poor. One-Stop Career Centers and employment service
            offices have a strong network of contacts with employers
            providing jobs in the initial third of the labor market.
        Question. The Department recently issued a solicitation for the
    competitive grant process. Could you explain how much money is
    available, who is eligible to apply, and what is the expected outcome
    from these grants?
        Answer. The amount of money for the competitive grants is 25
    percent of the total appropriation, after the set asides (for the
    Indian program, the Health and Human Services (HHS) evaluation, and, in
    fiscal year 1999, the performance bonuses to States) have been taken
    out. In fiscal year 1998, there is a total of $368.25 million, split
    between two separate solicitations. In fiscal year 1999, there will be
    approximately $343.25 million, split between two or more solicitations.
      --Eligible applicants include Private Industry Councils (PIC's),
            political subdivisions (cities and counties), and private
            entities, which can include community development corporations,
            community-based and faith-based organizations, disability
            community organizations, community action agencies, and public
            and private colleges and universities. Private entities are
            required to apply ``in conjunction with'' the PIC or political
            subdivision. [Note: Public colleges are included as private
            entities for the purposes of this program].
      --In addition to the general performance goals set forth for the
            overall WTW program (the primary being placement of individuals
            into unsubsidized jobs with good career potential for self-
            sufficiency) the expected outcomes of the competitive grants
            are two-fold--
        --First, these grants are targeted to the special needs of local
                communities. While WTW formula grant funds are distributed
                according to a general formula applied across the country,
                competitive grant funds are meant to address issues
                specific to local areas, as described by the community in
                its grant applications.
        --A second major goal particular to the competitive grants is
                expansion of the knowledge base on effective welfare-to-
                work strategies. Innovation is an important factor in
                evaluating competitive grant applications. Replication and
                dissemination of best practices will be a critical activity
                for the Department and its grantees.
    Formula Grants
        In regard to WTW formula grants, the majority of States are very
    eager to begin implementation. As of March 18, twenty State plans had
    been received. The Department of Labor and Health and Human Services
    Regional Offices continue to work closely with States to provide
    assistance in developing their plans. Since States are at various
    stages of readiness, the Department will continue to accept formula
    grant plans until June 30, 1998.
        Most of the States who have not yet submitted plans will do so,
    once they are able to complete their State and local planning processes
    and establish the appropriate linkages and partnerships necessary.
        Question. I've also heard that not all States have submitted plans
    for the formula funds. Could you explain why some States have opted out
    of the program?
        Answer. To date, very few States have informed the Department that
    they will opt out of the WTW program in fiscal year 1998. These States
    are, for the most part, small Western States with relatively low
    welfare caseloads. They have told the Department that they feel they
    can effectively serve their welfare caseload with the funds available
    to them under the Temporary Assistance for Needy Families (TANF)
    program. These States have also indicated that they may be interested
    in participating in fiscal year 1999.
        Question. What impact has welfare reform and the welfare-to-work
    initiative had on the workforce development system? Are they working
    together or competing?
        Answer. DOL anticipates that welfare reform will put more pressure
    on States and local areas to use JTPA funds to serve higher proportions
    of welfare recipients relative to other JTPA target groups. However, it
    is still too early to pick up such changes in administrative data. It
    also is much too early to tell how the welfare-to-work initiative will
    affect the broader workforce development system. DOL expects that
    welfare-to-work efforts will complement rather than compete with the
    broader workforce development system because in many local areas the
    same agency will operate both the JTPA and the WTW programs. Currently,
    63 percent of low income adults and 57 percent of JTPA's welfare
    recipients who leave the program are employed three months later,
    although half of the welfare participants have little if any work
    experience at program entry.
        Although administrative structures and levels of integration vary
    across States, the workforce development system has been working hard
    to incorporate welfare reform into its services structure. The
    Interstate Conference of Employment Security Agencies (ICESA) recently
    conducted a survey that indicated that:
      --In almost two-thirds of States, Employment Security Offices have
            agreements with welfare/social service agencies to provide
            employment services to job ready welfare recipients.
      --At least three States have enacted major legislation to put
            workforce development and welfare within the same agency.
      --Many other States indicated that they are planning to integrate
            services through their One-Stop system, and the majority have
            established Human Resource Investment Councils to integrate a
            variety of workforce and welfare programs and services.
      --Given the emphasis at the Federal, State and local level directed
            towards system integration, coupled with the flexibility
            provided by WTW grants, we see the workforce development and
            welfare infrastructures moving towards seamless service
            provision versus client competition.
                           success of welfare-to-work
        Question. The new welfare law provides a total of $3 billion over
    the next three years to help transition public assistance recipients
    into self-sufficient wage earners. Is this funding, coupled with
    existing Job Training Partnership Act resources, going to be enough to
    reach the requirement that 50 percent of adult welfare recipients
    obtain jobs by the year 2000?
        Answer. The 50 percent requirement you refer to appears to be the
    ``minimum participation rate'' of all TANF participants in work
    mandated in section 407 of the Act. The 50 percent participation is
    applicable in fiscal year 2002 and after. Minimum participation rates
    for fiscal year 2000 and fiscal year 2001 are 40 percent and 45
    percent, respectively. The $3 billion available for WTW in fiscal years
    1998 and 1999 are targeted at helping some of the hardest to employ
    TANF recipients successfully make the transition from welfare to work.
    These resources alone, or coupled only with JTPA resources, are not,
    nor were they intended to be, sufficient to achieve the 50 percent
    participation rate. Success in this area is dependent on a
    comprehensive strategy which utilizes WTW, JTPA, and TANF resources
    combined with TANF maintenance of effort resources, WTW matching funds,
    and other community resources to successfully move individuals from
    welfare to productive employment.
        Question. What happens after the year 2000, when the Welfare-to-
    Work program terminates, but States are still required to transition 50
    percent of welfare recipients into jobs?
        Answer. Because WTW funds are available for expenditure for a three
    year period from the date provided to a State, the WTW program will
    continue to operate at some level in most States through fiscal year
    2001.
                               performance bonus
        Question. The welfare reform legislation sets aside $100 million in
    ``bonuses'' to be distributed to States in fiscal year 2000 for
    successful performance. What criteria have been established on the
    basis for awarding performance bonuses?
        Answer. The Department has not yet finalized its performance bonus
    criteria but will do so before the August 1998 deadline. Performance
    bonus criteria will, as the statute and regulations require, be based
    primarily on the success of WTW programs in placing participants in
    unsubsidized employment, retention of participants in employment for at
    least 6 months, and participant earnings gains.
        Question. How do you intend to insure that States don't substitute
    federal welfare-to-work grant funds for activities that would otherwise
    have been supported with State and local funds?
        Answer. A number of provisions are included in the statute and WTW
    regulations which guard against such substitution of federal funds for
    already existing State and local program funding. First of all, the WTW
    program requires the expenditure of $1 in State or local funds on
    allowable WTW activities for each $2 in WTW grants funds received by a
    State. Second, the statute and WTW regulations limit the use of WTW
    funds to the provision of services which are not otherwise available in
    the community. Finally, the statute and WTW regulations prohibit the
    use of WTW grants funds or funds used as match for WTW grants funds as
    match for other federally-funded programs. The Department believes
    these safeguards are sufficient to guard against the substitution of
    WTW grants funds for pre-existing State and/or local program funding.
                                   evaluation
        Question. Critical to successful implementation of a welfare-to-
    work program is evaluation of what is effective, and making changes to
    improve performance. What efforts are being taken to make sure there is
    an effective monitoring and evaluation system for the Welfare-to-Work
    program?
        Answer. The Department will assign a Grant Officer's Technical
    Representative (GOTR) to be responsible for monitoring of and technical
    assistance to each WTW formula and competitive grantee. Most of these
    GOTR's will be located in the regional offices. All GOTR's will be
    thoroughly trained in their responsibilities. In addition, the
    Department is developing programmatic and financial/administrative
    management review guides to aid GOTR's in monitoring WTW programs.
    Finally, the Department has worked closely with the Department of
    Health and Human Services (HHS) to develop a comprehensive approach to
    evaluating the effectiveness of the WTW program.
        Question. The degree of this program's success may also depend
    significantly on what you decide to measure as indicators of success.
    What emphasis do you plan to put on going beyond the simple measures of
    ``persons served'' and ``placed in jobs'', to stress the quality of
    jobs, retention and employment, and increased earnings?
        Answer. The Department is committed to measuring the success of the
    WTW program based on outcomes rather than process. To that end, job
    retention, increased earning and other similar measures will be
    important factors in evaluating the program.
        Question. The welfare law places primary responsibility for
    performance data reporting with the Secretary of Health and Human
    Services. What impact has the Labor Department had on developing data
    to be collected from States?
        Answer. The Department is working closely with HHS and OMB to
    develop the data collection/reporting strategy for the WTW program.
        Question. What data collection issues remain to be resolved?
        Answer. Outstanding issues include agreeing on the precise data
    elements to be collected and how the data flow from the grantee to the
    federal level.
        Question. Madam Secretary, the Welfare reform legislation gave you
    responsibility to implement the $3 billion work program, but gave the
    Secretary of Health and Human Services responsibility for data
    collection and evaluation. Is this assignment of evaluation
    responsibility to HHS a concern to you?
        Answer. It is very rare for one agency to have responsibility for
    program operations while another agency is responsible for the
    evaluation of the program. I am confident, however, that the two
    Departments can work together on this.
        Question. What role does the Labor Department have, working with
    HHS, to monitor and evaluate the welfare-to-work effort?
        Answer. In addition to the longitudinal analysis planned by HHS in
    its national evaluation, HHS invited staff from DOL as well as other
    agencies affected by welfare reform such as Housing and Urban
    Development (HUD) to be part of the overall team designing the welfare-
    to-work evaluation. DOL's Assistant Secretary for Employment and
    Training met with HHS Policy and Evaluation administrators on the
    design of the evaluation. DOL's Assistant Secretary and staff also have
    worked closely with HHS in resolving evaluation issues with OMB. DOL
    included in its competitive Welfare to Work grant announcement bonus
    points for local sites willing to be part of the random assignment
    component of the HHS evaluation.
        Question. Will the evaluation system provide data on how many
    former welfare recipients achieve economic self-sufficiency?
        Answer. In addition to the longitudinal analysis planned by HHS in
    its national evaluation, HHS is providing competitive grants to a
    number of States to provide follow-up data on persons leaving the
    welfare rolls. This will include data both on persons who leave welfare
    on their own, and persons who reach welfare time limits. States will
    provide matching funds for such grants and will design their own
    follow-up data collection.
                               america's job bank
        Question. I have heard such great reports about the success of
    America's Job Bank, an Internet site that allows the public to look at
    what jobs are available throughout the country. How are you building on
    this success to meet the growing demand for this type of information?
        Answer. America's Job Bank (AJB) has been achieving solid month to
    month gains in job seeker and employer usage. The Department projects
    that approximately 55 million accesses to the AJB website will be
    recorded in March 1998, easily eclipsing the previous monthly high.
    With daily access to over 750,000 jobs, the AJB ranks as the largest
    Internet job bank in the world. Increasing numbers of firms are placing
    job orders on the service, with growth rates between 10 percent and 30
    percent registered each month in the number of listed job vacancies.
    Some large employers, including IBM and NationsBank, have begun placing
    all of their job openings on AJB.
        A long-standing Federal-State partnership recognizes the tremendous
    potential of the Internet to improve the functioning of the nation's
    labor markets. Working closely with the State Employment Security
    Agencies, the Department has developed America's Talent Bank (ATB)
    under the One-Stop initiative. Through the Internet, job seekers can
    post their resumes from One-Stops and other publicly-funded
    institutions (community colleges, public libraries) or from home. In
    April 1998, a new version of AJB will integrate the ATB. Under this
    combined system it will be easier for job seekers to apply for
    employment.
        Two other initiatives also should be mentioned. Customers who
    desire information on the operation of local, State, regional and
    national labor markets can access America's Career Information Network
    (www.acinet.org). The Department is also beginning the development of
    America's Learning Exchange (ALX), which should help support the
    investment in new skills the nation will need in the next century.
                           learning anytime, anywhere
        Question. Explain the Administration's ``Learning Anytime,
    Anywhere'' initiative. I know that ED has the lead, but what is DOL's
    component?
        Answer. The Administration's Learning Anytime, Anywhere initiative
    emphasizes the use of new technologies to improve postsecondary
    learning by increasing access to education and training, and improving
    program quality. This initiative will make it easier for Americans who
    live in remote rural areas, and have a disability, or cannot take
    advantage of traditional learning because of competing family and work
    demands to access quality learning ``anytime, anywhere.'' This
    initiative requests funding for both the Department of Labor ($10
    million in fiscal year 1999) and the Department of Education ($30
    million in fiscal year 1999).
        The overall leadership for this initiative is coming from the
    National Economic Council and the Office of Science and Technology
    Policy. The initiative has the following broad objectives:
      --To enable adult learners to find information easily on the skills
            they need to advance in or change careers, and compete for
            higher-wage jobs.
      --To expand opportunities for lifelong learning for all adults by
            creating pathways for them to tap into learning on demand
            delivered by a variety of institutions using new technologies
            such as the Internet, CD-ROM, interactive TV, and satellite.
      --To advance the use of technology through the use of existing
            grants, loans, and tax credits in the learning on demand
            environment.
        Under the Department of Education's (ED) proposed Learning Anytime,
    Anywhere Partnerships, ED will offer competitive grants to foster the
    development of high quality learning content where new learning
    technologies are used as a means for delivery. In addition, ED has
    proposed in its Higher Education Act authorization to broaden
    opportunities for distance learners by expanding institutional and
    student aid eligibility, eliminating the different treatments in cost
    of attendance between distance learners and on-campus learners, while
    ensuring quality through accreditation.
        The Department of Labor's (DOL) primary responsibility under the
    Learning Anytime, Anywhere initiative is to develop an Internet-based
    component of America's Labor Market Information System (ALMIS) that
    would serve the same ``public broker'' function for the training market
    that America's Job Bank (AJB) and America's Talent Bank (ATB) currently
    offer for the labor market. This new service, known as America's
    Learning Exchange, or ALX, would fulfill two primary functions: (1) to
    serve as a public conduit for information about, and access to,
    education and training resources, and (2) to foster the emergence of a
    coherent, efficient electronic marketplace for these resources. ALX has
    five primary customers: individuals, employers, education and training
    providers, education and training developers, and workforce development
    professionals.
        Secondarily, the DOL is also working with the Department of Defense
    to advance their Advanced Distributed Learning initiative and to move
    new learning technologies, e.g., the Intelligent Tutors, developed in
    Defense laboratories into use by the public workforce development
    system.
        Several Federal Departments and agencies are involved in this
    initiative. The Department of Education is working to remove
    restrictions on Pell grants for use in a distance learning environment,
    and, if their budget request is approved, will offer challenge grants
    to foster the development of high quality learning content where new
    learning technologies are used as a means for delivery. The Department
    of Defense is pursuing a procurement strategy to foster a new training
    development environment, Advanced Distributed Learning, which is based
    on creating the capability to combine and recombine basic training
    building blocks, called learning objects, using metalanguage
    descriptors. The National Science Foundation, as part of their Advanced
    Technology Program, is offering challenge grants to develop new
    learning technologies.
        Question. How will this initiative be managed?
        Answer. The approach agreed upon to develop ALX, similar to that
    used successfully to develop other ALMIS products, was to form a
    consortium of States and other organizations which had aligned
    interests. Minnesota agreed to lead such a consortium, and it was
    formed at an initial meeting in the summer of 1997. It has met four
    times since then, and now includes representatives from 16 States, 2
    Job Training Partnership Act Service Delivery Areas, 5 nonprofit
    organizations, and 3 Federal agencies. Additional partners are being
    sought. The ALX Consortium is augmented by a core staff component: 2\1/
    2\ full time Federal staff on detail from the National Occupational
    Information Coordinating Committee and 4\1/2\ full time contract staff
    paid for by Minnesota.
        The Consortium is organized into five operating committees: Design,
    Content, Taxonomy, Collaboration, and Marketing, each addressing a
    different substantive component of the initiative. To ensure effective
    management and coordination of the project, there is also a Planning
    Committee, composed of consortium core staff, the lead person for the
    Federal partner, the lead person for the State partner, and the Chairs
    of the five committees. Workplans have been developed for each of the
    five operating committees.
        The Consortium has also established a virtual workspace on the
    Internet (www.excelgovt.org). This space is being hosted by one of the
    Consortium's non-profit partners, the Council for Excellence in
    Government. In it, Consortium members can take part in ``threaded''
    topical discussions, post documents for comment and input, and send or
    receive e-mail from any member or all members of the Consortium.
    Additionally, there are monthly working meetings of the full Consortium
    and weekly conference calls of the planning committee.
                          stigma of welfare recipients
        Question. I share your concern about the stigma that is often
    attached to welfare recipients. That is why Congress established tax
    incentives for employers to hire former recipients. Nevertheless, based
    on HHS data, a large portion of welfare recipients are over 40. Many
    former recipients may face other cultural biases such as age
    discrimination. How does the Department expect to monitor these cases?
        Answer. Both the WTW statute and the implementing regulations
    contain nondiscrimination protections for WTW participants. For
    example, all WTW participants are covered by Federal, State and local
    laws prohibiting discrimination including: The Age Discrimination Act
    of 1975; Section 504 of the Rehabilitation Act of 1973; The Americans
    with Disabilities Act of 1990; and, Title VI of the Civil Rights Act of
    1964. Complaints alleging discrimination in violation of any applicable
    Federal, State or local law will be processed in accordance with those
    laws and the implementing regulations. Questions or complaints alleging
    discrimination in violation of the laws enumerated above may be
    directed to the Civil Rights Center in the Department. In addition, the
    regular program monitoring of State and local operations, which will be
    conducted by our regional office staff, will be able to identify cases
    of discrimination.
                                 school-to-work
        Question. Some parents and interested groups are concerned that
    school-to-work programs steer students away from college and tracks
    them into specific jobs. What evidence do you have to the contrary?
        Answer. School-to-Work (STW) is designed to enhance any student's
    education regardless of whether they're going to college or straight to
    the workplace. The STW initiative stresses academic achievement,
    preparation for college, and exposure to a wide variety of career
    options. It is designed to broaden opportunities for students.
    Internships help students understand the relevance of academic subjects
    and how to apply academic concepts at work and in everyday life.
    Mentors share knowledge, focus, and commitment to one's work while they
    provide extra adult support and encouragement to students. Local STW
    partnerships of parents, employers, community organizations, and
    educators work together on school improvement and enriching programs
    for out-of-school youth.
        Initial evidence from local communities suggests that schools that
    have adopted school-to-work principles have experienced increased
    attendance, reduced drop-out rates and increased college admission
    among students. STW learning experiences help students gain a realistic
    appreciation for what a ``day in the life'' of a career/occupation is
    really like, which aids in college planning and making better decisions
    about postsecondary education. Adria Steinberg writes in the March 25,
    Education Weekly, ``not surprisingly students in such [STW] programs
    often identify the internship, and their connection to adult mentors
    outside of school, as providing them with their most meaningful, and
    rigorous, learning experiences''.
        We can look to one of the first school-to-work initiatives,
    Boston's Pro-Tech program for early evidence. Sixty-nine percent of
    Boston's Pro-Tech class of 1995 went on to college as opposed to 51
    percent of students in Boston's public schools overall. In
    Philadelphia, the graduation rate (from high school) of STW students
    was 97.6 percent, compared to 85.8 percent of other students in the
    district. Good School-to-Work systems have become ``better college prep
    than college prep'' according to Robert Riordan of The Big Picture
    Company (a network of urban schools).
        Question. What steps is the School-to-Work Office taking to ensure
    parents that school-to-work programs won't preclude or discourage their
    children from going to college?
        Answer. Through technical assistance, grant monitoring, and public
    outreach, the National STW Office works closely with State and local
    grantees to ensure that the objectives of the Act are met. This
    includes making sure that partnerships designing State and local STW
    systems represent all appropriate parties including secondary and
    postsecondary educators, employers, parents, community leaders,
    students, and others who are concerned about the education and future
    of our youth. These partnerships are in place to develop and implement
    STW efforts that reflect local needs and community values.
        Question. The School-to-Work Opportunities Act aims to provide
    ``seed money'' or ``venture capital'' to leverage funds from private
    and public resources to promote broad-based school reform. Are you
    concerned that federal funds are not leveraging sufficient non-federal
    funds to sustain school-to-work programs as federal support declines
    and ends?
        Answer. States have been strongly encouraged over the past four
    years to consider how existing federal, State and local funding can
    support School-to-Work once their five-year implementation grant ends
    and/or the School-to-Work Opportunities Act (STWO) sunsets. In the
    first year after the STWO Act became law, data from the first eight
    States (implementing STW) indicated that for every Federal dollar
    invested, $2 was leveraged from other public and private funds. These
    included new contributions, funds redirected from other programs, or
    in-kind contributions, such as staff or facilities. The next assessment
    on funds leveraged from public and private sources will be made in late
    Spring 1998, when data from the latest Progress Measures survey (the
    instrument used to collect this information) will be available. This
    survey is expected to include responses from the 37 States that have
    had implementation grant funding for at least one year.
        Nevertheless, the leveraging of sufficient non-STW funds to sustain
    a fledgling system is a significant challenge. Implementing STW is a
    complex task, and significant time and resources are required to create
    sustainable systems that support education reform, workforce
    development, and economic development. The Departments of Education and
    Labor will work closely with all States to support their efforts to
    develop strategies for sustaining their STW initiatives. Our most
    pressing priority now is to ensure sustainability in the eight States
    who are entering the last year of their implementation grant in 1998.
    We will keep the Congress apprised of these efforts.
                   youth opportunity initiative and job corps
        Question. Madam Secretary, we understand one of your top priorities
    in the coming fiscal year is to create opportunities for out-of-school
    youth through the Opportunity Areas for Out-of-School Youth program. We
    know there is a tremendous need to address the training and employment
    needs of young people who are no longer part of the mainstream--and
    this Committee included $250 million in the Department's fiscal year
    1998 funding for this program, if it's authorized.
        Can you share with us how you see the Job Corps program working in
    concert with this initiative? What role does the Department see for Job
    Corps in the Opportunity Areas for Out-of-School Youth program?
        Answer. The Job Corps program and the new Opportunity Areas
    initiative will have an interactive relationship that will include
    several elements. First, Job Corps outreach/admissions counselors will
    conduct active recruitment in Opportunity Area program sites, making
    presentations to parents, guardians and potential participants and
    discussing the opportunities for training and post-program job
    placement through Job Corps. Second, Job Corps students who are unable
    to complete their Job Corps training and whose homes are in communities
    where an opportunity area program operates will be referred to that
    program. Third, non-residential Job Corps programs located in
    communities where opportunity area programs operate will offer
    enrollment opportunities for eligible youth, allowing them to live at
    home while participating in education and training.
                              job corps expansion
        Question. Madam Secretary, in fiscal year 1998 this Committee
    supported the appropriation of $4 million to begin the site selection
    process for the continued expansion of Job Corps. We are pleased to
    note that the Department acknowledged the Committee's request and has
    asked for an additional $33 million in fiscal year 1999 to continue
    this process and establish 5 new facilities. Madam Secretary, can you
    share with us the Department's long-term plans for the incremental
    expansion of Job Corps?
        Answer. Because Job Corps has a proven track record of
    effectiveness in serving this Nation's most at-risk youth, the
    Department hopes to continue to expand the program on an incremental
    basis over the next several years. We are not in a position to quote
    specific numbers at this time, but I can assure you that each year we
    will explore the feasibility of increasing Job Corps capacity and
    enrollment levels, while ensuring that the quality and effectiveness of
    the existing program is maintained.
                             worker protection laws
        Question. During last year's debate on the Welfare-to-Work
    initiative, there was a great deal of discussion about applying worker
    protection laws to the welfare-to-work program. How are States dealing
    with the reality that the Fair Labor Standards Act does apply to these
    jobs?
        Answer. States are successfully creating employment activities for
    welfare recipients, including work experience, that comply with
    provisions of FLSA.
        To this end, in May 1997, prior to the implementation of the WTW
    program, the Department provided guidance to the States concerning how
    the Fair Labor Standards Act (FLSA) applies to welfare recipients.
    Names of regional contacts from the Employment Standards Administration
    (ESA) were also provided to the States to answer questions and provide
    technical assistance.
        Question. What assistance is the Department providing to States to
    meet the requirements of the Fair Labor Standards Act as States move
    welfare clients into work experience?
        Answer. During the implementation of the WTW program, the
    Department increased its technical assistance efforts to States to
    assist them in developing WTW State formula plans which comply with the
    provisions of FLSA. In addition to the on-going guidance and assistance
    from regional contacts, the Employment and Training Administration
    (ETA) maintains a continuously updated Internet home page on WTW which
    includes answers to commonly asked questions such as ``How does FLSA
    apply to WTW participants?''. Regional WTW training sessions also were
    provided to State staff on the WTW regulations and program design and
    included presentations and materials from ESA staff concerning the
    applicability of FLSA. Following the training sessions, as States began
    developing their plans for the State formula grant program, ETA
    regional staff with the assistance of staff from ESA have worked
    successfully on a one-to-one basis with several States to create WTW
    program designs that assure compliance with FLSA.
                  unemployment insurance integrity activities
        Question. You are asking for $91 million to strengthen the
    integrity of the Unemployment Insurance System, which you say will save
    well over $100 million in 1999 alone. What specifically would these
    funds be utilized for, and how did you arrive at your savings estimate?
        Answer. The fiscal year 1999 President's budget request for
    enhanced integrity activities includes additional funding for the
    following functions: Eligibility Review Program (ERP), Benefit Payment
    Control (BPC), Tax Field Audit, and detection of separation issues.
        The Department estimates that this investment will save trust fund
    dollars of about $120 million in fiscal year 1999, and about $160
    million annually in the outyears. The savings will accrue from
    additional investments in: detection and collection of benefit
    overpayments, ensuring proper eligibility for UI benefits at the
    beginning of a claim, work search review, and collection of taxes.
        Data show that attention to four integrity activities: tax field
    audits, eligibility reviews, benefit payment control, and separation
    issue detection, has eroded over time. The savings estimate was
    developed by examining each of the integrity activities and determining
    the amount of funds which could be retrieved or retained in the trust
    fund given the addition of resources to the activity.
        For example, according to available information a determination can
    be made as to the average reduction in benefit payments due to errors
    detected in an eligibility review. Knowing how many eligibility reviews
    a reviewer can make per year, the savings per additional reviewer was
    calculated. Given average salary rates and the total dollars available
    for eligibility reviews, the number of additional reviewers was
    computed and the result multiplied by the savings per reviewer to
    calculate the savings attributable to the additional ERP's. Similar
    calculations were made for each of the other categories and in all
    cases conservative assumptions were used.
        The $91 million figure was authorized in the Balanced Budget Act of
    1997. For the purpose of determining savings from each of the four
    integrity activities, the $91 million was allocated among the four
    categories in the proportion to the amounts allocated in the fiscal
    year 1997 base grant. Thus, the savings calculation is conservative
    since States will in fact be able to target their funds in activities
    with the biggest payoffs.
                      request for child labor initiatives
        Question. Your budget proposes $37 million for child labor
    initiatives, of which $27 million is for overseas activities. Shouldn't
    we be spending more to correct child labor problems here at home than
    in foreign countries?
        Answer. As background, the Administration's Child Labor initiative
    includes the following four components: (1) $30 million for
    international programs against child labor, including the increase of
    $27 million identified above; (2) $50 million for the Migrant Education
    Program; (3) $5 million for a JTPA Migrant Youth Job Training
    demonstration program; and (4) $4 million to increase enforcement of
    child labor laws in the agricultural sector.
        This Administration is dedicated to fighting abusive child labor
    wherever we find it, here at home as well as around the globe. In fact,
    this initiative is proof that we intend to step up our efforts here at
    home even as we are building upon and increasing existing efforts to
    eliminate abusive child labor worldwide. The President's child labor
    initiative comes to almost $90 million. Most of this budget,
    essentially two thirds of this request, is targeting at correcting
    child labor problems here at home.
        According to ILO estimates, there are 250 million children between
    the ages of 5 and 14 youth working world-wide, of whom at least 120
    million work full-time. Tens of millions of these children work under
    extremely exploitative conditions. The depth of this problem requires
    our increased level of support, and thus we hope to commit one third of
    our child labor initiative to helping the millions of children around
    the world being terribly abused in the workplace.
                             children's initiatives
        Question. You are requesting $9 million under the Job Training
    Partnership Act pilot and demonstration authority for a child labor
    initiative and an apprenticeship child care initiative. Please provide
    for the record a detailed description of how these initiatives would
    work, including the background justification for them.
        Answer. Following are descriptions of the two initiatives:
    Child Labor Initiative
        In conjunction with the President's Child Labor initiative, the
    Department is requesting $5 million under the JTPA pilot and
    demonstration authority to foster new work and learning opportunities
    to help young migrant farm workers (ages 14-18) qualify for other job
    opportunities with career potential.
        The justification for this request is straightforward. Agricultural
    work stretches the limits of child labor standards by requiring long
    hours of stoop labor and exposure to hazardous chemicals. Because of
    the pressing economic needs of migrant families, their young people
    must often work in the fields rather than attend school, resulting in
    high drop out rates. As generations of families stay in agriculture,
    the future of its youth is bleak: continuing poverty, low educational
    achievement and inability to progress in an increasingly technical
    workplace.
        As a demonstration program, this initiative will allow us to test
    the efficacy of a combination of subsidized non-agricultural work
    experience and educational enrichment in expanding the horizons of
    migrant youth, breaking the generational cycle of migratory
    agricultural labor, and combating the violation of child labor
    statutes.
        The demonstration will be geared specifically to the special needs
    of farmworker youth. This will include an annual plan of action which
    will follow participants throughout the year. Through coordination and
    partnerships with schools and service providers across the country,
    participants will be provided with a planned sequence of work
    experience and educational enrichment opportunities as they follow
    their families through the migrant stream.
        The educational enrichment component of the demonstration will
    utilize the School to Work approach of contextual learning. This
    integrates mentoring, ``hands on'' learning, and credentialing as
    supplements to traditional classroom instruction. The subsidized non-
    agricultural work experience component would focus on exposure to
    professional and technical careers (e.g., banking, teaching, health
    occupations, et. al.). This combination of educational enrichment and
    work experience would maintain the participants' contribution to family
    income and allow them to complete their requisite annual academic
    credits without the usual disruption that the migrant stream engenders.
        After project implementation and completion (18-24 months), we
    expect an evaluation of outcomes and impact on the economic future of
    farmworker youth.
    Child Care Initiative
        On October 3, 1998, President Clinton hosted the White House
    Conference on Child Care to focus the nation's attention on the
    importance of addressing the need for safe, available, affordable
    quality child care. Also on October 3, Secretary Herman signed the
    Quality Child Care Targeting Agreement, which is designed to expand the
    utilization of the Registered Apprenticeship System by the child care
    industry.
        The initiative is designed to provide the child care industry with
    locally-owned collaborative partnerships to establish a structured,
    formalized credentialed educational system for child care providers by
    utilizing the National Apprenticeship System.
        Building on successful models will be one of the cornerstones of
    the initiative and to this end the Bureau of Apprenticeship's (BAT)
    West Virginia office has developed a very successful model for training
    Child Care Development Specialists. This child care apprenticeship
    statewide system incorporates training based on the 13 nationally
    recognized functional competencies of developmentally appropriate
    practices and experience. This and other models, like the Maine model,
    will be blended to meet the needs of those States that adopt the
    apprenticeship system of training for this occupation.
        To facilitate the initiative, BAT will convene 7 to 8 regional
    meetings during fiscal year 1998 to introduce the concept and foster
    partnerships needed for implementation on a national basis. Each
    meeting will be broadly inclusive. Participants will include child care
    experts, apprenticeship representatives, health and human services
    providers, educational specialists, and other interested parties.
        The major attributes of this initiative will begin in fiscal year
    1998 with the concentration of building an infrastructure and local
    ownership of the statewide system. BAT will provide guidance,
    leadership, and technical assistance to the process every step of the
    way and act in the capacity of liaison to foster collaboration among
    all parties involved.
        The fiscal year 1999 budget request includes $5 million for this
    initiative. $4 million will be utilized for seed grants in a variety of
    locations from urban to rural areas. With this request the Department
    can provide assistance to a minimum of 10 States during fiscal year
    1999. An additional $1 million in the Program Administration account
    will be used for 10 FTE to address the increased workload associated
    with building a sustainable child care infrastructure.
        By utilizing the apprenticeship strategy we have established a
    career path for child care providers that includes reduced turnover,
    increased wages, and potential educational opportunities.
        The Department of Labor has been approached by Chrysler, Ford, and
    General Motors (GM) to expand the BAT child care program to their
    employees. This would be a collaborative effort between the
    corporations and the United Auto Workers (UAW) union. Because the
    corporations already have existing apprenticeship programs established
    in other fields, they are comfortable with the model. They would like
    assistance from DOL in using the apprenticeship model to train
    providers in an effort to expand and enhance existing on-site child
    care centers. GM's initiative would include 20 States while Ford's and
    Chrysler's would include 10 States each. Regional meetings with the
    corporations and the UAW are tentatively scheduled for late April or
    May.
                             bls job vacancy survey
        Question. The Department's request includes what appears to be the
    development of a new economic indicator, the vacancy survey. Could you
    explain why this survey is needed and how it can be used and by whom,
    and when it will be available? How does this proposal relate to the job
    vacancy survey initiative incorporated in last year's House report,
    which was intended to pilot test the development of local information
    about job vacancies at the local level?
        Answer. Presently, there is no effective way for policy-makers to
    assess labor shortages in the United States. As a result, the existence
    of labor shortages can be inferred only indirectly using labor supply
    information, such as the unemployment rate. National data on job
    openings and labor turnover can serve as demand-side indicators of
    labor shortages. The availability of unfilled jobs is an important
    measure of the tightness of labor markets.
        Development of job openings and labor turnover data at the National
    level would greatly enhance policy makers' understanding of imbalances
    between the demand and supply of labor. Job openings and labor turnover
    statistics considered in conjunction with information on unemployment
    also would be helpful to analysts and policy makers interested in
    monitoring wage rates.
        High vacancy rates signal unmet demands for labor, just as high
    unemployment rates signal unused supplies of labor. Information on
    labor turnover would be of value, among other purposes, for diagnosing
    whether high or rising vacancy rates reflect increased difficulty in
    filling positions as opposed to increased hiring activity. Further,
    comparisons of the aggregate number of job openings to the number of
    unemployed persons can be expected to be useful in understanding
    increases or decreases in labor market mismatch. Estimates of the
    number of job openings by major industry group would enhance the
    diagnostic value of the vacancy information.
        The survey plans call for the first publication of an experimental
    series in late 2001.
        As we understand the pilot initiative undertaken by the Employment
    and Training Administration (ETA) based on last year's House report, it
    was intended to provide information on the number of vacancies by
    occupation at the local level for planning purposes.
        While the BLS initiative included in this year's budget request is
    not directly responsive to the House report, BLS sees these two efforts
    as complementary and is committed to working with ETA to insure
    comparability to the extent possible.
                  status of welfare-to-work competitive grants
        Question. Of the $1.5 billion provided for the welfare-to-work
    program in fiscal year 1998, $368 million are for competitive grants
    awarded directly by DOL to localities and entities working with
    localities. A solicitation for the first round of grant awards was
    published in the Federal Register on December 30 and were due to DOL by
    March 10, 1998. Unlike the formula grants, which are to be administered
    at the local level by Job Training Partnership Act (JTPA) Private
    Industry Councils (PIC's), competitive grants may also be administered
    by cities, counties, other localities, and private entities. (While
    private entities are permitted to apply for welfare-to-work competitive
    grants, the requests for proposals states that profits are not an
    allowable use of grants.)
        How would you characterize the responses you received for the first
    round of bids for competitive grants in terms of: (1) the number of
    responses, and (2) the types of entities that responded (e.g., PIC's,
    cities, rural counties, private entities)?
        Answer. The Department received over 500 grants applications in
    response to the WTW competitive Solicitation for Grant Applications
    (SGA) that closed on March 10. Applications were received from almost
    every State in the country and from all of the types of organizations
    identified as eligible in the SGA, including PIC's, cities, counties,
    community-based, faith-based and other nonprofit organizations, private
    for-profit organizations, private employers, transportation and housing
    authorities, and private employers.
        Question. Were the PIC's that responded in States that also have or
    intend to apply for formula grants?
        Answer. Proposals were received from PIC's in States who have
    received or are planning to apply for formula grants, as well as in
    States that have opted out of the formula program in Program Year 1998.
        Beyond these general characteristics, there is no information
    available at present regarding the types of applicants who applied for
    funding in this round. At present, the Department is in the process of
    evaluating the applications. We expect this process to be completed by
    the end of April.
        Question. Why did DOL, in its request for grant proposals, prohibit
    ``profits'' as an allowable use of funds when the law permits for-
    profit entities to participate in the welfare-to-work competitive grant
    program?
        Answer. The Department views WTW competitive grants as an
    opportunity for private for-profit entities to collaborate with non-
    profit organizations as well as public agencies to provide effective
    services for hard-to-employ welfare recipients. To a certain extent,
    competitive grant funds will subsidize the normal research and
    development activities of for-profit entities, enabling them to test
    experimental employment strategies at no cost to themselves. For-profit
    entities are welcome to use the knowledge and experience they gain in
    profit-making enterprises funded through other sources, but the
    Department feels it is reasonable to disallow the earning of profit on
    competitive grant funds.
        Question. How would you estimate the effect of this prohibition on
    the response rate of for-profit entities?
        Answer. During this first round of grant solicitation, the
    Department received some questions as to the disallowance of profits
    under competitive grants. We received no indication, however, that
    private for-profit entities chose not to apply as a result of the
    prohibition on profit. Since applications from private for-profit
    entities were received by the Department, we must assume that the
    impact of the prohibition was minimal.
        Question. What percent of responses were from for-profit entities?
        Answer. As indicated above, we have not yet performed an analysis
    of the types of applicants and grant applications received. We expect
    to be able to perform this analysis by the end of April.
                    health and human services data reporting
        Question. Under the 1996 welfare reform law, States are required to
    report case-level information for families receiving assistance under
    the Temporary Assistance to Needy Families (TANF) program, including
    their characteristics and benefits and services they receive. The
    Balanced Budget Act, which added the welfare-to-work program to the new
    TANF program, also added some data elements to describe welfare-to-work
    services by TANF families served with welfare-to-work funds. These data
    are to be reported to the Department of Health and Human Services
    (HHS). However, the law requires HHS to consult with the Department of
    Labor in defining these data elements. This data report is separate and
    different from the data reporting system under the JTPA.
        Has HHS consulted with you concerning data collection for the
    welfare-to-work program? Please describe the nature of the
    consultation.
        Answer. The Department is working closely with HHS and OMB to
    develop the data collection/reporting strategy for the WTW program.
    Outstanding issues include agreeing on the precise data elements to be
    collected and how the data flow from the grantees to the federal level.
        Question. What type of coordination between the State agency
    administering the TANF program and the local PIC's is required to
    collect welfare-to-work data?
        Answer. Coordination between the PIC's, the State WTW administering
    entity and the State TANF administering entity will be required in
    order for the data to be reported to HHS. We do not expect the DOL/HHS
    reporting instructions will mandate a particular organizational
    structure within which this coordination must occur. States will have
    the flexibility to develop reporting systems that best meet State and
    local needs, within the statutory requirements.
        Question. Do you have any concerns about the ability of the States
    and the local PIC's to coordinate and collect these data?
        Answer. The Department does not have major concerns about the
    ability of the PIC's, other local entities, and the States to collect
    and report WTW data. The PIC's and most State WTW agencies have for
    many years worked closely together to administer and report on the JTPA
    program. We expect the system to draw on this experience to minimize
    WTW reporting problems.
        Question. When will you have and expect to make available data on
    welfare-to-work recipients?
        Answer. Only about 20 States have begun operating the WTW program
    by the end of the January-March quarter. Most of the activity in these
    States has involved program start-up. As a result, the Department does
    not expect significant financial or program data to be reported until
    the end of the April-June quarter. As reports are due 45 days after the
    end of a quarter, data will not be available until September or
    October, 1998.
                                  outcome data
        Question. The interim welfare-to-work regulations permit, but do
    not require, PIC's to voluntarily submit information about welfare-to-
    work recipients under the JTPA data reporting systems. This is outcome
    information at the time a recipient leaves the program. The voluntary
    submission would be in addition to information required under the TANF
    data reporting system, which is caseload information while a recipient
    is in the program. The interim regulations note that the DOL may
    require the submission of outcome information in the future.
        Why did DOL decide not to require PIC's to submit outcome
    information through the JTPA reporting system for welfare-to-work
    recipients?
        Answer. The interim final WTW regulations indicated that the
    Department would pursue modifications to the Standardized Program
    Information Report (SPIR) to permit PIC's to use this reporting system
    for internal management purposes. However, the SPIR, as a termination
    based reporting system, cannot be used in its current configuration as
    a vehicle to report the transaction-based information required for the
    WTW program. We are working closely with HHS and OMB to develop the
    optimal reporting system for WTW recipients.
        Question. Will DOL obtain outcome information on the program? If
    so, how?
        Answer. DOL will obtain outcome information from the participant
    data reporting system being developed jointly with HHS.
        Question. How useful will the voluntarily reported data be to DOL
    in determining how to improve the program since some PIC's will be
    reporting it while others will not?
        Answer. The Department is exploring modifications to SPIR to permit
    its use by PIC's for internal WTW management purposes. Data for program
    improvement and evaluation purposes will be reported through the
    official WTW reporting system.
        Question. How will the effectiveness of the program be evaluated?
        Answer. The evaluation of the welfare-to-work program will
    encompass extensive implementation reports covering both year one and
    year two administrative data on participant characteristics, services
    received, and wages at placement. The data will be generated through
    indicator surveys of all formula and competitive grantees and site
    visits to 35 programs. The evaluation will also include formal random
    assignment studies in eight to ten sites to determine the effectiveness
    of alternative types of employment and training services, and in-depth
    case studies of welfare-to-work programs in 13 to 15 sites.
        Question. What are the respective roles of HHS and DOL in
    evaluating the welfare-to-work program?
        Answer. Congress assigned the Department of Health and Human
    Services the responsibility for evaluating the Welfare-to-work program,
    in consultation with DOL and HUD. DOL staff have worked with HHS in
    designing the evaluation, and will continue to work with HHS through
    the implementation of the evaluation.
                                 financial data
        Question. The interim final rule notes DOL will develop a form for
    financial reporting of welfare-to-work expenditures by States and
    localities. Welfare-to-work funds may be spent on work or work-related
    activities and supportive services.
        Has the Department developed a form for reporting welfare-to-work
    expenditures by States and localities? What categories of expenditures
    will be on the form? Will there be a breakout of expenditures for work
    and work-related activities versus supportive services?
        Answer. The Department has developed financial reporting
    instructions for both WTW formula and competitive grants, which will be
    issued shortly. The reporting instructions require expenditures for
    each allowable WTW activity (e.g. OJT, support services, post-
    employment services, administration) to be reported separately.
                       welfare-to-work performance bonus
        Question. The welfare-to-work program includes a $100 million set-
    aside from fiscal year 1999 funds for a performance bonus for States
    that achieve success in their welfare-to-work programs. The law
    requires the Secretary of Labor to consult with the Secretary of the
    Department of Health and Human Services, the National Governor's
    Association, and the American Public Welfare Association to develop a
    formula for awarding these bonuses. The formula must be developed by
    August, 1998.
        What consultations or activities has the Department undertaken
    toward the development of the formula for awarding welfare-to-work
    performance bonuses?
        Answer. The Department is currently meeting with Health and Human
    Services, the National Governor's Association, and the American Public
    Welfare Association to develop a fair and comprehensive performance
    bonus system. In addition, a workgroup will meet this spring, and will
    include stakeholders, as well as federal, State and local partners
    representing employment and training, and welfare agencies. This
    workgroup will assess various measurement options and give us vital
    feedback on how to best award performance bonuses. We expect the
    performance bonus system to be in place by the statutory deadline,
    August 1998.
                   opportunity areas for out-of-school youth
        Question. The fiscal year 1998 appropriation included $250 million
    in advance funding for a new Opportunity Areas for Out-of-School Youth
    (OASY) initiative for fiscal year 1999. (October 1, 1998 through
    September 30, 1999). This funding is contingent upon enactment of
    authorizing legislation by July 1, 1998. The program would award grants
    to high poverty communities to provide training and other assistance to
    out-of-school youth for the purpose of raising their employment rate.
    The President is requesting $250 million in advance funding for Program
    Year (PY) 2000 (July 1, 2000 through June 30, 2001).
        In the DOL budget justification, you state that you are requesting
    an advance appropriation for OASY for PY 2000, so that it is consistent
    with JTPA programs (which are funded on a program rather than a fiscal
    year basis). However, funds from the current appropriation may be
    obligated only through September 30, 1999. Since PY 2000 starts July 1,
    2000, it appears that the program would not be funded for the 9 month
    period of October 1, 1999 through June 30, 2000. Please explain this
    apparent gap in funding.
        Answer. It is correct that we will experience a nine month gap in
    funding from October 1, 1999 through June 30, 2000. This switch to
    program year funding will make the funding consistent with the language
    contained in the pending workforce development legislation. As a result
    of this gap, we are planning on having the $250 million advance
    appropriation from fiscal year 1999 carry us for the entire first 21
    months (the fiscal year plus the nine month gap) of the program. Due to
    budget restraints, we did not request an additional nine months of
    transition funding.
        We expect to award the first round of multi-year grants (funded
    with the advance fiscal year 1999 appropriation) in March of 1999. The
    grant award documents will contain language clarifying that the second
    year of funding will not be available until July 1, 1999--giving the
    grantees a planning period of approximately 15 months.
        Question. If you anticipate that fiscal year 1999 funds would be
    used to cover the period October 1, 1999 through June 30, 2000
    (contingent on the provisions of authorizing legislation), then
    couldn't the program still be forward funded in the fiscal year 2000
    budget, which could cover the Program Year July 1, 2000 through June
    30, 2001?
        Answer. Yes, the Opportunity Areas for Out-of-School Youth
    Initiative could be funded out of the fiscal year 2000 budget since we
    are planning on the fiscal year 1999 advance to carry the activities
    through June 30, 2000. However, it is critically important that we
    assure continued funding for this initiative. Therefore, we would not
    want this initiative ``zeroed-out'' in the fiscal year 1999 budget.
        Question. If funds are needed for the period of October 1, 1999
    through June 30, 2000, then wouldn't your request need to be for only
    75 percent of the amount requested (i.e., $250 million)?
        Answer. We will be able to stretch the fiscal year 1999 advance
    appropriation of $250 million over the initial 21 months of the
    initiative since it often takes grantees several months to begin full
    implementation. The advance fiscal year 2000 appropriation of $250
    million is needed to finance activities from July 1, 2000 through June
    30, 2001. This represents the full amount needed to finance the program
    year's activities, and the amount needed every year thereafter.
                 summer youth program and youth training grants
        Question. The budget proposal would retain language allowing
    service delivery areas to transfer 100 percent of the funds
    appropriated to either SYEP or Youth Training Grants between the two
    programs. This language has been in appropriation bills since fiscal
    year 1996.
        To what extent have service delivery areas taken advantage of the
    authority to transfer funds between SYEP and Youth Training Grants?
        Answer. Service Delivery Areas have fully utilized the authority to
    transfer funds in their youth programs. Our data show that in 1996,
    States transferred about $130 million from the Summer Youth Employment
    Program to the year-round Youth Training Program. In 1997, preliminary
    data indicates that approximately $102 million was similarly
    transferred from the summer program to the year-round program. Only a
    handful of States did not use the transfer flexibility. We expect
    States to continue to make significant transfers inasmuch as they have
    been doing so since the year-round program was reduced in 1995.
        Question. What kinds of improvements, if any, in the delivery of
    services to youth have you observed as a result of this authority?
        Answer. The 100 percent transfer authority between the summer and
    the year-round program enables local operators to customize and
    integrate their programs to better meet specific needs, i.e., target
    groups, length of program, and number of youth served. The Department
    also believes that flexible funding between the two programs enables
    the States and localities to sequence services over a longer period of
    time. This specifically meets the needs of those with substantial skill
    deficits.
                        job corps zero tolerance policy
        Question. In PY 1994 the Department instituted its ``Zero Tolerance
    Policy for Violence and Drugs''. According to the Department's Job
    Corps Annual Report for Fiscal Year 1996, the dropout rate in PY 1995
    increased to 38 percent from a fairly constant rate of about 31 percent
    in previous years as a consequence of full implementation of the
    policy. The Annual Report states that the dropout rate has leveled off
    at 34 percent in PY 1996 indicating a successful adjustment to the
    policy.
        What is a reasonable dropout rate and why?
        Answer. One must look at dropout rates in other programs to provide
    a context in assessing turnover rates in Job Corps. Data from the U.S.
    Department of Education's National Center for Education Statistics,
    published in 1992, showed a dropout rate for post-secondary, nine-month
    vocational certificate programs to be 49.5 percent. Further, in a
    report covering the 1992-93 school year, the Educational Testing
    Service indicates that one in four urban school districts experienced
    four year dropout rates of greater than 35 percent.
        Another way to look at the same issue is to review findings of an
    impact evaluation by Abt Associates on four Youth Conservation and
    Service Corps programs funded under Subtitle C of the 1990 National and
    Community Service Act. The study was published in August, 1996. These
    were programs that were intended to improve the educational and
    employment prospects of participants and enhance their personal
    development. They served a population similar to Job Corps. The Abt
    Study found that only 33.3 percent completed the program, whereas the
    Job Corps vocational completion rate for students entering vocational
    training was 61 percent in PY 1996.
        In these contexts, the Job Corps turnover rate compares well. It
    must also be kept in mind that nearly 80 percent of Job Corps students
    have already dropped out of the regular school system.
        Question. What steps are you taking, if any, to reduce the dropout
    rate?
        Answer. We understand that having some participants leave Job Corps
    within one or two months is a cost to the program and Job Corps must do
    what it can to minimize the extent to which it occurs. However,
    reducing the turnover rate is an extremely difficult challenge. The
    turnover rate has remained relatively constant in Job Corps since its
    inception. We have initiated many strategies in attempts to impact this
    particular area. These have included requiring applicants to sign
    letters of commitment, conducting behavior checks with the criminal
    justice system, identifying and addressing health issues, carefully
    assessing applicants' capabilities and aspirations to participate in
    Job Corps, assuring that child care needs are met, making sure that
    applicants understand Job Corps' policy of zero tolerance for drugs and
    violence, and thoroughly informing applicants about what to expect when
    they arrive at a Job Corps center. In May of this year we will be
    convening a conference with all outreach and admissions counselors to
    discuss these and other approaches to reducing the early dropout rate.
    Particular attention will be paid to strengthening the process of
    assessing an applicant's capabilities and aspirations, a primary
    concern identified in a recent GAO audit.
        With respect to center programs, we have developed and implemented
    an intergroup relations program to accommodate the diversity that
    exists on Job Corps centers. We are also implementing a new social
    skills training program to teach students how to deal with anger and
    conflict, dress properly, get along with one another and work together
    in a team setting. A recently-instituted refinement to our occupational
    exploration program is designed to better match students with available
    vocational training. Taken together, these address factors which can
    contribute to students leaving centers early.
        Question. One criticism of Job Corps has been that students do not
    always feel safe at Job Corps centers. Do you have any indication that
    as a result of the zero tolerance policy that students perceive Job
    Corps to be a safer environment?
        Answer. The Office of Job Corps is committed to ensuring that
    students perceive Job Corps centers as safe places. According to a
    recent student feedback survey, 89 percent of Job Corps students
    nationally perceive their centers to be safe.
        Question. What indication do you have, if any, that Job Corps has
    become a safer environment as a result of this policy?
        Answer. Anecdotal information indicates that center staff believe
    that Job Corps centers have become safer environments as a result of
    the zero tolerance policy.
                   job corps training related job placements
        Question. According to the Department's Job Corps Annual Report for
    PY 1996, 62 percent of all students placed in employment found jobs
    that matched the training received in Job Corps. (In PY 1995, 53
    percent of students obtaining employment were placed in jobs matching
    their training.) In its October, 1997 report on Job Corps, the General
    Accounting Office (GAO) stated that the training-related placement
    measure is flawed, because placement contractors have a wide latitude
    in deciding whether a job placement is a job-training match. The GAO
    report also states that Labor is developing a new system to more
    accurately determine job-training matches.
        In light of the GAO criticism of the training-related placement
    measure, how would you assess the accuracy of your reported 62 percent
    training-related placement rate?
        Answer. With regard to job training match (JTM), we share some of
    the GAO's concerns about how job training matches are determined.
    References were made by GAO as to the wide latitude and possible
    matches under the current job training match process. While such
    matches are possible, there are no empirical data to suggest they occur
    to any significant degree. GAO's examples of possible egregious matches
    were hypothetical only. We remain confident in the reported JTM data.
        Question. What steps have you taken to more accurately determine
    job-training matches?
        Answer. In accomplishing the objective of strengthening the JTM
    process, we will work with available coding systems. In this regard,
    and as acknowledged by GAO, Job Corps is moving to a new system based
    on the Occupational Information Network (O*NET) system. This replaces
    the current system which relies on the Dictionary of Occupational
    Titles and encompasses more than 14,000 codes. The new O*NET system
    will be more accurate, and easier to maintain and monitor in terms of
    egregious matches. The job training match issue is one of the primary
    projects addressed by the National Vocational Operations Committee,
    which was established by Job Corps to improve the quality of vocational
    outcomes.
                 government performance and results act [gpra]
        Question. How are the agency's annual performance goals linked to
    the agency's mission, strategic goals, and program activities in its
    budget request.
        Answer. DOL's work is organized around three strategic goals which
    are outlined in the fiscal year 1999 Performance Plan. These goals
    bridge the Department's many agencies and programs linking them to the
    DOL mission.
        Goal 1. A Prepared Workforce: Enhance opportunities for America's
    workforce.
        Goal 2. A Secure Workforce: Promote the Economic Security of
    Workers and Families.
        Goal 3. Quality Workplaces: Foster quality workplaces that are
    safe, healthy and fair.
        For each of the three strategic goals there are supporting outcome
    goals in the fiscal year 1999 Performance Plan that refine and further
    focus the strategic goals. For each outcome goal, there are supporting
    performance goals that set specific and measurable target levels of
    performance for DOL Agency programs for the fiscal year. Linkage to the
    budget is provided in the DOL Annual Performance Plan by cross
    referencing DOL budget activities to the Department's three strategic
    goals. Specific linkages between individual Agency goals and program
    activities are provided in the individual Agency Performance Plans.
        Question. Could you describe the process used to link your
    performance goals to your budget activities?
        Answer. Our current efforts focus on assuring the Department's
    Annual Performance Plan has a well defined program structure supported
    by performance goals that capture the core purpose of each program or
    activity. We will then work with OMB to propose to the Congress
    appropriate budget restructuring recommendations. While the current
    budget structure aligns closely with our performance plan goals in many
    program areas, some budget program activities may have to be
    restructured to achieve the necessary alignment of programs,
    performance measures, and resources.
        Question. What difficulties did you encounter and what lessons did
    you learn?
        Answer. We have made significant progress in this area but much
    remains to be done. As noted above, we view GPRA implementation as an
    iterative process. Our fiscal year 1999 Annual Performance Plan
    includes measures for key program activities in the DOL budget. Our
    experience shows that to develop good measures for all budget
    activities will take both time and resources to accomplish. We need to
    analyze programs for representative measures of core work, test the
    measures, and establish reporting systems to capture the data in a
    timely and accurate manner. While our fiscal year 1999 Annual
    Performance Plan includes a number of good measures, we need to
    systematically assess all our programs to identify good measures that
    are representative in terms of the effectiveness, efficiency and impact
    of the work being performed.
        Question. Does the agency's performance plan link performance
    measures to its budget?
        Answer. Yes, the DOL Annual Performance Plan cross references all
    DOL budget activities to the Strategic goals of the Department.
    Individual DOL Agency performance plans link Agency budget activities
    to Agency performance measures.
        Question. Does each account have performance measures?
        Answer. The WCF does not have performance measures, however, the
    activities which it funds (OASAM & CFO) have performance measures.
           performance plan structure vs. account activity structure
        Question. To what extent does your performance planning structure
    differ from the account and activity structure in your budget
    justification.
        Answer. The DOL program and financing (P&F) schedules include a
    hybrid of budget activities. Some DOL Agencies are closely aligned with
    their performance planning structure while others have a mixed
    alignment. In ETA, grants and program dollars are aligned to separate
    program based P&F schedules, and S&E dollars for staff in these
    programs are allocated on a functional basis in a separate P&F
    schedule. Similar variations exist in other DOL Agencies.
        Question. Do you propose any changes to your account structure for
    fiscal year 2000?
        Answer. At this time fiscal year 2000 considerations are premature.
    We will be assessing such changes with the development of the fiscal
    year 2000 budget.
        Question. Will you propose any changes to the program activities
    described under that account structure?
        Answer. As noted above, fiscal year 2000 considerations are
    premature. We will be assessing such changes with the development of
    the fiscal year 2000 budget.
                     establishment of performance measures
        Question. How were performance measures chosen?
        Answer. With the Department's three strategic goals in mind,
    Programs developed performance goals and measures appropriately
    supportive of the goals and generally focused on capturing: (1) the
    core purpose of the program (e.g., OSHA: reducing injuries/illnesses in
    high hazard industries); (2) implications of timeliness and accuracy
    for the program (BLS: produce and disseminate timely, accurate, and
    relevant economic information), and, (3) project-oriented goals to
    improve programs and service delivery (e.g., OASAM: One-hundred percent
    of mission systems will process Year 2000 dates correctly).
        Overall, we believe we have good measures in many programs, but we
    also have other programs which will require further study to establish
    measures of performance that are meaningful and cost-effective in terms
    of data collection, reporting, and analysis.
        Question. How did the agency balance the cost of data collection
    and verification with the need for reliable and valid performance data?
        Answer. Several areas in DOL, ETA for example, have comprehensive
    program data collection systems in place which are regularly audited by
    the DOL Inspector General. These data have proven reliable over time.
    We are now in the process of identifying baseline data needs to measure
    outcomes. In this process, we will weigh the relative cost and
    paperwork burden against the benefits of developing and implementing
    better performance measures.
        Question. Does your plan include performance measures for which
    reliable data are not likely to be available in time for your first
    performance report in March 2000?
        Answer. Given DOL projections for the implementation and refinement
    of data collection and reporting systems, we fully expect to report
    data which is reliable in the first DOL Annual Performance Report. A
    key exception, from a timeliness perspective, is the data reported
    under the Job Training Partnership Act (JTPA).
        The JTPA Program Year (PY) corresponding to fiscal year 1999 is
    July 1,1999-June 30, 2000. The performance data for PY 1999 will be
    available in December 2000, or 15 months after fiscal year 1999 ends
    (September 1999). Thus, for the DOL Annual Performance Report for
    fiscal year 1999, DOL will have reliable JTPA data that reflects PY
    1998 performance. This information will cover the period July 1, 1998
    through June 30, 1999, which includes nine months of fiscal year 1999.
        Question. What are the key performance goals from your fiscal year
    1999 Annual Performance Plan that you recommend this subcommittee use
    to track program results?
        Answer. The Department's Annual Performance Plan includes 43
    program performance goals and 8 measures of management effectiveness.
    These goals were selected from over 233 performance and management
    goals included in 15 DOL Agency Performance Plans. We believe that they
    are representative of the core aspects of DOL programs for fiscal year
    1999 and appropriate for tracking to assess DOL program results.
        Question. For each key annual goal, indicate whether you consider
    it to be an output measure (``how much'') or an outcome measure (``how
    well'').
        Answer. Of the 51 goals in the DOL Annual Performance Plan, 25 are
    outcome goals and 26 measure output.
              performance goals relationship to dol strategic plan
        Question. State the long-term (fiscal year 2003) general goal and
    objective from the agency Strategic Plan to which the annual goal is
    linked.
        Answer. Each of DOL's three strategic goals has supporting outcome
    goals which focus Departmental programs and activities on specific
    areas of emphasis encompassed by the broader strategic goal. Outcome
    goals for each DOL Strategic Goal are listed below.
        Strategic Goal: A Prepared Workforce: Enhance opportunities for
    America's workforce.--Increase Employment, Earnings and Assistance;
    Assist Youth in Making the Transition to Work; Provide Information and
    Tools About Work; Provide Information and Analysis on the U.S. Economy.
        Strategic Goal: Secure Workforce: Promote the economic security of
    workers and families.--Increase Compliance with Worker Protection Laws;
    Protect Worker Benefits; Provide Worker Retraining.
        Strategic Goal: Quality Workplaces.--Reduce Workplace Injuries,
    Illnesses and Fatalities; Foster Equal Opportunity Workplaces; Support
    A Greater Balance Between Work and Family; Reduce Exploitation of Child
    Labor and Address Core International Labor Standards Issues.
        Performance goals measuring program performance within the broader
    outcome goals areas are listed in Appendix D to the DOL fiscal year
    1999 Annual Performance Plan.
                          outcome and output measures
        Question. In developing your Annual Performance Plan, what efforts
    did your agency undertake to ensure that the goals in the plan include
    a significant number of outcome measures?
        Answer. Departmental guidance has consistently focused on achieving
    results. The Secretary of Labor has held two retreats with DOL's Senior
    Management Team which centered on Managing for Results. Top
    management's emphasis on measuring the results of our programs was
    heeded by DOL Agencies. Nearly 50 percent of the measures in the
    Department's fiscal year 1999 Annual Performance Plan are outcome
    measures.
        Question. Do you believe your program managers understand the
    difference between goals that measure workload (output) and goals that
    measure effectiveness (outcome)?
        Answer. The Secretary of Labor has held two retreats with DOL's
    Senior Management Team (a total of six days) that focused on the
    Department's Strategic Plan and its fiscal year 1999 Annual Performance
    Plan. During the retreats the both plans and the measures which
    comprise the plans were discussed. The Senior Management Team then
    formulated plans for informing all DOL employees on the plan's contents
    and for integrating performance requirements into the day to day
    activities of employees at all levels.
        Question. What are some examples of customer satisfaction measures
    that you intend to use? Please include examples of both internal and
    external customers?
        Answer. While our Departmental plan includes no measures of
    customer satisfaction, the 15 Agency plans include a number of such
    measures. Here are some examples:
        ETA/UI measure.--Meet or exceed the Secretary's standards for
    promptness in paying worker claims for UI and deciding appeals.
        PWBA measure.--Respond to all requests (from the public) for
    benefits plan documents, annual reports and other information
    maintained for pubic disclosure within an average of 10 working days.
        PWBA measure.--Provide timely assistance to participants and
    beneficiaries. Respond to 90 percent of written requests within 30
    days. Respond to 99 percent of telephone requests by c.o.b. the next
    business day.
        ESA measure.--Increase overall rating of satisfaction (``fair'' to
    ``very good'') among workers seeking Wage and Hour division services to
    70 percent.
        ESA measure: Increase customer satisfaction with the OWCP's
    Longshore and Harbor Workers Program service by 4 percent over the
    baseline.
        OSHA measure.--Establish baseline and interim performance goals for
    strategic measure: 95 percent of stakeholders and partners rate their
    involvement in OSHA's stakeholder/partnership process as positive.
        OASAM Measure.--80 percent of DOL managers and employees evaluate
    (OASAM) services as meeting or exceeding expectations. (This is an
    internal DOL measure that assesses customer (employee) satisfaction
    with the personnel, financial, and other support services provided by
    the Office of the Assistant Secretary of Administration and
    Management.)
                  measurable goals vs. fiscal year 1999 budget
        Question. How were the measurable goals of your fiscal year 1999
    Annual Performance Plan used to develop your fiscal year 1999 budget?
        Answer. Internal guidance to agencies in the budget formulation
    process required that requests for new budget initiatives be related to
    Departmental strategic goals and include a discussion of expected
    outcomes with proposed measures and projected cost.
        Question. If a proposed budget number is changed, up or down, by
    this committee will you be able to indicate to us the likely impact the
    change would have on the level of program performance and the
    achievement of various goals.
        Answer. As noted above, where there is a correlation, on a
    historical basis, of program performance data and funding, we are
    obviously better able to assess the impact of varying resource levels
    on program performance. Prediction of program performance with new
    measures, where the agency has had no experience with the data, would,
    of course, be tenuous.
        Question. Do you have the technological capability of measuring and
    reporting program performance throughout the year on a regular basis,
    so that the agency can be properly managed to achieve the desired
    results.
        Answer. DOL's capability to capture GPRA performance data and
    report it in a timely manner varies significantly among our programs.
    With a large number of new performance measures being tracked in fiscal
    year 1999, we are in the process of revising or updating existing
    systems to capture the necessary data, so it may be reported in a
    timely manner and used to manage.
        DOL has also requested $1.159 million for contractor assistance to
    develop and refine a set of program performance measures for use at the
    Department level. These performance measures would use data from the
    various programs to establish a set of performance indicators at a
    fairly high level of aggregation to measure effectiveness in the broad
    and diverse programs that support the Department's three broad
    strategic goals. The key will be to develop these indicators using
    advanced analytical techniques, statistical analysis and correlation.
    The funding would also support identification of any baseline data
    needs across the Department from which to establish more concrete
    measures of program effectiveness, and assure efficiency in data
    collections and information technology improvements.
        Question. If so who has access to the information--senior
    management only, or mid- and lower-level program managers too?
        Answer. The capability of our agencies to provide ready access to
    program performance data varies markedly. Programs are currently
    assessing their systems for reporting program performance data with a
    view toward upgrading or implementing new systems which will provide
    more timely collection and reporting of data to all levels of DOL
    management.
        Question. Are you able to gain access easily to various performance
    related data located throughout your various systems.
        Answer. Data from the states needs to be reported in a more timely
    manner. Another short fall in this area, as discussed in the previous
    question, focuses on new program performance data requirements
    generated by GPRA. DOL data reporting systems needs to be expanded to
    support this larger data collection effort.
                         account structure modification
        Question. The Government Performance and Results Act requires that
    your agency's Annual Performance Plan establish performance goals to
    define the level of performance to be achieved by each program activity
    set forth in your budget.
        Many agencies have indicated that their present budget account
    structure makes it difficult to link dollars to results in a clear and
    meaningful way. Have you faced such difficulty?
        Answer. Some DOL areas are closely aligned with their performance
    planning structure while others have a mixed alignment. Several DOL
    Agencies, for example, currently have budget decision units for
    overhead or staff based activities whose operations support multiple
    program performance measures. There may be cases where tying dollars to
    programs and program measures would be useful, and we may want to
    explore this and realign as necessary.
        Question. Would the linkages be clearer if your budget account
    structure were modified?
        Answer. Our current efforts focus on assuring the Department's
    Annual Performance Plan has a well defined program structure supported
    by performance goals that capture the core purpose of each program or
    activity. As noted above, we may want to explore realignment of the
    budget structure in terms of tying dollars to core programs and
    measures in certain areas.
        Question. If so, how would you propose to modify it and why do you
    believe such modification would be more useful both to your agency and
    to this committee than the present structure?
        Answer. The Department believes that our current appropriations
    structure, which has not been updated in many years, may not reflect
    the optimal display of resources which would permit better estimates of
    the total cost of our programs.
        When this structure--essentially budget activities--was first
    developed, its purpose was mainly to describe the types of programs and
    activities being funded. Although the Department always has been
    attentive to results in its programs, the GPRA provides an opportunity
    to re-examine how we budget to help us assess program impacts.
        In order to revise the current descriptive budget structure to a
    new presentation focused on results, it may be useful to realign the
    budget activity structure to reflect the program structure. The
    advantages would include a capability to assess the total program costs
    and the costs of achieving programmatic outcomes or results where these
    costs are a significant feature of the program.
        Another goal of restructuring would be to reduce the number of
    budget activities to provide more flexibility within DOL agencies for
    utilizing funds made available by the Congress. For example, Job Corps
    has experienced growth in the number of centers and in the number of
    students, but there has been a serious decline in funding in the
    staffing account for staff to manage the centers and allow the most
    efficient and effective operation. Staffing directly related to the Job
    corp program could be integrated in order to relate operations support
    activities to results and to reflect the total cost of the program and
    outcomes. Similarly, the Solicitor's Office works to support the
    Department's regulatory agencies in several areas and plays an integral
    part in helping to achieve the Department's goals. We now include
    requests for Solicitor staff when we make resource allocation decisions
    for legal support to OMB and then to Congress. We may want to explore
    additional ways of linking those activities in the regulatory agencies.
        The Department believes that a new activity structure could
    minimize the disconnect between programs and the resources needed to
    carry them out, and could better link total costs of the programs to
    the results. We will continue to explore the feasibility of realignment
    and may propose changes in the DOL budget structure in the preparation
    of the fiscal year 2000 budget.
        Question. How would such modification strengthen accountability for
    program performance in the use of budgeted dollars?
        Answer. Our goals cut across several budget activities, each
    contributing to the goal. In several cases, the overhead account for an
    entire agency represents overhead for all of the budget activities and
    contributes to each of the goals. Flexibility in determining what
    percentage of that account applies to each of the goals would be
    helpful in determining actual costs.
                           managerial cost accounting
        Question. Spending significant resources on performance measurement
    systems appears to be a wasteful exercise if this information is not
    linked to: (1) real data about what it costs to perform various
    government functions; and (2) how to allocate agency resources to
    perform these functions.
        Could you comment on your agency's cost accounting expertise and
    plans to link GPRA to the budget process?
        Answer. Linking cost information to program performance measures
    and indicators is key and Departmental discussions have been underway
    for the last year. We are running a pilot program this year for two of
    our Agencies to test our cost accounting system. This effort is a major
    CFO initiative and it is related to the GPRA provision on performance
    budgeting.
        Question. Under one of the new accounting standards recommended by
    the Federal Accounting Standards Advisory Board (FASAB) and issued by
    OMB, this year for the first time all Federal agencies are required to
    have a system of Managerial Cost Accounting. The clearly preferred
    methodology for such a system, as stated in the standard, is the one
    known as ``Activity-Based Costing'', whereby the full cost is
    calculated for each of the activities of an agency. What is the status
    of your agency's implementation of the Managerial Cost Accounting
    requirement, and are you using Activity-Based Costing?
        Answer. The Department is making good progress in its effort to
    implement a framework for managerial cost accounting. We have already
    modified our core accounting system to capture cost information, and we
    have established a Department-wide workgroup to develop implementation
    strategies in conformance with the direction taken in the Department's
    recently issued fiscal year 1999 Performance Plan. We are on target and
    expect to be able to provide cost data for fiscal year 1999. Given the
    range of activities undertaken throughout the Department, we share the
    view taken by the FASAB that a variety of appropriate cost accumulation
    approaches will be needed.
        Question. Will you be able in the future to show to this committee
    the full and accurate cost of each activity of each program, including
    in those calculations such items as administration, employee benefits
    and depreciation?
        Answer. In addition to the modifications which have been made to
    facilitate cost accumulation in the Department's core accounting
    system, a financial analysis software package has also been acquired to
    be used in allocating overhead costs to direct program activities. The
    ``full cost'' of the Department's programs, which will include an
    appropriate share of overhead expenses, will ultimately become part of
    the Department's financial statement presentation.
        Question. By doing so, would we then be able to see more precisely
    the relationship between the dollars spent on a program, the true costs
    of the activities conducted by the program and the results of these
    activities.
        Answer. Once full costing is implemented throughout the Department
    at the program activity level, it will be possible to provide a full
    and accurate distribution of the dollars spent on programs within the
    Department, the true cost of the activities conducted within each
    program and the results of these programs.
        Question. Will you be able to show us the per-unit cost of each
    activity and result?
        Answer. There is much work to be done in determining the relevant
    unit cost information throughout the Department's activities, as well
    as in determining precisely which activities are appropriate for cost
    accumulation. As the Department moves ahead with these analyses, its
    system should be able to provide the per-unit cost of each activity and
    result.
        Question. To what extent do dollars associated with any particular
    performance goal reflect the full cost of all associated activities
    performed in support of that goal? For example, are overhead costs
    fully allocated to goals?
        Answer. We expect to report the full costs for a particular goal in
    a manner that will fully reflect the activities within that goal and
    the overhead associated with that goal.
        Question. Please identify any significant regulatory reform
    measures that have been put in place by your agency in conjunction with
    the development of the agency's performance plan.
        Answer. No rules or regulations have been processed or initiated
    specifically related to the development of the Department's performance
    plan.
                 external factors influence on performance plan
        Question. Does your fiscal year 1999 performance plan--briefly or
    by reference to your strategic plan--identify any external factors that
    could influence goal achievement?
        Answer. Section 5 of the DOL Annual Performance Plan includes a
    section on Cross-Cutting Programs and Issues. Several of the issues or
    planning considerations addressed in this section relate to working
    with other government Agencies to achieve the Department's three
    strategic cross-cutting goals. Each of the outcome goals in the
    Performance Plan also address means and strategies. In addition, the
    Department's Strategic Plan identifies key external factors that may
    affect performance.
        Question. If so, what steps have you identified to prepare,
    anticipate and plan for such influences?
        Answer. In the DOL Strategic Plan areas have been identified where
    external influences could impact performance. The Plan also identified
    strategies to achieve goals.
        Question. What impact might external factors have on your resource
    estimates?
        Answer. Most of our external factors are related to economic or
    employment shifts and pending or new legislation. These changes would
    most likely cause a change in how we target our resources causing an
    adjustment in our priorities or a retargeting of our programs within
    the broad scope of the Departmental mission.
        Question. Through the development of the Performance Plan, has the
    agency identified overlapping functions or program duplication? If so,
    does the Performance Plan identify the overlap or duplication?
        Answer. We have not identified overlap or duplication but have
    identified other programs that are complimentary to ours.
        Question. Should agencies address management challenges and
    potential duplication and overlapping functions in their GPRA plans,
    and if so, how?
        Answer. The Department's Performance Plan does address management
    challenges and the coordination efforts with other federal agencies
    that have complimentary programs.
        Question. To what extent has GPRA been used by agency leadership to
    guide decision making? Will this use increase in the future and if so
    in what ways?
        Answer. The Department has traditionally been focussed on results
    and this has been reflected in the internal process for budget
    decisions. GPRA implementation in the Department has continued on this
    path. Internal guidance to agencies in the budget formulation process
    required that requests for new budget initiatives be related to
    Departmental strategic goals and include a discussion of expected
    outcomes with proposed measures and projected cost.
        GPRA principles will be used in many key decisions in the future.
    We are establishing a Management Council to monitor the execution of
    the Department's fiscal year 1999 Performance Plan and subsequent
    plans, and to provide central coordination of all of the Department's
    programs.
                        maturity of performance measures
        Question. Future funding decisions will take into consideration
    actual performance compared to expected or target performance. Given
    that:
        To what extent are your performance measures sufficiently mature to
    allow for these kinds of uses?
        Answer. We are currently assessing systems for reporting program
    performance data with a view toward upgrading or implementing new
    systems which will provide more timely collection and reporting of data
    to all levels of DOL management. The capability to provide ready access
    to program performance data varies markedly. Many of our performance
    measures are sufficiently mature, however, many programs will be
    setting baselines in fiscal year 1998 and 1999.
        Question. Are there any factors, such as inexperience in making
    estimates for certain activities or lack of data that might affect the
    accuracy of resource estimates?
        Answer. Many programs will be setting baselines in fiscal year 1998
    and 1999 and they have used educated estimates in the interim.
        Question. Are you requesting any waivers of non-statutory
    administrative requirements?
        Specifically, are you requesting any relaxation of transfer or
    reprogramming controls in return for specific accountability
    commitments?
        Answer. We are not requesting any additional transfer or
    reprogramming controls in return for specific accountability
    commitments.
                          revisions to strategic plan
        Question. Based on your fiscal year 1999 performance plan, do you
    see any need for any substantive revisions in your strategic plan
    issued on September 30, 1997?
        Answer. The Departmental Strategic Plan, submitted to Congress in
    September 1997, outlined six strategic goals. The fiscal year 1999
    Performance Plan consolidates those goals into three strategic goals.
    These goals support my vision, facilitate increased coordination, and
    foster greater cohesion within the Department. The revision also
    responds to concerns raised by external reviewers that the DOL
    Strategic Plan did not adequately reflect the integration and cross-
    cutting nature of DOL's programs. However, because we need to clearly
    align our strategic planning with these three goals, we plan to revise
    the Departmental Strategic Plan soon.
         proposed regulations regarding the black lung benefits program
        Question. It is my understanding that there has been significant
    delay in the promulgation of new black lung regulations by the
    Department of Labor. What has caused the delay in final action on these
    regulations?
        Answer. To make possible the fullest public participation in the
    rulemaking process, the period for the submission of written comments
    was twice extended, to a total of seven months. Two public hearings
    were also held, in Charleston, West Virginia and Washington, D.C. This
    process resulted in over seven hundred pages of hearing testimony and
    several thousand pages of written comments and related exhibits. Every
    major substantive and procedural aspect of the ninety-eight page
    proposal, as well as its possible economic impact on the coal industry,
    drew significant and highly diverse comments.
        Question. When will the Department issue these regulations?
        Answer. The Department is carefully reviewing the testimony and
    comments and will move forward with the process in a manner which will
    take into account the views of all of the affected groups, including
    claimants, large and small coal mine operators, insurers, attorneys,
    physicians and other health care providers.
                         employee stock ownership plans
        Question. The provisions of the Employee Retirement Income Security
    Act (ERISA) set standards to ensure that employee benefit plans are
    properly maintained, and that recordkeeping is accurate and current. It
    is my understanding that the Department of Labor has the fiduciary
    responsibilities of enforcing rules governing the activities of
    Employee Stock Ownership Plans (ESOP's). Title I, Part 5 of ERISA gives
    your department the authority to bring a civil action to correct
    violations of the law.
        While I am certain no two cases are alike, please indicate to me,
    in general, the criteria your department needs to begin an audit of a
    company's ESOP.
        Does the department ever conduct random audits? If so, please
    explain how the department would choose to conduct such an audit.
        Answer. The Department has very broad investigative authority under
    the Employee Retirement Income Security Act to conduct investigations
    to determine whether any person has violated or is about to violate
    ERISA. The initiation of an investigation is at the discretion of the
    Pension and Welfare Benefits Administration, the agency within the
    Department responsible for the enforcement and administration of ERISA.
    Generally, PWBA initiates an investigation of an employee benefit plan
    based on information that a violation has or may have occurred, or is
    likely to occur.
        PWBA does not follow a practice of conducting random audits. With
    over 700,000 pension plans and 2.5 million health and welfare plans
    subject to ERISA, random audits are not an efficient use of PWBA's
    limited investigative resources, which currently consist of
    approximately 350 investigators. PWBA selects plans for investigations
    based on a variety of sources and methods, including complaints
    received from participants of plans and other members of the public;
    computer targeting based on analysis of the database of Form 5500
    annual report filings; referrals from other government agencies; and,
    media reports.
        Question. Approximately how many audits does the department conduct
    each year?
        Answer. During the past three fiscal years, PWBA's enforcement
    program has had the following activity and results:

    ------------------------------------------------------------------------
                                                   Fiscal year--
                                      --------------------------------------
                                           1995         1996         1997
    ------------------------------------------------------------------------
    Civil cases:
        Investigations opened........        4,746        4,528        5,310
        Investigations closed........        3,840        4,201        4,506
    Assets recovered (in millions)...       $340.3       $407.4       $363.4
    Criminal cases:
        Investigations opened........          104          119          143
        Investigations closed........          102           96           85
        Indictments..................          101           82          105
        Convictions/guilty pleas.....           32           46           45
    ------------------------------------------------------------------------

        Question. Of the audits conducted by the department, what is the
    approximate percentage of ESOP's that are found to have irregularities?
        Answer. During the past three fiscal years, PWBA's enforcement
    program closed 431 ESOP investigations. Fiduciary violations were found
    in approximately 3 percent of those cases resulting in the recovery of
    approximately $2.8 million. Another $1.1 million monetary recovery was
    obtained in a case where completion of investigative work is still
    pending.
        Other violations that were less serious and may not have resulted
    in quantifiable monetary harm to plans were found in about 25 percent
    of the cases.
        Question. What is the approximate cost on the part of businesses to
    comply with the federal government regulations in the administration of
    ESOP's?
        Answer. An employee stock ownership plan (ESOP) is a defined
    contribution plan. Because most ESOP's are tax qualified, they are
    regulated by both the Department of Labor and the Treasury Department.
    Thus, costs borne by businesses to comply with regulations are based
    upon provisions of the tax code as well as ERISA. Most costs associated
    with ESOP compliance are attributable to tax qualification, but there
    are some costs associated with the reporting and disclosure
    requirements of ERISA (the tax code also requires annual reporting to
    the Federal government). These costs may be paid by an employer or paid
    directly by a plan out of plan assets.
        There is currently no reliable data on costs that would support
    such an analysis. Based on the way plans are designed and drafted, the
    cost of administering a plan may be paid directly by a plan out of its
    trust assets or paid in full or in part by the plan sponsor (e.g.
    corporation which establishes the plan). Although Federal regulation
    does result in some additional expense to plans, including ESOP's, any
    valid estimate would have to determine the extent to which an expense
    relates to Federal regulation as opposed to routine business operations
    (e.g., plan design and drafting expense, accounting and auditing fees,
    etc.). ERISA requires most employee benefit plans, including ESOP's, to
    file an annual report Form 5500 with the IRS and DOL, and if there are
    more than 100 participants in the plan a financial audit must be
    performed. In addition, ESOP's must have stock valuations performed to
    facilitate purchases, sales and distributions of benefits to
    participants, if the underlying employer stock is not publicly traded.
        Question. How often would the department audit an ESOP beyond the
    statute of limitations? What action does the department take if this
    occurs?
        Answer. ERISA's statute of limitations with respect to fiduciary
    breaches provides no action may be commenced after the earlier of six
    years from the date the breach or violation occurred, or three years
    after the earliest date of actual knowledge of the breach or violation.
    In the case of fraud or concealment the statute is extended to not
    later than six years after the discovery of the breach or violation.
        The statute of limitations acts as a bar to legal action with
    respect to a fiduciary's breach of a responsibility, duty or obligation
    in violation of the law. This is a factual question which is usually
    determined during the course of an investigation as information is
    developed which indicates that a violation did in fact occur.
    Generally, if it is known before the investigation commences that a
    potential fiduciary breach has been committed and is beyond the statute
    of limitations, an investigation of that issue would not be pursued
    unless there was a specific reason to do so, such as the development of
    evidence regarding additional, subsequent or continuing violations
    which might be actionable. It is not uncommon for an investigation to
    disclose multiple acts or transactions which give rise to potentially
    multiple fiduciary breaches and thus multiple statutes of limitation,
    which must be analyzed carefully to determine whether the Department
    can take enforcement action to address the violation(s).
        Question. Does the department provide information and advice on
    ESOP compliance requirements?
        Answer. The Department has a formal procedure which has been
    codified, ERISA Proc. 76-1, to answer inquiries of individuals or
    organizations affected directly or indirectly by ERISA as to their
    status under ERISA and as to the effect of certain acts and
    transactions. The answers to such inquiries are categorized as
    ``information letters'' and ``advisory opinions.'' Also, each of PWBA's
    Regional Offices and the National Office in Washington have customer
    service representatives who respond to written, telephone and in-person
    requests for technical assistance and information regarding employee
    benefit plans. Information and advice on ERISA-related topics,
    including ESOP's, may be obtained through the more formal written ERISA
    Proc. 76-1 process or through our customer service contacts.
        In addition, as part of our outreach efforts, PWBA representatives
    often speak publicly at seminars, conferences and programs sponsored by
    educational and trade organizations on a variety of employee benefit
    related topics, which may include ESOP related matters.
                                     ______

                  Questions Submitted by Senator Thad Cochran
                        federal acquisition regulations
        Question. Secretary Herman, what is the substance and the timing of
    the blacklisting regulations promised to the AFL-CIO by Vice President
    Gore over a year ago, regulations that would give the executive branch
    discretion to ``de-bar'' any company from engaging in federal business
    if an unfair labor complaint has been filed against the company with
    the National Labor Relations Board?
        Answer. The Federal Acquisition Regulatory Councils, and not the
    Department of Labor, are responsible for developing proposed changes to
    the Federal Acquisition Regulation (FAR). FAR changes are made through
    notice-and-comment rulemaking. Once proposed FAR changes are published
    in the Federal Register, the public--including all interested
    stakeholders and Members of Congress--will have the opportunity to
    comment on the proposal. No proposal has been published yet, and I am
    not aware of any precise timetable for the process.
        Question. Secretary Herman, although these regulations will be
    issued by the Office of Procurement, and not the Department of Labor,
    is it not true that the procurement system is merely the vehicle for
    pushing through this radical reshaping of labor policy in this country?
        Answer. I do not believe that the possible changes in Federal
    Acquisition Regulation (FAR) under consideration would have the effect
    that you suggest.
                                     ______

              Questions Submitted by Senator Kay Bailey Hutchison
                          proposed ergonomics standard
        Question. Can you describe the present status of the draft
    ergonomics regulation within OSHA, and do you believe that there should
    be an independent, peer-reviewed analysis of the scientific foundation
    for enacting such a regulation?
        Answer. Currently, we plan to publish a proposed rule in fiscal
    year 1999. OSHA is developing a draft regulatory text for the rule,
    which will be shared with stakeholders later this year. OSHA is also
    examining all available scientific and medical studies related to the
    rule; these will contribute to other sections of our proposal.
        We believe that it may not be necessary to have an independent
    peer-reviewed analysis as part of the process, since the scientific and
    medical evidence upon which any ergonomics rule will be based is peer-
    reviewed. In addition, we intend to rely heavily on NIOSH's analysis of
    more than 600 epidemiological studies, all of which were peer-reviewed.
    We expect the rulemaking process to provide additional information and
    that during the course of hearings and public comment, ample
    opportunity will be offered to challenge any and all of the evidence in
    the rulemaking record.
                      safety standards for small business
        Question. This week, I received a response to a letter I sent in
    December to OSHA Assistant Secretary Jeffress expressing concern that
    inappropriate safety standards may be applied to two specific
    industries: arborists and tower erectors. What efforts is the
    Department undertaking to ensure that appropriate and specifically
    tailored safety standards are being applied to these and other smaller
    industries? Specifically, do you believe it makes sense to apply
    commercial logging standards to residential tree pruners?
        Answer. In accordance with the Regulatory Flexibility Act, the
    Paperwork Reduction Act, the Administrative Procedure Act, and the
    Small Business Regulatory Enforcement Fairness Act (SBREFA), OSHA
    conducts numerous analyses of its proposed rules to consider their
    potential impacts on small businesses and on specific industries.
    Following these procedures closely ensures that our safety standards
    are appropriate to the industries covered by the standards. For
    example, if these analyses show that significant adverse impacts are
    anticipated, OSHA takes steps to minimize those impacts. These steps
    may include lengthening compliance deadlines, reducing paperwork
    requirements, or making material modifications to the rule.
        Throughout the rulemaking process, employers and industry groups,
    as well as workers, unions, and interested members of the public, have
    opportunities to review the proposed rule and submit comments to OSHA,
    including the opportunity to testify at public hearings. OSHA then
    addresses these comments in the preamble to the final rule. Under
    SBREFA, small entities are given special consideration through the
    Small Business Advocacy Review Panel process, if the rule is determined
    to have a significant impact on a substantial number of small entities.
        In the case of the Logging Operations Standard (29 CFR 1910.266),
    arborists and their industry representatives participated in the public
    hearings during the rulemaking process, and OSHA addressed their
    concerns in the preamble to the final Logging Operations Standard. OSHA
    also issued a memorandum to its field offices concerning how the
    Logging Operations Standard should be applied to tree pruners.
    Residential tree pruners face many of the same hazards that the Logging
    Operations Standard was designed to address: being hit by heavy tree
    branches; being caught in or crushed by tools and equipment, such as
    chain saws, axes and chippers, that pose hazards whenever they are
    used; and exposure to dangerous environmental conditions, such as heavy
    rain, snow, lightning, strong winds, and extreme cold. OSHA has
    determined that the combination of these factors presents a significant
    risk to employees.
        OSHA's intention in promulgating the Logging Operations Standard
    was to address the hazards associated with cutting trees, wherever
    those hazards are found, including commercial tree trimming and cutting
    operations. OSHA believes that the equipment requirements, safe work
    practices, and training provisions included in the Logging Operations
    Standard will significantly reduce the risks that workers face, and
    will reduce the number and severity of the injuries that occur as a
    result of exposure to the hazards associated with trimming and cutting
    trees.
        With respect to tower erection, the National Association of Tower
    Erectors (NATE) has raised a number of issues with OSHA relating to
    fall protection, employee access to towers, and gin pole safety. Our
    Towers Task Force is engaged in an intensive effort to identify
    specific tower construction safety procedures that will adequately
    protect employees. Once identified, these procedures will be spelled
    out in compliance directives.
        Our Task Force has learned that we are in the midst of an
    extraordinarily active period of tower construction. NATE members
    constructed approximately 16,000 towers in 1997. They expect to build
    large but steadily declining numbers of towers in the next few years:
    12,000 in 1998, 10,000 in 1999, and fewer thereafter.
        OSHA is actively considering formal rulemaking tailored to this
    industry. However, the standards promulgation process can be lengthy,
    and the bulk of the towers planned for the foreseeable future may well
    be built before that process could be completed. OSHA is keenly aware
    of the need to resolve these issues in a much shorter time frame than
    rulemaking may be able to accommodate, and is confident that, through
    the efforts of the Towers Task Force, it can expeditiously identify
    safety procedures that are workable, effective and timely and
    disseminate this information to the industry.
                             workforce development
        Question. As you know, the State of Texas has been a national
    leader in enacting broad-based workforce development reform, in
    anticipation of the federal government doing the same. However the
    State is concerned that many of its reform and consolidation efforts
    may be undone or undermined by federal legislation now pending in
    Congress that ostensibly seeks to achieve the same goals as the Texas
    and other State reforms have sought.
        Do you support legislation, and will you support regulations under
    such legislation, that allow proactive States like Texas to implement
    their own versions of workforce development, so long as those plans are
    consistent with the general purposes of the federal law?
        Answer. The workforce development reform legislation pending before
    Congress (S. 1186, the Workforce Investment Partnership Act, and H.R.
    1385, the Employment, Training and Literacy Enhancement Act) builds
    upon ongoing reform efforts at the State and Federal level. In order to
    honor State-initiated reforms that are consistent with Federal law, the
    Senate legislation contains provisions that would allow States that
    have enacted workforce development legislation prior to December 31,
    1997 to retain certain elements of such legislation. These provisions
    would remain in effect for the entire five years for which the bill is
    authorized. We have determined that approximately 22 States have
    enacted legislation that potentially could be grandfathered under this
    provision, including Texas.
        We believe that the grandfathering provision should apply to the
    following areas, as provided for in the Manager's Amendment to S. 1186,
    the Workforce Investment Partnership Act:
      --Human Resource Investment Councils (HRIC) in accordance with title
            VII of JTPA to carry out many of the same activities that would
            be carried out by the Statewide partnership under the bill;
      --Regional and local boards with composition different from the local
            partnerships under S. 1186 or JTPA. (Texas, Iowa, Utah and New
            Jersey have done so);
      --Designation of workforce development areas based on the regional
            planning areas in the State rather than the criteria in S.
            1186; and
      --Authority to impose financial sanctions under certain conditions on
            local areas that are continued poor performers.
        Question. Would you please indicate why the Department has failed
    to allow States like Texas the option of contracting-out the delivery
    of Employment Service to responsible, high quality providers? Such
    providers have the potential, do they not, of providing more services
    to more people at a lower cost?
        Answer. First, since 1993, the Department has worked with States,
    such as Texas, to forge workforce development systems that better serve
    job seekers and employers. States have implemented local One-Stop
    centers that provide job seekers and employers with a wide menu of
    services, without contracting-out Employment Service (ES) services.
    Federal funding under the Wagner-Peyser Act supports a national system
    of public employment services. For sixty-four years, with the knowledge
    and approval of Congress, the Department has required States to run
    their Wagner-Peyser ES programs with merit system personnel.
        The question of which public employment services, if any, should be
    available for States to contract-out at State option has national
    implications, and should be decided as a matter of a national policy.
    Moreover, this policy should not be decided in an ad hoc way, with each
    State determining which services are appropriate for contracting-out
    and which are not. The resulting patchwork of delivery system
    approaches could undermine the system's national character and national
    objectives. The Department plans to issue policy guidance after
    resolution of the merit staffing issue before the federal court in
    Michigan, and after a national dialogue on this issue to decide which
    functions authorized under the Wagner-Peyser Act may be construed as
    ``commercial'' and therefore available to be delivered by private
    vendors at States' options.
        Second, the Department has not analyzed whether private vendors
    might provide more services at a lower cost. Currently, the national
    Wagner-Peyser Act cost per entered employment for job seekers is $230
    and the entered employment cost in Texas is $154. Over the next several
    years, the Department will engage in a study to better understand the
    variations in services and costs among States. However, States now have
    considerable flexibility in managing the delivery of employment
    services consistent with the merit-staffing requirement. This
    flexibility is encouraged as an aspect of One-Stop system-building and,
    in this regard, we note that One-Stop system-building with a full range
    of services is proceeding well under a merit-staffed delivery system
    for ES in the great number of State workforce development settings.
        Question. With regard to workforce development, do you support
    consolidating federal job training programs? Which programs, if any, do
    you believe should not be consolidated into a larger funding stream,
    and why?
        Answer. Both the House-passed H.R. 1385, and the Senate-reported S.
    1186, take great strides toward consolidation of job training programs.
    The House bill would integrate some 60 training and employment programs
    into a streamlined and consolidated workforce development system, while
    the Senate bill incorporates over 50 programs in the workforce
    investment titles. However, we do not believe this should become a
    numbers game about how many programs are consolidated. There are many
    forms that ``consolidation'' can take, including elimination of
    programs, incorporation of programs into a new, simplified structure
    (for example, summer youth programs are authorized, but not a separate
    program), linkages among programs (for example, the Employment Service
    is closely linked to the new workforce development system), or
    ``street-level'' consolidation through the one-stop access to a wide
    range of workforce development related information and services. Both
    House and Senate bills reflect each of these types of consolidation.
        There are reasons why it may not be appropriate to consolidate a
    particular employment and training program into a block grant. Some
    programs have been created to address the needs of special populations,
    such as the disabled, Native Americans, or veterans. The administrative
    structures and systems for the delivery of services may be unique and
    therefore inappropriate to consolidate. Furthermore, the Congress
    created these programs with the intention of assuring that the needs of
    these special populations were addressed, and this could not be assured
    under a block grant. The important thing is to assure access to
    employment and training services for these populations through one-stop
    or ``full service'' centers, which the House and Senate bills will
    ensure.
        Question. Could you please clarify the exact nature and scope of,
    and any details you can provide regarding the implementation of the
    ``Work-Flex'' waiver recently granted to Texas?
        Answer. The Work-Flex designation is implemented through a
    modification to the grant the State of Texas has with the Employment
    and Training Administration for administration of the JTPA programs. A
    proposed modification has been formally sent to the State and after
    informal discussions, we believe that all the State questions have been
    answered.
        The Work-Flex modification describes the authority granted to the
    State and also provides examples of material not subject to waiver
    under this authority. As indicated to the State in this material, we
    expect this authority to be extended to June 30, 2002. However, since
    grants are issued annually, the authority for Work-Flex will have to be
    extended in each annual grant.
                                     ______

                 Questions Submitted by Senator Robert C. Byrd
                    national mine health and safety academy
        Question. Please provide the amount of revenues received by the
    Academy for the use of its facilities and for classes for fiscal year
    1996, fiscal year 1997, fiscal year 1998, and the projected amount for
    fiscal year 1999.
        Answer. The National Mine Health and Safety Academy raises revenues
    for deposit to the General Fund of the Treasury by charging tuition and
    lodging fees and selling training materials. The Academy has raised the
    following amounts:

    ------------------------------------------------------------------------
                                                    Tuition and    Training
                      Fiscal year                     lodging     materials
                                                        fees        sales
    ------------------------------------------------------------------------
    1996..........................................     $186,251      $99,641
    1997..........................................      240,876       79,800
    1998 \1\......................................      240,000       79,999
    1999 \1\......................................      240,000       77,000
    ------------------------------------------------------------------------
    \1\ The projected amount to be collected is based on past history.

        Question. Please provide the staffing levels at the Academy for
    those same years.
        Answer. The numbers below reflect end-of-year staffing levels.

    ------------------------------------------------------------------------
                                                        Full-time-
                                                        permanent    Other
    ------------------------------------------------------------------------
    Fiscal year:
        1996..........................................         60  .........
        1997..........................................         63          3
        1998 \1\......................................     \1\ 65      \1\ 1
        1999 \1\......................................     \1\ 67      \1\ 2
    ------------------------------------------------------------------------
    \1\ Projected.

        Question. Please advise how many requests have been made for the
    use of the Academy, how many were granted, and how many were turned
    down for fiscal year 1996, fiscal year 1997, and the numbers that are
    available for fiscal year 1998.
        Answer. The Academy received 877 requests in fiscal year 1996, 836
    requests in fiscal year 1997, and a projected 950 requests for fiscal
    year 1998. All the requests received have been granted, and we expect
    to honor all the requests estimated for fiscal year 1998.
        Question. Does the use of the Academy by other Federal agencies
    result in expanded benefits and cost savings to the taxpayer?
        Answer. Other Federal agencies are offered the use of Academy
    facilities. The Academy does not charge federal agencies for the use of
    classrooms, conference rooms or the auditorium. In fiscal year 1997,
    Academy space was used 115 times by other federal agencies such as the
    Department of Agriculture, Veterans Administration, Bureau of Prisons
    and the Department of Health and Human Services. In fiscal year 1998,
    we are projecting other federal agencies will request the use of the
    Academy 125 times.
        Additionally, safety and health training is provided for industrial
    hygienists, engineers, and local government officials not only for MSHA
    and other federal agencies, but for educational institutions, State
    Department of Mines, State Grant Recipients, and Contract trainers.
    Also, space is made available to state and local government agencies
    upon request.
        Question. Has the training provided at the Mine Academy led to a
    significantly reduced number of mine-related deaths across the nation?
        Answer. We believe the Academy's training has contributed to the
    reduction of mine-related fatalities. The Academy develops current
    accident-focused course curriculum and accident prevention and
    occupational health awareness programs. Also, it responds to requests
    for specialized safety and health training programs and materials from
    the mining industry. Academy on-site training is provided to both mine
    inspectors and interested industry personnel. Off-site training is also
    provided to the mining industry and MSHA districts throughout the
    country. This training is directly related to improving the health and
    safety of all miners. During fiscal year 1998, the National Mine Health
    and Safety Academy will provide 550 course days of training to ensure
    that MSHA's mine inspectors, other federal and state employees, and
    mining industry personnel are trained to recognize, eliminate and
    prevent hazardous conditions in the mining environment. The Academy
    continues to increase the number of training courses and available
    printed materials to inspectors and the mining industry, in general,
    and has increased the number of off-site training opportunities.
        It is universally recognized that training saves lives and prevents
    injures and illnesses. Unfortunately, the training rider added to
    MSHA's appropriation language prevents the agency from enforcing basic
    statutory safety and health training for miners at more than 10,000
    nonmetal mines employing more than 125,000 workers. Removal of the
    rider would facilitate much needed safety and health training for this
    sector of the industry. The training rider is an impediment to MSHA's
    ability to reverse the upsurge in fatal accidents in the metal and
    nonmetal mining sector. In 1997, 75 percent of the deaths at metal and
    nonmetal mines occurred at operations where MSHA cannot enforce basic
    safety and health training for miners. Also, more than 60 percent of
    the victims had received little or no training.
        The positive effects of training have helped reduce mining
    fatalities from a total of 247 in 1977 (which was the first year
    training was mandated for all miners) to 90 fatalities in 1997.
                          charleston job corps center
        Question. Pursuant to the opening of the new Job Corps center in
    Charleston, West Virginia, I would like to know how many employees are
    currently working in the new facility and how many are projected for
    fiscal year 1999; in addition, please provide staffing levels for the
    previous facility for fiscal year 1996, fiscal year 1997, and fiscal
    year 1998.
        Answer. The new Charleston facility is budgeted for 139 full-time
    equivalent (FTE) staffing positions. According to the most recent
    report from the center contractor, 129 of these positions were filled
    as of February 28, 1998. We anticipate that the budgeted staffing level
    of 139 FTE will be maintained for the foreseeable future. Before the
    Charleston Job Corps center was relocated to its new facility in the
    Fall of 1997, the old facility was budgeted for 137 FTE. The budgeted
    FTE staffing levels at the end of the 4 fiscal years mentioned in your
    question are as follows:

    Fiscal year:
        1996 old facility.............................................   137
        1997 old facility.............................................   137
        1998 new facility.............................................   139
        1999 new facility (planned)...................................   139

        Question. If possible, please estimate the total annual economic
    impact on the area, including salaries and other purchases, for fiscal
    year 1999.
        Answer. In fiscal year 1999, approximately $7 million will be spent
    by Job Corps in Charleston, West Virginia and the surrounding vicinity.
    These federal expenditures will be in the form of staff salaries and
    benefits, local purchases of goods and services, and allowance payments
    to the students at the Charleston Job Corps center.
        Question. Please also advise me how many students the new facility
    can accommodate and how many students are currently enrolled.
        Answer. The new facility can accommodate 400 students at a time.
    According to the most recent attendance report (for March 18, 1998) 363
    students are currently enrolled. Steps are being taken to bring the
    center to its full enrollment capacity of 400 students in the very near
    future.
                         cooperative compliance program
        Question. I have noticed that the Department has requested an
    increase of $2.8 million and 23 FTE's to increase on-site safety and
    health enforcement in highly hazardous workplaces by continuing the
    implementation of Cooperative Compliance Programs nationwide.
        Given the recent court-imposed stay on the implementation of these
    programs--and their uncertain future--what contingency plans does the
    Department have should the federal Court of Appeals prevent or
    significantly alter their implementation?
        Answer. OSHA does have a contingency plan for inspection
    scheduling, but there is not a contingency program for the cooperative
    aspect because this is one of the issues in the case brought against
    the CCP. We expect the court to eventually rule in OSHA's favor and the
    Cooperative Compliance Program (CCP) will then continue. In the
    meantime we will continue to work on cooperative efforts through local
    initiatives, OSHA consultation programs, OSHA voluntary protection
    programs (VPP), and compliance assistance.
        Prior to the CCP, past targeting systems were often and regularly
    criticized by industry and employee groups for inspecting employers
    with good safety and health records instead of concentrating on
    employers that failed to protect their workers. All interested parties
    agreed that OSHA needed some sort of system to target. The previous
    system only provided for inspection targeting based upon industries
    with elevated injury and illness rates, as opposed to targeting
    establishments with high rates. Consequently, when OSHA arrived at a
    work site the agency did not know if the establishment had a high or a
    low rate. Regardless of the individual employer's injury and illness
    rate, OSHA did an inspection.
        The new system that the CCP is based upon targets individual
    worksites with elevated rates. As a result, our resources are directed
    at employers most in need of an OSHA intervention. Regarding the stay
    of the CCP, we do not expect the court to rule until at least December
    1998 or January 1999. Therefore, the new program is essentially on
    hold. In the meantime, we have proposed an alternative targeting
    system, based upon site specific injury and illness data from the OSHA
    Data Initiative. This program, due to the stay, does not have a
    cooperative component. On April 6, 1998, the court ordered that the
    stay on the CCP program does not encompass OSHA's contingency plan for
    inspection targeting thereby allowing us to use this alternative
    system.
        The interim OSHA targeting plan uses BLS data for 1996 to identify
    the one hundred industries, as characterized by four-digit SIC Codes,
    with the highest lost workday injury and illness (LWDII) rates,
    excluding construction, agriculture, mining, and public administration.
    For those four-digit SIC Codes for which BLS did not report LWDII rates
    at the four-digit level (such as non-manufacturing), OSHA attributed
    the rate reported by BLS for the three-digit SIC's. Eight SIC's were
    not included in OSHA's 1996 data survey, and there are therefore no
    establishment-specific LWDII data for them. The final listing of
    industries containing establishments to be inspected therefore excludes
    those eight SIC's and includes the 99 four-digit SIC's with the highest
    LWDII's for which OSHA has establishment specific data.
        For each four-digit SIC on the list, each establishment with an
    LWDII rate at or above the average LWDII rate for that four-digit
    industry will be subject to an inspection with the exception of
    establishments in SIC 8051, ``Skilled nursing care facilities,'' SIC
    8052, ``Intermediate care facilities'' and SIC 8059, ``Nursing and
    personal care not elsewhere classified.'' Those three industries
    contained many more establishments than the other SIC's on the list. To
    avoid over-concentration on inspections in those three industries, only
    the top 20 percent of the establishments in those SIC's with LWDII's
    above the industry average will be subject to inspection. All
    establishments subject to inspection will have an equal chance of being
    inspected. The national office will provide each area office with a
    list of establishments within the area office's jurisdiction that are
    subject to inspection under the plan.
        Question. In particular, how would the additional $2.8 million
    requested for federal enforcement activities under this program be
    spent if the Department were not able to implement the Cooperative
    Compliance Program?
        Answer. The budget request for 23 FTE and $2,750,000 is tied to the
    agency's efforts to enhance construction expertise in OSHA as well as
    to provide additional resources to help implement the Cooperative
    Compliance Program (CCP). The CCP is OSHA's current approach to
    addressing high-hazard industries and workplaces and offering
    partnerships with participating employers. Even if the courts should
    rule against OSHA's current CCP scheme, we would still use the
    requested resources to focus on high-hazard areas and to generate
    partnership opportunities with employers to reduce workplace exposure
    to hazards.
    transfer of certain administrative services of part b of the black lung
                            program from ssa to dol
        Question. The conference report accompanying the fiscal year 1998
    Department of Labor, Health and Human Services, Education and Related
    Agencies Appropriation Bill included language directing the Inspectors
    Generals (IG) of the Department of Labor (DOL) and the Social Security
    Administration to provide annual, joint reports to the Committee on
    Appropriations on the Memorandum of Understanding (MOU) between the DOL
    and the SSA which transfers certain administrative services of Part B
    of the Black Lung Program from the SSA to the DOL. The purpose this
    report is to help Congress monitor whether the terms of the MOU are
    being followed.
        What is the status of the transfer of certain administrative
    services under the MOU?
        Answer. The Memorandum of Understanding (MOU) between the Social
    Security Administration (SSA) and the Office of Workers' Compensation
    Programs (OWCP) of the Department of Labor concerning maintenance
    activities for beneficiaries under Part B of the Federal Black Lung
    Program was signed September 26, 1997. Under the terms of the MOU, the
    Department has assumed responsibility for all routine maintenance
    activities associated with the Part B claims. The Social Security
    Administration (SSA) retains responsibility for taking applications on
    Part B claims and forwarding them to the appropriate DOL office for
    processing and also the responsibility for conducting Administrative
    Law Judge (ALJ) hearings to resolve contested issues, including
    overpayment issues, arising from Part B claims. SSA also retains the
    responsibility for considering appeals taken from ALJ decisions.
    Instances of possible fraud or abuse are also referred to the SSA OIG
    for investigation and possible prosecution.
        OWCP has devoted 17 FTE and 10 contract mail and file and data
    entry staff to Part B case work and SSA has agreed to pay the
    Department $2,475,970 for administrative services being performed in
    fiscal year 1998. However, negotiations with SSA have not been
    completed for the administrative costs for fiscal year 1999. The
    program currently estimates its Part B needs at $2,551,000 for fiscal
    year 1999.
        While the OWCP Division of Coal Mine Workers' Compensation is
    responsible for coordination and consultation in implementing the
    Memorandum of Understanding, ultimate responsibility for the policy,
    conduct, and administration of the Part B Black Lung program, including
    the services provided by OWCP, continues to rest with SSA.
        SSA delivered its electronic records for those beneficiaries to
    OWCP during the first week of October 1997. Benefits for the October
    entitlement period were prepared by OWCP and issued on November 3,
    1997. OWCP will have processed $350 million in monthly disability and
    survivors benefits to over 100,000 households, as of May 3, 1998.
        Typical claims maintenance actions are being performed by OWCP in
    one week or less from receipt of the necessary information from the
    beneficiary. Overall, the transfer has proceeded very smoothly with a
    high level of service being provided to the beneficiaries.
        Question. Has the DOL received any complaints from beneficiaries on
    the implementation?
        Answer. The initial mailing by the Social Security Administration
    to the beneficiaries, informing them of the transfer of administrative
    services and of which OWCP office would be responsible for their
    individual claims in the future, resulted in a large volume of
    inquiries to the nine OWCP offices' 800 numbers. The great majority of
    those telephone calls were inquiries rather than complaints. In those
    instances where the beneficiaries identified problems, they were
    addressed in the individual cases. Very few of the beneficiaries have
    felt it necessary to seek Congressional assistance to help resolve
    their individual problems. In December 1997, 22 Congressional inquiries
    were received in the nine OWCP claims servicing offices. In January
    1998, there were 13 such Congressional inquiries; in February, only 8.
    When compared to approximately 104,000 monthly beneficiaries, these
    numbers are very small and the trend is clearly moving in the right
    direction.
        Question. What is the status of the report the DOL IG is compiling
    with the IG of SSA?
        Answer. The initial planning phase of the audit requested by the
    Committee has begun with various preliminary activities. The OIG has
    met with staff from the Black Lung Program to obtain appropriate data
    necessary to perform the audit. In addition, we will be meeting with
    staff of the Social Security Administration OIG to coordinate and
    define the role of each office in the project. We anticipate allocating
    time over the next several months to data collection and coordination
    activities. In order to assess information through the end of fiscal
    year 1998, as requested by the Committee, the bulk of our audit work
    will be started in October 1998. Our final report will be issued on, or
    before, March 31, 1999, as required.
                       year 2000 computer problem at dol
        Question. What efforts are being made by the Department to prepare
    for the year 2000 computer problem?
        Answer. The Secretary of Labor has made Year 2000 compliance a top
    Departmental priority and has taken the necessary steps to accelerate
    progress in reaching the Department's target goals for Year 2000. The
    Deputy Secretary meets with each agency head on agency Year 2000
    progress. The Chief Information Officer (CIO) meets with agency heads
    to resolve problems and keeps the Deputy Secretary informed of progress
    weekly. The Office of the CIO has just completed an in depth review by
    agency of Year 2000 preparations to assure that the Department is
    prepared and has its computer systems ready for the Year 2000.
        In a memorandum dated December 31, 1997, the Secretary of Labor
    outlined to the DOL executive staff the steps to be taken to accelerate
    progress in reaching the Department's target goals for Year 2000. In
    this memorandum, the Secretary made it emphatically clear that Year
    2000 conversion is not to take the backseat to any other competing
    program initiatives--it is top priority.
        Management tools used to track progress and manage the effort
    include a quarterly internal report used to assess system needs and to
    track progress against established goals. A monthly exception report
    has been established, beginning February, 1998, requiring a report of
    any deviations from their Year 2000 plan. This report provides an
    ``early warning'' of potential issues needing attention and reduces
    risk.
        Should a system fall behind schedule, deviate from plans or
    encounter unforeseen problems, an ``early warning'' is received on a
    monthly basis through meetings of the Deputy CIO with Year 2000
    managers. The monthly exception report is used to advise the CIO, the
    Deputy Secretary and the Secretary of deviations.
        The CIO is hiring a Year 2000 contractor to provide additional
    support to CIO functions and to provide assistance to the agencies
    where needed. The CIO has entered into a partnership with the Inspector
    General to assist in Year 2000 matters by attesting to the viability of
    agency plans, progress and reports.
        The Department has taken aggressive measures to meet the new OMB
    mission critical target dates. Systems activities have been accelerated
    to meet the new deadlines. Acceleration has been achieved by increased
    resources, repairing rather than replacing systems and making year 2000
    modifications a top priority.
        The Department continues to show substantial progress in meeting
    Year 2000 mission critical objectives. The number of mission critical
    systems becoming Year 2000 compliant has increased from 16 percent to
    21 percent as reported in the most recent quarterly report to OMB. DOL
    management has demanded that Federal programming and contractor staff
    establish and follow aggressive schedules to convert and test
    applications/systems, including menus, sub-routines, programs, etc.
    Work on the remaining mission critical systems has been accelerated to
    meet the new government-wide goal to complete implementation by March
    1999.
        Other Year 2000 initiatives are listed below.
      --FTS2000 is the primary telecommunications service used by the
            Department and all host mainframe facilities are provided under
            other contracts. The Department is currently reviewing all non-
            FTS2000 data and voice grade telecommunication systems for Year
            2000 compliance. Plans are being developed to upgrade/replace
            systems as necessary.
      --The Department is currently analyzing its facilities and embedded
            systems for Year 2000 implications to ensure all Departmental
            facilities, laboratory training equipment and computer products
            with embedded systems chips are compliant or have ``work
            around'' capability. Plans are being developed to solve any
            Year 2000 problems found within internal systems used to
            control, monitor or assist the operation of equipment,
            machinery or building maintenance which include HVAC,
            elevators, security systems, network hardware and
            telecommunications with embedded computer chips. The process of
            contacting contractors and supply vendors to determine the
            current level of compliance in their equipment and to prepare
            schedules for upgrades and replacements, as well as testing
            plans, is on-going.
      --The Department has emphasized approaching the compliance issue for
            facilities on a mission-focused basis. Primary emphasis is
            placed on those facilities and equipment that impacts the
            essential missions such as providing workplace safety and
            health, critical infrastructures needed to carry out the
            Department's mission as well as the infrastructure needed for
            employees to do their work. Toward that end, the laboratory and
            testing facilities of the Department have been surveyed to
            determine what equipment is at risk. Manufacturers and vendors
            are being contacted to determine whether equipment contains
            date sensitive embedded chips, whether upgrades can be obtained
            or whether replacement equipment must be purchased. All micro-
            computers and LAN/WAN facilities either are now compliant or
            resources have been dedicated to ensure timely compliance.
      --The Department identified over 3,000 data exchanges with States and
            other partners. In February of this year, the Deputy CIO
            visited the CIO for the Commonwealth of Pennsylvania to review
            State interfaces as a quality check for the exchange of
            information data process. These materials were also sent to the
            States of Washington and California for further review.
      --The Department's host mainframe provider has successfully tested a
            Year 2000 compliant Logical Partition Region. This significant
            milestone allows for compliance testing of renovated host
            systems.
        In summary, the Office of the Chief Information Officer continues
    to work to identify and resolve potential problems relating to the Year
    2000 should they arise.
        Question. Should the Department fail to address the issue in time,
    how might black lung beneficiaries and those applying for benefits be
    affected?
        Answer. Sensitive elements in the legacy Automated Support Package
    (ASP) are being renovated to make them Year 2000 compliant. This will
    accelerate the scheduled implementation date for these elements for
    Year 2000 to March 1999. Work will continue concurrently on the fully
    Year 2000 replacement system. This decision to repair the mission
    critical functionality resolves a potential issue related to a delay
    caused by the late execution of the contract for system replacement.
        This system tracks the status, history and location of claims filed
    for black lung benefits. It also generates payment of medical and
    compensation for eligible recipients and maintains a history of
    benefits paid, accounting and financial data.
        The Department's Year 2000 contingency policy requires contingency
    plans for all mission critical systems. These plans are scheduled to be
    completed by July 1998. Contingency plans have already been developed
    under previous guidelines for certain targeted systems. Such is the
    case for the Black Lung ASP system.
        The renovation actions referenced above should preclude any type of
    system failure which might affect beneficiary payments, medical
    reimbursements to health care providers, result in overpayments or
    cause delays in responding to inquiries.
                                     ______

                    Questions Submitted by Senator Herb Kohl
                          retiree health care coverage
        Question. Every day around the country more companies inform their
    retirees that they are unable to continue to provide health care
    coverage that they promised in past agreements. Between 1988 and 1996
    availability of retiree health coverage declined by 8 percent among
    businesses with 500 or more employees. Too late, retired people find
    out that in the small print of their contracts a loophole allows the
    employer to end coverage if it gets too expensive. As I am sure you are
    aware, this happened to the employees of the Pabst Brewing Company in
    late 1996. They were left stunned and feeling lied to both by the
    company and the government who they thought had insured their benefits.
    What can the Department of Labor do for workers in this situation?
        Answer. Retiree health benefits, like other employment based
    benefits, are subject to the protections of Title I of the Employee
    Retirement Income Security Act (ERISA). Unlike defined benefit pension
    plans, however, these benefits are not guaranteed by the Federal
    Government.
        In 1993, the Department of Labor began looking for opportunities to
    offer its view of the law to support the legitimate expectations of
    employees who believed that they had been promised lifetime retiree
    health benefits. Since then we have filed several amicus briefs
    attempting to clarify benefit terms and help preserve the health
    benefits of the retirees involved. We filed five amicus briefs in the
    Pabst case, including a brief recently filed in the Seventh Circuit
    Court of Appeals, and have participated in several other cases. We have
    also published a brochure to assist retirees in understanding the terms
    of their health plan in order to better assess their options in the
    event of a termination or reduction of benefits.
        Question. Is legislation necessary to provide further protection
    under the Employee Retirement Income Security Act (ERISA)?
        Answer. The Administration proposed, and Senator Moynihan and Rep.
    Stark subsequently introduced, legislation that would amend ERISA to
    require that retirees, age 55 or older whose retiree health benefits
    are cut, be allowed to buy into their former employers' plans for
    active employees at a price not greater than 125 percent of the average
    cost for the group (S. 1749 and H.R. 3470). The legislation would also
    offer displaced workers aged 55 to 62 who lose benefits access to
    affordable coverage by buying into Medicare, and offer individuals aged
    62 to 65 access to Medicare benefits under a special program until they
    become eligible for the traditional Medicare program.
                          osha partnership initiatives
        Question. Many voices in Congress are calling for OSHA reform. They
    are pushing for, and I support, an OSHA that focuses on consultation
    and working with employers to improve safety instead of just levying
    fines. In the last few years OSHA has responded to these demands and
    begun to change its focus, it is now encouraging employers to work with
    them for safer workplaces. I am proud to note that the Vice President
    and the Department of Labor just recently honored Wisconsin Box Co. for
    its exemplary participation in OSHA's Cooperative Compliance Program
    (CCP). Has this program moved OSHA away from being an organization that
    employers fear as too arbitrary and authoritarian, to one they can work
    with to improve workplace safety?
        Answer. OSHA has sought a variety of ways to work with employers in
    achieving improved safety and health conditions in the workplace. The
    CCP effort was specifically intended to address conditions at those
    worksites with elevated injury and illness rates by offering
    partnership opportunities for employers and OSHA to work together to
    reduce those rates. We would like to think that the nearly 90 percent
    of employers that chose to participate in the CCP did so because they
    believed that they could successfully work together with OSHA to
    improve workplace safety and health. The experience of Wisconsin Box
    Company is testimony to the positive effect this type of program can
    have in improving working conditions.
                                  stay on ccp
        Question. The Chamber of Commerce and National Association of
    Manufacturers are challenging the CCP program in court, halting the
    program. Does the Department of Labor have a back-up plan to make sure
    that cooperation and consultation continues?
        Answer. OSHA does have a contingency plan for inspection
    scheduling, but there is not a contingency program for the cooperative
    aspect. We expect the court to eventually rule in OSHA's favor and the
    Cooperative Compliance Program (CCP) will then continue. In the
    meantime we will continue to work on cooperative efforts through local
    initiatives, OSHA consultation programs, OSHA voluntary protection
    programs (VPP), and compliance assistance. OSHA consultation programs
    have been and will continue to be a major part of OSHA's cooperative
    efforts. The court stay does not affect or alter these efforts.
                               dislocated workers
        Question. Our economy today is the healthiest it has been in
    decades. Unemployment rates in recent months have remained very low
    while inflation has been stable. While this is all good news, factories
    continue to close and some workers are still without jobs. All the
    sunny statements about the economy don't mean much to someone who has
    just been laid off. The President mentioned in his State of the Union
    address creating a program to aid communities after plant closings
    similarly to what the government does after a military base is closed.
        While I understand that some of this effort would be coordinated
    with the Department of Commerce, how will the Department of Labor be
    involved?
        Answer. The Title III dislocated worker program requires States to
    initiate rapid response assistance within a short period of time
    (preferably 48 hours or less) after notice/information is received by
    the State Dislocated Worker Unit of an impending mass layoff or plant
    closure. The purpose of this assistance is to begin to share
    information with the workers and the employer regarding the type of
    readjustment assistance that is available in the community, including
    federal funds to provide re-employment services and facilitation in
    forming a labor-management committee to determine what types of
    assistance the workers at a specific dislocation are expected to
    require.
        In order to address some of the concerns regarding communities that
    are being especially hard-hit by dislocations of unskilled workers with
    limited re-employment options and as part of the President's
    initiative, the Department of Labor is currently collaborating with the
    Departments of Commerce and Treasury to find ways to assist such local
    communities in responding to closures and downsizing. This is
    particularly critical in communities needing to actively grow or
    attract new businesses. In this regard, important elements of rapid
    response assistance include: providing or obtaining appropriate
    financial and technical advice and liaison with economic development
    agencies and other organizations to assist in efforts to avert worker
    dislocations; and assisting the local community in developing its own
    coordinated response and in obtaining access to State economic
    development assistance.
        Strategies developed by the Departments of Labor, Commerce,
    Treasury and other agencies are expected to provide opportunities for
    local communities to enhance such planning envisioned by rapid
    response, and to encourage the formation of community transition
    committees to respond to mass layoffs and plant closures.
        Question. On a slightly different note, how do you see the
    Workforce Investment Partnership Act that is currently awaiting
    consideration by the Senate, helping the dislocated worker?
        Answer. The Workforce Investment Partnership Act would help the
    dislocated worker by:
      --Maintaining a separate funding stream for dislocated workers, not
            only ensuring current resources, but retaining the ability to
            request increased funding based upon the needs of this targeted
            population. This is a major improvement over the provisions
            contained in the consolidation bills considered in the 104th
            Congress.
      --Maintaining a viable National Reserve Account (National Emergency
            Grants) to allow the Secretary of Labor to respond to mass
            layoffs, plant closures, and natural disasters.
      --Continuing the requirement that States conduct rapid response: the
            provision of onsite assistance to workers as soon as news of a
            layoff or plant closure is received. This is a valuable early
            intervention tool through which workers are provided
            information they need to start the transition process to new
            employment. Their need for services to regain employment is
            assessed and access to such services is facilitated.
      --Continuing to allocate funds to carry out dislocated worker
            research and demonstrations from the national level, as well as
            technical assistance for continuous improvement of dislocated
            worker services.
        In addition, dislocated workers will benefit from the other reform
    elements contained in the bill. Establishing One-Stop centers as the
    framework of the new system would improve dislocated workers' access to
    quality labor market information and services, and proposed skill
    grants and training performance information, or the Individual Training
    Account system, would enable them to make informed choices about
    training opportunities with qualified vendors.
                  job training reform/youth opportunity areas
        Question. The Congress will again try to pass a job training reform
    bill this year. This time however, there is even more pressure for
    swift action than in the past. Last year this committee appropriated
    $250 million for Opportunities for Out-of-School Youth that cannot be
    used unless authorizing legislation is signed into law by July 1st of
    this year.
        If Congress does not consider this legislation soon, and fails to
    meet the July 1st deadline, what would be some possible effects?
        Answer. The Youth Opportunity Area initiative is designed to boost
    the employment rate of out-of-school youth ages 16 to 24 in high-
    poverty areas from current levels of less than 50 percent to a level of
    80 percent. The pervasive joblessness that now exists in high-poverty
    neighborhoods is an underlying cause of the poverty, crime, youth
    gangs, drug abuse, welfare dependency, and family breakdown that
    characterize these communities. The effect of losing the $250 million
    will be to lose a chance to significantly change these communities and
    improve the lives of youth who live in them.
        Question. Could this group be served by another program? Does the
    Department of Labor have a ``back up'' plan?
        Answer. Apart from the small-scale Youth Opportunity Area pilots
    the Department is conducting in six communities with plans to expand
    the number of sites in PY 1998, there is no other DOL employment and
    training program that is strictly targeted on high-poverty urban and
    rural areas. DOL very much wants to implement the $250 million Youth
    Opportunity Area initiative. DOL will continue to work with Congress
    toward enactment of Workforce Development legislation in time to
    trigger the $250 million advance appropriation. We believe that the
    bill will be signed into law by July 1.

                              subcommittee recess

        Senator Specter. Thank you very much, Madam Secretary, that
    concludes the hearing. We appreciate your being here. The
    subcommittee will stand in recess until 2 p.m., Wednesday,
    April 1, when we will meet in room SD-192 to hear from Dr.
    Harold Varmus of the National Institutes of Health.
        [Whereupon, at 2:57 p.m., Wednesday, March 18, the
    subcommittee was recessed, to reconvene at 2 p.m., Wednesday,
    April 1.]

      DEPARTMENTS OF LABOR, HEALTH AND HUMAN SERVICES, AND EDUCATION, AND
              RELATED AGENCIES APPROPRIATIONS FOR FISCAL YEAR 1999

                                  ----------

                            WEDNESDAY, APRIL 1, 1998

                                           U.S. Senate,
               Subcommittee of the Committee on Appropriations,
                                                        Washington, DC.
        The subcommittee met at 2:20 p.m., in room SD-192, Dirksen
    Senate Office Building, Hon. Arlen Specter (chairman)
    presiding.
        Present: Senators Specter, Cochran, Faircloth, Bumpers, and
    Kohl.

                    DEPARTMENT OF HEALTH AND HUMAN SERVICES

                         National Institutes of Health

    STATEMENT OF HAROLD E. VARMUS, M.D., DIRECTOR
    ACCOMPANIED BY:
            RUTH KIRSCHSTEIN, M.D., DEPUTY DIRECTOR, NATIONAL INSTITUTE OF
                HEALTH
            RICHARD KLAUSNER, M.D., DIRECTOR, NATIONAL CANCER INSTITUTE
            CLAUDE LENFANT, M.D., DIRECTOR, NATIONAL HEART, LUNG, AND BLOOD
                INSTITUTE
            HAROLD SLAVKIN, M.D., DIRECTOR, NATIONAL INSTITUTE OF DENTAL
                RESEARCH
            PHILIP GORDEN, M.D., DIRECTOR, NATIONAL INSTITUTE FOR DIABETES
                AND DIGESTIVE AND KIDNEY DISEASES
            AUDREY S. PENN, M.D., ACTING DIRECTOR, NATIONAL INSTITUTE OF
                NEUROLOGICAL DISORDERS AND STROKE
            ANTHONY S. FAUCI, M.D., DIRECTOR, NATIONAL INSTITUTE OF ALLERGY
                AND INFECTIOUS DISEASES
            MARVIN CASSMAN, M.D., DIRECTOR, NATIONAL INSTITUTE OF GENERAL
                MEDICAL SERVICES
            DUANE ALEXANDER, M.D., DIRECTOR, NATIONAL INSTITUTE OF CHILD
                HEALTH AND HUMAN DEVELOPMENT
            CARL KUPFER, M.D., DIRECTOR, NATIONAL EYE INSTITUTE
            KENNETH OLDEN, M.D., DIRECTOR, NATIONAL INSTITUTE OF
                ENVIRONMENTAL HEALTH SCIENCES
            RICHARD J. HODES, M.D., DIRECTOR, NATIONAL INSTITUTE ON AGING
            STEPHEN I. KATZ, M.D., DIRECTOR, NATIONAL INSTITUTE OF
                ARTHRITIS AND MUSCULOSKELETAL AND SKIN DISEASES
            JAMES F. BATTEY, M.D., DIRECTOR, NATIONAL INSTITUTE ON DEAFNESS
                AND OTHER COMMUNICATION DISORDERS
            STEVEN E. HYMAN, M.D., DIRECTOR, NATIONAL INSTITUTE OF MENTAL
                HEALTH
            ALAN I. LESHNER, M.D., DIRECTOR, NATIONAL INSTITUTE ON DRUG
                ABUSE
            ENOCH GORDIS, M.D., DIRECTOR, NATIONAL INSTITUTE ON ALCOHOL
                ABUSE AND ALCOHOLISM
            PATRICIA A. GRADY, M.D., DIRECTOR, NATIONAL INSTITUTE OF
                NURSING RESEARCH
            FRANCIS S. COLLINS, M.D., DIRECTOR, NATIONAL HUMAN GENOME
                RESEARCH INSTITUTE
            JUDITH L. VAITUKAITIS, M.D., DIRECTOR, NATIONAL CENTER FOR
                RESEARCH RESOURCES
            PHILIP E. SCHAMBRA, M.D., DIRECTOR, FOGARTY INTERNATIONAL
                CENTER
            DONALD A. B. LINDBERG, M.D., DIRECTOR, NATIONAL LIBRARY OF
                MEDICINE
            JACK WHITESCARVER, M.D., ACTING DIRECTOR, OFFICE OF AIDS
                RESEARCH
            DENNIS P. WILLIAMS, DEPUTY ASSISTANT SECRETARY, BUDGET,
                DEPARTMENT OF HEALTH AND HUMAN SERVICES

                       opening remarks of senator specter

        Senator Specter. Good afternoon, ladies and gentlemen. The
    Subcommittee on Labor, Health and Human Services, and Education
    will now proceed.
        I regret our late start. We had a vote scheduled for 2
    o'clock, and if I am there to vote at 2 o'clock, I can get out
    at 2:01 and be here to have the minimal interruption with the
    hearing. But the 2 o'clock vote was postponed to 2:10, and then
    2:15, and then 2:17. Then they decided to do that because they
    scheduled a vote right behind it. That 30 second explanation
    does not tell you about the proceedings in the Senate. I value
    your time very highly. I know this is an extraordinary
    assemblage of talent. As the saying goes, there is more talent
    in this room since President Kennedy dined alone--and I had
    better be careful of what I say here. [Laughter.]
        The National Institutes of Health, as I so frequently say,
    in my opinion is the crown jewel of the Federal Government.
    Besides that, you are good. [Laughter.]
        It may not take too much to be the crown jewel of the
    Federal Government, but the National Institutes of Health has
    set a mark in what you have accomplished and I am a total
    supporter.
        We have a Federal budget of $1.7 trillion and if we set our
    priorities in order, there will be no problem in increasing
    your funding tremendously.
        We give lip service to doubling the NIH budget over 5
    years. It unanimously passed last year, 97 to 0. With Senator
    Harkin and I working together, crossing party lines--I learned
    a long time ago if you want anything done in Washington, you
    have to cross party lines and get bipartisan support--we tried
    to put the money into it by $1 billion plus budget amendment
    because the health account had been cut by $100 million, and it
    was defeated 63 to 27.
        We have readied an amendment for $2 billion extra. We are
    talking about doubling, which would be more than $2.5 billion,
    but we are talking about a $2 billion addition.
        I know that there are many grants not funded, and we would
    like to open up those doors if we possibly can.
        So this having been said, Dr. Varmus, we welcome you. We
    welcome your colleagues.
        We will have to vote again in a few minutes, so we are
    under time constraints, as usual. That is nothing extraordinary
    for the Senate and this distinguished panel is used to that as
    well.
        So let us set a 5-minute time limit. Your full statements
    will be made a part of the record and, to the extent you can
    summarize, we would appreciate it.

                     summary statement of Dr. Harold Varmus

        Dr. Varmus. Mr. Chairman, thank you very much. I appreciate
    those warm welcoming remarks. I will be extremely brief so that
    we can get on with the questioning.

                                increase Funding

        I am here for the fifth time representing the NIH. I am
    very pleased to be here to present an extraordinary budget by
    the President for 1999 of $14.797 billion, an 8.5-percent
    increase over our 1998 level, and a projected increase over the
    next 5 years up to a $20 billion final budget, a 50-percent
    increase.
        In our view, this is a wonderful time for such an increase.
    Research in biology and medicine is moving at an unprecedented
    pace. The public health needs continue to be great, both here,
    as the population ages, and abroad, and especially in our
    minority populations.
        I am going to omit a litany of our accomplishments, the
    great promises that new technologies offer, and simply mention,
    very briefly, four of the ways in which the Institutes and
    centers would spend this unprecedented $1.15 billion increase.
    Then we can get into some questioning to talk about specific
    projects they have in mind.
        First, with this year's budget, we would fund an
    unprecedented number of research grants, with a healthy success
    rate and adequate levels of support for individual grantees,
    allowing us to pursue the many exciting initiatives that are
    described in the NIH areas of emphasis package.
        Second, we would be able to implement many new, innovative
    components in our clinical research enterprise--recruitment of
    clinical investigators, training, career awards, clinical
    trials--as outlined in a letter that I recently sent to you in
    response to your question about our clinical research
    activities.
        The third area of focus is to help develop the environment
    in which research is done by developing new instruments,
    purchasing shared instrumentation, supporting more
    bioengineering research, and in other ways, enriching the
    environment for doing research.

                              prepared statements

        Finally, we want to recruit and train more effectively in
    all fields, providing a stable environment for performing
    research in which investigators have a reasonable chance of
    being supported over many years, increasing stipends for our
    trainees, encouraging transdisciplinary work, and doing a
    variety of other things that make it clear that science that
    benefits health is a very broad enterprise, which reaches from
    mathematics, computer sciences, and engineering, to medical
    research in the clinic.
        I would be pleased to answer any questions you might have
    about the specifics of the plans we entertain for this coming
    year.
        Thank you.
        [The statements follow:]
                     Prepared Statement of Harold E. Varmus
                             Office of the Director
        Mr. Chairman, Members of the Committee, we are pleased to be here
    today to discuss the fiscal year 1999 budget request for the Office of
    the Director (OD). As you know, the OD provides leadership,
    coordination, and policy direction for the overall extramural and
    intramural medical research activities across NIH, and for special
    programs specifically established within the OD. The office also
    provides management leadership and centralized support functions
    essential to the operations of the entire NIH.
        The President in his fiscal year 1999 budget has proposed that the
    OD receive $212.9 million, an increase of $11.8 million over the non-
    AIDS portion of the fiscal year 1998 appropriation. Including the
    estimated allocation for AIDS in both years, total support proposed for
    the OD is $254.7 million, an increase of $13 million over the fiscal
    year 1998 appropriation. Funds for OD efforts in AIDS research are
    included within the Office of AIDS Research budget request.
        The NIH, as a federation of research Institutes and Centers, (or
    IC's), conducts a vast program of medical research with the goal of
    advancing medical knowledge to improve health. Furthermore, NIH aims to
    develop the complex infrastructure of facilities needed to conduct this
    research. Attainment of these goals results in improved health for all
    Americans, enhancing the quality of life for our citizens, and
    benefitting the Nation's economy.
        As has often been expressed during these hearings, NIH is in a
    position to achieve great strides in the prevention, diagnosis, and
    treatment of disease and has undertaken an ambitious program of medical
    research emphasizing such themes as genetics and neurosciences, new
    approaches to the origin and development of disease, and new prevention
    and treatment strategies. The OD mission is to provide the program
    means--policies, priorities, processes, and procedures--wherein the
    research IC's can conduct their activities in the core program areas of
    research, research training and career development, and support of
    research facilities. The OD provides a structure and framework for the
    conduct of the activities of the IC's in a manner that is responsive to
    promising research opportunities and technologies, yet addresses public
    health needs. Specifically, the OD guides and supports research by
    setting priorities; allocating funding among these priorities;
    developing science policies on the use of research subjects and
    materials; maintaining peer review processes; administering grant and
    contract award functions; communicating health information to the
    public; facilitating the transfer of technology to the private sector;
    and providing fundamental management and administrative services such
    as financial accounting and personnel, property, and procurement
    management, administration of equal employment practices, and plant
    management services, including environmental and public safety
    regulations of facilities. The principal OD offices providing these
    activities include the Office of Extramural Research (OER), the Office
    of Intramural Research (OIR), the Offices of Science Policy,
    Communications, Legislative Policy and Analysis, the Office of Equal
    Opportunity, and the Office of Management. This request contains funds
    to support the functions of these offices.
        To further influence research activities and to address targeted
    public health needs and specific components of medical research, the OD
    maintains several trans-NIH offices and programs that focus on a
    particular aspect of research and foster and encourage research in that
    particular area. These OD offices address a variety of health needs and
    research areas, including programs to improve the health of women and
    minority populations, the use of complementary and alternative (CAM)
    therapies, activities to examine the use of dietary supplements,
    research related to social and behavioral patterns in the maintenance
    of health, and efforts to promote research on rare diseases. I will now
    discuss the budget requests of these trans-NIH offices in greater
    detail.
       office of research on minority health and the nih minority health
                                   initiative
        Minorities at all stages of life suffer poorer health and higher
    rates of premature death than does the majority population. To address
    these disparities from a trans-NIH perspective, NIH established the
    Office of Research on Minority Health (ORMH) to promote medical
    research aimed at improving the health status of minority populations
    throughout their lifespan; and to expand the ability of minority
    scientists to participate in all aspects of medical research. As such,
    the budget request is in support of numerous collaborative activities
    with the IC's in the core program areas of research, and in research
    training and career development. Specifically, ORMH will support
    research activities by providing grant supplementation for research on
    diseases that disproportionately affect minorities, such as lupus,
    asthma, and hypertension.
        The NIH Minority Health Initiative (MHI) sponsors specific projects
    to develop therapies for sickle cell disease, address diabetes among
    Hispanics and Native Americans, and treatment for hypertension among
    Asian and African Americans, support initiatives to decrease injury and
    death due to violence in minority youth, reduce unintended pregnancy in
    minority women, and support initiatives to reduce infant mortality in
    inner city populations.
        Research training programs such as the Bridges to the Future
    program, the Minority International Research Training (MIRT) program,
    and the Comprehensive Partnerships for Mathematics and Science
    Achievement (CPMSA) program are also supported. The Bridges to the
    Future program links two-year colleges with four-year colleges offering
    baccalaureate degrees in science; while an M.S./Ph.D. component of the
    program links institutions with terminal master's degree programs with
    schools offering Ph.D.'s in science. These activities help to ease the
    transition for students as they pursue each higher level of their
    education. The MIRT program encourages minority students to continue to
    pursue careers in medical research by providing exposure to global
    medical research issues and concerns through links with foreign
    scientists at established domestic medical research centers and with
    research institutions located abroad. Finally, the CPMSA program
    provides standards-based math and science curriculum development,
    teacher training, and research experiences for students in the K-12
    sector to encourage young students to consider careers in science.
        In addition, the ORMH represents the program means that NIH
    maintains to stimulate and foster minority research activities among
    the IC's, and to evaluate these activities and assess attainment of NIH
    goals in the area of minority health. To this end, the ORMH sponsors a
    number of community outreach and review functions including the
    convening of advisory committee meetings, and support of workshops,
    conferences, caucuses, and symposia designed to promote and assess
    minority health issues. In this respect, I am happy to report the
    establishment of the Advisory Committee on Research on Minority Health
    as a standing committee to advise the Director, ORMH, and the NIH
    Director on medical research activities pertinent to minority health
    issues. The Committee will hold its first meeting in April 1998.
                          office of disease prevention
        Within the OD, the Office of Disease Prevention (ODP) has several
    program offices that strive to place new emphasis on the prevention and
    treatment of disease. Chief among these is the Office of Alternative
    Medicine (OAM). OAM pursues studies of improved disease management
    through evaluation of complementary and alternative medicine (CAM)
    therapies. In the United States, it is estimated that some 61 million
    Americans, spending an estimated $13.7 billion annually, use CAM to
    treat varied conditions, both for preventive and for treatment
    purposes. The OAM, using its own program announcements and requests for
    proposals, will solicit applications and proposals in several promising
    research areas, including osteoarthritis, cardiovascular disease, and
    drug addiction. The OAM will continue funding Clinical Research Centers
    that have been established jointly with the IC's for the purpose of
    conducting research on alternative and complementary medical
    modalities. The Centers sponsor a number of clinical trials including
    examining the efficacy of herbal products for treating HIV-associated
    anemia, uterine fibroids, and alcohol dependence; examination of the
    use of acupuncture for treating drug withdrawal and addiction,
    dysphasia in stroke, and postoperative pain after oral surgery. Also
    underway are trials of Ginkgo biloba to treat stroke and traumatic
    brain injury; trials investigating supplementation to the diet with
    garlic on plasma lipoproteins levels; and acupressure and massage
    therapy in the management of asthma. In addition, the OAM will further
    enhance its dissemination efforts with the expansion of databases of
    CAM topics. Finally, the OAM will continue to explore methods to
    improve investigation and validation of promising CAM therapies through
    collaborations with other Institutes and agencies that perform long-
    term field studies.
        Continuing to pursue improved prevention methods, the Office of
    Dietary Supplements (ODS) stimulates research on the use of dietary
    supplements, particularly regarding health benefits and impact on
    disease prevention. The ODS will continue to support investigator
    initiated research protocols through Research Enhancement Awards
    Program (REAP) awards and joint program announcements with the ICD's.
    These address areas such as thaimine deficiency, use of vanadium salts
    and anti-folates; and protocols that investigate the effect of dietary
    supplements on antibiotic-induced hearing loss and loss of bone density
    in athletes. In the area of education and information dissemination,
    ODS will continue to maintain databases and Internet information pages
    to provide the public with information on such supplements, and to
    conduct conferences and workshops to encourage new research initiatives
    in this field.
        To address unrecognized public health needs, the ODP's Office of
    Rare Diseases develops and disseminates information on rare diseases
    and conditions and links investigators with ongoing research activities
    in this area. The ORD supports workshops and symposia to stimulate
    research interest and to identify research opportunities related to
    rare diseases. These workshops have resulted in a determination of
    research priorities, the development of research protocols, and
    criteria for diagnosing and monitoring rare disorders such as head and
    neck cancers, AIDS related malignancies, sleep control, hereditary
    ataxias, and unusual palsies and dysplasias. The results of these
    workshops are fully documented in a report on the outcomes of ORD
    sponsored scientific workshops and symposia to be provided to Congress.
           office of behavioral and social sciences research [obssr]
        The Office of Behavioral and Social Sciences Research (OBSSR) was
    established to address the role of health behaviors and social factors
    in the prevention and management of disease. The OBSSR increases the
    scope of, and support for, behavioral and social science across all of
    NIH. The office develops initiatives to stimulate research in these
    areas and to ensure that findings from this research are disseminated
    to the public. In one such initiative, the OBSSR, in collaboration with
    sixteen IC's and the American Heart Association, will sponsor an RFA on
    disease prevention through behavioral change that targets the risks of
    tobacco use, lack of exercise, improper diet, and alcohol abuse.
    Additionally, OBSSR plans to organize a trans-NIH initiative designed
    to fund research on the influence that socioeconomic factors have on
    health and disease.
                  office of research on women's health [orwh]
        Responding to the health needs of women, the Office of Research on
    Women's Health (ORWH), as the focal point for women's health research
    at NIH, strives to ensure that NIH supported research addresses health
    issues of concern to women, that women are appropriately included as
    subjects in research protocols and clinical trials, and that women are
    encouraged to pursue careers in medical research. Working from a
    comprehensive research agenda that approaches women's health across the
    life span, ORWH will use its budget to stimulate, initiate, and expand
    women's health research by supporting research grants, RFA's, PA's, and
    REAP Awards in priority areas identified during public hearings and
    workshops held during the ORWH conferences: Beyond Hunt Valley:
    Research for the 21st Century. These efforts will be focused in the
    following areas: diabetes prevention, Hormone Replacement Therapy and
    lupus, arthritis and chronic pain, heart disease, alcohol and drug use,
    reproductive health, and urologic and kidney conditions.
                              other od activities
        In addition to the offices previously mentioned, the OD sponsors a
    number of additional NIH programs that promote scientific research and
    enhance research career development.
        The OER coordinates the Academic Research Enhancement Award (AREA)
    program that provides grants to institutions that award degrees in
    health sciences but are not major recipients of NIH grant funds. These
    awards enable students to participate in a research project and
    encourage them to the possibility of careers in medical research. OER
    also sponsors the Extramural Associates Research Development Award
    (EARDA) program that provides competitively awarded grants to
    institutions that offer medical research programs but have a
    significantly under represented minority enrollment. The grants are
    designed to provide faculty at these institutions with skills needed to
    become more competitive in obtaining Federally sponsored research
    funds.
        The NIH, through the Office of Intramural Research (OIR), maintains
    loan repayment and scholarship programs as important instruments for
    recruiting high quality candidates in basic and clinical research
    positions. The request contains funds for the NIH Clinical Research
    Loan Repayment Program and the Undergraduate Scholarship Program, both
    for individuals from disadvantaged backgrounds; and for the Loan
    Repayment Program for General Research. Each program provides for the
    payment of educational costs in return for specific commitments of
    service in NIH's intramural research facilities.
        The Office of Science Policy coordinates several science education
    activities that benefit both students and teachers and encourage
    students to consider careers in research.
        The request also contains funds to support the Foundation for the
    National Institutes of Health to facilitate its transition to a self-
    sufficient entity able to support the mission of NIH through funds
    which the Foundation raises from private sources. Limitations are to be
    placed on the use of these appropriated funds, and their availability
    is contingent upon certification of a plan for self-sufficiency of the
    Foundation by the Secretary.
        The request also includes funds for a Discretionary Fund to permit
    the Director to respond to new and emerging high priority research
    opportunities such as vaccine study, gene mapping and imaging.
                        women's health initiative [whi]
        We are proposing to transfer the Women's Health Initiative (WHI) to
    the NHLBI, where it will function as a consortium among NHLBI, NCI,
    NIA, and NIAMS. We believe that by placing the WHI in an Institute, we
    can provide the best opportunity for success as it operates as a large-
    scale research project similar to others in the Institute. We recently
    conducted a detailed review of the WHI programs and contract costs in
    preparation for this transfer, and found that recruitment efforts had
    to be expanded beyond the original levels, special efforts to retain
    enrollees had to be put in place and increased emphasis on studying
    minority women was necessary. Expanding the sample size by 10,000 was
    necessary to ensure that we had participation from women of all
    demographic groups. But these increased recruitment and retention costs
    can noticeably diminish the financial resources for the other study
    components, and increasing the sample size will also increase the costs
    for follow-up. Therefore, an increase of $13.4 million is being
    requested by the NHLBI as a way to bring the WHI operation in-line with
    the long-standing program objectives. This increase is requested in the
    NHLBI budget along with the original funding request for the WHI.
                            management improvements
        Seeking to maximize administrative effectiveness, NIH, at the
    request of the Subcommittee, undertook a comprehensive review of the
    agency's administrative structure and costs to document the
    effectiveness of current practices and identify areas for future
    improvements. After considering the major recommendations that emerged
    from this review, we will focus implementation efforts on a number of
    high priority areas including: accounts payable; property management;
    personnel delegations; procurement; an automated time and attendance
    system; and information technology management. In addition, an overall
    assessment of security services will be initiated. Other initiatives to
    be pursued include better management of the decentralized delivery of
    administrative services; strengthening the partnership between the
    scientific and administrative staff; and establishing increased
    administrative accountability throughout the NIH. In addition, in
    response to Subcommittee concerns, the NIH is initiating review of
    regulations governing the conduct of extramural scientific research in
    an effort to identify and alleviate any unnecessary administrative
    burden these regulations may impose.
        The fiscal year 1999 budget request for the Office of the Director
    is $212.949 million. I will be pleased to answer questions.
        The activities of the OD are covered within the NIH-wide Annual
    Performance Plan required under the Government Performance and Results
    Act (GPRA). The fiscal year 1999 performance goals and measures for NIH
    are detailed in this performance plan and are linked to both the budget
    and the HHS GPRA Strategic Plan which was transmitted to Congress on
    September 30, 1997. NIH's performance targets in the Plan are partially
    a function of resource levels requested in the President's Budget and
    could change based upon final Congressional Appropriations action. NIH
    looks forward to Congress' feedback on the usefulness of its
    Performance Plan, as well as to working with Congress on achieving the
    NIH goals laid out in this Plan.
                            buildings and facilities
        I am pleased to present the President's budget request for the
    Buildings and Facilities (B&F) Program. The President in his fiscal
    year 1999 budget has proposed that the B&F receive $218.9 million, an
    increase of $12 million (or 5.8 percent) over the fiscal year 1998
    appropriation. Including the estimated allocation for AIDS, total
    support proposed for B&F is $225 million, an increase of $18 million
    (or 8.7 percent) over the 1998 appropriation. Funds for B&F efforts in
    AIDS research are included within the Office of AIDS Research budget
    request.
                    role in the biomedical research mission
        The B&F Program plays an essential role in supporting the
    biomedical research mission of the NIH and has a critical and exciting
    impact on shaping and defining the NIH campus. The Buildings and
    Facilities appropriation provides funds for the design, construction,
    improvement, and major repair of clinical, laboratory, and office
    buildings, as well as supporting facilities, essential to the mission
    of the NIH.
                                  master plan
        Armed with an updated master plan that was approved by the National
    Capital Planning Commission (NCPC) in February 1996 for the Bethesda
    campus, the NIH is moving forward with a new blueprint to guide future
    development on the campus. The new comprehensive master plan identifies
    programmatic requirements in terms of personnel and physical
    facilities; establishes concepts for future development and land use,
    buildings, utilities, open space, circulation and traffic management
    for the next twenty years; and illustrates how needs for laboratory and
    clinical research, administrative, and support space can be
    accommodated. An updated Master Plan for the NIH Animal Center in
    Poolesville was completed in the Fall of 1996.
        The NIH is, however, challenged with an aging, deficient physical
    plant. The majority of the infrastructure systems are 20 to 40 years
    old and beyond their design life. To address this problem, which has
    major occupational and environmental safety implications, two major
    strategies have been put in place. First, NIH has integrated all
    corrective construction programs into a comprehensive Facilities
    Revitalization Program. Its objective is to support laboratory and
    clinical research by providing safe, functional, modern, and adaptable
    facilities that are program effective and cost efficient over their
    expected life. The second strategy is the upgrade of the NIH utilities
    infrastructure, most of which is obsolete, beyond its useful life, and
    needed to meet the demands of modern research.
                   mark o. hatfield clinical research center
        In recent years, the NIH has placed the highest priority on the
    renewal of the Clinical Center (CC) hospital and related research
    laboratories. Ever since its construction in 1953, the CC has been the
    core of the Intramural Program, the training site for thousands of the
    nation's biomedical scientists, and home for the most prestigious
    clinical research program in the world. The power of this program is
    intimately linked to the diversity and quality of laboratory sciences
    present on the NIH campus, especially those practiced in space
    immediately adjacent to the clinical wards. With nearly half of the
    country's research beds, a large ambulatory care research unit, a
    coordinated training program, and over 1,000 protocols conducted with
    patients from throughout the nation and the world, the CC has fostered
    important work on diseases ranging from the well-known (e.g., cancer
    and AIDS) to the rare and obscure.
        The Clinical Center complex contains approximately 40 percent of
    the laboratory research space on the Bethesda campus, and about one
    half of the federally supported research beds for clinical research.
    However, the utility systems within the complex are deteriorated,
    outmoded, obsolete, and insufficient to support modern research.
    Numerous distinguished review groups, including the U.S. Army Corps of
    Engineers and the External Advisory Panel established by the Congress
    and chaired by Drs. Paul Marks and Gail Cassels, have confirmed the
    increasingly dangerous deficiencies in the physical condition of the
    existing Clinical Center and proposed the construction of a new
    research hospital. More recently, the DHHS Secretary's review of the
    Clinical Center confirmed the recommendation for a new facility and
    noted that its proposed operational changes can only be fully realized
    in a building with a modern design. In accordance with the advice of
    the Marks-Cassell Panel, the Administration and the Congress has
    supported the NIH plan to design and construct what is now the Mark O.
    Hatfield Clinical Research Center (CRC), a state-of-the-art research
    hospital with 250 beds, allied clinical facilities, and adjacent
    research laboratories for work that is closely intertwined with patient
    research activities, a traditional strength of the existing CC. It will
    be located to the North of the existing Building 10 complex and
    ambulatory care research building. The research hospital will be
    approximately 600,000 gross square foot (gsf) and will be served by an
    additional 250,000 gsf of new space dedicated to laboratory and program
    support. It is estimated that construction for the new CRC will take
    five years to complete and will be ready for occupancy in 2002.
        Funds provided in the fiscal year 1995 appropriation of $2,500,000
    were used to investigate and evaluate different project development
    approaches and design options for the new facility. They were also used
    to pay for a design concept competition. The CRC project was initially
    funded in fiscal year 1996 when funding of $23 million was provided for
    architecture and engineering design and design development for the
    project. The fiscal year 1997 and fiscal year 1998 B&F appropriations
    included $90 million in each fiscal year for the construction portion
    of the Mark O. Hatfield Clinical Research Center. In accordance with
    the intent of Congress, the project is being planned at full scope to
    completion. The fiscal year 1999 request of $90 million will continue
    the course of the project. The total planned budget for design and
    construction of the CRC is $333 million. The proposed appropriations
    language specifies $90 million for fiscal year 1999 and requests
    advanced appropriations for $40 million in fiscal year 2000 for the
    construction of the CRC, which will remain available until expended.
        The CRC is currently being fast-tracked, i.e., as segments of the
    project design are completed, the construction will start while the
    remaining design is being developed. Since September 1997, site
    preparation work for the CRC has been underway. This includes
    demolition of existing structures on the site of the CRC; modification
    of the existing south entrance to the Clinical Center to facilitate
    construction of the new CRC on the north side of the Clinical Center;
    and relocation of utilities and roadways. In the next year and a half,
    significant progress will be made: the design will be fully completed;
    the site preparation will be substantially completed; and the building
    foundation and structure will be in place.
                              hiv vaccine facility
        Another highlight of the fiscal year 1999 request for B&F is
    funding for the construction of an HIV Vaccine Facility. With President
    Clinton's announcement of another important new NIH AIDS vaccine
    initiative in May 1997, the NIH is moving forward to develop a Vaccine
    Research Center (VRC). The VRC will bring together in a single location
    scientists engaged in all aspects of vaccine research, integrating
    modern immunological science with detailed understanding of the
    pathogenesis of HIV infection, development of immunogens and vectors,
    and new approaches to vaccination. The VRC will be housed in a Vaccine
    Facility which has been initiated with $17 million appropriated in
    fiscal year 1998 to accelerate design and begin construction. Funding
    to complete construction of the Vaccine Facility, totaling $9.1
    million, is included in the fiscal year 1999 B&F budget request of $3
    million and $6.1 million made available in the Office of AIDS Research
    request.
                    essential safety and health improvements
        The NIH continues to place a high priority on the essential safety
    and health requirements of its facilities. In addition to the CRC, the
    Essential Safety and Health Improvements initiatives address the
    infrastructure upgrades to existing NIH facilities to meet critical
    occupational and environmental requirements to protect and support
    ongoing research programs, including the safety and health of NIH
    employees and patients. Supporting utilities need to be modernized and
    improved in order to meet safety and health requirements in support of
    the NIH research mission.
        The Infrastructure Modernization Program (IMP), initiated in fiscal
    year 1991, is in the final year of a nine-year program to replace and
    expand central utility equipment and distribution systems. A critical
    situation had developed where sufficient and uninterrupted services to
    research and patient care activities could not be ensured due to
    obsolete, deteriorated systems, overburdening from growth, and
    increasing program requirements. The IMP is critical to ensure the
    infrastructure capability to carry out the NIH mission and remove the
    possibility of a catastrophic failure of the central utility and
    distribution systems. This request includes funds to complete
    construction of the central power plant expansion that will house
    equipment such as secondary pumping apparatus, several chillers, and
    areas for maintenance and spare parts.
        Other funds included in the fiscal year 1999 request for the
    Essential Safety and Health Improvements initiatives are for; the
    systematic and phased removal of asbestos-containing materials from
    various NIH buildings; the implementation of the plan to correct fire
    and life safety deficiencies in NIH buildings on the campus and at the
    NIH Animal Center; the elimination of barriers to persons with
    disabilities; a multi-year program to address indoor air quality
    concerns at NIH facilities; the modernization of Building 6; the
    construction of the upgrade of the utility infrastructure at the NIH
    Animal Center, Poolesville; the ongoing rehabilitation of NIH animal
    research facilities; and initiation of the environmental assessments/
    remediation program. All of these projects are driven by federal and
    local regulations, policies and national accreditation requirements.
                         repair and improvement program
        The Repair and Improvement (R&I) program represents essential
    ongoing preventive maintenance, and major repairs and rehabilitation/
    upgrades to the physical plant that supports the main NIH campus in
    Bethesda, as well as to field stations that are the responsibility of
    the NIH. The R&I program covers projects of a recurring nature
    including roofs, roads, structures, and building utilities, as well as
    other projects that are unpredictable, and are one-time occurrences
    that require immediate attention that are critical to the continuing
    operation of our research facilities.
                        renovations and system upgrades
        This fiscal year 1999 B&F request also provides funds for the
    renovation of the basement of Building 30; safety upgrades within
    Building 37; and upgrades to NIEHS mechanical systems.
                        fiscal year 1999 budget summary
        The fiscal year 1999 request for Buildings and Facilities is $218.9
    million. The request is highlighted by $90 million for the Mark O.
    Hatfield Clinical Research Center, the third of four planned funding
    increments to complete construction; and $3 million to complete
    construction of the Vaccine Facility to house the VRC. The NIH, through
    the Office of AIDS Research budget request, has also made available
    $6.1 million in the fiscal year 1999 to support the Vaccine Facility
    project. The request totals $55.1 million for essential safety and
    health improvements composed of $7.5 million for the final year of
    funding of the site infrastructure modernization program at the NIH;
    $5.5 million for the phased removal of asbestos from NIH buildings; $3
    million for the continuing upgrade of fire and life safety deficiencies
    of NIH buildings; $500,000 for the elimination of barriers to persons
    with disabilities; $1.5 million for implementation of an indoor air
    quality improvement program; $8.8 million for the modernization of
    Building 6; $16 million for the construction of the upgrade of the
    utility infrastructure at the NIH Animal Center, Poolesville; $11.3
    million to continue the rehabilitation of animal research facilities;
    and $1 million to initiate a program of environmental assessments and
    remediation. In addition to the essential safety and health
    improvements, the fiscal year 1999 request includes: renovation
    projects amounting to $4.4 million for the basement of Building 30; $17
    million for the mechanical/life safety upgrades to Building 37; and
    funding of $9.1 million to upgrade mechanical systems at NIEHS. The
    fiscal year 1999 request also includes $40.2 million for the continuing
    program of repairs, improvements, and maintenance that is the true
    keystone of the B&F program.
        My colleagues and I will be happy to respond to any questions you
    may have.
                                     ______

                    Prepared Statement of Jack Whitescarver
        Mr. Chairman and Members of the Committee: I am pleased to present
    the President's budget request for the AIDS research programs of the
    National Institutes of Health for fiscal year 1999, a sum of
    $1,730,796,000, an increase of 7.7 percent above the comparable fiscal
    year 1998 appropriation.
        The activities of the OAR are covered by the NIH-wide Annual
    Performance Plan required under the Government Performance and Results
    Act (GPRA). The fiscal year 1999 performance goals and measures for NIH
    are detailed in this performance plan and linked to the HHS GPRA
    Strategic Plan that was transmitted to Congress on September 30, 1997.
    The OAR is anxious to meet the challenges set forth in this plan, and
    we look forward to continued support from Congress that will facilitate
    our achieving these goals.
        The role of the Office of AIDS Research (OAR) is to plan,
    coordinate, and evaluate NIH AIDS research and to develop this budget
    request, assuring that the nation's investment will be used to address
    the most compelling scientific opportunities and priorities that will
    lead to better therapies and prevention for HIV infection and AIDS.
                       aids epidemic in the united states
        If I were to summarize where we stand after 16 years of pitched
    battle against the AIDS pandemic, I would say, with apologies to
    Charles Dickens, that it is the best of times; it is the worst of
    times. Here in the United States, remarkable research progress has
    brought about longer and better quality of life for many HIV-infected
    individuals. New combination therapies of protease inhibitors and other
    antiretroviral drugs can reduce the amount of virus in the blood to
    undetectable levels. Death rates, hospitalization, and rates of new
    infections are decreasing in many populations. Drug regimens have
    dramatically reduced the number of infants born with HIV.
        But even here in the United States, the news is not all good. The
    new drugs are not a silver bullet. We do not know how long their
    benefit will last or whether immune function of treated individuals can
    be restored without additional interventions. There are many for whom
    the new drug regimens have not been effective or for whom the side-
    effects are not tolerable. We are now beginning to identify adverse
    metabolic effects that may be the result of long-term use of
    antiretroviral therapies. Drug-resistance and the transmission of drug-
    resistant HIV is a very dangerous reality. And many patients,
    particularly in our minority communities, simply do not have the means
    to access these life-extending therapies.
        AIDS is actually a series of individual epidemics, and although
    overall statistics are down in the U.S., the epidemics in many groups
    are increasing. AIDS cases continue to rise among women and minorities
    in our country. According to the CDC, in 1996 new AIDS cases increased
    by 19 percent among heterosexual African American men; 12 percent among
    heterosexual African American women; 13 percent among Hispanic men; and
    5 percent among Hispanic women. CDC recently announced that AIDS is on
    the increase in another group in our nation--people over 50 years of
    age. Since 1991, AIDS cases in the 13 to 49 age group increased 9
    percent; but cases in people over 50 increased 22 percent during that
    same time.
                               worldwide pandemic
        The news around the world is far worse. The World Health
    Organization and the Joint United Nations Programme on HIV/AIDS
    (UNAIDS) recently released new data demonstrating that the deadly march
    of the pandemic had been underestimated. They now estimate that 2.3
    million people died of AIDS in 1997--a 50 percent increase over 1996.
    Nearly half of those deaths were among women, and nearly half a million
    were children under 15 years of age. The total number of people living
    with HIV and AIDS worldwide has been revised upward to more than 30
    million adults and children, with 16,000 new infections each day. WHO
    estimates that more than 90 percent of people with HIV live in the
    poorer countries of the globe, as the epidemic continues its unabated
    spread through Africa, Asia, and now Eastern Europe.
        Thus, we face two great dichotomies in our progress against AIDS.
    One, the disparity that exists even among different populations within
    our own country; and the disparity that is exponentially greater
    between the industrialized and the developing worlds.
                   nih comprehensive research plan and budget
        The NIH AIDS research program is addressing these unacceptable
    dualities with a comprehensive research plan and budget that balances
    the need for new therapies that are more effective, less expensive, and
    in less complex dosage regimens with the need for a safe and effective
    vaccine that can be used worldwide. To gain the most expert advice and
    to achieve scientific consensus on the goals and objectives to be
    achieved, the OAR has established a unique and collaborative planning
    effort involving hundreds of individuals: NIH Institute Directors,
    scientists and program staff; non-government experts, including
    scientists from academia, foundations, and industry; and AIDS community
    representatives. The plan itself is unique in that it serves as the
    framework for the development of the budget and defines those research
    areas for which AIDS- designated funds may be allocated.
                         implementing the levine report
        The plan has also been shaped by the recommendations of the Levine
    Report, the comprehensive evaluation of the NIH AIDS research program.
    The recommendations of this landmark Report have had a lasting effect
    on almost every aspect of the AIDS research program--in setting the
    scientific agenda, refocusing priorities, and shaping the AIDS research
    budget. The report has had a profound impact in helping to establish
    the appropriate balance within the AIDS research program in two
    critical areas. The first area is the balance between investigator-
    initiated research grants and targeted, directed science. Before
    embarking on the evaluation process, OAR already had identified the
    need to place greater emphasis on investigator-initiated science and to
    increase the proportion of funding devoted to basic research. The
    Levine Report confirmed these priorities. Between fiscal year 1994 and
    this budget request, OAR has increased the number of new and competing
    research grants by 50 percent, thus encouraging innovation from a wider
    group of investigators.
        The second area of impact is the balance between research to
    develop treatments for those who are already infected and research to
    prevent infection. Vaccine research is a key priority of the Levine
    Report, and a specific challenge from the President. This budget
    request reflects an unprecedented commitment to this critical area of
    research. NIH has taken a number of steps to move the science in this
    area forward. Nobel Laureate David Baltimore now serves as chair of the
    NIH AIDS Vaccine Research Committee providing leadership and guidance
    to this effort. A new program of ``innovation grants'' was initiated by
    that Committee. A new center is being established on the NIH campus
    devoted to vaccine research with an AIDS vaccine as its first major
    goal.
        The Levine Report also challenged NIH to develop a Prevention
    Science Agenda. OAR established a Prevention Science Working Group that
    has established other priority areas of prevention research, including
    topical microbicides and other female-controlled barriers, treatment
    and prevention of sexually transmitted diseases, and prevention of
    mother-to-child transmission.
        NIH programs are pursuing the search for newer and better drugs and
    therapeutic regimens with increased potency, less complicated treatment
    regimens, and fewer toxic side effects. The second generation of
    protease inhibitors is now in development and moving rapidly through
    the drug development pipeline. NIH-sponsored researchers, in
    collaboration with industry, are working to identify, design, and
    evaluate new agents that interfere with other targets in the HIV life
    cycle with the goal of inhibiting HIV infection, disease progression,
    and transmission. NIH clinical trials will continue to identify and
    evaluate the most effective ways to use these drugs in combination.
                  benefits of aids research to other diseases
        Mr. Chairman, the nation's investment in AIDS research is also
    providing major benefits in our ability to understand and treat a wide
    spectrum of other infectious, malignant, neurologic, autoimmune and
    metabolic diseases. For example, the drug known as 3TC, developed to
    treat HIV infection, now has been shown to be the most effective
    therapy for chronic hepatitis B infection. The drugs developed to
    prevent and treat many of the opportunistic infections in HIV-infected
    patients also promise real benefit to those undergoing cancer
    chemotherapy or receiving anti-transplant rejection therapy.
    Researchers recently published a report suggesting that there is a link
    between the Kaposi's sarcoma-associated virus and multiple myeloma, a
    blood cancer. This finding may lead to new treatments or a vaccine, and
    additional information about the link between viruses and cancer. And,
    the study of the immune systems of HIV-infected individuals is
    providing new insight into changes that occur during the normal aging
    process.
        In a very real sense, AIDS has also revolutionized the way that we
    conduct research at the NIH for all diseases, empowering patients,
    particularly women and minorities, to participate in clinical trials
    and in the design and implementation of research protocols. This is
    progress that also will benefit people with all diseases and disorders.
        In closing, I would like to return to ``A Tale of Two Cities,''
    Dickens' story of the French Revolution, and read from its famous first
    sentence: ``It was the best of times, it was the worst of times; it was
    the age of wisdom, it was the age of foolishness; it was the epoch of
    belief, it was the epoch of incredulity; it was the season of Light, it
    was the season of Darkness; it was the spring of hope, it was the
    winter of despair * * *.'' For those of us in the battle against this
    awful disease, that quote captures the roller-coaster of emotion. There
    is darkness and light. There are advances and then new problems. We
    cannot be complacent because death rates are down. We have succeeded in
    keeping some people alive longer, but we are already seeing the many
    limitations of the new therapies. The epidemic has brought about a
    revolution in science and in public health, but the battle is far from
    over.
        The budget authorities provided to the Office of AIDS Research,
    that allow us to direct resources to the most important scientific
    priorities, are even more critical today as these opportunities
    constantly change. The Nation has invested major resources in the NIH
    AIDS research program. I believe that the steps taken by OAR over the
    past few years and the scientific progress that has been made,
    demonstrate that the Nation's investment is indeed well spent. We are
    grateful to the Committee for your continued support for AIDS research.
        My colleagues and I would be pleased to respond to any questions
    you may have.
                                     ______

                   Prepared Statement of Richard D. Klausner
        Mr. Chairman and Members of the Committee: I am pleased to appear
    before you for the third time as Director of the NCI. The President in
    his fiscal year 1999 budget has proposed that the NCI receive $2.536
    billion, an increase of $215 million (or 9.27 percent) over the non-
    AIDS portion of the comparable fiscal year 1998 appropriation.
    Including the estimated allocation for AIDS, total support proposed for
    NCI is $2.776 billion an increase of $229 million (or 8.99 percent)
    over the fiscal year 1998 appropriation. Funds for NCI efforts in AIDS
    research are included within the Office of AIDS research budget
    request. This will allow us to both continue and accelerate the
    progress I believe that we are making.
        Last year, we reported what we believed to be a historic
    observation--the first sustained, significant decrease in cancer
    mortality rates since such statistics were collected in the 1930's. We
    agreed then, in collaboration with the American Cancer Society and the
    National Center for Health Statistics of the Centers for Disease
    Control and Prevention, to issue an annual report card on cancer
    statistics. This year's report card, using numbers updated through
    1995, was presented at a press conference on Thursday, March 12, and I
    can tell you that the encouraging trends continue. This year, we have
    added incidence trends as well. From 1973 to 1990, overall cancer
    incidence rates increased by 1.2 percent per year. Since 1990, they
    have decreased by 0.7 percent per year. This drop includes three of the
    most common cancers: lung, colorectal, and prostate. Breast cancer
    rates, after increasing by 1.8 percent per year, are now flat. Non-
    Hodgkin's lymphoma had been rising at the extraordinary rate of 3.5
    percent per year. While it is still rising at 0.8 percent per year, the
    slowdown in the rate of increase is significant.
        Likewise, overall death rates continue to decrease by 0.5 percent
    per year, after rising 0.4 percent per year. For white males, this drop
    is 0.9 percent per year, while for black males, the mortality rate drop
    is 1.3 percent per year. Quite significant changes in incidence,
    mortality and pattern of disease rates for prostate cancer, the most
    common cancer in men, are currently being carefully analyzed.
    Overwhelmingly, due to the continuing increase in tobacco-related
    cancer deaths for women, the drop in their mortality rates is less than
    for men, 0.1 percent per year in whites and by 0.2 percent per year in
    blacks. Not captured by the above statistics are prolonged survival and
    improved quality of life for many of the millions of cancer survivors
    in this country.
                             control and prevention
        This year, I received reports from two outstanding blue ribbon
    panels advising the Institute on critical opportunities and needed
    approaches in cancer control and cancer prevention. We are now engaged
    in implementing the many recommendations of these groups, expanding our
    activities in these areas. Our response has included the formation of
    two newly configured divisions of the National Cancer Institute, the
    Division of Cancer Prevention and the Division of Cancer Control and
    Population Sciences. These new divisions will strengthen our efforts in
    both cancer prevention and cancer control. This past year, in cancer
    prevention, we completed the accrual of 13,000 women at increased risk
    of developing breast cancer to a critical clinical trial to determine
    whether the anti-estrogen, tamoxifen, can actually prevent this
    disease. The development of new so-called ``designer estrogens'' is
    creating new possibilities for very selective hormone manipulation for
    cancer prevention and we are actively evaluating clinical trials to
    examine this. The NCI is currently sponsoring 85 chemoprevention trials
    for breast, colorectal, lung, prostate and other cancers, a growing
    number of these based upon a real understanding of the mode of action
    of the interventions. Twenty-five new prevention trials are to be
    implemented over the next year.
        Identifying populations and individuals at high risk for cancer is
    a growing focus of the NCI. The Cancer Genetics Network, will involve
    eight different centers throughout the U.S. The goal is not only to
    identify new genes that predispose to cancer but also to learn better
    ways to counsel people, help them cope with the sequelae of genetic
    testing, and apply cancer prevention and early detection strategies in
    high risk individuals. Evaluating the efficacy of surveillance and
    prevention in high risk groups is the subject of several initiatives.
    One such population is the 8-9 million cancer survivors in the U.S. who
    are at an increased risk for the development of second cancers. In
    fiscal year 1998, we have invested five million new dollars to put in
    place a growing research portfolio under the coordination of our Office
    of Cancer Survivorship to address the many issues facing this
    population. Our goals include not only decreasing the risk of second
    cancers but also improving quality of life among our survivors.
                              incremental advances
        Advances in treatment often are incremental and they take time to
    have an effect on cancer mortality. It is this incremental progress
    that, in part, explains the mortality trends for numerous cancer sites.
    We have had few dramatic therapeutic breakthroughs in cancer research.
    We have, however, developed a clinical trials system to test and
    optimize often complex therapies. Over the past 12-24 months, we have
    completed clinical trials that have established new standards of
    optimal therapy for women with node-negative and locally advanced
    breast cancer, for women with advanced ovarian cancer, for patients
    with nasopharyngeal cancer, for melanoma, and for childhood renal
    cancer.
        A major explanation for the incremental nature of progress in
    treatment is that, with the exception of hormonal manipulation, our
    therapies have not been designed to target the machinery of cancer.
    This brings me to focus on dramatic changes in the National Cancer
    Program.
                               fruits of research
        Thirty years ago, Peyton Rous in his Nobel Lecture said, ``Tumors
    destroy man in a unique and appalling way, as flesh of his own flesh
    which has somehow been rendered proliferative, rampant, predatory and
    ungovernable * * * yet despite more than 70 years of experimental
    study, they remain the least understood * * * What can be the why for
    these happenings?'' Three decades later, Dr. Rous would be amazed. With
    dizzying speed and growing precision, we are mapping the inner workings
    of the tumor cell, explaining how it behaves and how it assures an
    accepting and nurturing host. The black box cell of Dr. Rous seen in
    Figure 1 is being replaced by the intricate circuitries of Figure 2.
    The cancer genes so frequently reported in the news are altered relays
    in this circuitry. Viruses, carcinogens and radiation all act by
    altering one or more of these specific pathways. Each circuit suggests
    a rational target for prevention or therapy of cancer as shown in
    Figure 3. Dozens are being developed. Ten years ago, 60 drugs were
    entering clinical trials for cancer. Today, that number is about 320.
        Let me illustrate one. Thirty-five percent of breast cancers
    overexpress a protein called HER-2, a crucial link in one of these
    growth-controlling circuits. These cancers tend to be more aggressive,
    and clinical trials have shown that women with such cancers require
    more intensive therapy to achieve the same outcome as women with tumors
    that do not overexpress HER-2. Last December, Genentech announced the
    results of the first clinical trial using an agent targeted
    specifically to HER-2. That agent, when added to taxol, showed a
    clinical response rate three times greater than with taxol alone in
    women with advanced metastatic breast cancer. New clinical trials will
    rapidly build on this result for breast and other cancers that
    overexpress this cancer gene, such as a proportion of ovarian and lung
    cancers.
        In one of the more exciting tests of our new knowledge of cancer
    biology, we now know that altered circuits in cancer cells result in
    the production of molecules that stimulate the growth of blood vessels
    that nourish the growing tumor. Without these, the tumor will die or
    never grow beyond a microscopic size. Over the next year, we plan to
    have the first potent anti-angiogenesis agents into clinical trials for
    cancer. Knowledge about these cancer circuits will profoundly affect
    our approach to therapy although I believe they will also have a major
    impact on prevention.
                                 the challenge
        To maintain this remarkable momentum of discovery, with the
    President's budget proposal, we can continue to increase the success
    rate for the funding of individual investigator-initiated research. We
    will continue to build on the infrastructure of the Cancer Genome
    Anatomy Project, which I introduced to you last year, to speed the
    discovery of the pieces of the machinery of cancer and especially to
    give us new molecular tools for early detection. This year, we will add
    to that project by beginning to catalog the natural variations in genes
    which will likely explain why different individuals respond to
    environmental, genetic and other causes of cancer so differently. This
    proposed budget will allow us to support a number of new initiatives
    which are aimed at bridging the gap between the explosion of
    discoveries in basic science and the need to translate these advances
    to our ultimate goal of reducing the burden of cancer for people.
        Among these are:
      --Develop chemistry-biology centers to capture revolutionary new
            approaches to the generation of millions of small molecules and
            to couple this with so-called ``smart assays'' in order to
            target these newly defined cancer circuits.
      --Build a new program for Rapid Access to Interventional Development,
            or RAID, which will allow the best new preclinical ideas in
            cancer intervention from investigators throughout the country
            to become available for clinical testing in an accelerated way.
      --Build a re-designed, informatics-based clinical trials system to
            expand access to prevention, detection and treatment trials, to
            improve the speed and value of the trials and to allow the
            growing number of compelling ideas to be rapidly tested.
      --Build a new imaging research network to rapidly evaluate emerging
            technologies in tumor imaging, both for early detection and
            staging and for image-guided therapy.
      --Fund new clinical training pathways and fund mid-level and senior
            clinical investigators to protect their time to engage in both
            clinical research and mentoring.
      --Improve our cancer surveillance system so we have a better
            understanding of the burden of cancer and where we need special
            efforts to control cancer.
        The activities of the NCI are covered within the NIH-wide Annual
    Performance Plan required under the Government Performance and Results
    Act (GPRA). The fiscal year 1999 performance goals and measures for NIH
    are detailed in this performance plan and are linked to both the budget
    and the HHS GPRA Strategic Plan which was transmitted to Congress on
    September 30, 1997. NIH's performance targets in the Plan are partially
    a function of resource levels requested in the President's Budget and
    could change based upon final Congressional Appropriations action. NIH
    looks forward to Congress' feedback on the usefulness of its
    Performance Plan, as well as to working with Congress on achieving the
    NIH goals laid out in this Plan.
        I will be happy to respond to any questions you may have.
                                     ______

                      Prepared Statement of Claude Lenfant
        Mr. Chairman and Members of the Committee: I am pleased to present
    the President's budget request for the National Heart, Lung, and Blood
    Institute (NHLBI) for fiscal year 1999, a sum of $1,646.8 billion, an
    increase of $124.3 million above the comparable fiscal year 1998
    appropriation. Total support proposed for AIDS is $68 million, an
    increase of $4.4 million over the 1998 appropriation. Funds for NHLBI's
    efforts in AIDS research are included within the Office of AIDS
    research budget request.
        This year, it is a particular pleasure to appear before the
    Committee. The NHLBI is celebrating its 50th anniversary, and we have
    much reason to be proud of our past and optimistic about our future.
    Since it passed the National Heart Act in 1948, the Congress has
    appropriated more than $23 billion in support of this remarkable
    enterprise. I want to thank you--and the American taxpayers--for this
    support and to tell you how richly rewarding this public investment in
    medical research has proven to be.
                                 nhlbi's impact
        When the Institute was founded 50 years ago, our nation was in the
    throes of an epidemic of heart disease, as indicated by the vital
    statistics data shown in Chart 1. Beginning at the turn of the century,
    and particularly after the end of World War I, heart disease death
    rates increased steadily among women and quite precipitously among men.
    It seemed that there was no end in sight for this alarming trend,
    because we were quite ignorant about the causes of heart disease and
    extremely limited in our ability to treat or prevent it. Heart disease
    was an implacable and inexorable threat to the public health.
        Who would have believed that this situation could be turned around
    in such a short period of time? But in fact, it has been, as can be
    seen in Chart 2, which extends the previous vital statistics data to
    the present time. Heart disease death rates among men are now about
    where they were 100 years ago, and among women they are 37 percent
    lower. Progress against coronary heart disease has been especially
    noteworthy. Not only do we have lifesaving treatments for heart
    attacks, but we are able to prevent many of them from occurring--or at
    least postpone them until old age.
        The same is the case with strokes, for which death rates have
    plummeted, due in great measure to improvements in detection and
    treatment of high blood pressure. The National Center for Health
    Statistics estimates that the average American can expect to live 5\1/
    2\ years longer today than was the case even 30 years ago and, as Chart
    3 indicates, nearly 4 years of that gain in life expectancy can be
    attributed to our progress against cardiovascular diseases, including
    coronary heart disease and stroke.
        Our assault on diseases that affect the very young has been equally
    vigorous and effective. For instance, the past 50 years have witnessed
    unprecedented improvements in the outlook for the 40,000 children born
    each year with congenital heart disease. In the 1940's, autopsies were
    virtually the sole means of identifying these congenital defects; now
    we can diagnose them in utero. Fetal diagnosis allows optimal medical
    management of children who may require life-saving surgery before they
    are a week old. The understanding of fetal and infant physiology, and
    the development of techniques to perform surgery safely on infants
    weighing as little as 3 pounds, allows many curative surgical
    procedures to be performed in infancy on children who, in the past,
    would have either died or lived very limited lives.
        Neonatal respiratory distress syndrome, which as recently as 1970
    claimed the lives of 10,000 newborns annually, is now responsible for
    fewer than 1,400 deaths each year, according to vital statistics.
    Children with inherited diseases of the lungs and blood, such as cystic
    fibrosis, sickle cell disease, and Cooley's anemia, which used to claim
    their victims in childhood, can now expect to live well into adulthood.
        As you know, the Institute's mandate has encompassed blood safety
    issues for the past 25 years. Here again, our research programs have
    paid off richly, not only in terms of reducing human suffering but also
    in terms of reducing health care costs. For example, in 1970 the chance
    of contracting hepatitis through a blood transfusion was 23 percent, as
    shown in Chart 4. This risk decreased substantially in subsequent years
    as a result of various measures taken to exclude high-risk blood donors
    and test blood for infectious agents, and is now close to zero,
    according to data recently published in the journal Clinical Chemistry.
    The most recent innovation, a highly sensitive anti-hepatitis C test
    implemented in 1992, is estimated to have prevented 33,310 cases of
    hepatitis annually, resulting in savings of $323 million in health care
    costs.
                            promising research areas
        As a result of the scientific discoveries and new research
    approaches developed during its first 50 years, the NHLBI is now poised
    to make a quantum leap in our understanding of many basic issues that
    govern health and disease. Let me describe several broad themes that
    are ripe for exploration in the near future.
        One area of considerable interest, because it cuts across
    cardiovascular, lung, and blood diseases, is thrombosis--the formation
    of blood clots. As anyone with hemophilia can affirm, the blood's
    ability to clot in response to an injury that allows it to escape from
    the blood vessels is a critical, life-preserving function. However,
    blood clots that form inappropriately, within intact vessels or the
    chambers of the heart, are responsible for a host of life-threatening
    events, including heart attack, stroke, peripheral vascular disease,
    and pulmonary embolism, as depicted in Chart 5. We have already
    developed a number of practical interventions to combat the devastation
    caused by thrombosis--for example, thrombolytic drugs to restore blood
    flow in the case of an acute heart attack; anticoagulants to prevent
    the clots that tend to form in the upper heart chambers of patients
    with atrial fibrillation and subsequently travel to the brain, causing
    strokes. Many opportunities now exist to make further progress by
    understanding, at a more fundamental level, how blood interacts with
    its environment. For instance, our research on atherosclerosis has
    revealed that the size of the plaque that clogs arteries may be far
    less important than other characteristics that make it susceptible to
    erosion and rupture, thereby releasing substances into the bloodstream
    that promote thrombosis. Millions of heart attacks may ultimately prove
    preventable if we can unravel this mystery and develop effective
    interventions. Furthermore, advances in our understanding of the
    genetics of thrombosis, coupled with new, highly sensitive imaging
    techniques, may enable us to identify persons who are most susceptible
    to these events, so that we can target the interventions to those most
    likely to benefit.
        Adaptive changes in tissue structure and composition, known
    collectively as ``remodeling,'' are a vital element of normal growth
    and development. However, remodeling in the heart muscle, the airways,
    and the blood vessels in response to prolonged disturbances, such as
    hypertension or inflammation, is harmful. Just as pulling too hard on a
    spring will stretch the coil out of shape and weaken it, years of
    uncontrolled hypertension can cause the cells of the heart muscle to
    lose their ability to contract, leading to heart failure. Similarly,
    remodeling of airway smooth muscle in response to chronic inflammation
    is a major feature of asthma. Exploration of the elements that regulate
    remodeling offers an unprecedented new opportunity to control or
    reverse many pathological processes.
        Angiogenesis--growth of new blood vessels--is a form of remodeling
    that can have both harmful and beneficial effects and is, therefore,
    the object of intense investigation. Recent studies indicate that both
    anti- and pro-angiogenic agents have significant potential for
    therapeutic use. For instance, cancer research has revealed that
    suppressors of angiogenesis can significantly and safely inhibit the
    growth of tumors by starving off their blood supply. On the other hand,
    angiogenesis promoters have been used successfully to bypass blood flow
    obstructions in people's legs, an approach that could reduce the need
    for amputation. Just last month, scientists reported success in using
    an angiogenic growth factor to increase blood flow to the heart muscle
    in patients whose coronary arteries were obstructed. This approach
    could have tremendous potential for reducing the suffering and costs
    associated with coronary heart disease.
        One additional example of remodeling involves the use of retinoic
    acid to stimulate growth of new air sacs, or alveoli, in the lungs of
    mice. Much work remains to be done before such an approach can be
    extended to humans, but it offers the first hope that emphysema--an
    invariably progressive and fatal disease--may be reversible.
        One final area of opportunity that I would like to mention, which
    is a trans-National Institutes of Health priority, is research on
    diabetes. Considerable progress has already been made in developing
    effective therapies, and there is much hope that a cure may ultimately
    be achieved. However, in the meantime, thousands of affected patients
    die each year, not of diabetes itself, but of its cardiovascular
    complications, as the data in Chart 6, derived from vital statistics
    and several small cohort studies, reveal. We perceive an urgent need
    for basic research to understanding the way in which diabetes increases
    cardiovascular risk, and for clinical studies to establish optimal
    goals for control of blood sugar, hypertension, and cholesterol levels
    in diabetic patients and to determine the best approach to
    revascularization of such patients who have coronary heart disease.
        I would be pleased to answer any questions that the Committee may
    have about the programs and plans of the NHLBI.
                                     ______

                      Prepared Statement of Harold Slavkin
        Mr. Chairman and Members of the Committee: The President in his
    fiscal year 1999 budget has proposed that the National Institute of
    Dental Research (NIDR) receive $214.6 million, an increase of $18.6
    million over the non-AIDS portion of the fiscal year 1998
    appropriation. Including the estimated allocation for AIDS in both
    years, total support proposed for NIDR is $229.5 million, an increase
    of $20 million over the fiscal year 1998 appropriation. Funds for NIDR
    efforts in AIDS research are included within the Office of AIDS
    Research budget request.
        The activities of the NIDR are covered within the NIH-wide Annual
    Performance Plan required under the Government Performance and Results
    Act (GPRA). The fiscal year 1999 performance goals and measures for NIH
    are detailed in this performance plan and are linked to both the budget
    and the HHS GPRA Strategic Plan which was transmitted to Congress on
    September 30, 1997. NIH's performance targets in the Plan are partially
    a function of resource levels requested in the President's Budget and
    could change based upon final Congressional Appropriations action. NIH
    looks forward to Congress' feedback on the usefulness of its
    Performance Plan, as well as to working with Congress on achieving the
    NIH goals laid out in this Plan.
                              a golden anniversary
        The NIDR will celebrate its 50th anniversary on June 24th, 1998.
    From today's perspective, the oral health of Americans 50 years ago was
    not as bleak as ``the undentisted ages'' Henry James described a
    century ago, but fell far short of ideal. Most Americans expected to
    be--and were--toothless by age 45. Tooth decay was so rampant that
    Congress was moved to establish NIDR by ``the appalling extent of
    dental disease and dental neglect.'' The new Institute would be
    responsible for ``conducting and fostering research on the causes,
    prevention, methods of diagnosis, and treatment of dental diseases and
    conditions.''
        And so we have. In 50 years we have transformed the practice of
    dentistry and literally changed the faces of millions of Americans.
    Today's dental office reflects a generation and more of private sector,
    professional and research community innovation and collaboration that
    have produced the high-speed handpiece, Panorex X-rays and digitized
    radiography, broad-ranging infection control and prevention, aesthetic
    dental materials and protective sealants, and exquisite pre- and post-
    operative management of pain and inflammation. As a result of
    continuing declines in tooth decay and periodontal disease, only 10
    percent of our population is toothless. From the initial discoveries
    that dental caries was an infectious disease that fluoride could help
    to prevent, NIDR scientists have built a research base that has opened
    the door to the study of all the tissues of the craniofacial complex.
    Importantly, the applications of dental science to improved diagnostic,
    treatment and prevention strategies are saving an estimated $4 billion
    a year in the cost of dental care in America.\1\
    ---------------------------------------------------------------------------
        \1\ Brown, L.J., Beazoglu, T., and Heffley, D. (1994) Estimated
    savings in U.S. dental expenditures, 1979-1989. Public Health Reports,
    109(2), 195-203. The updated figure was provided through personal
    communication from the authors.
    ---------------------------------------------------------------------------
                     a strategic plan for the 21st century
        Our mission to improve and promote craniofacial, oral and dental
    health through research remains. What has changed is how we hope to
    realize our goals. In the last year we published Shaping the Future, a
    strategic plan to carry us into the next century. We have streamlined
    our extramural and intramural research divisions to focus on six areas:
    Inherited Diseases and Disorders; Infection and Immunity; Oral and
    Pharyngeal Cancers; Chronic and Disabling Diseases; Biomaterials,
    Tissue Engineering and Biomimetics; and Behavior, Health Promotion and
    the Environment. These six areas reflect the penetration of oral
    science into all fields of biomedical and behavioral science and the
    imperative to address the riveting changes occurring throughout society
    worldwide: changes in demographics, in health care, in patterns of
    disease and in the very way we do science today. Ultimately, our goal
    is to meet the rising expectations of Americans to enjoy the best of
    health care and live to a ripe old age free of disease and disability.
                           as the twig is bent * * *
        Ideally, that means ensuring babies a healthy start at the
    beginning of life. Much of the excitement in biomedical research today
    lies in the discovery of genes that are essential to development. Of
    these, certain genes can be described as master architects of the body:
    They determine the basic body plan for tissues, organs and systems. A
    misspelling or mutation in such a gene can give rise to a condition
    like Rieger syndrome in which children are born with defects in organs
    situated at the front of the body. They have eye defects that can lead
    to glaucoma, small undeveloped teeth and a protuberant umbilicus. They
    may also have heart, limb and pituitary defects. Such multiple defects
    occur early in development, as the cells that form the embryo migrate
    to create the front to back, side to side and top to bottom orientation
    of life forms that developed early in the course of evolution. Indeed,
    these master genes were first discovered in fruit flies, where they are
    called homeobox genes. The newly discovered Rieger gene, called RIEG in
    the human condition and Rieg in mice, is a new member of a family of
    bicoid homeobox genes--proteins expressed in anterior structures of the
    body. In the fruit fly a RIEG-type gene is responsible for the design
    of the head.
        The finding that misspelling or mutations in a single gene can have
    so many ramifications is one of the more startling discoveries to come
    from molecular genetics research. In addition, two other syndromes we
    are studying underscore how often defects in teeth and bones occur
    along with other organ defects. For example, individuals born with
    cleidocranial dysplasia will be short, lack collar bones, suffer other
    craniofacial and skeletal abnormalities and yet may have more teeth
    than normal--all because they lack one copy of a gene that codes for a
    protein essential to bone formation. Mice lacking both copies of the
    gene are born with a complete lack of bone and die. A second multiple
    organ disorder is McCune Albright fibrodysplasia, a painful, crippling
    diseases in which there are bone lesions, changes in skin pigmentation
    and precocious puberty. Our investigators are working with scientists
    from the National Institute of Child Health and Human Development, the
    National Institute of Diabetes, Digestive and Kidney Diseases and the
    NIH Clinical Center to understand the disease process. As well, the
    need to help these patients is giving impetus to apply the principles
    of a revolutionary new science of Biomimetics.
        This new science unites biomedical knowledge of the genes and
    molecules that orchestrate the normal growth of bones, teeth, cartilage
    and other tissues with engineering, materials and computer sciences to
    achieve the natural repair and regeneration of body tissues. NIDR
    scientists have been prime movers in the discovery of the genes that
    encode growth molecules, now organized into families, such as bone
    morphogenetic proteins (BMP's). In collaboration with industry, these
    and other growth-promoting molecules have been synthesized, combined
    with other compounds and scaffolding material and readied for clinical
    use. So promising is this field that NIDR, in collaboration with the
    National Heart, Lung, and Blood Institute and the National Institute of
    Arthritis, Musculoskeletal and Skin Diseases issued a Request for
    Applications (to be funded this year) to spur research. NIDR will issue
    a Program Announcement in fiscal year 1999 that specifically targets
    craniofacial-oral-dental tissues for biomimetic repair and
    regeneration.
                             all cancer is genetic
        The path from the study of genes for development and repair to
    genes that figure in oral and pharyngeal cancer is short. Like all
    malignancies, these cancers develop because the genetic machinery that
    controls cell growth, differentiation and movement has gone awry,
    giving rise to a rogue clone of cells. With additional mutations the
    clone can become aggressive and invasive. This story has a tragic
    ending for the 9,000 Americans who die every year from oral and
    pharyngeal cancer. For those who do not die, radiation, chemotherapy
    and surgery leave a legacy of pain, disfigurement and dysfunction.
    After 5 years, the survival rate is only 50 percent.
        Logic dictates that if we are to derail this pathologic process, we
    need to identify the multiple sets of genes involved in cell growth,
    understand their function, and learn what happens when they are
    mutated. We also need to understand what makes some people inherently
    more likely to develop these cancers than others--isolating so-called
    cancer susceptibility genes. The next step is to develop tests to
    detect the presence of such genes and other markers of risk--
    preferentially using easily obtained samples of saliva for diagnosis.
    Finally, we need to develop smarter treatments--ways to replace mutated
    genes with intact copies, for example, or ways to stop the formation of
    new blood vessels that feed a growing tumor. With the intense interest
    in advancing cancer research today, we have many opportunities for
    collaboration. We are already funding three of our four oral cancer
    research centers with the National Cancer Institute (NCI), and our
    plans call for further networking with NCI, NICHD, the Centers for
    Disease Control and Prevention, the American Dental Association, the
    National Dental Association, and other groups. These activities will
    highlight cancer prevention programs, especially efforts to eliminate
    tobacco use in young people.
                         pain and heat: a genetic link
        Not all gene discoveries relate to development or disease. One of
    the more striking findings in the past year solves a mystery that has
    long puzzled neuroscientists: How do we sense burning heat? It turns
    out it's by the same mechanism that makes a chili pepper taste fiery.
    When you touch a hot stove you excite a receptor on the surface of
    sensory nerve cells that will also react to the chemical in peppers
    that makes them hot--capsaicin. NIDR-sponsored scientists have now
    isolated and cloned the gene for the capsaicin receptor (technically
    known as vanilloid receptor 1--VR1) enabling them to study how the
    receptor works. Investigators now suspect that VR1-receptor-bearing
    nerve cells are involved in a number of chronic pain conditions,
    especially where inflammation plays a role, from viral and diabetic
    neuropathies and rheumatoid arthritis to oral mucositis pain caused by
    head and neck radiation or cancer chemotherapy. Interestingly,
    continued stimulation of capsaicin receptors can lead to cell death,
    which is the reason that capsaicin is being used as an ingredient in
    salves and chewing gum to relieve burning pain. With the new
    understanding of the pain-heat genetic link, still better approaches to
    relieve chronic pain may be on the horizon.
        A second pain experiment in the past year does not resolve a
    mystery so much as underscore what investigators have long suspected:
    There are sex differences in response to pain. The experiment in
    question revealed that men and women reacted very differently to a
    particular kappa opioid analgesic used for post-operative pain control
    in patients undergoing wisdom teeth extraction. Women reported
    excellent pain relief, while men reported little or no relief. These
    provocative findings will be explored further as part of the agenda of
    the NIH Pain Research Consortium, which NIH Director Dr. Harold Varmus
    established in 1997 to enhance pain research and collaboration. The
    Consortium, co-chaired by the Director of NIDR and the Director of the
    National Institute of Neurological Disorders and Stroke, held a major
    symposium, New Directions in Pain Research, in November, 1997, bringing
    pain researchers and leaders in other fields of neuroscience together
    with patient groups for an exchange of ideas, findings and issues. Next
    month we will hold another NIH Conference on ``Gender and Pain,'' and
    in May yet another NIH Conference on ``Palliative Remedies for the
    Management of Pain.'' A major trans-NIH Program Announcement has just
    been issues to further catalyze pain research.
                       oral routes for systemic infection
        Periodontal disease, in which pockets of destructive bacteria in
    the gums attack the soft tissue and bone supporting the teeth, may lead
    to dangerous systemic complications throughout the body. Currently,
    periodontitis is being investigated as one of the culprits in the
    yearly birth of 250,000 premature, low birth weight (LBW) babies. Women
    with periodontal disease were found to be seven times more likely to
    deliver low birth-weight babies prematurely. Preliminary studies show
    that periodontal disease also may be a major contributor to
    cardiovascular disease. If this seems improbable, consider that a
    single tooth site of infection and bleeding in the mouth, if removed to
    the skin, would be equivalent to a one-inch-square open sore on the
    palm of your hand. The bacteria in such lesions may well release
    byproducts into the general circulation that can damage tissues
    directly or through the release of inflammatory mediators by the immune
    system. The constant production of such molecules in a chronic,
    inflammatory disease like periodontitis could then lead to tissue
    damage. In the case of pregnancy, these molecules can also induce pre-
    term labor. Further evidence of the potential damage to the body from
    oral bacteria comes from a recent study in which NIDR-supported
    investigators infused a common oral bacterium into the bloodstream of a
    rabbit. Within moments the bacteria secreted a unique protein with
    properties that stimulated the formation of a precocious blood clot,
    initiating a process that could lead to a heart attack or stroke.
                                 next 50 years
        Our Strategic Plan commits NIDR to three major initiatives: (1) to
    support world-class science across the six program areas described
    earlier; (2) to enhance research capacity by revitalizing
    infrastructure and training and career development programs; and (3) to
    intensify health promotion efforts so that research findings are
    readily adopted by providers and the public. A variety or
    organizational and administrative changes are in place to further these
    ends. As well, these changes will provide us with the flexibility and
    creativity that are needed to meet the challenges of a rapidly changing
    and complex society. In a year, we have seen unprecedented growth in
    the economy, exponential growth of information technology, and a rise
    in the standard of living. At the same time, we are witnessing a
    fundamental restructuring in health care delivery, we are faced with a
    steady stream of new or re-emerging diseases, and we must come to grips
    with the many bioethical issues occasioned by the progress of human
    genome and cloning research. These developments are fostering a climate
    of cooperation, collaboration, and communication that extends beyond
    NIH and the research community to the public at large. Communicating
    the facts of biomedical science is the best means we have to empower
    Americans to make decisions and life style choices to improve their
    health and prevent disease. That goal was intrinsic to the NIDR mission
    50 years ago, and will continue to be a driving force in the century
    ahead.
        My colleagues and I will be happy to respond to any questions you
    may have.
                                     ______

                      Prepared Statement of Phillip Gorden
        Mr. Chairman and Members of the Committee: I am pleased to testify
    before the Committee on behalf of the National Institute of Diabetes
    and Digestive and Kidney Diseases. The President in his fiscal year
    1999 budget has proposed that the NIDDK receive $927.5 million, an
    increase of $69 million over the comparable fiscal year 1998
    appropriation. Including the estimated allocation for AIDS in both
    years, total support proposed for NIDDK is $944.3 million, an increase
    of $70.5 million over the fiscal year 1998 appropriation. Funds for
    NIDDK efforts in AIDS research are included within the Office of AIDS
    Research budget request.
        A major goal of the NIDDK is to make investments in innovative
    technologies and discoveries that can be directly applied to patients
    in clinical trials. These advances then have immediate application to
    patient care and public health. This general process can be illustrated
    by examples in diabetes that clearly point to research advances and
    help chart our further progress. One of the most important objectives
    of our current research investment is to reduce the intensity and
    duration of an individual's exposure to high levels of blood glucose
    and to develop other risk-reducing therapies. Today, because of our
    earlier investments in basic science, we are able to pursue this
    objective through new research initiatives. It was our investment in
    basic research that produced the tools that enabled us to reach the
    point of applying clinical trial methodology. Through these trials, we
    could assess whether the complications of diabetes and onset of the
    disease itself can be prevented, thus laying the foundation for today's
    diabetes research agenda.
               diabetes as an illustration of research investment
        Diabetes is the most common cause of end stage renal disease. Thus,
    one of our major goals is to reduce the risk of this complication as
    well as other complications such as blindness, nerve degeneration and
    amputations. A class of drugs known as angiotensin converting enzyme
    inhibitors, originally designed to treat hypertension, were found in
    animal models to decrease the effect of diabetes on the development of
    kidney disease. When this approach was tried in diabetic patients who
    were developing kidney disease, we found a major effect of the drug in
    slowing the deterioration of kidney function. This is an excellent
    example of tertiary prevention, where the agent works independent of
    the effect on blood glucose concentrations. Now, if we add this effect
    to a major effect of lowering blood glucose concentration as shown in
    the Diabetes Control and Complications Trial, we see a dramatic effect
    of lowering risk by adding a form of secondary prevention to tertiary
    prevention. These major advances have already been introduced into
    clinical practice in both forms of diabetes.
        These results also paved the way to development of primary
    prevention strategies for two ongoing clinical trials. In the first,
    the Diabetes Prevention Trial, we are testing whether the prophylactic
    administration of insulin can prevent or delay the onset of type 1
    diabetes in at-risk individuals. In the second, the Diabetes Prevention
    Program, we are testing whether lifestyle and drug interventions can
    prevent or delay the onset of type 2 diabetes in at-risk individuals,
    including minority populations. These primary prevention trials are
    promising.
        In a predictive model, the effects of these various interventions
    in type 1 diabetes can be added together and extrapolated to the
    future, as shown on Figure 1. This model shows that the risk of
    developing diabetic kidney disease in at-risk populations may be
    enormously decreased, and this relates to other complications as well.
    Thus, from our basic research investments, we have developed strategies
    to interdict the course of diabetes and its complications. Though
    successful, these therapeutic regimens are difficult to follow,
    especially for children and adolescents. Patients and their families
    want better technologies that will produce easier and more effective
    treatments.
        To expand our therapeutic tools, we need innovative strategies for
    achieving the diabetes research advances of the future. Let me give you
    some examples of how we propose to achieve these goals. Specific
    mechanisms of interdicting the immune destruction in type 1 diabetes
    are now possible. For instance, we are using transgenic technology to
    create animal models to pinpoint mechanisms that will modulate the
    immune system, first in animals, and then in patients who are at-risk
    for the development of type 1 diabetes. Other key parts of our research
    agenda will be: (1) To discover the mechanism by which insulin-
    producing beta cells are destroyed, including exploitation of recently
    emerging concepts about the general mechanisms of cell death; (2) To
    identify possible viral or environmental factors that may cause type 1
    diabetes, including retroviruses; (3) To find transcription factors
    that regulate the tissue-specific generation of insulin-producing
    cells, including the possibility of stimulating a progenitor cell to
    produce insulin after the mature insulin-producing cells have been
    destroyed; (4) To engineer insulin-producing cells using constructs
    that will confer a specific property on the cell, such as the
    properties of glucose recognition, glucose sensing, and other similar
    regulatory steps; and (5) To develop other cell-based therapeutic
    modalities.
        In order to close the gap in the difficulty of administering
    insulin, we will foster research on a variety of glucose-sensing
    technologies. Recently, one of our investigators has presented an
    algorithm to relate interstitial or tissue glucose concentrations to
    blood glucose concentrations. A probe-sensing interstitial glucose
    concentration would avoid issues related to applying a probe to blood
    itself and would therefore be an important potential way to close the
    sensing loop. Thus, the concept of glucose sensing coupled to a
    delivery system is under vigorous pursuit and will clearly be a major
    effort in the next several years.
        Further approaches to understanding the causes of diabetes will be
    pursued by genetic techniques. Six known genes are involved in several
    forms of type 2 diabetes, and several large scale studies using ``high
    throughput'' genomics are attempting to find new genes in more
    conventional forms of type 1 and type 2 diabetes. With NIDDK
    sponsorship, a consortium of scientists is pursuing the genetics of
    both forms of diabetes. We are enthusiastic about the application of
    genetic technology to our understanding of the complications of
    diabetes. For example, we now know that only about 40 percent of long-
    term diabetics ever develop renal disease and that diabetic renal
    disease has a familial association. We now have the opportunity to
    elucidate the specific genes involved and how they may be modified by
    other environmental factors. This will be the focus of intense research
    in the next several years.
        Insulin resistance is a major feature of type 2 diabetes and a
    major investment in this area of research has led to our ability to
    conduct our prevention clinical trials. We now have four classes of
    orally administered drugs that are highly effective in the treatment of
    type 2 diabetes. These therapeutic advances are derivative of our basic
    research in insulin resistance and secretion. We now have state-of-the-
    art nuclear magnetic resonance technology to study glucose metabolism
    directly in the human body. This will provide important insights and
    new avenues of research into the role of circulating substrates and
    other factors that relate to insulin resistance. For instance, we are
    learning about the mechanisms by which exercise produces insulin
    sensitivity and are identifying new potential targets for drugs to
    modify insulin resistance. Further, the role of defective insulin
    secretion is becoming progressively well-defined in the onset of type 2
    diabetes. These studies provide us with new potential therapeutic
    targets.
        Our diabetes research agenda has advanced rapidly as new resources
    have become available. In this exciting endeavor we have been guided by
    the advice of leading scientific experts. To aid our short-term program
    development, we have the recommendations of a landmark trans-NIH
    symposium that the NIH Director and the NIDDK sponsored in September,
    1997, along with eight other NIH components on: ``Diabetes Mellitus:
    Challenges and Opportunities.'' We have also formed a trans-NIH
    advisory group of the leaders of those institutes to provide continuing
    advice. In addition, we have established the congressionally-directed
    Diabetes Research Working Group, which is developing a longer-range,
    comprehensive plan for the Congress. We are continuing to promote
    collaborations across the NIH and to seek partnerships with the
    biotechnology and pharmaceutical industries, and voluntary health
    organizations. Likewise, we will disseminate important research
    findings through the National Diabetes Education Program. This
    Education Program, which we support with the CDC and others parts of
    the diabetes community, is making a special effort to reach minority
    populations disproportionately affected by type 2 diabetes. For support
    of this program and all of our activities to improve the health of
    minorities through NIDDK research, I would like to extend our sincere
    appreciation to Congressman Louis Stokes, who has always been a strong
    advocate for minority health during his membership on this Committee.
           other examples of important research needs and investments
        Obesity is a major risk factor for type 2 diabetes, lipid
    disorders, hypertension, cardiovascular disease and cancer. As part of
    the Institute's Obesity Research Initiative, we provided leadership in
    establishing a Task Force on the Prevention and Treatment of Obesity to
    provide expert scientific advice to the NIH and the public; established
    Obesity/Nutrition Research Centers; and launched a Weight-Control
    Information Network. Through basic research, we have discovered
    multiple genetic loci for obesity in animals, with human parallels. The
    most dramatic discovery in the field of energy regulation was the
    identification of the first obesity gene and its protein product,
    leptin. In fiscal year 1999, we will continue to expand our programs to
    exploit the discovery of obesity genes and the complex neuroendocrine
    systems that regulate both food intake and energy utilization. Most
    importantly, we are making plans to initiate a major clinical trial,
    which we hope will show that the numerous health risks imposed by
    obesity can be reduced by voluntary weight loss.
        Many diseases within the NIDDK research mission involve infectious
    and inflammatory processes. To combat chronic liver disease we will
    launch a major natural history study of hepatitis C, based on a
    Consensus Development Conference we sponsored with NIAID. We are also
    pursuing expanded research on the role of cytokines and other mediators
    of infection and inflammation in food-borne illnesses that affect the
    digestive system and the kidney, and are building on a trans-NIH
    initiative on hemolytic uremic syndrome. In addition, we will continue
    our efforts to find new therapeutic targets in the inflammatory bowel
    diseases. In urologic diseases, we are promoting enhanced basic
    research to understand the biology of the pelvic floor, and its
    susceptibility to infection and inflammation. We have reformulated the
    database on interstitial cystitis, and are collaborating with the NIA
    and NICHD on urinary incontinence. We are also actively pursuing the
    possibility of developing a vaccine to protect against recurring
    urinary tract infections. Concomitantly, we are intensifying research
    on the biology of the prostate, which includes studies of benign
    prostatic hyperplasia, prostatitis, and prostate cancer, in
    collaboration with the NCI. In cystic fibrosis, we will be exploiting
    newly discovered concepts about how chronic infection is initiated and
    perpetuated.
        In genetics, an example of recent research progress is the
    convergence of several discoveries with respect to iron, which is
    important in nutrition, growth, and the maintenance of red-blood cells.
    However, iron overload is involved in a variety of disease processes,
    such as hemochromatosis, one of the most common genetic diseases in the
    U.S. Recently, scientists discovered the major gene for this disease.
    Paralleling this discovery, is the elucidation of the protein
    responsible for iron transport in the digestive tract.
        Our investment in basic research continues to be the wellspring of
    our innovative strategies for the future. We continue to make progress
    in understanding the role of a defective gene in the development of
    polycystic kidney diseases and are making plans to develop clinical
    milestones on which therapeutic strategies can be based. Similarly,
    endocrine research on hormones and growth factors is broadly applicable
    to breast, prostate and thyroid cancer, as well as to bone diseases
    such as osteoporosis. Other research with broad implications is a
    planned study of analgesic-associated kidney disease. A widely
    applicable model system is the zebrafish, which will provide a tool for
    visualizing pathways turned on in the development of insulin-producing
    cells in diabetes, as well as other developmental pathways. An example
    of basic research with unexpected therapeutic applications is work
    conducted by NIDDK intramural scientists on the properties of a toxin
    derived from a tropical frog, which shows promise of generating a new
    class of substances for effective pain management. Thus, progress in
    diabetes research and other disease-oriented research of the NIDDK
    depends on the continuing NIH investment in a strong foundation of
    fundamental and clinical research--along with research training and
    career development--as the underpinning of the entire biomedical
    research enterprise.
        The activities of the NIDDK are covered within the NIH-wide Annual
    Performance Plan required under the Government Performance and Results
    Act (GPRA). The fiscal year 1999 performance goals and measures for NIH
    are detailed in this performance plan and are linked to both the budget
    and the HHS GPRA Strategic Plan which was transmitted to Congress on
    September 30, 1997. NIH's performance targets in the Plan are partially
    a function of resource levels requested in the President's Budget and
    could change based upon final Congressional Appropriations action. NIH
    looks forward to Congress' feedback on the usefulness of its
    Performance Plan, as well as to working with Congress on achieving the
    NIH goals laid out in this Plan.
        This figure displays ``model'' projections of the potential
    benefits of past and ongoing NIDDK clinical trials on the rate of renal
    failure in people with type 1 diabetes. Similar benefits are projected
    for eye and nerve complications (data not shown). All patients enter
    the model before diabetes develops, according to the eligibility
    criteria for the NIDDK's ongoing primary prevention trial for type 1
    (Diabetes Prevention Trial 1 or DPT-1). The treatment after entry into
    the model is described below:
    Types of Prevention:
        None.--No treatment before diabetes develops; the model assumes
    that the patient receives historical diabetes care. After diabetes
    develops, the model assumes that standard diabetes care is given, as
    defined in the Diabetes Control and Complications Trial, that is,
    metabolic control of blood glucose levels to maintain clinical well
    being, but without the use of intensive treatment techniques or use of
    drugs, called angiotensin converting enzyme inhibitors (ACE
    inhibitors), for reduction of excess levels of protein in the urine.
        Tertiary Prevention.--1993--Clinical Trial with ACE Inhibitors: No
    treatment before diabetes develops. Standard DCCT care after diabetes
    develops. Use of ACE inhibitors in those developing gross proteinuria.
    This treatment regimen is assumed to reduce the rate (percent/year) of
    patients progressing from gross proteinuria to renal failure by 50
    percent a year, according to the clinical trial funded by the NIDDK.
        Secondary Prevention.--1993--Prevention of the Eye, Nerve and
    Kidney Complications of Diabetes in the NIDDK Clinical Trial of Glucose
    Control (the Diabetes Control and Complications Trial, commonly known
    as the DCCT). No treatment before diabetes develops. Intensive diabetes
    care after diabetes develops (that is close metabolic control of blood
    glucose levels), resulting in a measurement of blood glucose levels by
    a test called the called ``hemoglobin A1C test'' of 8 percent--levels
    which are approximately equal to the blood glucose levels maintained by
    the entire DCCT cohort for the 5 years subsequent to the conclusion of
    the trial, and about 50 percent of the effect achieved during the
    trial. Use of ACE inhibitors is assumed if gross proteinuria develops,
    with the reduction in risk described above.
        Primary Prevention.--Ongoing Trial--Prevention of the Onset of Type
    1 Diabetes in At Risk Individuals Through Prophylactic Administration
    of Insulin in the NIDDK-Funded Diabetes Prevention Trial (commonly
    called the DPT-1). This clinical trial, which is currently in progress,
    assumes that the risk of developing diabetes is reduced by 75 percent
    by the interventions being tested--the prophylactic administration of
    oral or parenteral insulin. Care if diabetes develops is as described
    above, and includes intensive diabetes care and use of ACE inhibitors.
    Note that the figure shows the theoretical benefits of yet-unproven
    therapies, while benefits shown for ACE inhibitors and Glucose Control
    are proven benefits of these interventions--projected over the
    patient's lifetime--based on data obtained from completed clinical
    trials funded by the NIDDK.
                                     ______

                      Prepared Statement of Audrey S. Penn
        Mr. Chairman and Members of the Committee: I am pleased to present
    the President's budget request for the National Institute of
    Neurological Disorders and Stroke for fiscal year 1999, a sum of $815.6
    million, an increase of $61.3 million, or 8.1 percent. Including the
    estimated allocation for AIDS, total support proposed for NINDS is
    $844.3 million an increase of $63.6 million over the 1998
    appropriation. Funds for NINDS efforts in AIDS research are included
    within the Office of AIDS research budget request.
        Today, I appear before you as the Deputy and Acting Director of the
    National Institute of Neurological Disorders and Stroke (NINDS). As a
    neurologist and as a former grantee of NINDS and member of the Advisory
    Council, I welcome the opportunity to be able to personally report to
    you about the activities of the NINDS research programs. We have been
    part of some amazing success stories over the past several years and
    have great hope that even more may be achieved to improve the care and
    treatment of people with brain diseases.
                              parkinson's disease
        Parkinson's disease (PD), is one of several neurodegenerative
    disorders in which progressively more and more neural cells in the
    motor control regions of the brain degenerate and stop working. In the
    case of Parkinson's disease, this process results in symptoms such as
    tremor and rigidity and eventually leads to disability and death. Other
    degenerative disorders such as Huntington's disease, amyotrophic
    lateral sclerosis, and Alzheimer's disease present with different sets
    of symptoms because different neural cells are affected.
        NINDS has long maintained a strong research emphasis both in our
    intramural and extramural programs in Parkinson's disease. This
    commitment has been met with success, for example, in understanding
    more about the system of cells, affected in PD, which use dopamine as
    their functioning chemical unit. Over the past few years there has been
    an acceleration of new findings that mark a turn in the outlook for
    progress. Following a 1995 workshop on Parkinson's disease, NINDS
    initiated a collaboration with the National Human Genome Research
    Institute and extramural investigators which quickly showed that in a
    single large family PD was caused by an alteration in a gene on
    chromosome 4. Further study showed that the gene is the blueprint for a
    protein called synuclein. Fortunately, synuclein was not entirely
    unknown to scientists; it had been previously identified in synapses
    (the point of contact between nerve cells) of electric fish and had
    been studied in rats, birds, and humans. Synuclein has been found in
    amyloid plaques, or aggregates of protein, found within brain cells of
    people with Alzheimer's disease and now it has also been found in Lewy
    bodies, also aggregates of protein, which are found in brain cells from
    people with the more common, non-inherited form of Parkinson's disease.
    The first chart shows Lewy bodies stained with an antibody specific for
    synuclein. So, one research discovery has brought together
    investigative themes from two major neurodegenerative disorders and has
    also raised new questions. Scientists are working to find out the role
    of synuclein in PD and are looking actively for other defective genes
    that may contribute to PD in other cases. Research to study the role of
    genes is PD is a very exciting and important endeavor, but it is just
    one part of a spectrum of studies supported by NINDS. We are supporting
    efforts to design and improve therapies including surgical approaches
    (pallidotomy), deep brain stimulation, cellular implantation, and use
    of growth factors. As a major new effort, NINDS has issued a request
    for applications for Parkinson's Disease Research Centers of Excellence
    which will place emphasis on multidisciplinary and collaborative
    studies and will include both basic and clinical research projects.
        I mentioned previously that brain cells of people with Alzheimer's
    disease and Parkinson's disease have abnormal aggregates of proteins
    that should not be there. The last few years have brought a remarkable
    convergence of evidence that several other neurological disorders
    result from abnormal folding and aggregation of proteins. Most notably,
    Dr. Stanley Prusiner, a grantee who has received funding from NINDS,
    the National Institute on Aging, and other NIH components, received the
    Nobel prize for his research to understand rare brain disorders known
    as transmissible spongiform encephalopathies (TSE's). In people who
    have inherited TSE's, a variation of a normally occurring protein
    called a prion is predisposed to become abnormally folded. The proteins
    clump together and eventually the nerve cells in which they are found
    die. Research also implicates abnormal protein aggregates in a group of
    diseases known as triplet repeat disorders; so named because one of the
    specific three-part coding units of the genetic code is repeated
    sequentially on the gene, an abnormal number of times. The second chart
    shows the difference between a normal gene sequence (and its product)
    and a triplet repeat (and its product). If protein aggregates play a
    role in causing nerve cells to die, then interventions to prevent them
    from forming may one day yield a new therapeutic strategy. Research to
    understand protein folding and protein-protein interactions in
    neurological diseases is an emerging and very active area of research
    which NINDS is pursuing and hopes to expand.
                                     stroke
        Stroke is a major health problem in the United States; recent
    results from a study funded by NINDS at the University of Cincinnati
    Medical Center reveal that approximately 700,000 strokes occur each
    year in the U.S. Based on data from the National Center for Health
    Statistics approximately 150,000 Americans die from stroke each year.
    Those who survive are often left with major disability, at great
    emotional and financial cost to their families and to our society. Many
    people do not really understand what a stroke is, what the warning
    signs are, or what can be done for stroke. Strokes occur when a blood
    clot (thrombus or embolus) blocks the circulation of blood within the
    blood vessels of the brain or when a blood vessel ruptures. As a
    result, the brain experiences a loss of oxygen and energy (in the form
    of glucose) which can kill brain cells and cause various symptoms such
    as paralysis, loss of speech, or confusion.
        NINDS supports and conducts research that encompasses the time
    before, during, and after stroke. For example, we have shown that
    surgery will prevent stroke in some patients. We also support an
    ongoing a clinical trial to test estrogen to prevent stroke in post-
    menopausal women who have had one stroke and are at risk for another,
    and we support epidemiological studies of risk factors for stroke in
    white, African-American, and Hispanic populations. The greatest
    contribution that NINDS has made to date for the acute strokes
    resulting from blood clots came from a 10 year research effort that
    demonstrated tissue plasminogen activator or tPA as the first proven
    treatment. The highly significant results showed that 11 more
    individuals out of every 100 patients were out of the hospital, free of
    major neurological impairments, not disabled, not in nursing homes, and
    back to their usual activity at the end of three months. This continues
    to be true at one year follow up. To be successful, however, the
    treatment must begin within three hours of the onset of stroke. The
    results with tPA have provided a whole new motivation to treat stroke
    as an emergency. The emergency aspects and the timing required for a
    successful result have required a change in attitude and behavior on
    the part of family, patients, and emergency and health care
    professionals. NINDS staff have been working closely with organizations
    involved with the care of stroke patients and the media to get the word
    out on ``brain attacks.'' For example, I am sure that in your home
    states the paramedics, the emergency physicians at the community
    hospital, perhaps even the visitors at the local senior citizens center
    will be able to tell you that they have heard or read about advances in
    the treatment of stroke.
                               spinal cord injury
        The advance in the use of tPA to treat stroke is the second time in
    recent memory that NINDS had an impact on emergency care. In 1990, a
    multi-center clinical trial supported by NINDS confirmed the
    effectiveness of methylprednisolone for the treatment of acute spinal
    cord injury, and set a new international standard of treatment for
    these patients. NINDS grantees continue to strive to improve on
    success: The results from a second trial completed in 1997 have shown
    that giving the drug for a longer period of time can significantly
    improve recovery over the standard treatment among patients who start
    treatment between three and eight hours of injury. NINDS supports many
    other efforts to understand the mechanisms by which trauma to the
    spinal cord produces injury and how the spinal cord might try to repair
    itself. We have shed some new light on these events. Recent results
    suggest that the regeneration of axons, the extensions from the nerve
    cell where signals are passed on and which are often severed during
    injury, may use a unique approach. Investigators have now shown that
    axons regenerate by extending blunt, growing tips which are filled by
    the proteins called neurofilaments. In contrast, during development,
    the axon is pulled along by long finger-like projections and then
    filled with the structural protein, actin. We need further
    investigations into these mechanisms so we may one day use the body's
    own capabilities to foster recovery.
                      children and neurological disorders
        Cerebral palsy, autism, muscular dystrophy, epilepsy, the ataxias,
    neurofibromatosis, Batten disease--these are just some of the
    neurological disorders that can affect children. I am proud to say that
    NINDS has a long history of commitment to research to benefit the
    health of children. In fact, early in my career I participated on a
    study, funded by this Institute, that is one of the largest studies of
    the newborn period ever undertaken to investigate risk factors for
    cerebral palsy and retardation.
        I would like to highlight just some activities in research on brain
    diseases in children. More than a third of all genetic disorders affect
    the nervous system, and hundreds affect infants and children. Recent
    progress includes gene discoveries for torsion dystonia, Batten
    disease, ataxia-telangiectasia, Niemann-Pick disease type C, and one
    type of childhood epilepsy. NINDS and the National Institute of Child
    Health and Human Development (NICHD) are co-sponsoring a clinical trial
    to follow up on evidence that the administration of magnesium sulfate
    to mothers at risk for premature delivery is associated with a reduced
    risk of cerebral palsy in their infants. We have funded new studies in
    autism and work with our colleagues in other Institutes to further
    advance research in autism.
                                new initiatives
        Finally, I will close with the mention of several major initiatives
    that NINDS will be involved with. In fiscal year 1999, NINDS with NIMH,
    will begin the brain molecular anatomy project (BMAP) to map gene
    expression in different parts of the brain during development,
    adulthood, and aging. A separate effort has been launched with NCI to
    characterize the genes associated with brain tumors which may be unique
    to the neoplastic state. Both efforts will result in a tremendous
    resource for investigators across the country. NINDS will also work
    with other interested institutes towards an expanded research program
    in pain. Another initiative will seek to accelerate the development of
    brain imaging techniques.
        The activities of the NINDS are covered within the NIH-wide Annual
    Performance Plan required under the Government Performance and Results
    Act (GPRA). The fiscal year 1999 performance goals and measures for NIH
    are detailed in this performance plan and are linked to both the budget
    and the HHS GPRA Strategic Plan which was transmitted to Congress on
    September 30, 1997. NIH's performance targets in the Plan are partially
    a function of resource levels requested in the President's Budget and
    could change based upon final Congressional Appropriations action. NIH
    looks forward to Congress' feedback on the usefulness of its
    Performance Plan, as well as to working with Congress on achieving the
    NIH goals laid out in this Plan.
        Mr. Chairman, I would be pleased to answer any questions you might
    have.
                                     ______

                     Prepared Statement of Anthony S. Fauci
        Mr. Chairman and Members of the Committee: I am pleased to present
    the President's budget request for the National Institute of Allergy
    and Infectious Diseases (NIAID) for fiscal year 1999. The President
    proposes that the NIAID receive $702 million, an increase of 8 percent
    for NIAID non-AIDS research activities. Including the estimated
    allocation for AIDS research activities, total support proposed for the
    NIAID is $1.47 billion, an increase of 8.6 percent over the comparable
    fiscal year 1998 appropriation. Funds for NIAID AIDS research efforts
    are included in the Office of AIDS Research budget request.
        The activities of the NIAID are covered by the NIH-wide Annual
    Performance Plan required under the Government Performance and Results
    Act (GPRA). The fiscal year 1999 performance goals and measures for NIH
    are detailed in this performance plan and are linked to the HHS GPRA
    Strategic Plan which was transmitted to Congress on September 30, 1997.
    The NIAID is anxious to meet the challenges set forth in this plan and
    we look forward to continued support from Congress that will facilitate
    our achieving these goals.
               fifty years: advancing knowledge, improving health
        This year, the NIAID celebrates fifty years of progress in
    understanding, treating and preventing infectious and immunologic
    diseases. During the past five decades, NIAID-supported research in
    fields such as microbiology and immunology has led to new therapies,
    vaccines and diagnostic tools that have profoundly benefitted global
    health. Capping this remarkable half-century are recent advances and
    initiatives that promise to further reduce the burden of disease in
    this country and around the world. Meanwhile, new challenges to the
    public health continue to emerge, underscoring the need for continued
    progress in our fight against infectious microbes and diseases of the
    immune system.
                             immunologic tolerance
        A long-standing goal of NIAID-supported immunology research is the
    development of new and better ways to prevent the rejection of
    transplanted organs and tissue ``grafts'' by the immune system. While
    current immunosuppressive drugs have greatly reduced graft rejection,
    these agents are highly toxic and increase a patient's risk of
    infection, cancer and other complications. In addition, despite major
    improvements in immunosuppressive therapy, 10 to 50 percent of
    transplanted organs and tissues are rejected by patients' immune
    systems within the first year.\1\ Even with the latest
    immunosuppressive drugs, approximately 60 percent of transplanted
    kidneys, the organ most often transplanted, are rejected within 10
    years.\2\
    ---------------------------------------------------------------------------
        \1\ United Network for Organ Sharing. ``The 1997 Report of Center-
    Specific Graft and Patient Survival Rates.'' Richmond, VA.
        \2\ Cecka, J.M. 1996. The UNOS scientific renal transplant
    registry. Clinical Transplants. p. 1-14.
    ---------------------------------------------------------------------------
        As we work to improve this record, we are encouraged by new
    findings, underpinned by years of basic immunology research, that show
    the feasibility of a totally new approach to preventing graft
    rejection. NIAID-supported researchers have demonstrated that it is
    possible to induce immunologic ``tolerance'' to a graft by turning off
    the specific immune responses that would otherwise attack it. Promising
    results in animal models have been achieved with transplanted kidneys
    and livers; early human studies suggest that long-term tolerance of
    transplanted bone marrow may be achieved with appropriate therapy.
        One approach to inducing tolerance is to block the second of two
    signals needed by T cells to become activated and orchestrate an attack
    on a foreign tissue or organ. In this regard, several different
    blocking molecules have shown considerable promise. Other approaches to
    inducing tolerance involve manipulating immune system molecules called
    cytokines, or inducing the suicide of the immune cells that otherwise
    would attack a graft. The refinement of strategies for inducing
    tolerance could revolutionize the field of transplantation and benefit
    the tens of thousands of patients whose lives could be saved or
    improved by a donated organ. In addition, our growing knowledge of
    immune tolerance will help in understanding and treating other
    conditions such as cancer, autoimmune conditions, and allergic and
    infectious diseases.
                         burden of infectious diseases
        It is underappreciated that infectious diseases remain the leading
    killer of people globally and the third leading cause of death in the
    United States.\3\ \4\ Of the approximately 52 million deaths worldwide
    in 1996, more than 17 million were due to infectious diseases,
    including approximately 9 million among children.\5\ In addition, a
    growing number of cancers and other chronic conditions have been
    attributed to infectious agents. For example, the bacterium
    Helicobacter pylori causes ulcers and stomach cancer, and Chlamydia
    pneumoniae has been implicated as a cause of artery-clogging plaques.
    Both hepatitis B virus and hepatitis C virus (HCV) can lead to liver
    cancer, and human papillomavirus is responsible for most cases of
    cervical cancer. In addition to their human toll, the financial burdens
    of infectious diseases are enormous. In the United States alone, costs
    associated with infectious diseases exceed an estimated $120 billion
    annually.\6\
    ---------------------------------------------------------------------------
        \3\ World Health Organization. 1997. ``The World Health Report
    1997.'' Geneva: World Health Organization.
        \4\ Pinner, R.W. et. al. 1996. Trends in infectious diseases
    mortality in the United States. JAMA. 275:189-193.
        \5\ World Health Organization. 1997. ``The World Health Report
    1997.'' Geneva: World Health Organization.
        \6\ Institute of Medicine. 1997. ``America's Vital Interest in
    Global Health.'' Washington, DC.: National Academy Press.
    ---------------------------------------------------------------------------
        In the face of the enormous challenges posed by infectious
    diseases, the sustained commitment of NIAID to basic and applied
    research has paid enormous dividends against newly recognized
    pathogens--such as human immunodeficiency virus (HIV) and HCV--and
    scourges which have long plagued humanity, including malaria,
    tuberculosis and life-threatening infant diarrhea.
                           progress against hiv/aids
        HIV, the cause of the acquired immunodeficiency syndrome (AIDS),
    remains one of the greatest threats to global health. More than 30
    million people worldwide are living with HIV/AIDS, a number expected to
    reach 40 million by the year 2000. In the 17 years since AIDS was
    recognized, an estimated 11.7 million people with HIV worldwide have
    died,\7\ including approximately 380,000 in the United States.\8\
    Despite the mounting toll of HIV, recent developments have provided a
    measure of optimism. In the United States, AIDS deaths dropped 44
    percent from the first six months of 1996 to the first six months of
    1997; new AIDS diagnoses declined by 12 percent during the same
    period.\9\ These encouraging trends are probably due to several
    factors, notably the increased use of potent combinations of anti-HIV
    drugs, and our growing ability to prevent and treat the many secondary
    infections associated with HIV disease.
    ---------------------------------------------------------------------------
        \7\ UNAIDS: ``Report on the Global HIV/AIDS Epidemic.'' Geneva,
    December, 1997.
        \8\ Centers for Disease Control. 1996. ``HIV/AIDS Surveillance
    Report.'' 8(no. 2): 1-40.
        \9\ DeCock, Kevin. 1998. Presentation: Fifth Conference on
    Retroviruses and Opportunistic Infections, February 2, Chicago, IL.
    ---------------------------------------------------------------------------
        Basic research into the structure of HIV and how it interacts with
    the immune system led to the development of the 12 antiretroviral drugs
    now licensed in this country. Various combinations of these drugs, as
    well as several investigational drugs now in clinical trials, have
    helped restore the health of many patients, dramatically reducing the
    amount of HIV in their bodies and lowering their risk of secondary
    infections, hospitalizations and death. In addition, new insights into
    the pathogens that prey on the weakened immune systems of HIV-infected
    individuals have led to improved prophylactic and curative therapies.
        Unfortunately, many HIV-infected individuals have not benefitted
    from the currently available drugs, cannot tolerate their side effects,
    or have difficulty complying with complex treatment schedules that may
    require them to take 30 or more pills a day. In addition, the ability
    of HIV to mutate and become resistant to the current drugs is a
    persistent threat. Therefore, the development of the next generation of
    therapies--well-tolerated, effective drugs that can be administered
    with a minimum of doses for prolonged periods--remains a priority.
    Together with partners in academia and industry, NIAID-supported
    scientists are pursuing many new treatment strategies and exploring
    ways to boost an HIV-infected person's immune system.
                              hiv vaccine research
        In many developing countries, where health care spending may be
    only a few dollars per person each year, such therapies will probably
    remain beyond the reach of all but the most privileged. Therefore,
    continued research into an HIV vaccine and other means of preventing
    HIV infection is crucial to slowing the epidemic in these settings, as
    well as in our own country. To speed the pace of discovery, NIAID has
    strengthened its efforts in HIV vaccine research. Among recent
    initiatives are 58 new grants to foster innovative research on HIV
    vaccines and the establishment of a Vaccine Research Center within the
    NIH intramural research program.
                                  hepatitis c
        Another recently recognized pathogen of great concern is hepatitis
    C virus (HCV), identified in 1989. HCV is a leading cause of cirrhosis,
    liver cancer, and a major reason for liver transplants. Worldwide, more
    than 170 million people are chronically infected with HCV, including 4
    million individuals in the United States.\10\ Annual HCV-related deaths
    number approximately 8,000 to 10,000 people in this country,\11\ a
    figure projected to reach 24,000 deaths/year by 2017 if effective
    therapies are not found. To combat this epidemic, NIAID recently
    established a network of Hepatitis C Research Centers to study the
    virus and how it causes disease. In the past year, researchers at one
    of the new centers reported a major breakthrough: the construction of
    functional, infectious clones of HCV, using genetic engineering
    techniques. This advance has facilitated HCV studies in cell cultures
    and animal models.
    ---------------------------------------------------------------------------
        \10\ World Health Organization. 1997. ``Weekly Epidemiological
    Record: March. 7, 1997.'' Geneva: World Health Organization.
        \11\ National Institutes of Health. 1997. Consensus Statement:
    Management of Hepatitis C. Bethesda, MD.
    ---------------------------------------------------------------------------
                 response to the threat of h5n1 avian influenza
        We have come to understand that the emergence of previously
    unrecognized pathogens such as HIV and HCV is a continual process. As
    further evidence of this, the first known cases of human influenza
    caused by a virulent bird virus known as H5N1 avian influenza were
    identified in Hong Kong in 1997. Given the possibility that this avian
    virus might combine with a human influenza strain and become more
    readily transmissible, possibly resulting in a pandemic, NIAID moved
    quickly with our colleagues at the Centers for Disease Control and
    Prevention, World Health Organization and other agencies in addressing
    research questions and public health needs associated with the
    outbreak. Fortuitously, as part of our long-standing research into
    respiratory viruses, we had in our repository the specific antisera
    needed to quickly develop test kits for detecting the avian influenza
    virus. NIAID has also supported the production of a recombinant vaccine
    for use in at-risk laboratory and health care personnel, as well as a
    surveillance effort in Hong Kong to identify and characterize the
    source of the avian virus.
                        a commitment to malaria research
        More than 40 percent of the world's population lives in areas at
    risk for malaria transmission.\12\ Approximately 300 to 500 million
    cases of malaria occur worldwide each year; every 20 seconds, a child
    dies of the disease.\13\ In the past year, the National Institutes of
    Health, together with research organizations and donor agencies from
    around the world, have worked to mobilize the scientific resources and
    political will needed to control this dread disease. The extraordinary
    interest among scientists, political leaders, the media and the general
    public in this new partnership, called the Multilateral Initiative on
    Malaria, is strong evidence that the global community has recognized
    the magnitude of the malaria problem.
    ---------------------------------------------------------------------------
        \12\ World Health Organization. 1997. ``Weekly Epidemiological
    Record: September 5, 1997.'' Geneva: World Health Organization.
        \13\ World Health Organization. 1997. ``The World Health Report
    1997.'' Geneva: World Health Organization.
    ---------------------------------------------------------------------------
        At NIAID, we have strengthened our long-term commitment to malaria
    research. NIAID-supported malaria projects--many in collaboration with
    other government and international agencies--include a new repository
    of malaria research materials that are available to researchers
    worldwide; basic, field-based and clinical research on all phases of
    malaria research; and projects to determine the genetic sequences of
    important malaria species. In addition, new collaborations between
    intramural and extramural scientists on malaria vaccine research,
    production and evaluation are underway.
                               diarrheal diseases
        Like malaria, diarrheal diseases are leading killers of children,
    resulting in about 2.5 million childhood deaths each year.\14\ At least
    a third of these deaths are probably due to rotavirus, a disease for
    which NIAID researchers have developed an effective, orally
    administered vaccine. As recently reported in The New England Journal
    of Medicine, this vaccine, the culmination of more than 20 years of
    research, reduced severe diarrheal illness by 88 percent in a study of
    infants in Venezuela, a country where rotavirus circulates year
    round.\15\ The vaccine is nearing licensure in the United States and
    other countries, and promises to have a major impact on the health of
    children worldwide. In the United States alone, widespread use of the
    NIAID-developed rotavirus vaccine could greatly reduce the 500,000
    doctor visits \16\ and 100,000 hospitalizations related to rotavirus
    each year,\17\ as well as the $1.4 billion in direct and indirect costs
    associated with the illness.\18\
    ---------------------------------------------------------------------------
        \14\ World Health Organization. 1997. ``The World Health Report
    1997.'' Geneva: World Health Organization.
        \15\ Perez-Schael, I. et. al. 1997. Efficacy of the rhesus
    rotavirus-based quadrivalent vaccine in infants and young children in
    Venezuela. N Engl J Med. 337(17):1181-1187.
        \16\ Glass, R.I. et. al. 1996. The epidemiology of rotavirus
    diarrhea in the Untied States: surveillance and estimates of disease
    burden. J. Infect Dis. 174 (suppl 1): S5-S11.
        \17\ Institute of Medicine. 1985. ``New vaccine development:
    establishing priorities,'' p.410-423. In Diseases of importance in
    developing countries (Vol I). Washington, DC.: National Academy Press.
        \18\ Smith, J. et. al. 1995. Cost effectiveness analysis of a
    rotavirus immunization program for the United States. Pediatrics.
    96:609-15.
    ---------------------------------------------------------------------------
                        the promise of new technologies
        Many of the advances I have described have been facilitated by
    rapid advances in molecular biology, notably the development of fast
    and accurate methods for sequencing the genomes of disease-causing
    microbes. Sequence information can be used in many ways, such as
    finding targets for therapies, identifying antigens to incorporate into
    vaccines, detecting mutations that cause drug resistance, and
    determining the factors that influence the virulence of a microbe.
        The success of the first microbe sequencing project--the
    delineation of the complete Haemophilus influenzae genome in 1995--
    encouraged the Institute's current efforts to sequence the full genomes
    of eight other medically important bacteria. NIAID also supports
    projects to provide complete or partial genome sequences of large
    parasitic protozoa.
                          maintaining a research base
        The burden of infectious and immunologic diseases, in human and
    economic terms, is enormous. It is critical that we maintain a strong
    scientific infrastructure in core disciplines such as infectious
    diseases, immunology and microbiology to meet the challenges of these
    diseases. With skillful use of the increasingly powerful tools of
    molecular biology, by identifying research opportunities and priorities
    and vigorously pursuing them, and by sustaining a strong research base,
    we will be well-positioned to make further progress against current
    disease threats as well as the new diseases that will inevitably
    emerge.
                                     ______

                      Prepared Statement of Marvin Cassman
        Mr. Chairman and Members of the Committee, good morning. I am
    pleased to present to you the programs of the National Institute of
    General Medical Sciences (NIGMS). The President in his fiscal year 1999
    budget has proposed that NIGMS receive $1.115 billion, an increase of
    $77.6 million over the non-AIDS portion of the fiscal year 1998
    appropriation. Including the estimated allocation for AIDS in both
    years, the total support proposed for NIGMS is $1.145 billion, an
    increase of $79.5 million over the fiscal year 1998 appropriation.
    Funds for NIGMS efforts in AIDS research are included within the Office
    of AIDS Research budget request.
        The goal of NIGMS is to ensure the continuing productivity of basic
    biomedical research, which has provided the foundation for the
    astonishing developments we witness daily in the understanding and
    treatment of disease. In its 35-year existence, NIGMS has supported
    some of the most significant advances in biomedical science. One
    reflection of the success of NIGMS-funded research is the number of
    Nobel Prizes awarded to our grantees. Since 1962, we have supported
    almost 60 percent of all the American Nobel laureates in chemistry and
    physiology or medicine. Among these was the award in 1978 for
    understanding the way bacteria cope with foreign invaders, an esoteric
    study that would seem to have little practical value. Yet this work
    formed the basis for recombinant DNA technology, which underlies the
    biotechnology industry.
                  from basic research to disease applications
        But we do not have to go back 20 years to trace the contributions
    of basic research. A number of striking developments have emerged in
    the past year alone, of which I have time to describe only a few. The
    examples I have selected all have in common that they began with the
    examination of a fundamental biological process in an organism other
    than humans, but quickly revealed applications to human disease.
    Indeed, the studies were not even done in mammalian organisms, but in
    much simpler systems such as bacteria, yeast, and the common fruit fly.
    There are obvious reasons why many biological processes cannot be
    studied in humans, and the use of these models is based on the repeated
    observation that many fundamental processes are common to a variety of
    species. Examining these phenomena in model organisms provides a
    detailed understanding that can lead to general principles with broad
    applications. The examples I will give show how studies in bacteria,
    yeast, and the fruit fly have generated knowledge that can be applied
    to Lyme disease, neurodegenerative disorders, and cocaine addiction.
        The first example is a study in an unusual bacterium that may lead
    to a therapy for Lyme disease. The bacterium is part of an esoteric
    class called archaebacteria, which are found in a variety of
    inhospitable locations such as ocean bottoms, hot acid springs, and
    high-salt environments. One of our investigators was interested in the
    very fundamental question of how this bacterium carries out protein
    synthesis, a universal requirement of all living organisms. It appeared
    that one essential component of protein synthesis was missing in the
    bacterium, and he was curious to see how the organism survived without
    it. It turns out that the component is present, but in a form unrelated
    to that found in all other bacteria and higher organisms. Or almost
    all. Careful examination of the genomic sequence of the organisms that
    cause Lyme disease and syphilis showed that in these pathogens there
    exist compounds with strong similarity to the material found in the
    archaebacterium, but these compounds are quite different from those
    with analogous functions in humans. Scientists could exploit this
    fundamental difference between a pathogen and its human host to develop
    new antibiotics to treat Lyme disease. Such antibiotics would attack
    the compound involved in protein synthesis in the bacterium without
    damaging this essential process in the human host. Parenthetically,
    this is but one illustration of the enormous value of having complete
    genomic sequences of organisms other than humans.
        A second example is a discovery in yeast that sheds light on
    certain kinds of neurodegenerative diseases in humans. This sounds
    inherently unlikely, and certainly could not have been predicted. After
    all, even if a yeast cell did have a form of dementia, how would we
    know? But this relationship between humans and yeast is in the apparent
    existence of prion-like particles in both organisms. Prions are thought
    to be infectious protein particles that are implicated in the
    initiation of so-called ``mad cow'' disease and other disorders. The
    1997 Nobel Prize in physiology or medicine was awarded to the scientist
    who championed the role of prions in disease. An NIGMS investigator has
    recently shown that there is a protein in yeast that has many of the
    same characteristics as the prions found in mammalian brains. For
    example, the yeast protein generates the same fibers formed by
    mammalian prions, which are comparable to those found in the autopsies
    of humans and animals that have died of diseases where prions were
    implicated. Furthermore, critical interactions with other materials in
    the cell are exactly the same for the yeast protein and mammalian
    prions. These studies now provide a model system to investigate an
    immensely complex problem in a comparatively simple organism, yeast.
    They even begin to suggest a new target for potential therapies.
        Finally, we arrive at the common fruit fly, an organism that has
    provided us with the opportunity to study many fundamental biological
    phenomena, particularly in the areas of development and gene
    regulation. One of our investigators has spent many years studying
    fruit fly genes that are involved in the nervous system and in
    behavior. Comparable genes in humans are involved in depression and
    other mental disorders, as well as in Parkinson's disease and drug
    addiction. In the course of his work, the scientist used volatile--or
    ``crack''--cocaine as a tool to stimulate neurological responses in the
    flies, which led him to observe that flies and mammals respond to
    cocaine in strikingly similar ways. This time-lapse image shows one
    such similarity--the circling movement of a single fly following
    exposure to cocaine. Rodents and primates display similar movement
    patterns in response to the drug. This, along with other behaviors,
    suggests that both the fundamental neural pathways involved in cocaine
    response and the linkage to behavior are retained across species. As a
    result of this work, the fruit fly now appears to be a very promising
    model system to examine the genetic and molecular pathways leading to
    cocaine sensitization, as well as to investigate the pathways involved
    in a variety of neurological disorders.
        It is striking that in all of these examples, health-related
    applications emerged almost immediately from basic research studies.
    This is, of course, not the norm for most of the fundamental research
    studies that we support. And yet, it is not so far from the reality of
    modern biology. The mosaic of scientific research has expanded to the
    point at which basic research and its applications follow very closely.
    It is appropriate to remember a comment made by Louis Pasteur in 1871:
    ``* * * there does not exist a category of science to which one can
    give the name applied science. There are science and the applications
    of science, bound together as the fruit to the tree which bears it.''
    The examples I have given today describe a few such trees and their
    early fruits.
                         tackling biological complexity
        If the past and the present provided such a bounty of important
    outcomes from basic research that can be applied to the problems of
    health and disease, the future promises even more. The incredible
    volume of detailed knowledge about fundamental biological processes
    suggests that we may soon be in a position to understand the design
    principles of living systems. NIGMS has recently held two workshops to
    identify how we can facilitate progress in this difficult research
    area. Participants in both workshops were unanimous in their opinion
    that progress will require interdisciplinary approaches. However, a
    major barrier is the shortage of biological scientists who also have
    the quantitative and computational expertise that is needed for
    progress to be made. We are pursuing several approaches to address this
    shortage. We have already created a program to support mathematicians,
    physicists, and engineers in collaborative research projects with NIGMS
    grantees that are intended to develop new approaches to the study of
    complex systems.
        We are also planning two new training efforts in this area. One
    will provide individual postdoctoral fellowships to scientists with
    doctoral degrees in physics, mathematics, engineering, computer
    sciences, and related areas to allow them to be trained in basic
    biomedical research. The second will support courses and workshops
    designed to train biologists in computational and statistical methods.
        Another important goal is understanding individual variability in
    drug responses, a field sometimes described as pharmacogenetics. NIGMS,
    in collaboration with several NIH institutes, will soon convene a
    working group of scientists to help us define new research directions
    in this area. In the meantime, we are collaborating in the initiation
    of training efforts in clinical pharmacology, a discipline that is
    critically linked to pharmacogenetics and that has significant
    shortages of trained personnel.
                            training for the future
        We continue our efforts to train tomorrow's scientists and to bring
    more underrepresented minorities into careers in biomedical research. A
    new initiative that we are planning for the coming year is to enhance
    traditional postdoctoral training by promoting the development of
    teaching skills through innovative programs that involve assignments at
    minority-serving institutions. We feel that this initiative will
    provide several benefits. It will be of particular value to the many
    scientists who during their graduate careers become interested in
    teaching, but have little or no opportunity to develop those skills. At
    the same time, it will provide minority-serving institutions with
    access to individuals who are on the cutting edge of their disciplines,
    while relieving scientists at those institutions from some of their
    teaching burden and allowing them time for research and collaborations.
        The activities of the NIGMS are covered within the NIH-wide Annual
    Performance Plan required under the Government Performance and Results
    Act (GPRA). The fiscal year 1999 performance goals and measures for NIH
    are detailed in this performance plan and are linked to both the budget
    and the HHS GPRA Strategic Plan which was transmitted to Congress on
    September 30, 1997. NIH's performance targets in the Plan are partially
    a function of resource levels requested in the President's Budget and
    could change based upon final Congressional Appropriations action. NIH
    looks forward to Congress' feedback on the usefulness of its
    Performance Plan, as well as to working with Congress on achieving the
    NIH goals laid out in this Plan.
        Thank you, Mr. Chairman. I would be pleased to answer any questions
    that you may have.
                                     ______

                     Prepared Statement of Duane Alexander
                                 budget request
        I am pleased to present the fiscal year 1999 President's budget
    request for the National Institute of Child Health and Human
    Development (NICHD) of $654.7 million, an increase of $47.4 million or
    7.8 percent over the comparable fiscal year 1998 appropriation.
    Including the estimated allocation for AIDS in both years, total
    support proposed for NICHD is $727 million, an increase of $52.2
    million over the fiscal year 1998 appropriation. Funds for NICHD
    efforts in AIDS research are included within the Office of AIDS
    Research budget request.
                            research accomplishments
        Congress established the National Institute of Child Health and
    Human Development 35 years ago to help the people of this Nation have
    healthy children at the time they want them, and to help those children
    survive, learn, and develop in ways that allow them to reach adulthood
    free of disease and disability and able to contribute fully to society.
    As we have been celebrating our 35th anniversary, we have looked back
    at some of the accomplishments of our research that have made major
    progress toward achieving those goals for all American families. The
    list of our top achievements in those 35 years is impressive.
        For example, NICHD-supported scientists developed and demonstrated
    the effectiveness of newborn screening tests for phenylketonuria (PKU)
    and hypothyroidism. Every newborn infant in the United States now
    receives these tests, and thanks to their use we prevent over 1,200
    cases of mental retardation every year. Every parent whose child leads
    a normal life rather than being mentally retarded from these conditions
    can thank NICHD research.
        Another example is the NICHD Diabetes in Early Pregnancy Study that
    showed clearly that rigid control of a diabetic mother's blood sugar
    before and during pregnancy markedly reduced her elevated risk of
    having a stillborn or malformed infant. This regimen has now become
    standard care. Every diabetic woman who has a healthy baby can thank
    NICHD research.
        I have told this Committee before about the NICHD scientists who
    conceptualized and developed a conjugate vaccine to prevent Hemophilus
    influenzae type b meningitis. With this vaccine now standard care for
    infants, this disease has gone from the leading cause of acquired
    mental retardation in the United States, to near elimination. Every
    parent seeing their child immunized to protect it from this disease can
    thank NICHD research.
        Through a combination of improvements from NICHD research in our
    ability to care for premature infants, such as better ventilation,
    surfactant to prevent respiratory distress syndrome, improved
    nutrition, and better control of infection, the birth weight at which
    half of premature infants survive has fallen from around 1,800 grams
    when NICHD was established to approximately 800 grams today. During
    this same time, the Nation's infant mortality rate has fallen by 70
    percent. Every mother who takes a very low birth weight infant home
    from the hospital can thank NICHD research.
        Leading the way in the Nation's decline in infant mortality rate in
    the last four years has been a marked reduction in Sudden Infant Death
    Syndrome (SIDS) deaths. As shown in the graph, for many years SIDS
    deaths were remarkably stable at 5,400 per year, or 1.4 deaths per
    1,000 infant births. The research-based recommendation of the American
    Academy of Pediatrics in 1992 to place infants to sleep on their backs
    or sides rather than their tummies had only a small impact until the
    NICHD Back-to-Sleep campaign was launched in 1994. Since then, back or
    side sleeping has increased, and the rate of SIDS deaths has declined
    dramatically, with preliminary data for the first six months of 1997
    indicating a rate of 0.5 deaths per 1,000 births. This represents a
    reduction of nearly two-thirds from the old steady state condition. The
    3,000 fewer families each year who lose an infant to SIDS can thank
    NICHD research.
        Our staff at NICHD and the scientists we support are justly proud
    of these 35 years of scientific accomplishments and their translation
    to practice to improve public health. There has been a good return on
    the investment of the American people through the Congress in the
    research supported by this Institute. But there is much more we can do,
    and with your support and encouragement, we are hard at work on
    hundreds of other conditions that still need to be addressed.
                                 birth defects
        While strides have made in reducing several causes of infant
    mortality, less is known about its leading cause: birth defects. Our
    studies here range from basic investigations in genetics and
    developmental biology, using a variety of animal models including mice
    and zebrafish, to epidemiological studies of cause, and therapeutic and
    prevention research. Basic studies are particularly important because
    they allow us to elucidate the underlying processes of normal
    development and to identify what goes wrong to cause birth defects and
    genetic diseases. The fact that genes are conserved throughout the
    animal kingdom has enabled us to translate the leads from basic studies
    in animal models to understand human disorders, such as neural tube
    defects, skeletal anomalies, primary immune deficiencies, and disorders
    in the formative stages of the nervous system that lead to mental
    retardation or learning and behavior problems.
                                vaccine research
        Progress in science is incremental, building on previous research.
    One example is the E. coli O157 vaccine. E. coli O157 is a bacterial
    food contaminant that causes mild to fatal gastrointestinal and renal
    disease in about 20,000 people a year. This new vaccine was produced by
    our same intramural scientists who developed the Hib vaccine mentioned
    earlier, using the same conjugate vaccine concept and technology. We
    recently reported success in inducing high levels of protective
    antibody production against E. coli O157 in adult volunteers. One
    intriguing aspect of this vaccine is that we may be able to prevent the
    disease in humans by eliminating the organism at its source by
    vaccinating cattle. Studies testing this concept are currently under
    way, as are field trials of a conjugate vaccine to prevent typhoid
    fever, and studies of a Shigella conjugate vaccine to prevent dysentery
    in children.
                                premature labor
        Applications of advances in genetics, especially from the Human
    Genome Project, continue to benefit NICHD as well as other Institutes.
    One case in point is microarray technology, which permits the study of
    thousands of genes at once to determine which are functioning (``turned
    on'') at a given time. Our scientists are beginning to apply this
    technology to study gene expression in women in premature labor, and
    comparing that pattern with pregnant women not in preterm labor, with
    the goal of determining at a genetic level the heretofore elusive
    causes and mechanisms of premature labor. These studies also offer the
    potential to develop a much-needed diagnostic test to determine whether
    a woman is truly in premature labor, as well as identifying targets for
    therapeutic intervention. Research to reduce prematurity is an
    essential part of our effort to eliminate racial differences in infant
    mortality as part of the President's initiative on race.
                       reading development and disability
        Other new scientific technologies are allowing us to combine
    studies in biology and behavior to achieve a fundamental understanding
    of the origins of problems and follow the course of treatment to assess
    how the underlying problem is corrected. Nowhere is this more dramatic
    than in the studies linking fundamental neurosciences and reading
    behavior. One technique being used is called functional magnetic
    resonance imaging, and has generated the pictures you see displayed on
    the poster. These are images taken during attempts at a reading-related
    task by a person with normal reading ability, on the right, and a
    person with significant reading disability on the left. The disabled
    reader shows none of the activity in the region at the back of the
    brain used by the normal reader in the reading task, and increased
    activity in the front area of the brain reflecting intense effort to
    overcome the apparent block in function at the early stages of the
    task. We are now engaged in remedial interventions with a large number
    of children with reading disability and will be retesting them after
    they learn to read to determine whether the treatment results in use of
    the same parts of the brain that children with normal reading ability
    use, or whether they develop alternative pathways that allow them to
    read. Meanwhile, our basic studies and clinical trials of reading
    intervention in the classroom are continuing and are proceeding well.
                                 child day care
        Results of research on the association between characteristics of
    child day care (quantity, quality, stability) and children's social,
    cognitive, and language development continue to come from the NICHD
    Study of Early Child Care. This longitudinal study of over 1,300
    families is the most comprehensive and detailed study of child care
    ever undertaken. Adding to results described before, this year
    scientists continued to find that family income, quality of the home
    environment, maternal education or language ability, and mother's
    behavior toward the child are the best predictors of children's
    cognitive, language and social development. Scientists also reported
    that children in exclusive maternal care do not have a cognitive or
    language advantage over children in child care, and that those in
    center care actually tend to do better in those areas at age three than
    those in maternal care. For those children who are in child care, the
    researchers found that the more language stimulation children received,
    the better their cognitive and language abilities over the first three
    years of life. Children's self-control, compliance and problem
    behaviors were found to be only minimally predicted by child care:
    those in higher quality of care had somewhat more favorable outcomes in
    these areas than those in lower quality of care. The quality of care
    was also associated with better mother-child interaction over the first
    three years of life. While no relation emerged between the quantity of
    child care and children's psychological outcomes, more hours in care
    were associated with somewhat less optimal mother-child interactions
    over the first three years of life. In these interactions mothers were
    slightly less sensitive and responsive and the children were somewhat
    less engaged. Most recently, the investigators reported that
    characteristics of child care provision that can be regulated
    (adult:child ratio, group size, provider education and training) are
    related to cognitive and social outcomes of children at three years of
    age. All these findings taken together can help guide parents when they
    choose child care and policy makers when they make decisions about the
    support of families and child care programs.
                            women's health research
        With the funds provided by the Congress in fiscal year 1998 and
    requested for fiscal year 1999, the NICHD will launch two major
    initiatives to improve women's health. First, to increase the number of
    obstetrician-gynecologists engaged in research, the NICHD, with support
    from the Office of Research on Women's Health, is establishing a group
    of Women's Reproductive Health Research Career Development Centers. At
    these sites newly trained ob/gyn clinicians will be linked with mentors
    and research facilities and equipment and given training to assist them
    in pursuing research careers focusing on addressing problems of women's
    reproductive health. Without this help, we are losing many individuals
    interested in and capable of pursuing clinical research, and this
    program is intended to remedy that situation. Second, we are working
    with the ob/gyn community and other Institutes to expand significantly
    research directed toward the long-term consequences women suffer
    related to child bearing--incontinence, uterine and rectal prolapse,
    chronic pain, and other harmful and disabling conditions. Our studies
    will range from basic neuroanatomical and connective tissue research,
    to epidemiologic studies relating management of pregnancy and delivery
    to long term adverse outcomes, to studies of the most effective
    management and rehabilitation for these disorders. We should do all
    that we can to help women avoid these consequences of childbearing, and
    the increased funding requested in the fiscal year 1999 budget will
    help launch an initiative to address this under-researched area.
                             pediatric pharmacology
        There is great hope that the proposed new FDA rules requiring drugs
    potentially useful in children to be tested in children, in combination
    with the NICHD Pediatric Pharmacology Research Unit Network, will
    finally end the decades-long era of children being ``therapeutic
    orphans,'' forced to rely only on the results of drug tests in adults.
    To further facilitate the testing of drugs in children, the funds
    requested for fiscal year 1999 will allow NICHD to expand the Network
    to ten sites from the current seven, and to initiate a broad range of
    basic studies of child/adult and genetic differences in drug metabolism
    and response to different classes of drugs to help guide drug testing
    both in the Network and elsewhere.
        Mr. Chairman, these are just a few examples of how NICHD research
    is attempting to improve the health and well-being of women, children,
    and families. I will be pleased to answer any questions.
                                     ______

                       Prepared Statement of Carl Kupfer
        Mr. Chairman and Members of the Committee: I am pleased to present
    the President's fiscal year 1999 budget request for the National Eye
    Institute (NEI) a sum of $374 million, an increase of $28 million (or
    8.2 percent) above the comparable fiscal year 1998 appropriation.
    Including the estimated allocation for AIDS research within the Office
    of AIDS Research budget request, total support proposed for the NEI is
    $384 million, an increase of $28 million (or 8.1 percent).
        In recent years the American people--through their representatives
    in Congress--have shown great confidence in the National Institutes of
    Health. Americans have placed tremendous faith in NIH's ability to
    conduct and support high quality research for a wide spectrum of
    diseases and disorders. The NIH research community--and in our case,
    the NEI--is grateful for this vote of confidence. Both the NIH and NEI
    have gratefully accepted the challenge to improve the health of the
    American people.
                        laboratory and clinical research
        It is important to point out that laboratory research serves as the
    foundation for clinical, or patient research. Clinical research
    improves diagnosis and treatment, which is the ultimate goal of the
    NEI. For scientists to get to the clinical research stage, a great deal
    of supporting laboratory research must first be conducted. That is why
    a significant amount of our funding goes for such research. The results
    of these studies may be stepping stones to discovery of an effective
    treatment or a means of prevention.
        An excellent example of this bridge between laboratory and clinical
    research is the introduction of two new drugs used to treat glaucoma.
    Glaucoma, a major public health problem in the United States, is the
    leading cause of blindness in African-Americans. It is often associated
    with a rise in the normal fluid pressure inside the eye, leading to
    vision loss and even blindness. For many years, the NEI has supported
    laboratory research into the most effective drugs to control the flow
    of fluid into and out of the eye. This NEI-supported research led to
    clinical research, which resulted in the recent introduction by the
    pharmaceutical industry of two new FDA-approved glaucoma drugs--
    lantanaprost and dorzolamide. With their increased effectiveness and
    reduced side effects, these new drugs add important options for the
    treatment of glaucoma.
        Other discoveries from laboratory research may provide significant
    insight into diseases seemingly unrelated to the original focus of the
    studies. An excellent case in point occurred at the NIH last Fall.
    Scientists searching for genes thought to be involved in resistance to
    cancer drugs discovered a gene that is expressed only in the retina.
    This led to collaboration between cancer and vision researchers and the
    discovery that this gene is linked to the most common juvenile form of
    macular degeneration, called Stargardt's disease. This disease affects
    about 25,000 Americans; develops primarily in people between the ages
    of six and 20; and leads inevitably to marked visual disability. This
    discovery may help researchers unravel the molecular mechanisms that
    lead to Stargardt's disease, which in turn may help unravel some of the
    mysteries surrounding the disease's adult form: age-related macular
    degeneration. The gene discovery also emphasizes in the strongest terms
    that the conduct of high quality research often leads to an
    unsuspected, but very valuable, addition to the medical literature.
    This knowledge can provide insight into related disease processes.
                        age-related macular degeneration
        Age-related macular degeneration, or AMD, is the leading cause of
    blindness in older Americans. AMD affects the macula, a tiny area in
    the retina that helps produce sharp, central vision required for
    ``straight ahead'' activities such as reading, sewing, and driving. AMD
    cannot be prevented, and treatment is effective in only a small number
    of cases. It is estimated that AMD already causes serious visual
    impairment in approximately 1.7 million of the 34 million Americans
    over age 65. As the ``baby boom'' generation ages, and in the absence
    of further prevention and treatment advances, the prevalence of AMD is
    estimated to reach epidemic proportions of 6.3 million Americans by the
    year 2030.
        Although the fundamental cause of AMD remains elusive, we are
    making progress in our research. Several risk factors, including
    smoking, diet, cholesterol level, and genetic factors, appear to be
    associated with the disease. The NEI is conducting a large clinical
    trial, called the Age-Related Eye Disease Study, to assess whether
    antioxidants and/or zinc can slow down the development and progression
    of AMD. The NEI is also closely studying the possibility that
    deficiencies of two carotenoid antioxidants--lutein and zeaxanthin--may
    contribute to the development of AMD. The NEI convened a workshop of
    experts last month to develop a research approach that will best
    evaluate the effect of lutein and zeaxanthin on AMD.
                               neovascularization
        Neovascularization is the growth of new blood vessels in the retina
    and the major sight-threatening abnormality in diabetic retinopathy.
    During their lifetime, nearly half of all people with diabetes will
    develop some degree of diabetic retinopathy. The disease can blind as
    many as 25,000 people with diabetes each year. The NEI's continuing
    support for research on diabetic retinopathy has led to identification
    of several growth factors related to neovascularization. These growth
    factors may be stimulated by a lack of oxygen, causing new blood
    vessels to grow. The NEI is considering clinical trials on several
    pharmaceuticals that would inhibit the growth of these new blood
    vessels, and is working with the pharmaceutical industry in this
    effort.
                              biology of the brain
        NEI research covers many other diseases and disorders of the visual
    system. For example, we are expanding research on the growth and
    development of neurons in the visual system to allow damaged nerve
    cells to survive and reestablish their normal connections. About 38
    percent of all nerve fibers that enter or leave the brain pass through
    the two optic nerves which connect the eyes to the brain--and there are
    more than one million nerve fibers in each optic nerve. This is why
    research into preventing damage to these nerves and restoring their
    normal function is a major neuroscience research priority. Such
    knowledge is also applicable to other parts of the brain.
        Research into retinal degeneration will be expanded into
    understanding the mechanisms of cell death in the retina, which is the
    part of the eye that transmits visual information to the brain.
    Retinitis pigmentosa affects over 100,000 Americans and belongs to a
    group of inherited retinal degenerations that causes severe visual
    disability. We will expand our research into the therapeutic potential
    of growth factors that can either rescue damaged retinal cells or
    prevent degeneration from proceeding. A number of clinical trials will
    soon begin in this area. Other clinical trials are continuing to
    develop treatments that may prevent visual disability in very premature
    infants.
        The molecular and cellular mechanisms regulating the growth of the
    eye are being pursued aggressively, since elongation of the eye is the
    major cause of myopia, or nearsightedness. About 25 percent of the
    adult population in the U.S. is nearsighted, and this condition appears
    to become more prevalent with each subsequent generation. The NEI is
    conducting clinical trials to develop strategies that may slow down the
    development of nearsightedness.
                             other avenues of study
        An integral part of the NEI's research portfolio is providing
    funding to clinician scientists who are committed to a career in
    research and have the potential to develop into independent
    investigators. The Mentored Clinical Scientist Development Award
    provides an intensive, supervised research experience. Depending on the
    candidate's previous research experience, a three, four, or five-year
    plan may be proposed. The plan integrates classroom studies with
    ``hands-on'' experience in the laboratory or in areas such as
    biostatistics and epidemiology.
        One of the most critical components of translating research in the
    laboratory to our use in everyday life is the public/private
    partnership that is actively pursued by the NEI. In an effort to
    quantify the direct benefits of basic research to commercial
    enterprise, the NEI reviewed vision-related patents granted since 1975.
    We found that eye technology innovation has grown steadily, with almost
    a fourfold increase in the number of patents granted, from 224 in 1975
    to 848 in 1996. The NEI is identified as the research sponsor for over
    30 percent of the scientific articles referenced by these patents. An
    even greater number of non-eye care patents make reference to NEI-
    supported research, meaning that the commercial relevance of NEI
    research extends to technologies outside of the eye care arena.
                                quality of life
        The NEI is going beyond measuring patient health by the traditional
    standard of clinical outcome. We are also assessing a person's quality
    of life. We have developed a ``Quality of Life'' questionnaire that
    measures patients' perception of their own visual functioning. This
    questionnaire is intended to capture many aspects of visual disability
    that are identified by patients as being important for their daily
    activities. Patient outcome is not just what the doctor says it is--
    it's also what the patient says it is.
        The NEI is supporting health services research as another way of
    improving patients' quality of life. Health services research is
    broadly defined to include topics such as increasing patient access to,
    and utilization of, vision care services. Health services research also
    includes improving the delivery of vision services by eye care
    professionals, and measuring the vision health of patients receiving
    eye care services. New health care technologies resulting from this
    research can allow physicians and patients to utilize the knowledge
    gained from clinical trial results. It can also help doctors and
    patients better understand quality of care and the cost effectiveness
    of care.
        The NEI, through its National Eye Health Education Program, is
    developing a program aimed at raising awareness about the impact of low
    vision on daily living. We broadly define low vision as any visual
    condition, not correctable by glasses or contact lenses, that impairs
    everyday function. Among the target audiences of the low vision program
    will be people over age 65 and health care and social service
    providers. The low vision program will be instrumental in informing
    Americans about low vision and how the use of visual devices and
    rehabilitative services can maximize remaining vision to improve a
    person's quality of life.
        The activities of the NEI are covered within the NIH-wide Annual
    Performance Plan required under the Government Performance and Results
    Act (GPRA). The fiscal year 1999 performance goals and measures for NIH
    are detailed in this performance plan and are linked to both the budget
    and the HHS GPRA Strategic Plan, which was transmitted to Congress on
    September 30, 1997. NIH's performance targets in the Plan are partially
    a function of resource levels requested in the President's Budget and
    could change based upon final Congressional Appropriations action. NIH
    looks forward to Congress' feedback on the usefulness of its
    Performance Plan, as well as to working with Congress on achieving the
    NIH goals laid out in this Plan.
        Finally, Mr. Chairman, I am proud to announce that the NEI has
    completed its sixth long-range plan for eye research. This five-year
    research plan outlines research strategies aimed at accomplishing our
    long range goals and objectives for each of our scientific programs.
        Mr. Chairman, I look forward to answering your questions.
                                     ______

                      Prepared Statement of Kenneth Olden
        Mr. Chairman and Members of the Committee: I am pleased to present
    the President's budget request for the National Institute of
    Environmental Health Sciences (NIEHS) for fiscal year 1999, a sum of
    $348.1 million, an increase of $24.5 million over the comparable fiscal
    year 1998 appropriation. Including the estimated allocation for AIDS in
    both years, total support proposed for NIEHS is $354.8 million, an
    increase of $24.7 million over the fiscal year 1998 appropriation.
    Funds for NIEHS efforts in AIDS research are included within the Office
    of AIDS Research budget request.
                 environmental health science and public policy
        As shown in Chart No. 1, the focus of my presentation is ``Bridging
    the Gap Between Environmental Health Science and Public Policy''. In
    most instances the scientific and technical information available today
    is inadequate to develop scientifically sound and comprehensive
    solutions to complex environmental health problems. Without better
    information, how can we direct resources to areas of environmental
    health and safety that will have the most significant impact on human
    lives?
        Might I ask, ``How many times during your tenure in the U.S.
    Congress have you faced the quandary of being asked to intervene in
    environmental health policy issues without the benefit of sufficient
    information? To make decisions with enormous public health and economic
    consequences?
        Just last summer I imagine that many of you were queried about the
    health effects of Pfiesteria following fish kills along our eastern
    shores. This is an important issue where the concerns of agribusiness,
    industry, tourism, and environmentalism are all potentially involved.
    As another example, many of your constituents have perhaps expressed
    concern about health effects of low level electric and magnetic fields.
    Your concern has certainly been voiced to me in the form of a directive
    in the 1992 National Energy Policy Act; as Director of the NIEHS, I am
    required to give to you this year a report on the possible risks of
    these exposures. Perhaps some of you have been involved in the recent
    discussions surrounding federal reference doses for mercury. This issue
    is particularly important because children are unusually sensitive to
    this neurotoxicant; thus, its presence in fish has special relevance to
    pregnant women and children. Also I suspect that many of you were
    involved in discussions surrounding new proposed ambient standards for
    ozone and particulate matter, which are being reassessed by the EPA as
    part of its requirements under the Clean Air Act Amendments of 1990.
    Finally, you will soon be asked to consider the Environmental
    Protection Agency (EPA) proposal to require detailed reporting about
    chemicals and potential health hazards in drinking water. While
    expansion of federal environmental ``right to know'' regulation for
    drinking water is in principle a good thing, can Americans make
    informed decisions given the magnitude of the data gaps in the
    toxicological profiles on the mixture of over 700 chemicals in the
    drinking water of the U.S.?
        What these few examples have in common is that, all too often,
    important public health decisions have to be made in the absence of
    adequate information. It is this inadequate information base, coupled
    with the undeniable economic costs of remediation, that continually
    forces those of you in Congress to determine where the balance should
    be between suspected public health effects of environmental exposures
    and the economic costs of reducing these exposures.
        The frequency of such quandaries indicate how important it is to
    invest in better science. By better, I not only mean more information,
    but I refer specifically to better data on how people differ in their
    susceptibility to environmental exposures, better data on the health
    effects of exposures to mixtures of chemicals rather than single
    compounds, better data on actual human exposures, better data on the
    mechanisms by which these exposures cause disease, and better methods
    to integrate all this information into regulatory standards. Although
    we have not reached this stage yet, I am convinced that the new
    cutting-edge technologies in genetics and cell biology position us to
    attain this ideal.
        Clearly we cannot fill gaps in data by flooding the void with
    brilliant assumptions about exposure, hazard potency, and
    characteristics of the population at risk. Instead we must make
    strategic investments that can lead us to the rational environmental
    health policies, as well as environmental protection policies, we will
    need for the 21st century and beyond. We at NIEHS have given great
    thought to what these investments should be, and I outlined some of
    them for you in last year's testimony. I would like to take this
    opportunity to provide a ``report card'' of where we now stand.
                           individual susceptibility
        First, I discussed last year how a person's risk differs according
    to their genetic makeup and the need for this information to improve
    risk assessment decisions. An Environmental Genome Project was proposed
    that could address this knowledge gap. I am pleased to report that a
    trans-NIH effort, involving 15 Institutes, is underway to investigate
    the genetic basis of environmental disease susceptibility. The
    discovery of susceptibility genes is critical to a better understanding
    of numerous diseases, and the development of efficacious and cost-
    effective prevention and treatment strategies. Such studies will shed
    some light on the often asked question, ``Why me, Doc?'', and will help
    change the current one-size-fits-all approach to health care and
    environmental health and safety regulations.
                              exposure assessment
        Second, I noted that little is known about which compounds in our
    environment people are actually exposed to or how much of these
    exposures they absorb or store in their bodies. Recent advances in
    analytical techniques should permit detection of environmental and
    occupational chemicals in small samples of blood and urine. This past
    year the NIEHS has been developing an exposure assessment program, Body
    Burden 2000, that is evolving into a multiagency initiative involving
    the Centers for Disease Control and Prevention (CDC), Food and Drug
    Administration (FDA), EPA, Department of Defense (DOD), and others.
    Already we have experienced success in a pilot project with CDC
    designed to improve the exposure assessment of environmental endocrine
    disruptors. This information will be useful as regulatory agencies
    grapple with the issue of endocrine disruptors, particularly as they
    affect the health of children.
                           high throughput technology
        Third, I alerted you to the need for high throughput technologies
    for toxicologic testing. The last 50 years has witnessed the
    development of over 75,000 chemicals. Yet, according to a recently
    published Environmental Defense Fund report, ``even the most basic
    toxicity testing cannot be found in the public record for nearly 75
    percent of the top-volume chemicals in commercial use.'' (EDF, 1997).
    In a similar study, the National Academy of Sciences' National Research
    Council concluded that 78 percent of the highest-volume chemicals in
    commercial use ``had not had even minimal toxicity testing'' (NAS/NRC,
    1984). We are clearly in a state of toxic ignorance and it is not
    likely to be resolved by our current reliance on 2-year rodent
    bioassays. The NIEHS has made considerable progress in developing
    technologies that can eliminate, or at least reduce, the testing
    backlog that leads to this state of toxic ignorance. As I have reported
    to you previously, the NIEHS, under the auspices of the National
    Toxicology Program (NTP), is evaluating the predictiveness of novel
    transgenic mouse models. As you can see in Chart No. 2, we have tested
    close to 30 chemicals in transgenic mice and the results compare
    favorably with results from our traditional bioassay. Also, since 1997,
    all 2-year studies reported by the NTP are accompanied by results from
    parallel studies in transgenic animals. This program will greatly
    increase our ability to evaluate the best uses for transgenic models in
    regulatory decision making. Chart No. 3 shows the potential benefit of
    using the transgenic models in testing, primarily the fact that we can
    do these assays faster and at less cost. One of the most exciting
    aspects of this program is that it is being done in partnership with
    the pharmaceutical and chemical manufacturing industries. Based on
    progress with these alternative systems, the FDA is now allowing some
    test data to be submitted using transgenic animals.
        Relying on whole animal bioassays, even transgenic animals, will
    not completely solve our information deficit. The NIEHS is developing a
    new methodology, called computational biology, that allows regulators
    to use a variety of information--chemical structure relationships,
    tests in single cell systems, limited whole animal studies--to assess
    how environmental agents alter critical biological systems and cause
    disease. The regulatory community has already used several examples of
    this approach as a basis for improving risk assessments. The NIEHS
    plans to provide even more tools for rapid assessments and is hoping to
    exploit advances in recombinant DNA technology, combinatorial
    chemistry, and microarray technology.
                                complex mixtures
        The fourth strategic investment I discussed last year was the need
    to define health effects from exposures to complex mixtures, rather
    than the current system which only assesses effects of single
    compounds. The NIEHS will be funding university-based researchers
    throughout the country to address this critical research gap. I am
    confident that in the future I will have significant successes to share
    with you on the research outcomes of these studies.
                               children's health
        I would like now to discuss our fifth strategic investment--
    children. As you know the developing child represents a particularly
    vulnerable target for adverse environmental effects. This Nation has
    been particularly vigilant in protecting its children at those times
    when solid, scientific information has been provided. The story of lead
    and its subsequent dramatic decline in children illustrates our
    determination to protect the child. This resolve, however, was only
    possible because of the firm scientific foundation provided by the
    research community, much of which was supported by NIEHS. The NIEHS
    continues to support research in the critical area of children's
    susceptibility to environmental agents.
        According to a recent report of the National Resources Defense
    Council (NRDC, 1997), the worst environmental threats to children's
    health include: lead, air pollution, pesticides, environmental tobacco
    smoke, and drinking water contamination. Other important health
    concerns include children's greater vulnerability to radiation-induced
    thyroid cancer, their susceptibility to the neurotoxicity of
    polychlorinated biphenyls (PCB's) which are frequent contaminants in
    fish, and their potential interaction with environmental endocrine
    disruptors released into our environment that have the ability to alter
    hormone functions.
        To address these problems the NIEHS is establishing Centers for
    Children's Environmental Health and Disease Prevention. Working jointly
    with the EPA and CDC, we have released an RFA to the research community
    that will establish Children's Environmental Health and Disease
    Prevention Centers to define the environmental influences on asthma and
    other respiratory diseases, childhood learning, and growth development.
        The incidence of childhood asthma is rising at an alarming rate,
    particularly among the urban poor. Common household allergens in the
    air may be contributing to this devastating disease. It remains to be
    proven if removing the allergens from a household will provide an
    effective remedy in reducing asthma attacks or incidence. These
    propositions are under examination in multicenter, multiyear studies
    sponsored collaboratively by the NIEHS and the National Institute of
    Allergy and Infectious Diseases (NIAID). This Inner-City Asthma Study
    is a prevention trial to develop a comprehensive and cost-effective
    intervention strategy to reduce asthma morbidity in inner-city children
    and adolescents.
        Given the NIEHS' interest in exposure assessment that I mentioned
    earlier, it is logical that we have added an exposure assessment study
    to complement this effort. This National Allergen Survey is being done
    in collaboration with the Department of Housing and Urban Development
    (HUD). It is a population-based, national survey of dust hazards in
    U.S. homes and will monitor for both allergens and lead. Our objective
    is to examine the relationship between allergen exposure and diseases
    such as asthma and allergies. This study will give us an estimate of
    allergen exposures in the general population, will estimate the
    magnitude of the allergen problem in the U.S., and will reveal how
    allergen exposures differ as a function of geographic region,
    socioeconomic status, housing type, and ethnicity.
                                    summary
        In summary, I have articulated a series of strategic investments
    worthy of public support. Chart No. 4 outlines the seven steps needed
    to resolve our current state of toxic ignorance. The NIEHS, by
    implementing these programs, is leading the way to modernize risk
    assessment and bridge the gap between environmental health science and
    the public policy it serves. I would be happy to respond to any
    questions you may have.
                                     ______

                     Prepared Statement of Richard J. Hodes
        Mr. Chairman and Members of the Committee: The President in his
    fiscal year 1999 budget has proposed that the National Institute on
    Aging (NIA) receive $556 million, an increase of $38 million over the
    non-AIDS portion of the fiscal year 1998 appropriation. Including the
    estimated allocation for AIDS in both years, total support proposed for
    the NIA is $558 million, an increase of $39 million over the fiscal
    year 1998 appropriation. Funds for NIA efforts in AIDS research are
    included within the Office of AIDS Research budget request.
        I am pleased to have the opportunity to highlight the efforts
    undertaken by the NIA to extend through research the healthy, active
    years of life for all Americans. For nearly a quarter of a century, the
    NIA has led the scientific effort to comprehend aging processes,
    producing many advances that enhance the quality of life and prevent
    costly disease and disability. Such discoveries have come at an
    opportune time. Facing a century in which 75 million babyboomers will
    turn 65, we all stand to gain from a healthy, fully engaged older
    population. Aging research is key to achieving this goal.
                          alzheimer's disease research
        The NIA leads an intensive effort to conquer Alzheimer's disease
    (AD), a progressive brain disorder marked by an irreversible decline in
    intellectual abilities and by changes in behavior and personality. As
    the most common cause of dementia in older people, AD affects as many
    as four million Americans, with devastating effects to patients, their
    families, caregivers, and society. Fortunately, the pace of research
    findings is accelerating. For example, several studies point to the
    protein fragment beta-amyloid, a major component of the plaques that
    litter the spaces between nerve cells in the brains of AD patients, as
    having a key role in the neuronal destruction in AD. The process
    involved, however, has remained a mystery. This year, NIA grantees
    provided evidence that a newly-identified protein binds with the beta-
    amyloid, and that this process may contribute to neuronal dysfunction
    in AD. Grantees also recently identified a new pathological feature of
    AD brains, a plaque-like lesion that contains a previously unknown
    protein which could potentially provide a new diagnostic marker and
    improve understanding of the causes of AD. The recent generation of
    genetically engineered transgenic mice that express mutant human genes
    associated with AD and exhibit AD-like behavioral deficits and brain
    lesions may serve as a much needed animal model for the study of AD.
        Based on research world-wide, people who inherit a particular type
    of apolipoprotein E (ApoE4) are recognized to be at special risk for
    the late onset form of AD. NIA grantees are therefore investigating the
    potential use of genetic testing for ApoE in the clinical diagnosis of
    AD. Results indicate that ApoE genotyping, although not sufficiently
    sensitive or specific alone as a diagnostic test for AD, may reduce the
    number of incorrect diagnoses by close to 30 percent when administered
    after a clinical evaluation. In a related study, scientists have found
    differences with respect to ApoE among African-Americans, Hispanics,
    and Whites. A 5-year, prospective, longitudinal study showed that, in
    the absence of ApoE4, the cumulative risks of AD to age 90 were four
    times higher for African-Americans and twice as high for Hispanics as
    for Whites. In the presence of ApoE4, the cumulative risk to age 90 was
    similar for individuals in all three ethnic groups. These results
    suggest that while the ApoE4 allele is a determinant of AD risk in
    Whites, the other two groups have an increased risk of AD regardless of
    their ApoE genotype, and that other genes or risk factors may
    contribute to the risk of AD in African-Americans and Hispanics.
        In the critical effort to identify effective treatment for AD,
    studies reported in the past year have identified three new candidate
    interventions--antioxidants, non-steroidal anti-inflammatory drugs
    (NSAID's) such as ibuprofen, and estrogen replacement therapy. Two of
    these studies used 15 years' worth of data from NIA's Baltimore
    Longitudinal Study of Aging, now in its 40th year. The first study
    linked use of NSAID's with an approximately 50 percent reduced risk of
    AD. The second study associated a history of estrogen replacement
    therapy in postmenopausal women with approximately a 50 percent
    reduction in the risk of AD. Based on these and previous findings, the
    NIA plans to initiate clinical trials to test the effectiveness of
    ibuprofen and of estrogen vs. placebo in treatment or prevention of AD.
    In addition, NIA-supported researchers completed a placebo-controlled,
    randomized prospective clinical trial to assess the effect of the
    antioxidants vitamin E, selegiline, or the combination on progression
    of moderately impaired AD patients. The trial showed that selegiline
    and vitamin E may slow development of functional signs and symptoms of
    AD by several months, although they did not affect cognitive measures.
    This study provided the basis for a newly planned novel secondary
    prevention trial to test whether high dose vitamin E slows the
    conversion to AD in people with mild cognitive impairment (that is,
    having a memory deficit but no dementia). This is the first trial
    designed to delay AD onset.
                                biology of aging
        Advances in basic biology have fueled a revolution in aging
    research. A notable example of this progress is the award of the Nobel
    Prize in Medicine to Stanley B. Prusiner, a long-time grantee of the
    NIA, the National Institute of Neurological Disorders and Stroke
    (NINDS), and other NIH components. Dr. Prusiner was cited for his once-
    controversial discovery of prions, ``an entirely new genre of disease-
    causing agents,'' that cause ``mad cow'' disease and other lethal
    brain-wasting conditions. His laboratory's latest findings involve the
    mode of transmission of ``mad cow'' disease between species and the
    forms of prions associated with clinical disease.
        Rapid progress has also been made on identifying genes that affect
    longevity in lower organisms. One of these genes (daf-2) regulates
    life-span in the worm Caenorhabditis elegans. A mutation in this gene
    can more than double the worm's life-span, if a second gene (daf-16)
    assists in the process. The daf-2 gene codes a protein equivalent in
    function to the human insulin receptor, part of a nutrient-sensing
    pathway the worm uses to monitor and alter its metabolism. These
    findings imply that the same biological system used by the worm for
    metabolic regulation could also be central to delaying the aging
    process and extending worm longevity. If this scenario is valid, the
    finding may help explain why rodents who eat a diet that is
    nutritionally balanced but 30 percent reduced in calories live 30-40
    percent longer, stay active and healthy until late in life, and have
    fewer malignancies than do rodents not calorically restricted. In
    addition, these findings may advance understanding of how human insulin
    regulates metabolism and why this regulation fails in diabetes. To
    benefit from these discoveries, the NIA plans a new initiative to
    identify genes that modulate the rate of aging in humans. These
    findings are expected to yield insights into both aging and age-related
    diseases.
        Major new advances have been made in understanding the role of
    telomeres and telomerase in aging and cancer. Telomeres, repetitive DNA
    segments found on the ends of chromosomes, help maintain chromosomal
    integrity and function. When cells divide, telomeres normally lose
    segments and shorten until, at a critical length, cell division ceases
    and cells become senescent. The enzyme telomerase compensates for
    telomere loss by adding DNA segments to the ends of chromosomes. This
    process rarely takes place in normal human cells, where telomerase
    response is absent or insufficient. In 80-90 percent of human tumor
    cells, however, telomerase activity is robust, and cells divide
    endlessly. How and why telomerase reactivates to contribute to cell
    immortalization is not known. But the correlation between telomerase
    activation and cancerous growth has stimulated many scientists to view
    telomerase inhibition as a potential new approach to cancer therapy. In
    recent months, scientists discovered and cloned the gene for the active
    subunit of human telomerase, making possible the critical study of how
    telomerase activity is regulated. Scientists have now inserted copies
    of the newly-cloned gene into normal, telomerase-negative cells in the
    laboratory, causing these cells to express telomerase. In contrast to
    the normal cells, which exhibit telomere shortening and cessation of
    cell division, the telomerase-expressing cells had elongated telomeres
    and have continued to replicate far beyond the limits observed for
    normal cells. These results confirm that telomere shortening causes
    cellular senescence under laboratory conditions. The ability to avoid
    senescence in normal human cells is expected to have important
    applications in research and medicine.
                        reducing disease and disability
        As life expectancy increases, there is an urgent need to keep these
    additional years disease- and disability-free. Cardiovascular disease
    and cancer, as the two leading causes of mortality in the elderly, are
    important research targets. The only common cardiovascular disease now
    increasing in prevalence in the U.S. is heart failure, and a chief risk
    factor for this disease is isolated systolic hypertension. The NIA and
    the National Heart, Lung and Blood Institute supported a controlled
    clinical trial to test the effectiveness of low doses of the diuretic
    chlorthalidone to treat systolic hypertension in older people. Older
    people who were treated in the trial had 50 percent less heart failure
    than those not treated. The chance of developing heart failure dropped
    even more for persons who had previously had a heart attack, an
    improvement of 80 percent. Treatment of isolated systolic hypertension
    with this relatively inexpensive medication could make major
    differences in quality of life and save substantial medical costs. The
    NIA also collaborates with the National Cancer Institute on cancers in
    older people, including breast and prostate cancer. Using data from the
    BLSA, NIA scientists and colleagues have produced several important
    advances about the role of prostate specific antigen (PSA), an enzyme
    useful for detecting and indicating the aggressiveness of prostate
    cancer. Some PSA binds proteins in the blood, and some PSA remains
    free, or unbound. At the time of cancer diagnosis, the ratio of free to
    total PSA in blood may predict whether the cancer will be fast or slow-
    growing. This can help the physician decide whether to treat or monitor
    the cancer. Avoiding unnecessary treatment, such as radiation or
    surgery, may reduce complications, including impotence and
    incontinence, as well as reduce health care costs.
        NIA research also focuses on mobility and freedom from pain in
    older people. Loss of bone mass due to osteoporosis contributes to 1.5
    million fractures each year in the U.S., according to a recent article
    in the publication Bone. An NIA controlled trial studied the effect of
    dietary calcium and vitamin D supplementation in maintaining bone
    density and preventing fractures in older men and women. This regimen
    prevented bone loss at all skeletal sites and was associated with a 50
    percent reduction in the rate of symptomatic nonvertebral fractures.
    This underlines the importance of older persons' maintaining adequate
    levels of calcium and vitamin D to minimize bone loss. Osteoarthritis,
    a painful degenerative joint disease, also affects millions of older
    Americans. A controlled trial conducted at an NIA Older Americans
    Independence Center proved that walking and resistance exercises can
    safely improve function and reduce pain in patients with knee
    osteoarthritis, suggesting that exercise should be prescribed as part
    of the treatment for these individuals.
        Supplements of hormones and hormone-like molecules, such as
    melatonin, DHEA, testosterone, and growth hormones, are of growing
    popular interest. Claims have appeared in the news that taking such
    supplements can make people feel young again or can prevent aging.
    Unfortunately, these claims have not been proved, and the wrong balance
    of hormones can be dangerous. The NIA is conducting research to define
    the biologic action of these hormones and to assess the clinical
    utility of replacement therapy of hormones that tend to decline, on
    average, with age. For example, research has focused on understanding
    observed age-related declines in testosterone, which could contribute
    to decreased muscle and bone capacity, and the biology of the
    menopause, which is associated with pathology such as increases in
    osteoporosis and cardiovascular disease. This initiative has great
    potential for developing effective strategies to promote strength and
    prevent disability in older men and women.
                         behavioral and social research
        Behavioral and social research is instrumental in enabling older
    people to maintain or enhance physical and cognitive function and be
    fully engaged in life. The NIA also has consistently supported research
    to encourage long-term behavior changes that decrease risk of disease
    and disability. A new NIA centers initiative is increasing
    understanding of aging and improving health status in older minority
    populations, complementing the efforts of other centers that are
    developing strategies to keep people active and productive in late
    life. Significant progress is also being made on understanding and
    influencing changes with age in cognitive function. This year, a
    landmark study that compared identical and fraternal twins over age 80
    found that the contribution of heredity to cognitive ability remains
    very strong, approximately 50 percent, even in old age. These results
    contradicted hypotheses that predicted an increased impact of
    environmental factors with age in determining intelligence.
        The NIA also monitors the impact of population aging on disease and
    disability. Demographic research has shown that there are at least 1.4
    million fewer disabled older persons in the U.S. than there would have
    been if the disability rates of the elderly had not improved since
    1982. Further studies will identify and quantify the specific
    underlying causes contributing to the decline. Additional analysis will
    involve the dynamics of old-age life expectancy, projections of the
    support ratio, and health expenditures, as well as the implications of
    trends in health, disability, and life expectancy for national policies
    on retirement and programs for the elderly.
        The NIA will continue to identify initiatives that maximize
    scientific and management efficiency and that have the potential for
    placing successful aging within everyone's reach. I would be happy to
    answer any questions.
                                     ______

                     Prepared Statement of Stephen I. Katz
        Mr. Chairman and Members of the Subcommittee: I am pleased to
    present the President's budget request for the National Institute of
    Arthritis and Musculoskeletal and Skin Diseases. Including the
    estimated allocation for AIDS research in both years, total support
    proposed for the NIAMS is $295.6 million, an increase of 7.6 percent
    over the fiscal year 1998 appropriation. Funds for NIAMS efforts in
    AIDS research are included within the Office of AIDS Research budget
    request.
        benefits of medical research in bones, joints, muscles, and skin
        Medical research has demonstrated time and again the genuine
    difference it can make in many dimensions of people's lives. While the
    Congressional Justification is full of such research advances, and I am
    very enthusiastic about and proud of those achievements, I want to
    focus today on my outlook for the future. What will life be like a
    decade from now if we invest in the bright scientific minds and in the
    unprecedented tools of medical research that are available to us today?
    What difference can it make in people's lives when we wisely invest the
    funds proposed in our fiscal year 1999 budget?
        You have heard in my testimony in the past that virtually every
    household in America is affected by some disease or disorder of the
    bones, joints, muscles, and skin--and that these diseases take an
    enormous toll on one's quality of life. Because our research mandate is
    quite broad and diverse, progress realized from research that we
    support has the potential to benefit virtually every household in
    America. We hear a lot about the concerns of baby boomers and the aging
    of the American population. I would like to sketch out some dimensions
    of what life could look like if the research we are supporting,
    conducting, and planning realizes its full potential.
        Imagine a future where quality of life is not compromised by old
    age or pain and suffering * * * where people are productive and
    independent well into their senior years. Bone fractures seriously
    compromise quality of life, and they are often a consequence of
    osteoporosis--a thinning of bones--that constitutes a major public
    health problem. We have learned an enormous amount about how bones
    become strong and that they are constantly being built up and broken
    down. This past year, in an important series of discoveries,
    researchers supported by NIAMS and the National Institute of Dental
    Research identified a gene essential for the buildup of bone--thereby
    opening up exciting opportunities for the development of potential new
    bone strengthening interventions to prevent bone fractures. This
    finding has clear implications for osteoporosis, Paget's disease,
    osteogenesis imperfecta, and other bone diseases. Move now to the
    schools. We are heartened to see children and adolescents benefitting
    from programs targeting their strong bones and reducing their sports
    injuries. We know that calcium is critical for maintaining integrity of
    bones and that people build up their bone ``bank account'' during the
    first three decades of life. During the past year, in studies in
    Mexican-American girls, we learned how the vitamin D receptor gene is
    related to bone mineral density, and why some girls may be more
    susceptible to low bone mineral density. We look forward to
    developments that will alter or reverse this susceptibility.
        Move now to the beach and other recreational sites. Here we see
    people of all ages enjoying time outdoors while taking informed and
    proven precautions to avoid skin cancer caused by sunlight exposure.
    During the past year, we have learned more about how certain mutated
    genes cause skin cancer, the most common form of human cancer, and we
    are now trying to understand how these effects might be reversed or
    altered.
        Move now to the doctor's office and other sites of health care. We
    see people clearly benefitting from better diagnostic tools, improved
    medical devices, and more effective treatments with fewer side
    effects--all derived from research. We are supporting studies of a
    number of technologies, such as MRI to identify early osteoarthritis
    and bone implant engineering to design bone and joint replacements with
    greater longevity. Move now to the world of information. People will
    continue to derive their information from many, diverse sources. My
    goal is that current, reliable information will be available to all of
    these people regardless of the venue they choose. When patients
    understand their disease, they can make sound decisions about their
    health care, and they can be empowered by the sense that they control
    their disease * * * their disease does not control their lives. We are
    working toward a world where pain and suffering are significantly
    reduced, where disabilities less frequently compromise daily life,
    where women and minorities are no longer disproportionately affected by
    so many diseases, and where quality of life and productivity are
    routinely experienced at high levels. Is this an ambitious vision?
    Absolutely. Is it really achievable? I think it is. Now I would like to
    share with you other examples of progress as well as our initiatives.
                  additional research advances and initiatives
        One of the most rewarding aspects of my job as Director of the
    NIAMS is the opportunity to report on the research advances we have
    supported over the last year. In arthritis, we know much more about
    changes that occur in cartilage cells lining the joints in people with
    osteoarthritis, and we are focusing increased emphasis on identifying
    appropriate markers to determine the diagnosis, prognosis, or severity
    of osteoarthritis. Recently, we have learned how certain genes are
    turned on and produce products that cause cartilage cells to die. Until
    recently, it was very difficult to propagate cartilage cells in a test
    tube, but certain growth factors have now been identified that enhance
    cartilage cell growth. These findings provide important scientific
    opportunities for increasing our understanding of osteoarthritis.
        A major overarching category of diseases under study in our
    Institute is autoimmune diseases, those in which the body's own cells
    turn against the body and cause diseases such as rheumatoid arthritis,
    systemic lupus erythematosus, Sjogren's syndrome, alopecia areata,
    scleroderma, and others. We are making progress in all of these, and
    advances in understanding one of these diseases has implications for
    all of them. Studies in tumor suppressor genes--long an integral
    component of cancer research--have revealed new insights into
    rheumatoid arthritis. Investigators have reported this year that
    synovial tissue from the joints of severe chronic rheumatoid arthritis
    patients contain a mutated tumor suppressor gene that controls the
    growth of normal cells. This may, in part, account for the chronic
    overgrowth of joint-lining cells in rheumatoid arthritis.
        Another important discovery was made by researchers in our NIAMS
    Intramural Research Program who identified the gene responsible for the
    disease called Familial Mediterranean Fever (FMF). Attacks of this
    disease are characterized by inflammation as manifested by arthritis,
    chest pain, abdominal pain, recurring bouts of fever, and skin rashes.
    This discovery will provide important insights into the causes of
    inflammation in FMF and many other inflammatory diseases, and provide
    for new and improved treatment for this and perhaps many other diseases
    characterized by inflammation. Funds provided in fiscal year 1999 will
    facilitate the development of animal models, diagnostic tests, and
    further identification of specific mutations in these patients. These
    brief highlights provide a glimpse of the hope that research offers for
    the many people suffering from the common, costly, crippling, and
    chronic diseases within the mandate of the NIAMS.
           value of being a part of the national institutes of health
        One of the strongest assets we have as an Institute is being a part
    of the National Institutes of Health. We share a common goal and
    commitment--improving the health of the American people--and we work
    together toward that end. Very frequently you will hear about diseases
    that are supported by many different institutes. For example, research
    on osteoporosis is supported by some 14 different components of the
    NIH. Such an approach is not duplicative, but complementary. We all
    approach our studies from a different perspective, but the goal is
    improved understanding of and strategies to reduce osteoporosis. With
    complex diseases like fibromyalgia, we often take a multi-pronged
    approach. We support basic studies in understanding the disease process
    and the troubling symptoms that people with fibromyalgia experience. We
    support innovative scientific workshops (as we did in July 1996) to
    enable basic researchers who never heard of fibromyalgia, but are
    conducting the latest research on sleep disorders or pain, to talk to
    clinicians who see patients with fibromyalgia every day, but are
    stymied in how to improve their lives. We then consider the
    recommendations from such a workshop and develop and implement
    strategies based on these recommendations. Again, using the example of
    fibromyalgia, as a result of that scientific workshop, the Institute is
    issuing a request for applications for exploratory and developmental
    grants in this area, targeting the pressing research questions in this
    area. Similar approaches have been utilized for many other diseases,
    including rheumatoid arthritis, osteoarthritis, systemic lupus
    erythematosus, scleroderma, low back pain, repetitive motion disorders,
    and various skin diseases. We ask what is the best strategy for
    understanding each disease and how we can improve the lives of
    patients. Over and over again, we have seen how research in one area
    significantly informs our understanding of other diseases. That is why
    it is so essential to support studies across the research spectrum.
           partnerships with voluntary and professional organizations
        In addition to our interactions with our colleagues across the NIH,
    we have also partnered with our colleagues in several voluntary and
    professional organizations. I am very pleased with the three new
    partnerships that have been developed this past year. The first is a
    novel partnership with the Arthritis Foundation, the National Institute
    of Allergy and Infectious Diseases, and the Office of Research on
    Women's Health to support a national consortium of 12 research centers
    in the search for genes that determine susceptibility to rheumatoid
    arthritis. The Arthritis Foundation not only provides financial
    support, but plays an invaluable role in patient recruitment and in
    increasing awareness of this study, the largest such effort in the
    world. The NIAMS also has partnered with both the American Society for
    Bone and Mineral Research and the S.L.E. Foundation to co-fund grants.
    Such arrangements benefit both components--the voluntary and
    professional organizations benefit from the NIAMS' expertise in grant
    review, and the Institute is able to support more studies than would be
    possible without the co-funding. When we share common goals, as we do
    in the examples just cited, the partnerships are clearly beneficial--
    for the public, the voluntary groups, and the NIAMS.
        The future: challenges and plans
        What are the challenges to reaching the vision of the future that I
    described earlier and how do I plan to invest the budget to address
    those challenges? The increased budget will allow the NIAMS to support
    more research grants in key areas of opportunity and need, and we will
    expand our research portfolio in a number of priority areas. For
    example, we will explore specific opportunities to learn more about
    skeletal morphogenesis and growth, mechanisms of central nervous system
    damage and cardiovascular disease in systemic lupus erythematosus,
    hematopoietic (blood cell forming) and immune system effects on bone
    physiology, gene therapy for arthritis and skin disease, and structural
    biology of muscle membrane proteins. The NIAMS convened four working
    groups this year--in arthritis, bone, orthopaedics, and skin--to
    discuss clinical research needs and opportunities. There is a serious
    challenge in the field of clinical research, where problems include a
    shortage of people trained to do clinical research, and a shortage of
    people in the pipeline pursuing a career in clinical research. For
    example, our clinical panels expressed concern about the scarcity of
    individuals in NIAMS-related specialties, such as rheumatology,
    particularly pediatric rheumatology, as well as the dearth of
    physicians doing research in bone endocrinology, orthopaedic surgery,
    and dermatology. Our ability to derive maximum benefits from medical
    research will be seriously compromised if we do not address these
    shortfalls. Clinical researchers provide a vital bridge for translating
    bench research to bedside improvements, as well as translating bedside
    insights into bench opportunities. The new initiatives launched by the
    NIH in clinical research training and career development will help
    address important public health needs in NIAMS-mandated areas. I am
    confident that this aggressive and proactive approach will make a
    genuine difference in medical research in the future.
        The activities of the NIAMS are covered within the NIH-wide Annual
    Performance Plan required under the Government Performance and Results
    Act (GPRA). The fiscal year 1999 performance goals and measures for NIH
    are detailed in this performance plan and are linked to both the budget
    and the HHS GPRA Strategic Plan which was transmitted to Congress on
    September 30, 1997. NIH's performance targets in the Plan are partially
    a function of resource levels requested in the President's Budget and
    could change based upon final Congressional Appropriations action. NIH
    looks forward to Congress' feedback on the usefulness of its
    Performance Plan, as well as to working with Congress on achieving the
    NIH goals laid out in this Plan.
        In closing, I want to express my gratitude to the members of this
    subcommittee for their strong and unwavering support of medical
    research. I hope that ten years from now we will be able to speak about
    the benefits that medical research has enabled--that we will be able to
    enjoy progress in all aspects of the lives of the American people. I am
    focused on that goal--the research we are supporting, conducting, and
    planning is aimed at achieving that goal. I am optimistic that we are
    on the way to achieving that goal.
        My colleagues and I will be happy to respond to any questions you
    may have.
                                     ______

                   Prepared Statement of James F. Battey, Jr.
        Mr. Chairman and Members of the Committee: I am honored to appear
    before you as the newly appointed Director of the National Institute on
    Deafness and Other Communication Disorders (NIDCD). Several members of
    Congress were actively involved in the creation of the NIDCD nearly ten
    years ago. As you envisioned, NIDCD has become the focal point of
    research in human communication supported and conducted by the Federal
    government in the fifty states. In the last several years, in my role
    as the NIDCD's Scientific Director, I was part of the Institute's
    growth and development, whose goal is to advance knowledge about the
    mechanisms and processes of human communication, and revolutionizing
    prevention and treatment of disease and disorder. The President in his
    1999 budget has proposed that the National Institute on Deafness and
    Other Communication Disorders receive $213.8 million, an increase of
    $14.9 million over the non-AIDS portion of the fiscal year 1998
    appropriation. Including the estimated allocation for AIDS in both
    years, total support proposed for NIDCD is $215.7 million, an increase
    of $15 million over the fiscal year 1998 appropriation. Funds for NIDCD
    efforts in AIDS research are included within the Office of AIDS
    Research budget request.
       communication skills at the center of successful life in the new
                                    century
        Communication skills will be central to a successful life in the
    new century for all Americans. For the 46 million Americans with
    communication disabilities, however, getting up and facing each day is
    a challenge. The simple acts of speaking, listening, of making their
    wants and their needs understood, are often impossible. For the
    individual who has vertigo, or the person who finds himself or herself
    suddenly unable to hear, the days are challenging. For those who cannot
    speak without stuttering or for those who are unable to express ideas
    clearly after suffering a stroke, for those who cannot use their voices
    to talk with a friend on the phone due to the devastation of throat
    cancer--each day is challenging. The days are challenging for the child
    who has autism. They are also a challenge for the individual who cannot
    participate in activities because his or her tinnitus has become
    overwhelming. For an older person a loss of balance can result in falls
    and fractured bones, and a loss of hearing results in isolation. For
    the young child who begins a struggle with language, that if not for
    intervention, will be a lifelong struggle--communication disabilities
    pose a constant challenge. NIDCD made important progress in the
    disorders of human communication this year and has identified new
    targets, new tools and new teams for accelerating discovery in fiscal
    year 1999.
                           new tools: sensory imaging
        In reviewing the progress of the past year, the advances made in
    human communication research are frequently based upon new tools, new
    targets and new teams of scientists looking at research in novel ways.
    For example, we now have the ability to see the brain at work during
    human communication through the use of powerful imaging tools. Much of
    the human brain is used for hearing, balance, voice, speech and the
    manipulation and production of language, as well as the ability to
    smell and to taste.
               imaging provides first objective view of tinnitus
        Having the ability to image brain activity patterns during various
    communication events involving stuttering, aphasia, tinnitus, and
    American Sign Language is revolutionizing our understanding of normal
    and disordered processes of human communication. In one of many
    remarkable advances this year, NIDCD scientists are able to visualize
    brain activity occurring with tinnitus, or ringing in the ears.
    Tinnitus has been extremely difficult to study without an objective
    model as it is associated with virtually every kind of hearing loss.
    These studies provide ground-breaking information about the nature of
    tinnitus, which will hopefully lead to improved strategies for
    diagnosis and treatment for the millions of Americans challenged with
    the incessant or intermittent audiotory sensation that is tinnitus.
                    sensory hair cell regeneration progress
        NIDCD-supported scientists are determining the properties of unique
    sensory cells of the inner ear called ``hair cells.'' [Exhibit 1:
    Sensory Hair Cells] These cells are critical for converting mechanical
    energy from sound or motion into electrochemical signals sent to the
    brain. Loss of hair cells is frequently the cause of hearing impairment
    and balance disorders. NIDCD-supported scientists are studying the
    molecular mechanisms underlying hair cell regeneration in animal model
    systems with the ultimate goal of using this information to restore
    hair cells in individuals with hearing impairment and balance
    disorders.
                       cochlear implants restore hearing
        In a different way, NIDCD scientists are trying to restore hearing
    through support of the development of the cochlear implant. The
    cochlear implant is a sensory neural auditory prosthesis that improves
    economic and social outcomes for post-lingual hearing impaired
    individuals. [Exhibit 2: Cochlear Implant and Figure A: Inner ear and
    cochlear implant] Here is a modern cochlear implant. Let me show you
    how it works. Part of it is surgically implanted within and behind the
    ear and the other components are worn. The implant bypasses the
    nonfunctioning hair cells in the cochlea and stimulates the auditory
    neural pathway. The prosthesis also includes a voice processor that has
    been designed to sample and convert sound at high speed and through a
    brilliant speech processing strategy. As an indication of how well this
    implantable prosthesis works, many who become suddenly deaf in mid-
    career are now able to remain in their jobs. These individuals are able
    to use the telephone again after learning to use the implant through
    rehabilitation training.
         early identification of deaf and hard of hearing infants and
                            development of language
        NIDCD has continued to investigate the development of language,
    signed or spoken, in children who are deaf or hard of hearing. NIDCD-
    supported scientists have shown that the first six months of life
    represent a crucial period for subsequent development of language
    either spoken or signed. A number of states are implementing universal
    newborn hearing screening which begins with a test for auditory
    function very soon after birth. In 1998, NIDCD-supported scientists
    will complete a five-year study showing that two screening methods,
    measurement of otoacoustic emissions and auditory brainstem responses,
    can be used to accurately identify these deaf and hearing-impaired
    newborns. These research results will provide much needed guidance for
    implementing universal newborn hearing screening.
                 progress in understanding olfactory reception
        The olfactory receptor gene family has about 1,000 members. More
    than five years ago, scientists discovered this large, multi-gene
    family, but had difficulty proving that these receptors responded to an
    odorant. An NIDCD-supported laboratory has shown that a member of the
    multi-gene family first identified as encoding a putative odorant
    receptor does indeed code for a protein that is capable of specific
    odor binding leading to a physiological response. Using a recombinant
    adenovirus, scientists were able to direct expression of a particular
    receptor gene in an increased number of rat olfactory neurons.
    Electrophysiological recording showed that increased expression of a
    single olfactory receptor gene increases odor and sensitivity to a
    small subset of odorants. These studies provide the basis for
    additional research that will correlate olfactory receptor structure
    with odorant responses.
          new approach for children with specific language impairment
        NIDCD has also made progress in studying specific language
    impairment (SLI) in hearing children. Specific language impairment, or
    SLI, is a deficit in language acquisition found in the absence of other
    cognitive impairment, and is present in about 8 percent of American
    school age children. SLI is a common cause of poor academic performance
    and frustration with learning. For a long time the focus of research
    was upon language and language strategies. Within the last few years,
    however, NIDCD-supported scientists have determined that SLI is often
    caused by a specific inability to process rapidly changing auditory
    information, such as occurs in some normal human speech. These findings
    will allow a more precise diagnosis of SLI, and suggests new
    intervention strategies to help children with SLI.
       molecular genetics collaboration provides key to form of hearing
                                   impairment
        Molecular genetics is revealing genes involved in many disorders of
    human communication. The search for hearing impairment genes is greatly
    facilitated by the timely, collaborative information exchange among
    different NIH Institutes working with a common purpose. For example,
    when a gene for a syndrome consisting of hearing impairment coupled
    with thyroid abnormalities was identified by a National Human Genome
    Research Institute scientist, this information was shared with NIDCD
    intramural investigators. The NIDCD scientists used the information to
    show that different mutations in the same gene also causes recessive
    non-syndromic hereditary hearing impairment in some families.
         improved understanding of the cause of recurrent otitis media
        As every parent knows, otitis media or middle ear infection, is the
    most frequent reason that a sick child visits either emergency rooms or
    physicians' offices, and the estimated cost of treating otitis media is
    $5 billion a year. Otitis media appears to be increasingly resistant to
    conventional antibiotic therapy. One of the most difficult aspects of
    treating otitis media is that relapses often occur within several weeks
    of antibiotic treatment. This clinical problem was difficult to
    explain, since most middle ear effusions showed no evidence of
    bacterial infection when cultured. Using a molecular biology technique
    (polymerase chain reaction assays), NIDCD scientists were able to
    detect the presence of bacterial mRNA in a significant number of
    culturally sterile middle ear effusions. This established the presence
    of viable organisms in some culture-negative Otitis Media with
    Effusion. Scientists believe that these elusive bacteria exist in
    biofilms, a kind of bacterial community that contains intact but
    indolent organisms deep within the film and away from antibiotics.
    Otitis media may serve as an ideal model for studying the role of
    biofilms in other recurrent infectious disease.
                      new teams: velocardiofacial syndrome
        In addition to new tools and new targets, new teams of scientists
    are providing collaborations for progress. NIDCD is convinced that
    multidisciplinary teams of scientists working together will be most
    effective in understanding the basis for human communication disorders.
    The NIDCD has already observed the benefit of this kind of
    collaboration. Velocardiofacial syndrome (VCFS) is a genetic disorder
    resulting in cardiac malformation and cleft palate, which has direct
    impact upon human communication skills. A team of NIDCD-supported
    scientists including molecular biologists, human geneticists,
    otolaryngologists, and cardiologists are searching for the gene or
    genes that cause VCFS. They are also developing better tools for
    diagnosis and treatment. This multi-disciplinary team is a model for
    future partnerships among clinicians and scientists. NIDCD sees an
    opportunity to support similar teams who will work together to
    understand the biology and genetics of voice, speech, and language
    disorders, and translate this understanding into improved diagnosis and
    better intervention strategies.
         new nih collaborative teams: nidcd supports autism initiative
        NIDCD was pleased to cooperate on an important autism initiative.
    Autism is a common developmental disorder found in children, affecting
    as many as one child in 1,000. One of the most striking problems these
    children face is the inability to communicate with other people. NIDCD
    has joined three other Institutes (National Institute of Child Health
    and Human Development, National Institute of Mental Health and National
    Institute of Neurological Disorders and Stroke) to support research to
    identify the genes that underlie autism, as well as to develop more
    effective intervention strategies. In another collaborative effort,
    NIDCD is working at defeating cancer of the head and neck. Each year,
    tens of thousands of Americans develop cancer of the head and neck.
    Conventional treatment using surgery and radiation therapy is often
    less than fully effective and results in destruction of organs critical
    for human speech. Clearly, better treatment modalities are needed.
    NIDCD has partnered with the National Cancer Institute and the National
    Institute of Dental Research to conduct and support research to
    determine the molecular mechanisms critical for the pathogenesis and
    progression of these malignancies. Cancer of the head and neck is
    unusual in that the scientist can watch the progression, remission or
    treatment effectiveness directly. In addition, these three institutes
    will work together to translate these basic scientific discoveries into
    more effective treatment options, sparing organs critical for human
    communication.
                 nidcd collaborates for hearing aid improvement
        NIDCD is collaborating with the Department of Veterans Affairs and
    the National Aeronautics and Space Administration to improve hearing
    aids and sponsored a workshop to showcase technologies existing in
    Federal laboratories to facilitate transfer of those technologies that
    could improve the function of hearing aids. NIDCD looks forward to
    funding applications from multidisciplinary collaborations designed to
    improve speech signal processing for hearing aids.
                                    new plan
        The pace of biomedical research advance is accelerating. To stay
    ahead, NIDCD is launching an accelerated planning process that will
    seek the collective ideas of the scientific community as to where the
    greatest need and opportunity lie in human communication research. New
    tools, new targets, and more importantly, new teams of investigators
    will be needed to rapidly and effectively seize the remarkable
    opportunities before us. We look forward to expanding our understanding
    of the biology and genetics of human communication disorders that
    affect 46 million Americans, and translating that knowledge into better
    strategies for diagnosis, early intervention and treatment. Thank you.
        My colleagues and I will be happy to respond to any questions you
    may have.
                                     ______

                     Prepared Statement of Steven E. Hyman
        Mr. Chairman and Members of the Committee: The President in his
    fiscal year 1999 budget has proposed that the NIMH receive $701.8
    million, an increase of $52.4 million over the non-AIDS portion of the
    fiscal year 1998 appropriation. Including the estimated allocation for
    AIDS in both years, total support proposed for NIMH is $809.7 million,
    an increase of $59.5 million over the fiscal year 1998 appropriation.
    Funds for NIMH efforts in AIDS research are included within the Office
    of AIDS Research budget request.
                 excessive disability stems from mental illness
        Mental illness is a serious burden for the American people and for
    the entire world. Data from the landmark Global Burden of Disease study
    sponsored by the World Health Organization, the World Bank, and the
    Harvard School of Public Health clearly establishes the enormous
    contribution of brain disorders to disability. Iin developed countries
    such as the United States, four of the leading ten causes of disability
    are mental disorders. As Figure 1 shows, these four are unipolar major
    depression, schizophrenia, manic depressive illness and obsessive
    compulsive disorder. Also on this list, however, are alcohol use,
    dementia, stroke, and drug use. When one adds these conditions to the
    four mental disorders that I mentioned, eight of the ten leading causes
    of disability are seen to be brain and behavioral disorders. In the
    United States, the leading cause of disability is unipolar major
    depression, a serious disorder that affects 5 percent of Americans at
    some point in their lives.
        Serious depression often begins early in life, and reoccurrences
    throughout life are the rule. While the popular press recently has made
    much about the widespread use of antidepressants in the U.S., we should
    not be misled into thinking that the extent of use is evidence that all
    cases of major major depression are identified accurately and treated
    appropriately. Indeed, all available data tell us otherwise. Despite
    remarkable strides in developing treatments for depression, which
    compare favorably with treatments for almost any other chronic
    affliction of human kind, we are still unable to achieve full
    remissions or prevent recurrences in a disturbing fraction of
    sufferers. Also, the age of typical first onset of major depression
    vividly illustrates why mental disorders contribute so much to the
    burden of disability in the United States and worldwide. Mental
    disorders often begin early in life--if not in childhood, then most
    often in young adulthood, often at a time when a young person is just
    completing his or her education and society has a maximal investment in
    that young adult's future productivity.
        With schizophrenia, too, and other severe disorders, again we have
    made remarkable recent progress in the palliation of symptoms. Still,
    it is the rare and exceptional individual with this illness who attains
    the level of independence and productivity that they would have
    achieved but for the onset of illness. These facts underscore a point
    that I make often but which, in the face of continuing widespread
    misunderstanding and stigma in our society, bears repetition. Mental
    disorders are real brain disorders, they are diagnosable, and we have
    treatments that make an extraordinary difference in the lives and
    productivity of many of the victims. Although research on mental
    disorders has much yet to accomplish, we have made encouraging progress
    in understanding and developing treatments, particularly for the most
    severe forms of illness. Unfortunately, this progress may be overlooked
    given the tendency of the popular media and even some mental health
    professionals to conflate the kind of mental stress and distress which
    we all suffer intermittently with serious mental illness.
        Let me turn from this discussion of the burden of mental illness to
    two examples of progress that have been made during the last year, one
    in the area of basic science, and one in the clinical realm.
                mechanisms of cellular memory in mental illness
        On prior occasions, I have had opportunity to speak to you about
    the importance of genetic vulnerability in the production, or origins,
    of mental illness. Today, I would like to describe to you how the brain
    records experience in a way that contributes not only to the formation
    of normal memories of many types but which can also contribute to the
    onset and maintenance of illness in genetically vulnerable individuals.
    Let me begin by noting that the hundred billion or so nerve cells in
    our brains each may make thousands of connections with other nerve
    cells. These connections, which are called synapses, are the
    fundamental units, or sites, of information transfer. Whenever we
    remember something, whenever we record an experience in our brains, the
    physical structure of our brains is altered. We are learning that
    memory is the result of the physical changes in these synaptic
    connections! When we learn, the connection between some nerve cells is
    strengthened while connections between others are weakened. Research
    funded by several NIH Institutes, including NIMH, has revealed that
    structural changes that occur at the synapse when we learn are mediated
    by complex but highly orchestrated patterns of molecular change. Using
    a variety of animal models, including mice with experimentally altered
    genes, we have learned many details about the precise molecules that
    are involved in the recording of different kinds of memory, including
    explicit, conscious memories. What has remained elusive, however, has
    been the ability to correlate actual learning due to experience with
    its major physiologic signature of increased synaptic strength, a
    signature which goes by the name of long-term potentiation or LTP.
        Several months ago, two separate research groups provided evidence
    for this long suspected correlation between increased synaptic strength
    and a behaviorally significant form of memory. This discovery was made
    not with the kind of memory associated with thinking or cognition,
    however, but with the memory associated with emotional experience. This
    important insight into mechanisms by which experience alters brain
    structure occurred during the course of investigations of learned
    fear--specifically, its neurobiologic correlates in a part of the
    brain, the amygdala, that processes emotion. Figure 2 illustrates the
    information available through the use of functional magnetic resonance
    imaging, or fMRI. This image vividly represents activation of the
    amygdala in response to pictures that are designed to elicit negative
    emotions, including fear. The data here show a composite increase in
    the magnetic resonance signal during the presentation of negative
    pictures, when compared with neutral pictures. Knowing how memories of
    fear are coded in the brain represents significant progress on the path
    toward a fuller understanding of normal brain function; for our
    purposes at NIMH, it also is a very important step on the path to
    understanding how panic attacks (which are experiences of spontaneous,
    overwhelming fear) lead to the disabling constriction of life which
    goes by the name of agoraphobia; similarly, the information already has
    shed light on the means by which overwhelming trauma often leads to
    long-term symptoms that may disable a person in many domains of life.
    Indeed, knowledge about the role of memory in emotional processing may
    be a valuable step toward understanding the severe anxiety symptoms
    that often occur in major depression. Most importantly, the discovery
    suggests specific strategies for developing novel treatments for each
    of the conditions I have listed. For one, the discoveries permit us to
    focus neuroimaging tools on the human brain with the aim of obtaining
    increasingly precise pictures of what goes wrong in the brain in mental
    illness. In addition, knowing precisely where in the brain information
    processing events occur and the mechanism by which they are recorded
    may permit us to develop highly targeted treatments.
                    research focus on clinical interventions
        Even as we continue to make fundamental progress in understanding
    brain function and dysfunction, we are embarked on an ambitious program
    of clinical research with the goal of improving the lives of patients
    with mental disorders. As part of a reorganization of NIMH's extramural
    programs that we undertook last year to revitalize the Institute's
    attention to mental illness in the context of new science, I created a
    new funding division that will focus exclusively on our public health
    mission of improving treatment and prevention interventions. Given the
    pace of basic science, accompanied by new attention to
    ``translational'' research that seeks to apply fundamental knowledge of
    brain mechanisms to clinical uses, I believe that new treatments will
    become available at an increasing pace. We must ensure that such
    treatments find their appropriate place in clinical practice. Thus, an
    important challenge for NIMH, which we address principally through our
    new Division of Services and Intervention Research, is to find out what
    treatments work in children, in adults, in the elderly, and the
    circumstances or conditions under which they can be delivered most
    effectively. This Division also disseminates information to the public
    and to health care providers on proven treatments for mental illness.
            advances and challenges in treating childhood depression
        I would like to highlight a study that shows progress but at the
    same time points to the need for continued research. Last November,
    NIMH-funded investigators reported on a major clinical trial that
    documented the efficacy of the antidepressant, fluoxetine (Prozac), in
    children. This well-conducted trial demonstrated convincingly that
    pharmacologic treatments are indeed efficacious in children, as
    measured by stringent standards of clinical outcome, safety, and
    tolerability of the medication. The medication clearly worked but, at
    the same time, the response rate was not as high in children as it is
    in adults. This reduced efficacy is a matter of concern since older,
    so-called tricyclic antidepressants have not proven efficacious in
    children. Thus, while we have one proven treatment, the development of
    novel, more effective treatments, including psychotherapies
    specifically designed for children, remains an urgent priority. We must
    also examine why we so often fail to identify children with depression
    and how children gain access to treatment. And, drawing on our
    capacities to look at very fine brain structures, we must study very
    carefully the impact of both depression and antidepressant treatments
    on the developing brain.
                            nimh research priorities
        What are NIMH's priorities for the coming year? A wealth of
    scientific opportunities forces us to be very judicious in selecting
    areas for special focus and investment. In addition to modernizing and
    expanding the field of childhood mental disorder research--a task that
    entails attention to research training needs--and supporting clinical
    trials for children, an important priority is clinical trials of new
    treatments for schizophrenia. Several fundamentally new medications for
    schizophrenia that were designed on the basis of what we know about the
    neurobiology of the illness are coming onto the market and it is
    imperative that we address outstanding questions about their most
    appropriate use. Another priority is prevention research. Just last
    month, the Mental Disorders Prevention Research Workgroup, which under
    the aegis of the National Advisory Mental Health Council conducted an
    in-depth review of our portfolio, presented its final report. From the
    Workgroup's recommendations, the Institute will assign high priority to
    such under-researched areas as the prevention of suicide, with
    particular emphasis on suicide in older individuals.
        We continue to emphasize the search for genes that produce
    vulnerability to schizophrenia, manic depressive illness, early onset
    depression, and other mental disorders. The Genetics and Mental
    Disorders Research Workgroup of our Advisory Council has issued a
    concise list of recommendations in areas that extend from creating and
    analyzing the necessary large samples of DNA and clinical data from
    families with high rates of certain mental disorders, to fostering
    collaborations across NIH, to sponsoring new NIMH initiatives in the
    genetics of mental disorders. We have implemented or are in the process
    of implementing, these recommendations--guidance that I find very
    helpful as we grapple with the enormous difficulties posed by the
    complexity of genetic vulnerability to mental disorders.
        Research on brain development is a critically important priority
    for the Institute. While developmental neurobiology is a thriving
    field--and, indeed, I had occasion earlier this year to testify before
    the House subcommittee on issues of brain development and mental
    disorders--I am aware of important gaps in our knowledge base. Our
    progress in understanding emotional memory demands that we learn more
    about the development of those parts of the brain involved in
    processing emotion and integrating thought with emotion, brain regions
    that are critically involved in mental disorders. In partnership with
    the NINDS and several other NIH Institutes, we have initiated a
    project, called the Brain Molecular Anatomy Project, or B-MAP. The goal
    is to identify all genes that are expressed in the brain, using
    emerging gene discovery technologies. Knowing where genes are used in
    the brain is a first step in understanding what they do in cells and
    how they interact with other genes and environmental signals. This
    information will prove invaluable as we investigate the normal and
    abnormal changes that occur in the human nervous system at various
    stages of life.
        In accordance with our National Mental Health Advisory Council
    report on Basic Behavioral Science, we have launched an effort that
    will bring to bear the benefits of behavioral science on critical
    public health issues including prevention of mental disorders. AIDS is
    an urgent area in which NIMH-sponsored behavioral science research
    already has had a salutary effect. Behavioral research has much to
    offer in efforts to enhance treatment adherence and compliance and in
    the development of new psychotherapies, which we need particularly to
    tailor to children and older people, which is especially important
    given the value of psychotherapy as a complement to pharmacotherapy in
    many serious mental illnesses.
        Formidable gaps in our knowledge remain, but we have increasingly
    powerful tools to close them and make progress in the interest of
    Americans with mental illness.
        My colleagues and I will be pleased to respond to any questions you
    may have.
                                     ______

                     Prepared Statement of Alan I. Leshner
        Mr. Chairman and Members of the Committee: The President in his
    fiscal year 1999 budget has proposed that the National Institute on
    Drug Abuse receive $395.1 million, an increase of $35.3 million over
    the comparable 1998 appropriation. Including the estimated allocation
    for AIDS, total support provided for NIDA is $576.3 million an increase
    of $49.1 million over the fiscal year 1998 appropriation. Funds for
    NIDA efforts in AIDS research are included within the Office of AIDS
    Research budget request.
                              nida accomplishments
        I am pleased to report that during these historic times for
    science, the National Institute on Drug Abuse (NIDA) has had another
    year of exceptional accomplishment, as NIDA-supported researchers made
    enormous strides toward improved understanding, prevention and
    treatment of one of our Nation's most serious public health problems--
    drug abuse and addiction.
        We now know more about abused drugs and the brain than is known
    about almost any other aspect of brain function. New technologies and
    new knowledge have revolutionized our insight into the brain. I mean
    this in the most literal sense. Using functional magnetic resonance
    imaging (fMRI), we have moved beyond a single snapshot of a brain high
    on drugs to being able to actually look at the dynamic changes of the
    brain that occur as an individual takes a drug. We can observe the
    different brain changes that occur as a person experiences the
    ``rush,'' the ``high,'' and finally the craving of a commonly abused
    drug like cocaine.
        We are also using imaging technology to explore what neurochemical
    changes are occurring during addiction. As shown in Figure 1, using
    Positron Emission Tomography (PET) technology we can now see what
    tobacco smoking is doing to the human brain. Here you can see in the
    brain of the smoker a tremendous decrease in the levels of an important
    enzyme known to be responsible for breaking down dopamine, called
    monoamine-oxidase-A (MAO-A). This decrease in MAO-A actually results in
    an increase in dopamine levels. This may be a reason that smokers
    continue to smoke--to sustain the high dopamine levels, which result in
    the sensation of pleasure.
        At an even more refined level, NIDA-supported scientists have
    identified one of the critical brain proteins that mediates nicotine
    addiction. Scientists pinpointed the beta 2 subunit of the nicotinic
    cholinergic receptor as being essential to the process of nicotine
    addiction. Using bioengineering tools, these researchers produced a new
    strain of knockout mice which lack this important protein. In contrast
    to normal mice, mice without this receptor did not self administer
    nicotine, though they did take cocaine. This clearly demonstrates that
    the brain reward pathway thought to be common to all addictions remains
    intact, even though nicotine itself loses its pleasurable effect.
        These findings support a convergence of data which show that
    nicotine, just like cocaine, heroin and marijuana, all work to elevate
    levels of the neurotransmitter dopamine in the brain pathways that
    control reward and pleasure. It is this change in dopamine that we have
    come to believe is a fundamental characteristic of all addictions.
                       averting a methamphetamine crisis
        Dopamine activity is central to one of the country's most alarming
    emerging drug problems, methamphetamine abuse. The use of this highly
    addictive drug, once dominant primarily in the Southwest, is spreading
    rapidly across the country. As shown in Figure 2, just a decade ago
    methamphetamine was confined to relatively limited pockets of use in
    the West. It is now spreading through the mid-West and becoming an
    emergent new problem in previously ``untouched'' cities.
        This is of particular concern because of recent research
    demonstrating the neurotoxic effects of the drug. In non-human primates
    exposed to methamphetamine doses that are routinely used in human
    abusers, scientists have found profound effects on both the brain's
    dopamine and serotonin neurotransmitter systems. These long-lasting
    neurochemical effects are thought to be partly responsible for the
    severe behavioral abnormalities that accompany prolonged use of this
    drug. To avert a potential methamphetamine crisis, we need to develop
    effective medications to treat the addiction, as well as new tools such
    as anti-methamphetamine antibodies to be used by emergency room
    physicians to treat the growing number of overdoses.
        We are confident that we will be able to develop effective
    treatments for methamphetamine, just as we have for other serious drug
    addictions such as heroin and nicotine. We have effective addiction
    treatments in our clinical toolbox and countless others that are being
    tested, although admittedly not enough. We do already have methadone
    and LAAM (levo-alpha-acetyl-methadol) for opiate or heroin addiction,
    and will be seeking approval for both buprenorphine and buprenorphine
    combined with naloxone in 1998. For tobacco addiction, there are
    several nicotine-replacement therapies, such as the patch and gum, and
    several non-nicotine ones as well, such as bupropion (Zyban) that are
    readily available.
                              treating addictions
        We do not, yet, have a medication to treat cocaine addiction, which
    remains both a national need and a NIDA priority. But we do have
    encouraging news. We are about to launch our first ever large scale
    multi-center clinical trial for a cocaine medication. In designing this
    trial we are capitalizing on a body of current findings that suggest
    that medications consistently work better when they are used in
    combination with behavioral therapies. When we initiate the trial in
    the Fall we will add a standardized behavioral component to one of our
    most promising compounds, selegeline.
        NIDA hopes to expand upon this trial by launching a National Drug
    Treatment Clinical Trial Network to ensure that all potential addiction
    treatments are tested in real life settings. Our science has matured to
    the point where we can take a more systematic approach to rapidly and
    efficiently test the effectiveness of behavioral, psychosocial and
    pharmacological treatments in large-scale, multi-site clinical trials.
        Although it can be done, addiction is not a simple disease to
    treat. Addiction is a chronic relapsing disease that results from the
    prolonged effects of drugs on the brain. It can affect every aspect of
    a person's life. This is why an individual's treatment program must
    address not only the individual's drug use, but also help restore their
    abilities to function successfully in society. The most effective
    treatment approaches must attend to all of addiction's biological and
    behavioral components.
        It is these kinds of research-based concepts and approaches that
    are most needed by the frontline clinicians who are facing the day-to-
    day realities of treating their patient's drug addictions. We know that
    we cannot just disseminate research findings through journal articles
    in the hopes that a busy treatment provider will have time to read,
    analyze and implement a particular finding. That is why we translate
    these findings in a way that is both useful and used by treatment
    providers at every level. Toward this end, NIDA is sponsoring a
    National Conference on Drug Addiction Treatment next month. At this
    conference, NIDA will release the first two in a series of treatment
    manuals developed to help drug treatment practitioners provide the best
    possible care that science has to offer. The manuals take
    scientifically-supported therapies for addiction and offer detailed
    guidance on how to implement them in real-life practice settings.
                        replacing ideology with science
        Undertakings like these exemplify our commitment to sharing
    research findings with the broadest community possible. An example of
    the positive impact that our research findings can have on society is
    seen in the recent efforts by many of our criminal justice colleagues
    to provide treatment to prison populations. NIDA-funded scientists have
    demonstrated that comprehensive treatment of drug-addicted prison
    inmates, when coupled with treatment after release from prison, reduces
    by 70 percent the probability of their being rearrested and the
    likelihood they will return to drug use.
        Other important societal issues were addressed through a number of
    major conferences that NIDA supported such as our National Heroin
    Conference, and NIH's Consensus Development Conference on Effective
    Treatment of Heroin Addiction. Additionally, we are continuing to take
    our science to the true beneficiaries of our research endeavors--the
    American public. We joined with local partners across the country to
    sponsor a series of Town Meetings. Our April Town Meeting with the
    citizens of Boston will coincide with the March 29th premier of an
    outstanding five part series on addiction that Bill Moyers and his
    staff at National Public Television have produced. NIDA has provided
    substantial technical assistance in the development of this series and
    its accompanying educational materials.
        We at NIDA want to replace ideology about drug abuse and addiction
    with science. We also want to provide the public with the necessary
    tools to play an active role in preventing drug use in their own local
    communities. Last year I showed you what has now become one of our most
    popular publications--``Preventing Drug Use Among Children and
    Adolescents''. This user-friendly guide of principles summarizes
    knowledge gleaned from over 20 years of prevention research. Over
    150,000 copies have been circulated to communities throughout the
    country as they evaluate existing prevention programs and develop new
    ones.
               preventing drug use among children and adolescents
        Understanding what makes a person more susceptible to a potential
    drug problem, and progression from first drug exposure to developing
    addiction, will enable us to much more effectively target our
    prevention efforts. Just as important, however, is the identification
    of protective factors, those behaviors, environments and activities,
    that seem to enable many people to avoid drug use altogether, or get
    right back on track if they falter or relapse during treatment.
        We are also supporting research that focuses on the special needs
    of older children and adolescents who have been placed in juvenile
    court detention programs, dropped out of school, or have become
    homeless. It is particularly important that we find effective
    prevention and treatment approaches for these special populations in
    light of a 1998 study which found that 13-19 year-olds who have both
    conduct and drug abuse problems, already are meeting standard adult
    criteria for marijuana dependence.
        We are also continuing to study the effects of prenatal drug
    exposure. We are finding that some, though not all, of the cohorts of
    crack-exposed babies now entering elementary and middle school may be
    significantly, although perhaps subtly, affected. Because these effects
    can be subtle and expressed only as children develop, long-term follow-
    up is needed. Longitudinal studies will also enable us to examine
    whether prenatally drug-exposed children are more vulnerable, or at
    increased risk for drug abuse in childhood and adolescence.
                           genetics of drug addiction
        Determining who is at most risk for addiction will be a critical
    research area addressed through NIDA's new Genetics of Addiction
    Initiative. A culmination of NIDA-supported family and twin studies,
    coupled with neurobiological and molecular breakthroughs, has provided
    us with the confidence to more aggressively explore the role of
    genetics in drug addiction. NIDA's multi-faceted approach in this
    endeavor will include the use of genome-wide scans, linkage and
    association studies in humans, and the continuation of animal studies
    to test and confirm the role of new candidate genes.
                 government performance and results act [gpra]
        NIDA's activities are covered within the NIH-wide Annual
    Performance Plan required under GPRA. The fiscal year 1999 performance
    goals and measures for NIH are detailed in this performance plan and
    are linked to both the budget and the HHS GPRA Strategic Plan which was
    transmitted to Congress on September 30, 1997. NIH's performance
    targets in the Plan are partially a function of resource levels
    requested in the President's Budget and could change based upon final
    Congressional Appropriations action. NIH looks forward to Congressional
    feedback on the usefulness of its Plan, as well as to working with
    Congress on achieving the NIH goals laid out in this Plan.
                   understanding the complexity of addiction
        All of these exciting research efforts are moving us closer to
    truly understanding the complexity of addiction. It is only through a
    multi-disciplinary approach will we be able to unravel the remaining
    mysteries of addiction. NIDA will continue to use the most
    sophisticated research equipment and techniques, and seize all
    scientific opportunities that present themselves to ensure that no more
    lives are lost to what is ultimately both a preventable and, if not
    prevented, a treatable disease. I will be happy to answer any questions
    you may have.
                                     ______

                       Prepared Statement of Enoch Gordis
        Mr. Chairman and Members of the Committee: The fiscal year 1999
    President's budget request for the NIAAA is $230,243,000, an increase
    of $17.5 million over the fiscal year 1998 appropriation. Including the
    estimated allocation for AIDS, total support proposed for NIAAA is
    $245,730,000, an increase of $18.6 million over the fiscal year 1998
    appropriation. Funds for NIAAA AIDS research are included in the Office
    of AIDS research budget request.
                             problem of alcoholism
        Alcoholism is one of our country's most serious and persistent
    health problems. Approximately two-thirds of all American adults (ages
    18 and older) drink an alcoholic beverage during the course of a year
    \1\. At least 13.8 million American adults develop problems from
    drinking.\2\ Our young people, for whom alcohol remains the number one
    drug of abuse, also are at risk for developing alcohol-related
    problems. Recently published data from NIAAA's National Longitudinal
    Alcohol Epidemiologic Survey, which assesses lifetime risk for alcohol
    use disorders (alcohol abuse and alcohol dependence), provides
    convincing evidence that the younger the age of drinking onset, the
    greater the chance that an individual at some point in his or her life
    will develop a clinically diagnosable alcohol use disorder. As shown on
    Chart 1, young people who began drinking before age 15 are four times
    more likely to develop alcohol dependence during their lifetime than
    those who began drinking at age 21.
    ---------------------------------------------------------------------------
        \1\ Midanik LT, Room Robin. The Epidemiology of Alcohol
    Consumption. Alcohol Health & Research World 1992, 16:3:183-190.
        \2\ Grant BF, Harford TC, Dawson DA, Chou P, Dufour M, Pickering
    RS. Prevalence of DSM-IV Alcohol Abuse and Dependence--United States,
    1992 Alcohol, Health & Research World 1991, 183:243-248.
    ---------------------------------------------------------------------------
        The health problems caused by alcohol use include damage to the
    brain, liver, gastrointestinal tract, and heart. The relative risk for
    many alcohol-related illnesses rises along with the quantity of alcohol
    consumed daily \3\. Other consequences of alcohol use include crashes
    and other injuries, domestic violence, neglect of work and family, and
    costs to society associated with police, courts, jails, and
    unemployment. Altogether, the consequences of alcohol abuse and
    dependence are estimated to cost the nation $100 billion \4\ and
    100,000 deaths a year \5\.
    ---------------------------------------------------------------------------
        \3\ Boffeta P, Garfinkel L. Alcohol Drinking and Mortality among
    Men Enrolled in an American Cancer Society Prospective Study.
    Epidemiology 1990, 1:5:342-348.
        \4\ Rice DP. Ninth Special Report to the U.S. Congress on Alcohol
    and Health. DHHS, PHS, 1997 pg 388.
        \5\ National Institute on Alcohol Abuse and Alcoholism. Eighth
    Special Report to the U.S. Congress on Alcohol and Health. NIH Pub. No.
    94-3699. Bethesda, MD: National Institutes of Health, 1993.
    ---------------------------------------------------------------------------
                              promise of research
        NIAAA's research is guided by one fundamental purpose-to develop
    the necessary knowledge to effectively prevent and treat alcohol abuse
    and alcoholism and their related consequences. Through its nurturing of
    the Nation's alcohol research agenda, NIAAA makes an implicit promise-
    that science will yield practical applications that will help those who
    suffer as a result of alcohol abuse and alcoholism. In support of this
    mission, NIAAA conducts and supports a broad-based program of
    biomedical and behavioral research in areas such as the epidemiology of
    alcohol use, abuse, and dependence; alcohol's effects on the brain; the
    genetics of alcoholism, alcohol toxicology; the benefits to health of
    moderate drinking; the effects of public policies on preventing alcohol
    use disorders, and clinical trials to develop or evaluate alcoholism
    treatment therapies.
        The activities of the NIAAA are covered within the NIH-wide Annual
    Performance Plan required under the Government Performance and Results
    Act (GPRA). The fiscal year 1999 performance goals and measures for NIH
    are detailed in this performance plan and are linked to both the budget
    and the HHS GPRA Strategic Plan which was transmitted to Congress on
    September 30, 1997. NIH's performance targets in the Plan are partially
    a function of resource levels requested in the President's Budget and
    could change based upon final Congressional Appropriations action. NIH
    looks forward to Congress' feedback on the usefulness of its
    Performance Plan, as well as to working with Congress on achieving the
    NIH goals laid out in this Plan.
                      pathway from research to application
        While the promise of research is that science will yield practical
    applications, some areas of investigation will require a longer time to
    fulfill the promise than others. For example, the knowledge gained from
    clinical trials is almost immediately available for application to
    alcoholism treatment programs whereas complex basic studies
    investigating alcohol's effects on the brain and the relationship of
    these effects to behavior, will take longer to develop information that
    can be used to design new medications. Chart 2 shows the relative time
    frames in which various areas of research may be expected to yield
    practical applications and will serve as the basis for my further
    remarks.
    Clinical Trials
        NIAAA-supports clinical trials designed to develop new and evaluate
    existing treatments. Such trials led to the Food and Drug
    Administration's approval of the medication naltrexone as an adjunct to
    traditional treatment. A product of neuroscience research, naltrexone
    is the first medication since 1949 to be approved to help maintain
    sobriety after detoxification from alcohol. NIAAA currently is
    conducting clinical trials to determine which groups of patients are
    most responsive to naltrexone and the benefits and side effects of
    long-term use. Based on evidence that naltrexone, used in combination
    with verbal therapy, can prevent relapse more than standard verbal
    therapy alone, NIAAA is supporting clinical trials to evaluate the
    effectiveness of combined behavioral/naltrexone therapy to
    substantially reduce the current 50 percent relapse rate among those
    treated for alcoholism.
        Two potential medications on the horizon are acamprosate and
    amperozide. Acamprosate has been clinically tested and used
    successfully for relapse prevention in Europe. After extensive
    consultations with the NIAAA, the pharmaceutical industry has launched
    clinical trials of acamprosate in the U.S. Because of its hypothesized
    mode of action, Amperozide, which has been shown to successfully reduce
    alcohol consumption by primates, is expected to be effective in
    treating human alcoholism. NIAAA also plans to test amperozide in
    collaboration with the Veterans Administration.
        Two recent clinical studies demonstrate that it may be possible to
    intervene inexpensively with heavy drinkers before they progress to
    alcoholism. In the first randomized trial of this kind, investigators
    provided direct evidence that brief physician intervention with problem
    drinkers can decrease alcohol use and health resource utilization.
    These studies are important because detecting alcohol abuse at an early
    stage of development and prior to the onset of alcoholism has both
    practical and medical benefits.
    Neuroscience
        The complex mental processes that govern drinking behavior are
    carried out in the brain by many independent interactions among neural
    systems comprised of neurotransmitters and their receptors. Two main
    processes involved in drinking are being studied: positive
    reinforcement, or the pleasurable feedback an individual receives from
    alcohol use; and negative reinforcement, the discomfort associated with
    being deprived of alcohol. In positive reinforcement, alcohol appears
    to interact with the brain's ``pleasure'' or reward system to stimulate
    continued use. Negative reinforcement, which appears to involve
    separate neural systems, may result from the brain's chronic exposure
    to alcohol. Such exposure causes the brain's cells, or neurons, to
    adapt to the presence of alcohol and to ``miss it when it is not
    present.'' Clarification of these processes will enable scientists to
    develop specifically designed medications tailored to individual
    physiology. The study of the mechanisms of action of the two
    medications currently used to prevent relapse--naltrexone and
    acamprosate--is informing this effort. These two drugs appear to work
    through different mechanisms to achieve the same effect; naltrexone by
    blocking positive reinforcement and acamprosate by acting on negative
    reinforcement.
        Alcohol scientists are using advanced neuroscience techniques
    (e.g., patch clamping, imaging, electrophysiology, neurochemistry, and
    cognitive neuroscience) to understand the fundamental phenomena
    associated with alcoholism, i.e., physical dependence, tolerance,
    impaired control over drinking, and the craving for alcohol. However,
    investigating the specific effects of alcohol is challenging; alcohol
    interacts with and alters the activities of many different brain cell
    components and, consequently, may have diverse and profound effects on
    nerve cell function. For example, alcohol can affect various
    neuroreceptors causing the neuron to react by increasing or decreasing
    its usual functions. These receptors are divided into subunits. The
    different ways in which subunits combine affects the brain's
    sensitivity to alcohol, and quite possibly, the sensitivity to alcohol
    among different individuals. How an individual's pattern of subunits
    affects his or her initial sensitivity to alcohol and how alcohol
    influences the way in which subunits combine to affect sensitivity are
    both under study. Transgenic animals have been bred with different
    brain receptor compositions to determine which constitute those that
    are most vulnerable to alcohol. As we learn which subunit variations
    account for addiction, we will be able to develop new medications
    designed to interfere in the addictive process by acting on specific
    brain chemicals.
    New Approaches to Medications Development
        Medications have been traditionally developed either by lucky
    accident, or by finding new uses for established medicines. We are now
    moving into a new era in which our understanding of the shape and
    structure of important molecules in the body is dramatically improved
    with techniques such as crystallography and nuclear magnetic imaging.
    With the help of computers and powerful methods of combinatorial
    chemistry to create hundreds of new potential compounds rapidly, it
    will become increasingly possible to design new medications
    specifically to fit known biological structures and alter their
    function. The crystal structure of the alcohol metabolizing enzyme,
    aldehyde dehydrogenase seen in Chart 3, was reported by NIAAA grantees
    this year. It is a fine example of how new insight into structure
    explains function, and is a prototype of what future medication
    development will exploit.
    Genetics
        There is ample evidence that a significant portion of the
    susceptibility to alcoholism is inherited. Genetics researchers are now
    actively engaged in identifying the genes that confer this
    vulnerability and developing ways to apply this information to clinical
    populations. The task is difficult because alcoholism is likely to be
    polygenic, with each gene contributing only a portion of the
    vulnerability. The search for the relevant genes is now actively
    pursued in several settings.
        Through the Cooperative Study on the Genetics of Alcoholism (COGA),
    a multisite study at six centers, hundreds of probands and families
    have been interviewed, a complex computerized pedigree database has
    been incorporated, and statistical genetics and molecular biology
    techniques are being applied to ``informative'' families. Phenotypic
    markers shown previously to be relevant to alcohol are incorporated in
    the study, including biochemical markers, evoked potential responses,
    and tests of initial sensitivity to alcohol (the latter being a strong
    predictor of later alcoholism). COGA scientists have recently located
    chromosomal ``hot spots,'' areas of potential linkage of alcohol
    dependence, on chromosomes 1, 7, 8, and 16. Also, the possibility of
    protective factors is suggested by possible linkage on chromosomes 4
    for resilience to alcoholism. In addition, locations for the genes
    involved in the expression of evoked potential responses, a high-risk
    marker for alcoholism, have been tentatively identified. Because
    replication of genetic findings in independent populations is essential
    for their verification, NIAAA has funded two new genetic linkage
    studies. Although smaller in scale than COGA, the relative genetic,
    cultural, and phenotypic homogeneity of these studies' subject samples
    should enhance their likelihood of success.
        Once we know which proteins are coded by the genes for alcoholism,
    alcohol researchers will be able to study the effect of various
    combinations of neurochemicals on these proteins and design medications
    that are targeted specifically to interrupt those processes which
    result in the development of alcoholism.
                              where are we going?
        Research has diversified and consolidated our knowledge of alcohol
    problems. We will continue this progress into the new millennium by
    focusing on research to determine which aspects of the vulnerability to
    alcoholism are inherited; how genetic and non-genetic factors interact
    in the development of alcoholism; how biology and behavior interact in
    the development of alcohol use disorders; and by developing and testing
    new prevention and treatment and methods to reduce the risk for
    alcoholism, improve the chance for recovery and reduce the risk of
    relapse. NIAAA also will continue to pursue research aimed at
    preventing fetal alcohol syndrome, reducing drunk driving;
    understanding the effects of alcohol advertising on our nation's youth;
    improving adolescent alcohol treatment, and clarifying the health
    effects of moderate drinking.
        My colleagues and I will be happy to respond to any questions you
    may have.
                                     ______

                    Prepared Statement of Patricia A. Grady
        Mr. Chairman and Members of the Committee: The President in his
    fiscal year 1999 budget has proposed that the National Institute of
    Nursing Research (NINR) receive $62.4 million, an increase of $4.3
    million over the non-AIDS portion of the fiscal year 1998
    appropriation. Including the estimated allocation for AIDS in both
    years, total support proposed for NINR is $68.3 million an increase of
    $4.7 million over the fiscal year 1998 appropriation. Funds for NINR
    efforts in AIDS research are included within the Office of AIDS
    Research budget request.
        Nursing researchers are at the frontiers of science, building the
    foundation of knowledge for the nation's 2.5 million registered nurses,
    the largest health profession in our Nation, and for other providers of
    health care. Our research is not disease specific, nor is it dedicated
    to a particular age group or population. What nursing research does is
    ask questions that probe the very core of patients' and families'
    personal encounters with illness or its avoidance, perhaps to a more
    immediate, intense extent than other disciplines of science. We ask,
    for example, whether men and women respond differently to drugs used
    for pain relief. What kinds of information will help people reach a
    decision about genetic testing? What can be done to ease the symptoms
    of terminal illness and to help patients maintain their quality of
    life, dignity, and sense of control at the end of life? We are the
    front-line integrators of the science and insights that come from the
    multidisciplinary teams engaged in clinical and basic medical research.
    In recognition of this approach, we say nurses bring ``Life to Research
    and Research to Life.'' In other words, nurses bring patient issues to
    nursing researchers for study, and nursing researchers return important
    information and answers that are directly applicable to people's lives
    and health care.
                      nursing research makes a difference
        Let me give you some vivid examples of how nursing research makes a
    difference:
      --NINR funded a Spanish Arthritis Self-Management Program that is now
            being used by the California chapter of the National Arthritis
            Foundation. The National Arthritis Foundation plans to expand
            this program nationwide, and they have provided funds to adapt
            the materials for Chinese patients with arthritis. The
            investigator is developing similar programs in Spanish for
            other disorders, such as heart and lung diseases, and is
            working with a major national HMO to implement these programs.
      --Research funded by the Institute has shown, for the first time,
            that gender makes a difference in pain relief and that a
            painkiller that had little, or even no, effect on men provides
            women greater relief, with fewer side effects. This finding has
            launched a new awareness of the influence of gender on pain and
            its alleviation and has important implications for future drug
            development and therapy.
      --Nurse researchers have developed an assessment scale that can
            actually predict within several days upon admission which
            nursing home patients are likely to develop pressure ulcers, a
            condition that is painful and dangerous. This important finding
            enables nursing home staff to take early preventive action. The
            assessment technique has been incorporated into the
            ``Guidelines on Pressure Ulcers,'' published by the Agency for
            Health Care Policy and Research, which informs clinical
            practice.
      --Nursing research has developed a model for early hospital discharge
            that is successful in reducing the costs of Cesarean
            deliveries, hysterectomies, and the complications of diabetes
            in pregnant women. Even more importantly, patient satisfaction
            with the quality of care has increased and rehospitalizations
            have been reduced. The investigator is consulting with several
            HMO's to facilitate adoption of this model into their
            operations.
        Mr. Chairman, last October this subcommittee held a hearing on
    child health issues and asked a key question--What can be done to
    promote healthy lifestyles during childhood and the turbulent
    adolescent years that will continue throughout adulthood? Nursing
    investigators have found some important answers to this question as a
    result of their research. Let me cite an example that is particularly
    compelling--the Cardiovascular Health in Children (CHIC) project, first
    funded in 1990. Initial findings showed that an educational
    intervention conducted in 21 rural and urban elementary schools in
    North Carolina significantly reduced risk factors for cardiovascular
    disease in preadolescents. The issue then became how healthy habits
    learned through the intervention are sustained. To find out, the
    researchers are conducting a follow-up of these students for four
    additional years. The investigators are also testing the intervention
    in 6th through 8th graders to determine whether interventions at the
    elementary school or middle school levels are more effective. A key
    component of this study is the strong representation of minority
    students in the project--20 percent are African American. The
    investigators are now in discussion with the North Carolina school
    system to introduce the program more broadly. Since North Carolina lies
    in the middle of the Nation's heart disease and stroke belt, the impact
    of this program can be significant. The principal investigator is also
    working with her counterparts in Japan and France to compare
    cholesterol, obesity, and physical activity in children. Parts of her
    intervention will soon be replicated in elementary schools in the
    Kagamahari province of Japan, a rural area three hours from the city of
    Kyoto.
                        a focus on end-of-life research
        Let me highlight a particularly important area of research for the
    Institute that touches all of us--end of life. In 1997, NINR was
    designated by Dr. Varmus as the lead NIH Institute for palliative care
    research. NINR is the logical lead on this because of our broad span of
    research that encompasses people at all ages, from all populations, and
    who die from many different causes. The need for research in this area
    is clear. Advances in biomedical and behavioral research have greatly
    improved the length and quality of our lives. But what about the end
    phase of life? In this case, research and care issues associated with
    the inevitable experience of dying have not kept pace. Everyone wants a
    ``good death.'' Although our personal definitions of what this means
    may differ, the ultimate goal must be to make the transition from life
    to death as comfortable as possible, with reduced distress to the
    patient and families, leading to death with dignity.
        Health care professionals are trained to cure disease and to save
    lives, but at life's final phase, the issue becomes one of managing
    symptoms effectively. This is a specialty area of nurses and of
    particular interest to nurse researchers. Last September we cosponsored
    a scientific workshop on treating the symptoms in terminal illness and
    issued a program announcement in collaboration with NCI, NIAID, NIMH
    and OAM to stimulate further research in palliative care to ease pain,
    difficulty with breathing, delirium, weakness, nausea, fatigue, and
    depression. We also seek studies of ethical concerns--for example,
    controversies connected with honoring the dying person's wishes--and
    how to help patients and their families make decisions. We look forward
    to this challenge and to working with our NIH colleagues. We also look
    forward to reporting back to you next year about progress on this
    important health and social concern.
                      recent advances in nursing research
        Let me now turn to three recent research advances that promise to
    affect the way health care is provided. Telehealth technology extends
    nursing resources to remote areas and right into individual homes. We
    can save lives by increasing early detection of disease or disease
    complications; and we can reduce costs by decreasing visits to the
    doctor's office. A case in point is a home monitoring project involving
    lung transplant patients. We already know that most rejection occurs in
    the first year after a transplant. Early detection therefore becomes
    key to survival, and patients can play an active role. By using an
    electronic diary and spirometer monitoring device, patients at home can
    record measurements of pulmonary function, vital signs, and symptoms,
    which are then transmitted once a week to a data center for review by
    health care professionals. The frequency and accuracy of these reports
    enable immediate intervention to prevent organ failure. Our findings
    indicate that patient adherence is at 82 percent. This project
    currently monitors more than 100 lung transplant patients. The
    potential of the spirometer-monitoring device for other pulmonary
    conditions appears promising.
        Another advance is in the area of pain. Nurse researchers have long
    been active in this area. A new discovery challenges current practice
    and has important implications for surgical patients. Typically
    benzodiazepines, such as Valium, are used to sedate patients just prior
    to surgery. Our investigators have found, however, that Valium blocks
    the effectiveness of the morphine that patients receive later on to
    reduce pain during or after surgery. By combining a benzodiazepine
    antidote, in this case flumazenil, with morphine after surgery to
    counteract the effects of the earlier-administered Valium, patients
    experience greater pain relief without adverse side effects. This study
    adds important information to the increasing body of knowledge about
    the mix and timing of pain medications.
        Another finding has implications for expanding the usefulness and
    accuracy of electrocardiograms (ECG's). Traditionally, a 10-electrode
    ECG attached to various points on the body is used to detect heart
    abnormalities, but the device is cumbersome, particularly if continuous
    monitoring is required. Investigators tested a device with only 5
    electrodes to determine if it was as effective as the 10-electrode
    device. Results showed that in patients undergoing coronary
    angioplasty, both devices detected the presence or absence of
    ischemia--a deficiency of blood supply to the heart--in 150 of 151
    patients. The 5-lead device also showed the location of the ischemia in
    the heart muscle in 148 out of 151 patients. The convenience and
    accuracy of the 5-electrode model has potential uses in a variety of
    settings, and it promises much improved flexibility of use. Examples
    are when the patient must be monitored continuously and needs mobility,
    or when an ambulance needs the capability to transmit ECG information
    continuously to the hospital before the patient arrives.
                   areas of opportunity for research emphases
        A prominent characteristic of nursing research is its
    interdisciplinary perspective that is free of the boundaries of a
    particular disease, age group or technology. Collaborative efforts
    within NIH are an essential part of NINR activities, and our planned
    research directions for fiscal year 1999 reflect this emphasis. Let me
    describe briefly six of these areas that appear especially promising:
      --Stroke is the number one cause of adult disability. Its symptoms
            can be discouraging for the patient and difficult to manage for
            health care providers and family caregivers. NINR will solicit
            research to identify and test nonpharmacological approaches to
            the management of stroke, including helping stroke patients
            learn to care for themselves and helping family members
            strengthen their own caregiving skills.
      --We often take breathing for granted until disease, surgery, or
            other events interfere to make us uncomfortably, sometimes
            fearfully, aware of our need for the next breath. Mechanical
            ventilation provides relief, but the downside is the dangerous
            risk of inflammation, infection, and dependence on the machine.
            NINR plans a program announcement for multidisciplinary studies
            to address long-term ventilation issues, including quality of
            life, and ethical and cost considerations.
      --As discussed in the subcommittee's hearings last November on the
            role of the mind in healing and health, the relationship
            between behavior and the immune system, known as
            neuroimmunomodulation, is an important but nebulous area in
            need of clarifying research. NINR will solicit proposals to
            examine the impact of behavioral interventions on physical
            status and how altered immune function affects people's
            psychological state and willingness to change behaviors.
      --Although the U.S. infant mortality rate has decreased, the rate of
            low birthweight, typically premature births, has slowly
            increased. These babies are at risk for a multitude of physical
            and psychological problems, and account for a significant
            proportion of the annual health care expenditures for children.
            The National Center for Health Care Statistics reports that
            African Americans are over two times more likely to have poor
            pregnancy outcomes than whites, yet studies show economic and
            social conditions are not the cause. The challenge then becomes
            one of understanding the reasons for ethnic variations. An NINR
            initiative will focus on these and other issues that can inform
            prevention strategies for low birthweight in populations at
            risk. Since many health problems of adulthood have their roots
            in unhealthy behaviors in childhood and adolescence, the NINR
            plans to expand its prevention research in this area.
            Interventions at a younger age appear particularly critical.
            NINR will issue a program announcement to stimulate research
            that will reduce or prevent risky behaviors in young people,
            such as smoking, drug and alcohol abuse, and poor eating
            habits.
      --Resurgence and emergence of infectious diseases and bacterial
            resistance to antibiotics is a worldwide issue. In addition to
            increased surveillance, new antibiotics and research into the
            immune system, NINR will encourage research to understand
            better the effects of behavioral influences on adherence to
            medical treatment, diet, personal hygiene, and sexual behavior.
        In conclusion, I would like to stress that as we arrive at the 21st
    century, it is clear that health research, health care, and health
    choices are increasingly interdependent, and that nursing research will
    play a vital role in all three areas. A prominent private sector health
    care official, has said that the next decade will be the decade of the
    nurse. I agree. Scientifically validated methodologies, communication
    strategies, and effective interventions--coupled with a basic
    understanding of human nature and our Nation's diverse populations,
    will make a positive difference to the health and quality of life of
    the American people.
         Mr. Chairman, I will be pleased to answer any questions you might
    have.
                                     ______

                    Prepared Statement of Francis S. Collins
        Mr. Chairman and Members of the Committee: I am pleased to present
    the President's budget request for the National Human Genome Research
    Institute (NHGRI) for fiscal year 1999, a sum of $236,996,000, an
    increase of 10.4 percent over the fiscal year 1998 comparable
    appropriation. Including the estimated allocation for AIDS, total
    support proposed for NHGRI is $240,134,000. Funds for the NHGRI efforts
    in AIDS research are included in the Office of AIDS Research budget
    request.
                                 gene discovery
        This is my fifth opportunity to appear before this Committee. As
    Director of NHGRI, I am proud of its leadership in the U.S. Human
    Genome Project and its cutting-edge research program on the genetic
    analysis of disease. Now at the half-way mark, progress in the 15-year
    Human Genome Project, its impact on health research and even public
    policy has surpassed the most ambitious expectations.
        With Human Genome Project tools, it is possible to track down a
    disease-related gene even when nothing is known about the biochemical
    problems of the disease or how the gene works. This technique, based on
    identifying the position of a gene in the chromosome and then isolating
    it, was successfully used for the first time in 1986. Now, the
    increasing detail and quality of genome maps have reduced the time it
    takes to find a disease gene from years, to months, to weeks, to
    sometimes just days, and scientists are using the tools to discover
    dozens of disease genes each year. Increasingly, gene hunters are
    combining positional cloning techniques with a new ``gene map'' to make
    gene finding even easier and quicker. Constructed largely by scientists
    at NHGRI-supported research centers and the National Library of
    Medicine, the map has doubled in its detail since the first version was
    released two years ago. It now contains 30,011 gene tags, which may
    represent nearly half of all human genes. Disease-gene hunters now have
    about a 50 percent chance they will find an already characterized gene
    waiting for them in the chromosomal neighborhood they know is involved
    in a disease.
        The isolation of a gene for Parkinson's disease (PD) last year
    demonstrated the power of this new discovery method and showed
    conclusively that changes in DNA can cause PD in some families. Only
    two years ago, the National Institute of Neurological Disorders and
    Stroke held a workshop to explore using genetic approaches to
    understand PD. A team led by scientists in NHGRI's Division of
    Intramural Research (DIR) began large-scale genetic analysis of DNA
    from members of a large Italian family containing almost 600 people,
    more than 60 of whom have been diagnosed with Parkinson's. In nine
    days, NHGRI gene hunters mapped the gene to a region of chromosome 4,
    which contained approximately 100 genes. One of the genes in that
    interval had already been identified on the gene map and was known to
    encode a protein called alpha-synuclein. That gene was an excellent
    candidate for a Parkinson's disease gene because earlier research had
    already shown the protein builds up in brain cells of people with
    Alzheimer's disease, and people with PD have similar deposits. In just
    a few months, the researchers showed conclusively that an altered
    alpha-synuclein gene caused Parkinson's in the study families. Many
    have hailed this as the most significant advance in Parkinson's disease
    research in 30 years. Just ten days ago, a German research team used
    genome mapping tools to identify a new region on chromosome 2 that also
    appears to contain a gene that predisposes to Parkinson's. Some of the
    genes already known to exist in that region are providing excellent
    candidates for identification of the actual gene.
        At NHGRI, intramural scientists and their colleagues have made
    tremendous progress this year in identifying the genetic components of
    some common cancers. These include identification of an altered gene
    that can cause multiple benign endocrine tumors and a type of
    pancreatic cancer--a syndrome called multiple endocrine neoplasia type
    1 (MEN1), and a gene, called AIB1, linked to the growth and progression
    of breast cancer. DIR scientists and their collaborators this past year
    isolated a gene underlying the neurological disorder Niemann-Pick Type
    C (NPC), and other genes involved in rare diseases that shed light on
    normal cell function. A newly discovered gene called JAG1, for example,
    was shown to cause the rare childhood disease Alagille syndrome. JAG1
    has already been studied in the fruit fly and may help explain how
    incorrect cell signals during development can result in a wide range of
    birth defects.
                         human genome project progress
        The ultimate goal of the international Human Genome Project is to
    spell out, letter by letter, all 3 billion bases in the human genome by
    the year 2005. Since the start of the Human Genome Project, scientists
    have been experimenting with whole-genome sequencing methods on
    smaller, less complex micro-organisms. This past year, for example,
    NHGRI-supported scientists at the University of Wisconsin-Madison
    published the full DNA sequence of the bacterium E. coli--probably the
    most studied simple organism in all of science and the foundation of
    the biotechnology industry. Researchers now have access to the
    organism's genetics in their entirety--all 4,403 genes nestled among
    4,639,221 base pairs of DNA, which gives them a powerful new tool to
    observe complete cellular systems, including metabolism, the regulation
    of gene activity, substance transport, and cell division.
        NHGRI began pilot projects in 1996 to test strategies and
    technologies for full-scale sequencing of the human genome, which
    contains about 1,000 times more DNA than E. coli does. Already,
    investigators have deposited almost 40 million bases of high-quality
    human DNA sequence in GenBank. NHGRI grantees expect to produce 60
    percent or more of the total human DNA sequence (1.8 billion base
    pairs), with the remainder to be contributed by other Human Genome
    Project partners in the United States and abroad. To complete its
    portion, NHGRI recently announced a $70 million initiative to establish
    a coordinated network of laboratories. Those laboratories are expected
    to produce an average of 300-500 million bases of finished, accurate
    human sequence per year by 2003. The sequence produced must have four
    characteristics--the ``4 A's'' of the Human Genome Project--(1) the
    sequence must be accurate, that is, the DNA spellings must be correct.
    The sequencing network will include quality assurance labs to ensure
    accuracy of 99.99 percent or better. (2) Large-scale sequencing relies
    on the accurate assembly of smaller lengths of sequenced DNA into
    longer, genomic-scale pieces, so DNA coming from the NHGRI network will
    be assembled into long pieces that reflect the original genomic DNA.
    (3) Because human DNA sequence must also be affordable, a portion of
    the network will focus on technology development to reduce cost as must
    as possible. (4) Finally, high-quality, finished human DNA sequence
    should be available to the entire research community, so NHGRI has
    introduced policies to make sequence from the network accessible within
    24 hours through public databases.
        The Human Genome Project is unique among most biological research
    efforts in its establishment of specific, goal-oriented research plans.
    The current plan expires in October, 1998, so NHGRI is in the midst of
    establishing a research plan to cover the next five years. The new plan
    will include working toward completing the first full human DNA
    sequence, developing faster sequencing technologies for the future,
    studying sequence variation and its relationship to disease,
    identifying and analyzing the function of genes in the human genome,
    and continued studies of the ethical, legal, and social implications
    (ELSI) of new genetic technologies.
                                complex diseases
        Straightforward rules of inheritance govern disease traits
    resulting from changes in a single gene, and it is now easier and
    faster than ever to track down and isolate such disease genes. But the
    inheritance of most common disorders--diabetes, heart disease, and most
    common cancers, which result from the interplay of environment,
    lifestyle, and small effects of many genes--is much more complex and
    requires even more powerful tools.
        NHGRI has just launched a new initiative to help speed the
    breakthroughs in complex disease research--a major new goal for the
    Human Genome Project. Most complex diseases result from the combined
    effects of several relatively weak genetic contributions, and finding
    disease genes that have such weak effects has been painstakingly
    difficult. The search for such genes would be aided enormously by a
    thorough cataloging of the different versions of a whole list of
    genetic sites that occur in the human population. With such a catalog,
    scientists could begin to define which genetic differences are
    associated with a propensity for a specific disease and could help
    explain why, although we all carry the same genes, some individuals,
    families, and even ethnic groups appear to be more likely than others
    to develop certain diseases. To facilitate these studies, NHGRI is
    leading an NIH-wide effort along with 17 other Institutes to develop a
    very high-density map of slight-but-telling differences in the DNA code
    called ``snips'' (for single nucleotide polymorphisms or SNP's).
        Another NHGRI initiative is contributing to the analysis of complex
    disease. The Center for Inherited Disease Research (CIDR), located on
    the Bayview campus of Johns Hopkins University, provides high-
    throughput genotyping services, study design advice, and sophisticated
    database assistance to research teams attempting to identify genetic
    locations and variations involved in complex diseases. A joint effort
    by eight NIH institutes, with the NHGRI serving as the lead, CIDR has
    just completed its first genotyping project for genomic changes
    associated with manic-depressive disorder. A second project, a study of
    deafness, has begun.
        NHGRI is also involved in whole-genome studies to identify
    mutations that lead to adult onset diabetes mellitus and prostate
    cancer to understand and help remedy the disproportionately high rates
    of those diseases among African-Americans. These studies are supported
    by the NIH Office of Research on Minority Health and organized by an
    NHGRI-Howard University collaborative center for studying diseases that
    disproportionately affect minority individuals.
                             technology development
        Studies of genetic variation in large populations, complex
    diseases, and the simultaneous activity of multiple genes will rely on
    development of new technologies for large-scale genomic analysis. Such
    studies are already successfully using the marriage of semiconductors
    and DNA in so-called DNA chips. One version, which originated from an
    NHGRI grant to a scientist at a small California company, was recently
    featured on the cover of Fortune Magazine and in this year's State of
    Union address. That chip consists of a thin slice of silicon about the
    size of a postage stamp upon which threads of DNA, whose spellings are
    already known, are arrayed. Such DNA chips can be used for a broad
    range of studies, including identifying DNA changes that lead to
    disease. This would be particularly useful, along with family histories
    and data from large population studies, for establishing an
    individual's risk of developing common but hard-to-treat disorders like
    cancer, heart disease, diabetes, or psychiatric disorders, where
    multiple genetic alterations contribute, but each on a small scale. A
    baseline genome scan could give patients and health care providers
    helpful information about an individual's disease risk profile and
    point to which prevention strategies--when available--should be put
    into place. Eventually, the chips may even be used to identify which
    patients are genetically most likely to respond to specific therapies.
    Diseases may be subclassified by their underlying genetic configuration
    rather than by physical symptoms. Administering drugs targeted only to
    that particular genetic subtype could maximize efficiency, minimize
    side effects, and reduce treatment time wasted on ineffective
    therapies. The pharmaceutical industry is eagerly awaiting advances in
    DNA chip technology, and a catalog of human DNA variations, to
    incorporate into their research and development programs for improved
    treatment strategies.
                 ethical, legal, and social implications [elsi]
        These dramatic new abilities to read large amounts of genetic
    information have important implications for the privacy and fair use of
    that information. The Human Genome Project is unique among research
    programs in its commitment to address the ethical, legal, and social
    implications of its technologies side-by-side with the scientific
    agenda. NHGRI's ELSI research and policy development programs have
    spearheaded policy movement on a number of complex issues by supporting
    rigorous scholarly research and through development of options for
    state and federal policy makers.
        One of the most active ELSI areas has been policy development
    related to the privacy and fair use of genetic information,
    particularly in health insurance, employment, and medical research.
    This past year, President Clinton announced his support for a
    comprehensive legislative solution to the problem of genetic
    discrimination in health insurance, based on recommendations the ELSI
    Working Group and the National Action Plan on Breast Cancer (NAPBC)
    developed in a workshop three years ago. Protection gaps in The Health
    Insurance Portability and Accountability Act, which took a significant
    step toward preventing genetic discrimination in health insurance, can
    now be closed by legislation that would expand those protections to the
    individual insurance market. In January, Vice President Gore announced
    Administration support for federal legislation to prohibit genetic
    discrimination in the workplace. Again, the Administration's
    recommendations are based on the recommendations of the NAPBC-ELSI
    Working Group, which held a workshop two years ago to address the use
    of genetic information in employer-provided insurance, in
    discrimination in hiring and promotions, and privacy of that
    information. NHGRI staff worked closely with staff from the Office of
    the Secretary of Health and Human Services, the Department of Labor,
    and the Department of Justice to present these options to the White
    House. NHGRI and NAPBC recently met for a third time to address
    problems related to protecting the privacy of genetic information in
    the medical record. Workshop participants identified areas where new or
    modified policies or practices might enhance privacy protections
    without discouraging crucial areas of research. The group is developing
    a set of principles for researchers, research institutions, state and
    federal agencies, and policy makers to consider in formulating privacy
    protections for research information.
        Other significant steps have been taken to ensure the responsible
    integration of genetic tests into clinical practice. The Task Force on
    Genetic Testing recently concluded its two-year analysis of genetic
    testing in the United States and published a report that contains
    recommendations for federal agencies, testing laboratories, and health
    professionals. The Cancer Genetics Studies Consortium, supported by
    NHGRI and several other NIH Institutes, has published in medical
    journals their recommendations for follow-up care of individuals with
    specific cancer-causing gene mutations. Another product from the group
    describes informed consent for genetic testing for susceptibility to
    adult-onset cancer.
        Recognizing the rapid pace of human genetics research and its
    impact on an increasing number of medical disciplines, the American
    Medical Association and the American Nurses Association, in
    collaboration with NHGRI staff, founded the National Coalition for
    Health Professional Education in Genetics. The Coalition's mission is
    to ensure that our nation's health care providers have the knowledge,
    skills and resources to integrate responsibly new genetic knowledge
    into health care. Approximately 100 organizations representing health
    care professionals, consumer groups, industry, genetics professional
    organizations, and government agencies participated in the Coalition's
    first meeting this past year. The new National Foundation for
    Biomedical Research, a government-created foundation ``dedicated to
    creating public-private partnerships to promote the mission of the
    National Institutes of Health,'' is considering serving as the
    Coalition's administrative manager.
        As the Human Genome Project approaches the half-way mark, the
    contributions it has made to understanding human diseases have been
    gratifying and remarkable. In the years ahead, the full DNA sequence of
    the human will give us unprecedented opportunities to observe and
    understand the literal thread of life. There is now no question that
    genome maps, sequence, and analytical tools will provide a robust
    technological infrastructure for biomedical research well into the next
    century.
        The activities of the NHGRI are covered within the NIH-wide Annual
    Performance Plan required under the Government Performance and Results
    Act (GPRA). The fiscal year 1999 performance goals and measures for NIH
    are detailed in this performance plan and are linked to both the budget
    and the HHS GPRA Strategic Plan which was transmitted to Congress on
    September 30, 1997. NIH's performance targets in the Plan are partially
    a function of resource levels requested in the President's Budget and
    could change based upon final Congressional Appropriations action. NIH
    looks forward to Congress' feedback on the usefulness of its
    Performance Plan, as well as to working with Congress on achieving the
    NIH goals laid out in this Plan. My colleagues and I will be happy to
    respond to any questions you may have.
                                     ______

                  Prepared Statement of Judith L. Vaitukaitis
        Mr. Chairman and Members of the Committee: I am pleased to present
    the President's budget for the National Center for Research Resources
    (NCRR) for fiscal year 1999, a sum of $423 million, an increase of
    $51.5 million (or 13.9 percent) above the comparable fiscal year 1998
    non-AIDS appropriation. Including the estimated allocation for AIDS in
    both years, total support proposed for NCRR is $514.8 million, an
    increase of $60.9 million over the fiscal year 1998 appropriation.
        It is a pleasure once again to have the opportunity to discuss the
    accomplishments and future directions of the NCRR, which fills a unique
    and indispensable niche in the family of NIH institutes and centers.
    Unlike the other components of NIH, which focus on particular
    biomedical disciplines, diseases, or organ systems, NCRR provides the
    essential tools and infrastructure that facilitate all lines of NIH-
    supported research, ranging from basic to clinical investigations. NCRR
    can best be described as a catalyst for discovery, for without advanced
    instrumentation, up-to-date research facilities with access to
    specialized expertise, and animal models for human diseases, the
    scientific enterprise would be slowed and more costly. Each year more
    than 15,000 investigators, supported by more than $1.8 billion from the
    NIH categorical institutes, utilize NCRR-supported research resource
    facilities as integral parts of their research. Shared instrumentation
    grants and repositories for both biomaterials and animal models are
    also invaluable resources to thousands of additional extramural
    investigators. Our fundamental objectives are to direct NCRR's support
    to maximize sharing of research resources and technologies, enhancing
    multidisciplinary research by fostering collaborations among
    investigators, and leveraging federal funds.
                     advanced instrumentation and computers
        Advanced instrumentation and computers have a fundamental role in
    most biomedical studies, yet they also account for some of the largest
    expenses. To help reduce costs while providing access to the most
    sophisticated research tools, NCRR supports shared instruments and
    resources, including a network of more than 60 biomedical technology
    resource centers that develop and provide access to critical
    technologies for health research, ranging from those for degenerative
    brain disorders, cancer, cardiovascular diseases to AIDS.
        Shared resources are essential tools in efforts to unravel the
    complexities of the human genome as well as to define the genetic
    defects that lead to diseases such as sickle cell anemia, cystic
    fibrosis and a variety of cancers. This enormous undertaking requires
    an array of sophisticated and costly instruments such as sequencers,
    mass spectrometers, analytical ultracentrifuges, and nuclear magnetic
    resonance imagers. By awarding grants for these instruments as shared
    resources, their utilization is greatly increased. On average, more
    than 15 investigators share each instrument provided through NCRR's
    Shared Instrumentation Grant program. In fiscal year 1999, NCRR will
    significantly expand this unique program to assure that investigators
    have state-of-the-art research tools.
        In recent years it has become increasingly clear that a complete
    picture of the genome can only be obtained if gene identification
    efforts are supplemented with studies to characterize the proteins
    produced by the genes. At an NCRR-supported microscopy and imaging
    resource at the University of California, San Diego, scientists are
    developing microscopic methods that permit mapping of both genes and
    their products in situ for Alzheimer's Disease, for example. Resource
    facilities like this and others will accommodate investigator access
    and permit remote control of sophisticated instruments over the
    Internet and facilitate electronic communication with colleagues at
    other sites. Such arrangements will permit interactive tasks as if the
    collaborators are in the same laboratory. Continuing developments in
    computer technology and establishment of the ultrafast Internet-2 will
    allow extensive scientific collaboration and sharing of research
    resources and technologies. In fiscal year 1999, NCRR plans to expand
    these initial efforts, so in a few years cooperating university
    Internet sites will provide gateways to access sophisticated
    technologies, investigators and databases across the research
    community.
        X-ray crystallography provides the ultimate details of molecular
    structures. The ultrabright synchrotron-generated X-rays have made it
    possible to increase resolution to levels that were not believed
    possible just a few years ago. For example, NCRR-supported scientists
    at Stanford University recently determined the detailed structure of
    the protein fibrinogen, which is essential to stop bleeding but also
    contributes to heart disease and stroke. As the human genome project
    identifies more genes, more proteins of unknown structure and function
    will require characterization in order to define the causes of disease
    and to develop novel therapies for them. In fiscal year 1999, NCRR
    plans to increase its support for investigator access to synchrotron
    beamlines.
        As research problems become more complex, their solutions require
    more sophisticated technologies that demand an integrated approach. For
    example, the attached Figure summarizes the interaction of several
    costly, advanced technologies that contribute significantly to the
    development of novel drug therapies. This approach is commonly referred
    to as structure-based drug design. Either high energy x-rays, high
    field nuclear magnetic resonance or both technologies provide essential
    data about the structure of a purified protein. In the Figure before
    you, high energy x-rays, generated at the Advanced Photon Source at the
    Argonne National Laboratory, provide a key tool to analyze a
    crystallized protein. However, that crystallographic data may not be
    enough. That same protein may also need to be studied by high field
    nuclear magnetic resonance at an NCRR-supported research resource
    facility such as the Massachusetts Institute of Technology's Center for
    Magnetic Resonance to gain additional information to discern the
    protein's molecular structure. Data from synchrotrons or NMR's can be
    analyzed by a special software designed to run on a supercomputer,
    which may be located at the University of Pittsburgh. That processed
    information may then be moved over the Internet and analyzed by 3D
    Visualization tools, using the investigator's own workstation. The
    image in the center of the Figure was created with a molecular graphics
    system at the NCRR-supported University of California at San
    Francisco's Computer Graphics Laboratory. Visualization tools help
    identify the site on the molecule at which a drug may interact.
    Candidate drugs and proteins which may bind at the active site can be
    selected from databases over the Internet at sites somewhere in the
    U.S. or Europe. The molecule displayed is HIV-1 protease (shown in
    green and yellow) along with a drug candidate (depicted in magenta)
    bound within the enzyme's active site. The drug inhibits or blocks the
    biologic action of the protease and is a potential new treatment for
    HIV infection in man. The structure of HIV-1 protease was solved by
    members of the Crystallography Laboratory of the National Cancer
    Institute. Structure-based drug design is a faster and more cost
    effective approach to drug development than the empirical approaches
    used in the past.
        Other recent developments in areas related to genomic research will
    generate major new multidisciplinary initiatives. Areas such as laser
    light source technology and design of extremely small-scale tools using
    nanofabrication and nanobioengineering techniques are now so advanced
    that engineers and scientists are constructing devices for detection of
    single molecules and miniaturizing instruments that will save expensive
    reagents and man hours. For example, the development of microchips for
    ultrasensitive DNA analysis is a revolutionary approach to
    miniaturization. Manufacture of these chips requires multidisciplinary
    expertise in production of computer chips, molecular biology, optics,
    and gene sequencing that will bring together physicists, engineers, and
    biologists. NCRR plans to extend its support to provide these powerful
    tools to identify genetic risk factors which may be modulated by diet,
    changes in lifestyles or other approaches to prevent, delay or treat
    disease.
                           biology of brain disorders
        Thanks to powerful new technologies such as functional magnetic
    resonance imaging, or fMRI, and multiphoton laser scanning microscopy,
    scientists have gained increasingly detailed insight into the biology
    of the human brain. NCRR-supported researchers at Carnegie Mellon
    University, University of Pittsburgh Medical Center, and Pittsburgh
    Supercomputing Center have combined the powers of fMRI, high-speed
    networks, and a supercomputer to produce high-quality 3-D images of the
    working brain within seconds of recording. To capitalize on these
    technological enhancements, NCRR will support development and
    acquisition of instruments that provide images of the brain, including
    images of tissue damaged by neurodegenerative diseases such as
    Parkinson's or Alzheimer's, in even more detail than currently
    possible. In addition, NCRR will support development of user-friendly
    database structures to facilitate investigator analysis and synthesis
    of vast data sets.
                                genetic medicine
        Nonhuman biological and disease models are indispensable to
    biomedical research. To understand gene function in cancer, diabetes
    and cardiovascular diseases, for example, scientists have developed
    thousands of genetically altered animal models in mice and rats. To
    assure preservation of these models, which are expensive to maintain,
    NCRR will create additional national and regional repositories to
    assure that novel genetically altered mice and rats can be distributed
    to investigators nationwide.
        Certain studies with great implications for human health can best
    be carried out in nonhuman primates. Examples include development of a
    vaccine against AIDS and in-depth understanding of the immune system.
    Scientists at NCRR-supported Regional Primate Research Centers have
    developed procedures for producing genetically identical monkeys.
    Availability of these animals will facilitate development of an AIDS
    vaccine and provide a unique model to more effectively study tissue
    rejection associated with organ transplantation. NCRR plans to further
    develop this model.
        Gene therapy is still at an early stage but holds great promise.
    NCRR, in collaboration with the National Cancer Institute, the National
    Heart, Lung, and Blood Institute and the National Institute of
    Diabetes, Digestive and Kidney Diseases, supported the establishment
    and maintenance of three National Gene Vector Laboratories that produce
    clinical-grade gene vectors, or carriers. These gene carriers are used
    in human gene therapy to transport therapeutic genes into cells where
    they are needed to alleviate or cure diseases such as cystic fibrosis,
    atherosclerosis, and an array of cancers. But the technique still needs
    refinement, and additional vectors need to be developed and studied.
    Because the safety of new vectors must be extensively examined, NCRR
    plans to support the development of additional vectors as well as their
    preclinical evaluations at NCRR-supported research resource facilities.
                               research capacity
        NCRR administers an NIH-wide extramural construction grant program
    that requires matching institutional funding. The awards support
    renovation or new construction of research facilities at medical
    schools, hospitals, universities, and research institutions. According
    to a 1996 survey conducted by the National Science Foundation (The
    Status of Biomedical Facilities), academic institutions had deferred
    $3.6 billion worth of needed biomedical construction and repair or
    renovation projects. To help alleviate this need, NCRR plans to
    continue funding of construction projects to upgrade biomedical
    research facilities.
        General Clinical Research Centers (GCRC's) play a key role in
    patient-oriented research and that research reflects that supported by
    the NIH categoric Institutes. The GCRC's host nearly 9,000
    investigators who conduct nearly 6,000 research projects annually. The
    GCRC's provide infrastructure to academic institutions through the
    support of inpatient and outpatient research facilities and other
    resources vital for state-of-the-art, patient-oriented research. The
    GCRC's also provide an effective forum for training and junior career
    development for mentored, patient-oriented, clinical research. The
    GCRC's need to expand research activities into less traditional GCRC
    research areas, such as intensive care, emergency rooms, trauma units,
    and other specialized units. Seriously ill patients are increasingly
    studied at GCRC's, and the need for specialized testing and research
    nurse staffing to support those research studies has increased
    markedly. To address this need, NCRR in fiscal year 1999 will enhance
    support for the network of GCRC's which provide a critical interface to
    assure that scientific advances for rare diseases, cancers, diabetes
    mellitus, AIDS, cardiovascular and many other diseases are transferred
    from the laboratory to the patient.
        To enhance research on diseases such as renal disease, diabetes
    mellitus, and cancer, that disproportionately affect minority
    populations, NCRR will support establishment of Centers of Clinical
    Research Excellence at NCRR-supported Research Centers in Minority
    Institutions that are affiliated with medical schools. The centers will
    recruit new faculty, established investigators in clinical research,
    who will serve as mentors to junior investigators in an effort to build
    effective clinical research teams.
        The activities of the NCRR are covered within the NIH-wide Annual
    Performance Plan required under the Government Performance and Results
    Act (GPRA). The fiscal year 1999 performance goals and measures for NIH
    are detailed in this performance plan and are linked to both the budget
    and the HHS GPRA Strategic Plan which was transmitted to Congress on
    September 30, 1997. NIH's performance targets in the Plan are partially
    a function of resource levels requested in the President's Budget and
    could change based upon final Congressional Appropriations action. NIH
    looks forward to Congress' feedback on the usefulness of its
    Performance Plan, as well as to working with Congress on achieving the
    NIH goals laid out in this Plan.
        My colleagues and I will be happy to respond to any questions you
    may have.
                                     ______

                    Prepared Statement of Philip E. Schambra
        Mr. Chairman and Members of the Committee: I am pleased to present
    the President's non-AIDS budget request for the Fogarty International
    Center for fiscal year 1999, a sum of $19.1 million, which reflects an
    increase of $1.4 million over the fiscal year 1998 appropriation.
    Including the estimated allocation for AIDS, total support requested
    for the FIC is $30.4 million, an increase of $2.1 million over the
    fiscal year 1998 appropriation. Funds for the FIC efforts in AIDS
    research are included within the Office of AIDS Research budget
    request.
        This year the FIC enters its 30th year as a focus of NIH
    international activities. Our mission is to assist this nation to deal
    with health problems that transcend national boundaries and that can be
    combated most effectively through international cooperation. Through
    training and research support, FIC enables American universities and
    research institutes to cooperate in regions of the world that, due to
    disease burdens, provide unique opportunities to advance international
    health.
                           why international health?
        May I direct your attention to the chart which pictorially displays
    why international health is important. First, to protect Americans
    against global health threats. With frequent international travel, vast
    movements of populations of refugees, and potential changes in our
    climate affecting health, global trends are of increasing importance
    for us all. One has only to consider the emergence and spread of AIDS
    to recognize the necessity of confronting health needs in a global
    context. Moreover, international commerce presents new risks for the
    transfer of infectious agents for both humans and livestock, as well as
    toxic substances such as pesticides and pollutants, and even biologic
    and chemical agents.
        Second, to fulfill a longstanding American humanitarian tradition.
    The Global Burden of Disease Study commissioned by the World Bank
    indicates that developing nations suffer over ninety percent of the
    burden of premature mortality as measured in lost years of life. These
    countries, constituting three-quarters of the world's population, now
    share a triple burden: the persistence of infectious diseases and
    malnutrition responsible for 16 million deaths per year, mainly
    children; a growing incidence of chronic disease and disability due to
    increased life spans and new risk exposures; and environmental and
    occupational health hazards which accompany industrialization.
        Third, to advance America's global interests. The United States is
    at the vanguard of scientific progress and produces more knowledge,
    publications and medical interventions than any country in the world.
    Because of our leadership, we share an opportunity and an obligation to
    influence the international community, international organizations and
    developing and industrialized countries alike to address the health
    problems of those most in need. Further, international cooperation in
    biomedical science not only enables the United States to share skills
    and knowledge, but cultural and societal values intrinsic to scientific
    progress as well.
        This nation's investment in research on global disease prevention
    produces significant economic returns. For example, the Institute of
    Medicine of the National Academy of Sciences reports that the United
    States saves $450 million every year by not having to vaccinate its
    citizens against smallpox. The World Health Organization predicts that
    our efforts to eradicate poliomyelitis will result in global savings of
    $500 million by the end of this decade. However, despite U.S.
    prominence in the creation of new drugs and medical devices as measured
    by percentage of world patents, our global share of exports to a market
    that exceeds $40 billion annually, namely developing nations, is a mere
    15 percent. International cooperation in health is one pathway to
    emerging markets enabling millions of citizens of these countries
    access to more modern drugs.
                  how does fic meet these critical challenges?
        Please turn once again to our chart with the overlay which
    describes our major efforts. In the progress of biomedical science, one
    critical limiting factor is human talent. FIC's investment is in human
    capital, with a particular focus on developing nations. Scientific
    partnerships with these nations are of strategic importance. What
    follows describes our efforts to improve America's scientific capacity
    to conduct international research on global priorities identified in
    collaboration with our sister institutes at NIH and the scientific
    community.
        With the support of this committee, the FIC International Training
    and Research Program in Emerging Infectious Diseases was initiated this
    past year to improve our capacity to understand the fundamental biology
    and epidemiology of new or resurgent infectious diseases. Launched in
    collaboration with the National Institute of Allergy and Infectious
    Diseases, the program explores the changing patterns of infectious
    diseases due to microbial evolution, human behavior, and economic
    development and land use.
        The model for this new program is FIC's AIDS International Training
    and Research Program. Under this program, over 1,300 foreign scientists
    from over 80 countries in Africa, Asia, Latin America, and Central and
    Eastern Europe have received long-term HIV research training in the
    United States. Many former trainees are now co-investigators on NIH-
    supported research projects in developing countries where HIV/AIDS is
    epidemic. In addition, more than 41,000 physicians, nurses and
    laboratory technicians have gained new skills through in-country
    training courses. The emerging infectious diseases and AIDS programs,
    in tandem, represent investments in training and infrastructure that
    will assist the United States to develop vaccines and other
    interventions for diseases that require international trials. These
    include HIV, tuberculosis (TB), diarrheal and parasitic diseases, and
    acute respiratory infections.
        HIV and other pandemics demonstrate that disease is not demarcated
    by national borders. In some cases, disadvantaged groups in the United
    States exhibit similar health risks with populations in resource-poor
    nations, risks due to micronutrient deficiencies and perinatal
    infections and other conditions. There are lessons to be learned
    domestically from research conducted abroad. For example, studies in
    Tanzania demonstrated that unless treatment regimens are supervised
    closely, TB rapidly becomes resistant to available drugs. That finding
    now has been applied to community health programs in New York City and
    other urban centers.
        Another FIC global priority is to prevent adverse health effects of
    industrial and chemical pollutants. The FIC International Training and
    Research Program in Environmental and Occupational Health enables U.S.
    institutions to train scientists from regions of the world with high
    levels of contaminants in the environment and workplace, such as
    Eastern Europe, Russia and the new republics. The program is co-funded
    with the National Institute of Environmental Health Sciences and CDC's
    National Institute for Occupational Safety and Health, and National
    Center for Environmental Health. Current studies in Ukraine and Belarus
    undertaken after the accident at Chernobyl include the effects of
    radiation on growth and development, incidence of thyroid cancer, and
    reproductive health disorders.
        One of the chief casualties of environmental decay is biologic
    diversity. There is a tendency to assume that our increasing
    technological sophistication moves us further from dependence on the
    natural world. However, it is likely that ecosystems maintained by
    diverse species are part of our protection against diseases. For
    example, deforestation has introduced new infectious agents into human
    populations; the depletion of ozone in the stratosphere erodes
    protection against the damaging effects of ultraviolet radiation.
        The Earth's biota also is a continuing resource for new
    therapeutics. The FIC leads an interagency effort to discover new drugs
    from the earth's biological diversity. The International Cooperative
    Biodiversity Groups Program is funded in partnership with several NIH
    research institutes, the National Science Foundation, and U.S.
    industries. This program represents academic-industry consortia,
    examining genetic resources from terrestrial and marine environments
    worldwide. The program now is in its fifth year, and together these
    groups have examined over 3,000 species for activity in 13 therapeutic
    areas. At this early stage in the drug development process, there are
    approximately 25 high priority leads, including several to treat
    malaria, viral diseases, and cancer. Of equal importance, by
    demonstrating the economic and humanitarian potential of new drugs
    derived from biodiversity, this program has influenced governmental
    efforts to sustain ecological balance in Argentina, Peru, Chile,
    Suriname and Mexico.
        A root source of global health problems is demographic pressure.
    The world's population is now expanding at the unprecedented rate of
    nearly 1 billion per decade. Demographers at the United Nations
    estimate that virtually all of this growth will occur in the developing
    nations of Africa, Asia and Latin America. There is broad consensus
    that more stable population growth will enhance the prospects for
    improved living conditions for billions in the decades ahead. Yet this
    will require new medical technologies and social adaptations generated
    through research. Through our International Training and Research
    Program in Population and Health, FIC increases the capacity to conduct
    research on reproductive and neonatal health care and improves
    demographic capabilities in countries where population growth impedes
    economic development. The program is co-funded with the National
    Institute of Child Health and Human Development. Already, several
    collaborative projects have yielded discoveries. Scientists at the
    University of Virginia and the National Institute of Immunology in New
    Delhi, India have identified a specific antigen on spermatozoa in
    primates that will serve as the basis of a male contraceptive vaccine.
    If ultimately developed, this vaccine would be a major breakthrough in
    the field of contraceptive development.
        Finally, in partnership with the National Library of Medicine, the
    FIC conceived an International Training Program in Medical Informatics
    to increase research capacity and health care through information
    technology. A pilot program with Africa will be initiated in fiscal
    year 1998. The fundamental goal is to develop collaborative teams of
    U.S. and African researchers and information specialists who apply
    state-of-the-art telecommunications and computer technologies to
    challenges in biomedical science and medical care.
        As we come to the conclusion of this century, it is worth noting an
    important historical symmetry. NIH began as a small laboratory on
    Staten Island, tending to the needs of merchant marine sailors at the
    turn of the last century. The Laboratory of Hygiene proved its worth
    after diagnosing cases of cholera among immigrant passengers on the
    steamship ``Alesia''--the first diagnosis of cholera in the western
    hemisphere. That landmark discovery was made possible through
    collaborations with the laboratory of Robert Koch in Berlin, who
    pioneered methods to isolate bacteria, and the laboratory of Louis
    Pasteur in Paris. This early discovery presaged the very practical
    benefits of public investments in basic research. It also signaled our
    reliance on international cooperation to accelerate the pace of
    discovery in medical science. This is our historic tradition, our
    public trust, and our mission at FIC.
        Mr. Chairman, my colleagues and I will be happy to respond to any
    questions you may have.
                                     ______

                   Prepared Statement of Donald A.B. Lindberg
        Mr. Chairman and Members of the Committee: I am pleased to present
    the President's budget request for the National Library of Medicine
    (NLM) for fiscal year 1999. The President in his fiscal year 1999
    budget has proposed that the NLM receive $171.3 million, an increase of
    $13.4 million over the comparable 1998 appropriation. Including the
    estimated allocation for AIDS, total support proposed for the NLM is
    $174.7 million, an increase of $13.5 million over the 1998
    appropriation. Funds for the NLM efforts in AIDS research are included
    within the NIH Office of AIDS Research budget request.
                                  free medline
        I am proud to tell you the NLM has accomplished what I suggested to
    you last year when I said ``it might actually be possible to offer
    MEDLINE without charge.'' This suggestion was echoed a week later in
    the testimony of world renowned heart surgeon Dr. Michael DeBakey, who
    chairs the NLM Board of Regents. It actually happened less than 3
    months later, on June 26. Senators Arlen Specter and Tom Harkin
    provided a public forum for the announcement that the NLM would provide
    MEDLINE free to all users of the Internet and World Wide Web. Vice
    President Gore did the ceremonial ``first free MEDLINE search.''
    Successfully, I might add. A new feature introduced was the ability to
    link a MEDLINE user who wishes to get a full article directly to the
    home page of a number of medical publishers, where articles may be
    viewed or ordered. So far, about 100 journals are linked to MEDLINE and
    the number continues to increase.
        Today, the world's largest database of peer-reviewed medical
    information is being queried more than 300,000 times each day--more
    than a tenfold increase in less than a year. Who is doing all this
    MEDLINE searching? The traditional users, of course: doctors and other
    health professionals, librarians, scientists, and students. They are
    delighted with the new (and free) easy-to-use methods of access we have
    provided. But the more profound change is that the public--consumers,
    patients, parents, and other patient advocates--can now use MEDLINE to
    learn more about their own health and about how the results of medical
    research can affect it. This change has been fueled by widespread
    publicity of the announcement, including items in daily papers, weekly
    news magazines, consumer and other popular magazines, and televised
    reports; there were even episodes on NBC's ``ER'' and CBS's ``Chicago
    Hope'' that hinged on a MEDLINE search! Because of all this, MEDLINE is
    now being used by tens of thousands of people who a year ago had never
    even heard of it. Although many of the articles referenced in MEDLINE
    are too technical for the average person to understand, I believe that
    there is much in MEDLINE that is pertinent and useful for consumers. I
    am announcing here that we have begun to add references from carefully
    selected health newsletters for the public published by medical schools
    and other government agencies. We plan to enrich MEDLINE so that it
    will have even more information oriented toward the public.
                                    outreach
        In expanding the potential audience for MEDLINE we will be relying
    more and more on the outreach mandate. You may recall that our
    legislation was amended directing us to publicize our services. The
    tremendous recent growth in MEDLINE searching notwithstanding, we still
    have a long way to go before every health professional knows about
    MEDLINE and how it can contribute to high-quality medical care. Our
    services are no longer even bound by national borders, since the
    Internet makes MEDLINE accessible around the globe. In fact, the NLM
    Board of Regents recently approved the report of a 2-year study of
    NLM's international programs; one recommendation was that the NLM
    should be a flexible partner and encourage the use of electronic
    information resources by health professionals in other countries. I
    should note that some 50 percent of MEDLINE records are from non-U.S.
    journals. Another international project, begun in 1997 at the request
    of the NIH Director, aims to enhance the ability of African malaria
    researchers to communicate electronically with colleagues in Africa and
    around the world and to access critical biomedical information from
    local libraries, remote databases, and the Internet. The project is
    part of the African Multilateral Initiative on Malaria.
        The Library is targeting outreach efforts to several audiences that
    we believe can use our services to great advantage. We recently
    conducted a ``train the trainer'' program to teach older citizens how
    the Web can be used as a source of good health information. We want to
    set in motion a multiplier effect that will spread to senior centers,
    public libraries, and nursing homes across the country. AIDS is another
    special emphasis area. NLM's AIDS-related databases contain information
    that is useful to patients, families, and care providers, and we are
    working with community groups, including public libraries, to reach
    them. We are also reaching rural and other underserved health care
    professionals to show them how the Library's electronic information
    services can reduce professional isolation and put them in touch with
    the latest currents in biomedicine.
        The NLM's Toxicology and Environmental Health Information Program
    has operated for many years and is only now getting the attention it
    deserves. A panel of distinguished scientists assembled by the
    Institute of Medicine has recommended that the toxicology and
    environmental health databases be made much more easily accessible and
    widely available (such as the NLM has done with MEDLINE). Those
    underutilized databases contain a wealth of information that could be
    used by scientists, educators, and the public in dealing with
    pollution, chemical spills, and other threats to the environment.
        The NLM's outreach activities could not be successful without the
    assistance of the National Network of Libraries of Medicine (NN/LM).
    The mission of the Network is to make biomedical information readily
    accessible to U.S. health professionals irrespective of their
    geographic location. The eight Regional Medical Libraries that form the
    backbone of the Network are supported by contracts from the NLM. The
    4,500 member institutions serve as the Nation's medical information
    infrastructure and provide a wide range of services, many of which are
    based on information resources provided by NLM. We have supplemented
    the contracts throughout the eight regions, to encourage innovative
    outreach projects, and plan to invest even more in the coming year.
    Closely connected to the NN/LM is NLM's Extramural Program for
    providing grant assistance. Several programs are outreach-related,
    including support to medical institutions to connect to the Internet.
    Other programs are for improving library resources of the NN/LM, health
    science communications, and research training in medical informatics.
                            next generation internet
        Usage of the Internet and World Wide Web has exploded. To ensure
    that the Internet will be up to handling future demand, a Next
    Generation Internet (NGI) initiative has been formed. This is a
    partnership between industry, academia, and several government science
    agencies, including the NLM. The NGI is a logical outgrowth of the High
    Performance Computing and Communications (HPCC) initiative and will
    provide affordable, secure information delivery at rates thousands of
    times faster than today and accelerate the introduction of new
    networking services for businesses, schools, hospitals, and homes. The
    NLM, which has in the past conducted a number of HPCC-related
    activities, plans to sponsor a variety of NGI health-care applications
    in such areas as advanced telemedicine, digital libraries, and distance
    learning. Such applications often require the nearly instantaneous
    transfer of many gigabits of data, for example in applications
    involving imaging. As important as the ability to transfer massive
    amounts of data--perhaps more important for health care--is the
    requirement for guaranteed quality of service and security of private
    information over the Next Generation Internet.
        One of the most important aspects of the NGI in the health sciences
    is the use of computer and telecommunication technology for medical
    diagnosis and patient care--what has come to be called telemedicine.
    The concept encompasses everything from the use of standard telephone
    service to high-speed transmission of digitized signals in conjunction
    with computers, fiber optics, satellites, and other sophisticated
    peripheral equipment and software. The NLM has made a commitment to
    furthering telemedicine by sponsoring several dozen projects around the
    country, in a variety of rural and urban settings. Through these
    projects, now in their second year, we hope to evaluate the impact of
    telemedicine on cost, quality, and access to health care. Playing an
    important role in all these projects are two studies recently released
    by the National Academy of Sciences (and co-funded by NLM) on criteria
    for evaluating telemedicine and on best practices for ensuring the
    confidentiality of electronic health data. We expect the NLM-supported
    projects to serve as models for both evaluation and confidentiality.
    The NLM has just commissioned a third study by the Council that will
    take a hard look at the elements required if the NGI is to be of
    maximum service to health care and medical research. Capacity, quality,
    reliability, and security are some of the elements that will be
    evaluated; a strategy to achieve this infrastructure will be proposed.
        Also intimately related to the NGI is Phase II of the Digital
    Libraries Initiative. The goals of the first phase were to advance
    fundamental research and build testbed networks for new technologies
    that capture, store, search, and retrieve knowledge from distributed
    electronic collections. Phase II, which is just under way, seeks to
    extend this technology to new application areas. NLM will contribute
    funds to this effort in order to assure that biomedical research
    institutions have an opportunity to compete for research grants and to
    develop imaginative and useful digital library applications of the NGI.
        One of the most fascinating of the Library's high-tech enterprises
    is the Visible Human Project. This program has produced computer-
    generated images of two cadavers, one male and one female. NLM's
    relatively modest investment in the project has resulted in more than
    1,000 licenses for use of the datasets by individuals and corporations
    in 27 countries. Thanks to the Visible Humans, doctors can practice
    procedures on ``surgical simulators''; medical students can conduct
    dissection over and over using a CD-ROM called ``The Recyclable
    Cadaver''; and non-invasive cancer screening techniques such as
    ``virtual colonoscopy'' are being developed.
                     molecular biology information services
        Also closely connected to the NGI are the programs of NLM's
    National Center for Biotechnology Information (NCBI). The NCBI
    continues to advance the state of the art in analyzing the rapidly
    expanding wealth of information about our genetic makeup. NCBI has the
    most extensive and complete databases on DNA and protein sequence data
    in the world and logs over 2 million web hits a day. By all accounts it
    is the single most heavily used site in the world for molecular biology
    information. NCBI scientists collect and analyze molecular sequence
    information from laboratories at NIH around the world. The database,
    GenBank, recorded a milestone when the one billionth base was added
    just a few months ago--it took 18 years to collect the first one
    billion bases, but because of the explosive rate of growth, the second
    billion bases will probably be in the database just 18 months from now.
    NCBI has also been assembling all the data available on human genes
    resulting from the Human Genome Project. The NCBI's Human Gene Map now
    contains information on over 32,000 genes, nearly one-half of total
    estimated human genes. The Human Gene Map is on the web and allows
    everyone from a high school student to a Nobel laureate to find genetic
    information at his or her level of expertise. Another scientific
    resource the NCBI recently created is the database on the genetics of
    Plasmodium falciparum sequences, the organism that produces the most
    severe form of malaria and is responsible for most of the 2 million
    malaria deaths each year.
        NCBI has distinguished itself as an international focus for genomic
    information research and is in the forefront in applying this wealth of
    information to the detection and diagnosis of genetic disease. In
    collaboration with the National Cancer Institute, NCBI has embarked on
    a major project to produce the ``molecular fingerprint'' of cancer
    cells, to characterize what genetic steps occur as cells move from
    normal to cancerous states. The ultimate result of this research will
    be a powerful diagnostic tool that will provide a way to identify genes
    that directly cause cancer and identify cells in an early precancerous
    state, thereby enhancing the probability of early treatment.
                             basic library services
        Basic library services are the foundation on which is built the
    many advanced information products and services offered by the Library.
    The collection, begun in 1836, now numbers more than 5 million.
    Important as the collection itself are the Library's lending activities
    and cataloging and indexing services that make the information widely
    accessible through publications like the Index Medicus and databases
    such as MEDLINE. Several important workload indicators hit all-time
    highs in fiscal year 1997: a total of 519,000 journal articles were
    indexed for the databases (one-third more than the previous record).
    There were 630,000 requests from libraries around the world and on-site
    patrons for materials from the NLM collection (+8 percent). The trend
    is for steady growth in the collections, bibliographic and other
    databases that derive from the collections, and information services
    that depend on both. Basic library services must be protected if the
    Nation is to continue to benefit from its investment in biomedical
    research.
        The activities of the NLM are covered within the NIH-wide Annual
    Performance Plan required under the Government Performance and Results
    Act (GPRA). The fiscal year 1999 performance goals and measures for NIH
    are detailed in this performance plan and are linked to both the budget
    and the HHS GPRA Strategic Plan which was transmitted to Congress on
    September 30, 1997. NIH's performance targets in the Plan are partially
    a function of resource levels requested in the President's Budget and
    could change based upon final Congressional Appropriations action. NIH
    looks forward to Congress' feedback on the usefulness of its
    Performance Plan, as well as to working with Congress on achieving the
    NIH goals laid out in this Plan.
        My colleagues and I will be happy to respond to any questions you
    may have.

                               Budget submission

        Senator Specter. Dr. Varmus, I begin with a question which
    you and I discussed when we dedicated the building to our
    distinguished colleague, Senator Hatfield.
        As I understand it, there are two budgets submitted, one
    which you give to OMB, which I believe you call an optimum
    budget--is that so?
        Dr. Varmus. Yes; that is our budget request.
        As I explained to you in our letter, we had abandoned the
    time-honored tradition of making a very blue sky professional
    judgment budget and, instead, had provided to OMB our best
    estimate of what could be done given fiscal and political
    constraints to OMB as part of the negotiation with OMB over our
    budget.
        We provided you yesterday with more of a traditional
    professional judgment budget, developed by each individual
    Institute and center--this is not a coordinated NIH final
    number but a set of numbers developed by each of the Institutes
    and centers.
        Senator Specter. Would that be like the so-called optimum
    request?
        Dr. Varmus. No; it is more like the traditional
    professional judgment budget. The optimal request we put in to
    OMB this year was 10 percent above the fiscal year 1998 House
    mark, which was lower than our final fiscal year 1998
    appropriation.

                                 Grant funding

        Senator Specter. Well, the question that I would like to
    have answered is if you had your druthers--or let me articulate
    it more precisely--if you had funds to make as many grants as
    you think are worthy, without the constraints of a budget and
    the limitations necessarily imposed by OMB, what would the
    figure be?
        Dr. Varmus. That is a number that has been put together by
    the individual Institutes and it is a number that comes out to
    be on average, about 23 percent above our appropriated level.
        But I have two things to say, Mr. Chairman. First is that
    at NIH, we feel very strongly that we can accomplish a
    tremendous amount, be extremely happy, and have a very
    productive research environment with the President's request.
        Second, I find it difficult to make a clear recommendation
    without taking into consideration the realities that exist--
    namely, that if NIH is awarded too much, it may be at the
    expense of other very worthwhile programs that the President
    has indicated an interest in, including programs that are
    supported by other Federal science agencies whose work is very
    important to our ultimate goals.

                               NCI bypass budget

        Senator Specter. Dr. Klausner of NCI, in the President's
    budget, it is $2.7 plus billion, but the professional judgment
    is $3.19 billion. Dr. Klausner, what is the difference in what
    you would accomplish with the $3.19 billion than the $2.77
    billion?
        Dr. Klausner. Senator Specter, the $3.19 billion is the
    number from the NCI bypass budget, which I am requested to
    prepare by law and present to the Congress.
        That bypass budget of $3.191 billion emerged from a pretty
    long process of prioritization and planning, and with that,
    compared to the President's budget, it is clear that we would
    be able to fund more like one-third of the grants, as opposed
    to about 28 percent. That is one of the differences.

                             Clinical trial system

        Second, one of the major differences is that we are looking
    toward a major expansion in our clinical trial system, both an
    expansion and a redesign of our national clinical trial system.
    That is quite an expensive proposal and enterprise. The
    difference between those numbers very much depends upon the
    speed with which we can expand the clinical trials system so
    that the trials are faster, they accrue faster, they end
    faster, so that we can do more trials, and we can transform the
    clinical trial system from one that has been based, really, on
    a paper and pencil system for over 40 years to a new
    informatics-based electronic system and one that can more
    readily accommodate the more complex clinical trials that are
    associated with biologic markers, with genetic predisposition,
    with measures of the environment, et cetera.
        So the difference would be the time it would take to rampup
    our clinical trial system, for example, to a size that we think
    would be optimal.

                              Grant funding policy

        Senator Specter. Dr. Klausner, you say the difference in
    grant awards would be from 28 percent to 34 percent?
        Dr. Klausner. About that, yes.
        Senator Specter. I am not challenging this, but what is the
    rationale for stopping at 34 percent? May there not be some
    great ideas behind those unopened doors in the remaining 66
    percent?
        Dr. Klausner. Yes; there may well be.
        Our feeling at this moment is that this is something we
    want to build to. We do feel that the peer review system, that
    does not necessarily simply reject grants but critiques them,
    provides feedback so that the grants that are submitted then
    could be improved and submitted again.
        Senator Specter. Well, my question is what is the rationale
    for setting 34 percent and not having others?
        As I look at the country's priorities and look at health
    care and the fact that we have a $1 trillion budget on health
    care. We look at $14 billion, which is a small fraction, would
    we not be better off as a country? Instead of granting 34
    percent of the grants, to grant 68 percent of the grants.
        I know that you don't have the whole budget before you, but
    the Congress does. What I am trying to find out is at what
    rational point do you stop and say that 34 percent is the line
    we ought to draw?
        You are not even getting that, of course; you are at 28
    percent.
        Dr. Klausner. Right.
        Senator Specter. But I have a conviction--we went through
    this in some detail in 1995, after the House cut $900 million.
    We came to a hearing and we had the Hatfield-Specter-Kassebaum
    amendment--Senator Hatfield, because he was chairman of the
    full committee, and I of the subcommittee, and Senator
    Kassebaum because she was chairman of the authorizing
    committee. Unfortunately, we don't have Senators Hatfield and
    Kassebaum around anymore.
        But why not more?
        Dr. Klausner. I think that is a very good question. Our
    view is that, ultimately, we would like all of the good ideas
    funded. But we do think that what this percentage means is
    this. A number of the grants that come in are reviewed by peer
    review, and, after the peer review, are sort of, in essence, in
    a range that are automatically funded. There are other grants
    beyond that which we actually hope to fund, but they go through
    a process of revision based upon the feedback, the input of
    peer review, which, actually, we think is quite healthy.
        So there is, I think, for all of us this tension of wanting
    to make sure that all of the excellent grants are funded and
    wanting to maintain a robust and competitive peer review
    system. Is it exactly 34 percent or 35 percent? I think for all
    of us, we don't know where exactly that is.
        We think quickly moving up toward about the 33, 34, 35
    percent will both maintain the value of the responsiveness of
    the peer review system and will assure that more excellent
    grants are funded.

                        funding for Alzheimer's disease

        Senator Specter. I would like to move now to Alzheimer's,
    which has a tremendous amount of emphasis in the public mind. I
    understand Alzheimer's is divided among a number of categories.
        Whom can I sensibly ask to respond on Alzheimer's?
        Dr. Varmus. There are four Institutes that have major roles
    in Alzheimer's research. I would recommend asking the National
    Institute on Aging which has taken the lead in coordinating the
    research among those four Institutes.
        Senator Specter. And whom would I call on there?
        Dr. Varmus. Dr. Hodes.
        Senator Specter. OK, Dr. Hodes. You are quite a way away
    from my dais, so it is tough to see you.
        Dr. Hodes, why not more money for Alzheimer's?
        Dr. Hodes. I think as you have heard and seen in our
    written submissions, there certainly is a great deal of
    scientific opportunity for research on Alzheimer's disease.
        Under the President's budget, the NIH overall budget and
    allocations to Institutes, there is potential for substantial
    commitment to Alzheimer's. The overall expenditures at NIH for
    1999 estimated under the President's budget are about $374
    million, about three-fourths of which is likely to be funded
    through NIA, the rest through other Institutes which also have
    substantial efforts in that area.
        Senator Specter. How close are you, if you can quantify it
    or if it is a sensible question, to deferring Alzheimer's by 5
    years? I keep hearing the statistic that if you defer
    Alzheimer's by 5 years, it saves $40 billion.
        First, is that a sensible estimate?
        Dr. Hodes. It is a best estimate in an imperfect area of
    prediction.

                          delaying Alzheimer's disease

        Senator Specter. OK. How close are we to deferring it for 5
    years?
        Dr. Hodes. That is not easily answered. It's probably not
    right around the corner. The best of any accomplished results
    to date are quite modest and speak of delays in the progression
    of symptoms by a small number of months.
        There is, however, a great deal of hope in the form of
    leads that have come, for example, from epidemiological
    studies, suggesting that women with a history of postmenopausal
    estrogen use, or men or women with a history of nonsteroidal
    anti-inflammatory use, have very striking reductions in their
    risk of Alzheimer's--in the range of 50 percent.
        These kinds of exciting suggestions from correlations in
    epidemiology will lead to opportunities this year and next, and
    in years to come, for the initiation of clinical trials to
    directly test whether such agents, in fact, are capable of
    delaying the progression of symptoms or even the onset of
    disease.
        Among the high priorities for use of the expanded funds
    awarded under the President's budget will certainly be an
    acceleration of the initiation and accrual of patients in these
    very important studies to see if, indeed, they do have the
    potential for substantial delays of Alzheimer's of the sort
    that you are asking about.

                              Parkinson's disease

        Senator Specter. Let me move to Parkinson's, another high
    visibility item. It is a little hard to judge those from my
    chair, but who, Dr. Varmus, should this next question be
    addressed to?
        Dr. Varmus. Dr. Penn.
        Senator Specter. Dr. Penn.
        Dr. Penn. Yes, sir; the opportunities in Parkinson's
    disease right now I think are very exciting. We are not at a
    brand new therapy. We are investigating therapies that are
    currently available and we are working with the gene that has
    been identified to find out more about what actually is going
    on with those cells that are dying.
        Senator Specter. I hear talk about identification. Is it 16
    genes? Have more genes been identified?
        Dr. Varmus. In the case of Parkinson's?
        Dr. Penn. Yes; it's more like three or four mutations in
    one major gene.
        We have multiple families where a gene defect will be
    identified, I would think, in the reasonably near future, and
    if those all coalesce to one story, we will be in great shape.
        Senator Specter. Can you give any meaningful estimate as to
    how close you are on Parkinson's disease?
        Dr. Penn. Again, I am going to quote Dr. Hodes. It is not a
    matter of months. It is more a matter of several years out. We
    have multiple therapies, multiple clinical trials in which we
    are trying to work this.
        Senator Specter. So it is several years out. Within a
    decade?
        Dr. Penn. A full decade? I hope not.
        Senator Specter. Good.
        Dr. Penn. I would say it would be a little bit sooner than
    that.

                              Alzheimer's disease

        Senator Specter. How about Alzheimer's? Can you say that
    for Alzheimer's?
        Dr. Penn. I would not want to speak to Alzheimer's.
        Senator Specter. Oh, I am talking to Dr. Hodes on this. Can
    you say that for Alzheimer's, that it is not as much as a
    decade out?
        Dr. Hodes. I think the most that I think I can responsibly
    say is that within a period of 3 to 5 years, we should have
    extremely informative data about how successful the current
    best candidates are. The reason for doing the studies,
    unfortunately, of course, is precisely because we do not have
    any guarantees of what their outcome will be.

                            status of Heart disease

        Senator Specter. Let me turn now to Dr. Lenfant of the
    National Heart, Lung, and Blood Institute.
        Take heart disease, how close are you? What are the
    parameters for an evaluation as to how close you are for
    significant improvements?
        Dr. Lenfant. Mr. Chairman, first of all, I think that over
    the years we have made considerable progress, as evidenced by
    the decline in the death rate from the most prevalent heart
    disease, coronary disease/heart attack.
        As I have reported to you over the years, the decline has
    been approximately 50 to 60 percent during the last 25 years or
    so.
        Today, we have before you a number of alternatives which I
    believe very strongly will allow us to make considerable
    progress, not only in the treatment of this condition, coronary
    heart disease and heart attack, but also to address the
    complication of that condition, which, unfortunately, will
    continue to occur. Heart attacks often result in heart failure,
    which is an ever-increasing problem in this country. We see
    through the advent of molecular medicine, cell biology and the
    understanding of the most intimate component of heart tissue
    the prospect that some day, in the future, we will be able to
    replace current interventions, such as heart transplantation or
    artificial heart--which, as you know, during the last 20 or so
    years were commonly spoken about--by just restoring normal
    heart tissue and basically repairing the damage which is
    responsible for the heart failure.
        So I think that before us we have enormous prospects and
    lots of work is going on at this time which is very, very
    successful.
        Now if your question is when will all that occur, I would
    not venture to give estimates of the time that it will take.
    But I think that in the heart community--just during the
    weekend I was meeting with the American College of Cardiology
    during their early meeting--you can sense their optimism for
    making very significant progress and continuing what we have
    already accomplished during the last 20 or 30 years.
        Senator Specter. Thank you.

                              Alternative medicine

        The subject of alternative medicine has an enormous
    following from what I find on my open house town meetings. That
    office has not been very heavily funded.
        Dr. Varmus, upon whom should I call here?
        Dr. Varmus. To talk about alternative medicine?
        Senator Specter. Yes.
        Dr. Varmus. I think perhaps I would do that.
        Senator Specter. Is the head of the Alternative Medicine
    Department here?
        Dr. Varmus. Well, we have two people who are below me in
    the hierarchy--Dr. William Harlan, who is the head of the
    Office of Disease Prevention, which has oversight of the Office
    of Alternative Medicine, which is handled by Dr. Wayne Jonas.
    But I think I can answer the question for you.
        Senator Specter. Is Dr. Jonas here?
        Dr. Varmus. I don't know.
        Is he?
        [Pause.]
        Dr. Varmus. Dr. Harlan who is the immediate supervisor for
    that office is here, or I could answer the question for you, if
    you like.
        Senator Specter. Does Dr. Jonas not rate high enough on the
    hierarchy to come?
        Dr. Varmus. His office is in a group of offices overseen by
    Dr. William Harlan.

                   funding for Office of Alternative Medicine

        Senator Specter. OK.
        Dr. Harlan, you have the floor. But you have to come
    forward to the microphone.
        While he is coming forward, Dr. Varmus, I know, or at least
    I understand, that there has been some resistance to heavier
    funding for alternative medicine.
        Dr. Varmus. I have good news to report there, Senator
    Specter.
        We have taken very good use, I believe, of the additional
    funds that were provided last year, and we have a number of----
        Senator Specter. If Senator Harkin were here, the question
    would not have been so diplomatically stated. [Laughter.]
        Dr. Varmus. That may be. I appreciate the way in which it
    was stated. [Laughter.]
        We have a number of new trials in progress with funds from
    that office. The office is working extremely well with the
    Institutes. We formed a transagency, Public Health Service-wide
    coordinating committee to look at alternative practices. I
    think the whole operation is on a much better footing.
        Dr. Harlan.
        Dr. Harlan. I would agree with Dr. Varmus.
        The progress, I think, has been very encouraging.
        Senator Specter. Did you say that you do agree with Dr.
    Varmus?
        Dr. Harlan. Sorry?
        Senator Specter. You say that you do agree with Dr. Varmus?
        Dr. Harlan. I do.
        Senator Specter. I would have been surprised if you had
    not. [Laughter.]
        Dr. Varmus. I would have been extremely disappointed,
    Senator. [Laughter.]
        Senator Specter. Go ahead, anyway.
        Dr. Harlan. Let me agree with the adjectives and adverbs
    that he has applied. I think the cooperation has really been
    outstanding with the Institutes in terms of developing new
    studies and new initiatives coming from the Office of
    Alternative Medicine.
        The other thing that I think is quite striking is the
    ability of the office to combine the scientific expertise
    within the Institutes with the office and come together with a
    product that I think represents the best in science.
        Senator Specter. Dr. Varmus, on assessing the priorities,
    why on a relative basis has alternative medicine been given so
    little, relatively?
        Dr. Varmus. The function of the office is to coordinate
    research in this area and to carry out research in cooperation
    with the Institutes.
        The office has funds which are involved in setting up data
    bases, which has been done very effectively, especially with
    the cooperation of the Library of Medicine in the last year, to
    oversee the world's activities in this area--what people are
    actually doing--and providing guidance to the Institutes. The
    budget of the office went from roughly $12 million to about $20
    million, a very substantial increase, in 1998. That new money
    was used to start a variety of clinical trials which will then
    be picked up by the Institutes.
        Senator Specter. But not much of an increase from 1998 to
    1999, just $1.5 million.
        Dr. Varmus. That is about an NIH average.

    request for comprehensive account of Federal activities in Alternative
                                    medicine

        Senator Specter. This subcommittee has requested a
    comprehensive accounting of current Federal activities in the
    field. The report which we received notes the only work done up
    to now has been a search of Internet sites of Federal agencies.
    Obviously, on its face, this is inadequate.
        We are very interested to receive a complete report as to
    what is being done in the Federal Government and what is being
    done abroad. This way we can have a comprehensive compendium on
    this subject.
        I want to emphasize, as I know Senator Harkin would if he
    were here, the tremendous interest that there is among the
    people on this subject. Just today, the front page of the New
    York Times has that remarkable story about the 11 year old. I
    will not ask you if you have retained her.
        Dr. Varmus. I'm sorry we didn't fund her, Senator.
        Senator Specter. Well, I think we could handle that on a
    funding basis. [Laughter.]
        I would ask you to make a high priority on reporting to
    this subcommittee what is going on in alternative medicine and
    to give us a projection as to what more could be done.
        It is not inappropriate to respond to public interests and
    public concerns.
        Dr. Varmus. I agree.
        Senator Specter. There is a tremendous amount in the
    literature. My colleagues and I are very frequently asked why
    not more and what is being done and isn't there something
    really here?
        We talked about this in the past and I appreciate the jump
    from $11.9 million to $20 million between 1997 and 1998.
    However, I have a sense that more is in order, given the scope
    of your budget and given the scope of the public interest.
        Did you want to make a comment?
        Dr. Varmus. Just very briefly, Senator.
        I was hoping to be able to give you that report today. We
    still lack a few responses from other agencies that we are
    surveying. We know you want the report.
        We will add to the report some responses to the questions
    you have raised today. I would like to give you a brief
    description of the transagency oversight we are providing and
    some indications of new directions the Institutes would like to
    take in cancer, arthritis, and several other areas that I think
    you would find interesting.
        Senator Specter. There is another vote on, as I had said
    earlier there would be. I am going to have to excuse myself for
    just a few minutes. I shall return promptly and I will ask you
    all to wait.
        We will recess for just a few minutes.
        [A brief recess was taken.]
        Senator Specter. We will turn on the 5-minute clock for
    rounds of questions by Senators.

                          Alternative medicine abroad

        Dr. Varmus, when we recessed, we were talking about
    alternative medicine. What can be collated with respect to the
    medical information on alternative medicine beyond the confines
    of the United States?
        Dr. Varmus. What we have done recently is to make use of
    the National Library of Medicine to make all articles in all
    journals that describe activities in the alternative medicine
    research available to anyone who goes into the data base. That
    includes journals from all over the world.
        Senator Specter. Including those which go beyond the United
    States?
        Dr. Varmus. Actually, the majority of those journals are
    not even in English. But we have translations and summaries.

                         progress of HIV/AIDS research

        Senator Specter. To whom should I direct a question
    regarding AIDS funding, Dr. Varmus?
        Dr. Varmus. Either to Dr. Whitescarver, who is the Acting
    Director of the Office of AIDS Research, or Tony Fauci, the
    Director of NIAID, or to me.
        Senator Specter. Let's go to Dr. Whitescarver, who was
    first mentioned.
        Similar to the questions posed, could you summarize the
    progress on the research as to AIDS? Is it a realistic question
    to provide some approximate date when we might look for a cure?
        Dr. Whitescarver. Thank you, Mr. Chairman.
        AIDS has enjoyed some substantial support and many
    scientific opportunities, which I think have been addressed in
    a timely manner. As a result of that, we have therapies that
    have contributed to reduced hospitalization and people living
    longer.
        The mortality rate has dropped considerably.
        So I think there has been a great deal of progress in the
    last few years. We still have a long way to go because this
    epidemic is certainly not over. It is far from over and we
    don't know about the long-term efficacy of these new drugs, how
    long their benefits are going to last. There are already some
    problems coming up.
        But the good news is there are second generations of these
    drugs in the pipeline. The molecular biologists have identified
    targets for drug development, new targets, therefore, new
    therapies are on the horizon.
        To answer the second part of your question, I think that is
    very difficult, once again, as with most diseases to put a time
    on a cure or even a prevention. But I think we are moving
    rapidly in that direction, at least to put AIDS in the
    perspective of a chronic, manageable disease.
        Senator Specter. Dr. Penn has estimated Parkinson's disease
    well within the decade. Could HIV be put in the same category?
        Dr. Whitescarver. I think it would be safe to say, as a
    chronic manageable disease and maybe even a cure, within 10
    years, yes.

                                Clinical trials

        Senator Specter. Thank you.
        Dr. Varmus, on the issue of clinical trials. There has been
    a lot of concern about whether there are sufficient resources
    being developed. I know you have accentuated that issue. Are we
    doing enough on clinical trials with your current projection?
        Let me rephrase that. Why do you think we are doing enough
    on clinical trials with your current projection?
        Dr. Varmus. I would say that we are doing more. I don't
    think the word ``enough'' is a word that I would use here.
        There are several problems. One is the problem of having
    adequate number of trained personnel to carry out clinical
    research, clinical trials, in particular. The second issue is
    one of patient accrual into clinical trials. The third is
    simply supporting the clinical trials processes themselves
    which, as you know, are very expensive.
        You have heard today from a number of investigators whose
    Institutes are markedly expanding their clinical trials
    activities.
        In cancer, for example, there are many more, four or five
    times more drugs in the pipeline than there were 5 or 10 years
    ago. As a result, if we are going to test all those drugs that
    are being developed, we are going to need more patients in the
    pipeline.
        You have heard about Alzheimer's disease, Parkinson's, and
    AIDS, where there are expanded opportunities for trying out new
    therapies.

                           new Clinical investigators

        Senator Specter. Dr. Varmus, let me interrupt you to focus
    on another aspect here before my orange light goes on.
        I am told the number of first time physician applicants for
    research project grants declined by 30 percent between 1994 and
    1996. At that rate, we may have none by the year 2000.
        Has this trend continued in 1997 and are you concerned
    about this market decline?
        Dr. Varmus. We are very concerned about it, Senator
    Specter. There are some nuances of interpretation here. For
    example, the data do not capture the number of physicians who
    are serving as co-principal investigators and who are,
    nevertheless, doing research.
        In addition, we think that the number reflects changes that
    are occurring at academic health centers, where there is
    increased pressure for doctors to perform care to support the
    center rather than to do research.
        One of the reasons we developed a new training and support
    mechanism for clinical investigation, the so-called K-23 and K-
    24 awards, is to ensure that a larger number of people enter
    clinical research and are able to sustain the activity, despite
    other demands on their time.
        Senator Specter. In order of arrival, as is our protocol,
    Senator Kohl.

                                    Epilepsy

        Senator Kohl. Thank you, Senator Specter.
        Dr. Varmus, I would like to talk about epilepsy with you
    this afternoon. Is it Dr. Penn to whom I would address my
    question?
        Dr. Varmus. Yes; that would be appropriate.
        Senator Kohl. Dr. Penn, I am interesting in focusing on
    diseases that affect children, particularly epilepsy.
        Nearly 2.5 million Americans suffer from epilepsy and 30
    percent are children. Currently, NINDS spends approximately $55
    million on research for epilepsy while much larger amounts are
    spent on other diseases that affect far fewer people.
        I do not want to pit one disease against another, but I am
    interested in knowing how you make decisions on funding
    neurological disorders within the NINDS. How do you decide on
    this smaller amount for epilepsy, given the large number of
    Americans who suffer from epilepsy?
        Do you think that epilepsy should get more research
    dollars?
        Dr. Penn. We, like other Institutes, Senator, work toward
    opportunity and really good clinical research. In epilepsy, we
    have several very nice studies going, both basic and clinical,
    and particularly in our own program in the Institute, we are
    working to actually develop more drugs for children with
    epilepsy.
        The issue of priority setting and which disorders at any
    one time may get more money or less money is partly the
    science, partly the investigators out there. We don't
    particularly want to try to pit one disease against another,
    either. But there are times when there is great opportunity in
    one disorder and perhaps others are just going along.
        We have major epilepsy centers. We have a major epilepsy
    center at Children's Hospital in Philadelphia, actually, for
    childhood epilepsy.
        We are very concerned about the fact that a lot of
    childhood epilepsy is somewhat hard to treat. You need multiple
    drug therapy. We have an advisory committee to our drug
    development program looking at these very issues.
        So it is not really a low priority with us. In fact, in the
    last several years it has taken on a very high priority,
    especially for children.

                                Epilepsy funding

        Senator Kohl. I am not sure I understood the import of your
    answer. I was suggesting that since there are so many more
    Americans suffering from epilepsy, particularly children, than
    other diseases relative to the amount of money that is spent on
    research, I do not understand why we do not commit more money
    to epilepsy, given the number of Americans who are suffering
    from epilepsy. Perhaps you can elaborate on this.
        Also, I understand that there is conceivably a cure for
    epilepsy that is out there, given enough research, that is out
    there within our grasp, given sufficient dollars for research,
    that developing a cure for epilepsy or a prevention in the
    first place is not beyond your conception, but that research
    dollars need to be committed.
        Could you comment on that, please?
        Dr. Varmus. Perhaps I could make a comment, Senator.
        First of all, there are many patients with epilepsy who are
    very successfully treated. There is a long history of research
    on epilepsy that has given us a number of medications that are
    extremely effective in controlling the disease.
        Second, as Dr. Penn has pointed out, there are oversight
    committees that are looking at possible opportunities for
    research in epilepsy. These committees have been encouraging
    drug development for pediatric patients and those patients that
    have refractory epilepsy.
        Third, what tends to happen in a field like epilepsy is
    that a new discovery encourages people to come into the field.
    That has happened in a very dramatic way in the last couple of
    years with the discovery of some genetic diseases whose mutant
    genes have actually been isolated in the last year or two.
    Those discoveries give us dramatic new insights into how
    structural abnormalities in nerve cells can contribute to the
    disordered electrical activity that leads to epileptic
    seizures.
        We think those discoveries are going to draw many new
    people to this field and that we will be getting grant
    applications that will allow the portfolio to increase in the
    best possible way as a result of really outstanding
    applications.
        Senator Kohl. In the event that we will provide
    significantly more funds to NIH over the next several years,
    which I support, do you anticipate spending a significant part
    of that on epilepsy research?
        Dr. Varmus. Yes, sir; we believe that virtually every
    disease we work on is going to benefit both directly and
    indirectly from increased expenditures for health research.

                         Epilepsy--access to treatment

        Senator Kohl. One of the complaints of many families who
    have children with epilepsy is that the research done at NIH
    does not always lead to treatments that families have access to
    and can afford.
        What steps are you taking to make sure that the treatments
    you develop can actually be affordable and used by families?
        Dr. Penn. We work directly with patient groups in our own
    programming with these drugs that we are working to develop. We
    are working really with very small businesses and with drugs
    which larger industries are not that interested in developing.
        It is absolutely critical that we do that because some of
    our larger pharmaceutical industries have not really gone after
    the drugs that we need to treat epilepsy. Some of our best
    drugs are very old drugs. We need some new ones and we need
    them for children.
        Therefore, we are trying to work and we are working
    directly also with the help of the FDA to develop these and,
    hopefully, to keep the costs down. I hear you, sir.
        Senator Kohl. Thank you, Dr. Penn and Dr. Varmus.
        Thank you, Mr. Chairman.
        Senator Specter. Thank you very much, Senator Kohl.
        Senator Cochran.

                     prepared statement of Senator Cochran

        Senator Cochran. Thank you, Mr. Chairman.
        Mr. Chairman, I have a prepared statement which I hope can
    be printed in the record along with a question on the subject
    of clinical research, which you raised of Dr. Varmus.
        Senator Specter. Without objection, it will be made a part
    of the record.
        [The statement follows:]

                   Prepared Statement of Senator Thad Cochran

        Mr. Chairman, I believe as you do that there must be a
    strong federal commitment to medical research. Through the
    commitment of this Congress and the diligent efforts of the
    National Institutes of Health, an ever-expanding base of
    scientific knowledge about health and disease is being
    developed that has already begun to revolutionize both our
    approach to scientific inquiry and the practice of medicine.
        Part of this medical research revolution is occurring in
    Mississippi. With NIH support, the University of Mississippi
    Medical Center, in conjunction with Jackson State University
    and Tougaloo College, is initiating a major study of
    cardiovascular disease in African Americans--the Jackson Heart
    Study. We are hopeful that the partnership between NIH and
    these Mississippi schools will yield important new findings on
    how to deal more successfully with this serious problem.

                            translation of Research

        Senator Cochran. On another subject, we all are supporting
    increased funding for NIH. There is no question about the
    consensus here in the Congress that more money is needed for
    the programs that you administer. The President has requested
    an increase in funding.
        It raises a question about whether we are doing enough to
    be sure that the findings of the research are being translated
    into programs of prevention, education, and the rest. I know
    the Centers for Disease Control is involved in some programs in
    our State, for example, and cancer screening is one example.
        To what extent are you working with CDC and shouldn't there
    be a concomitant increase in CDC funding or program funding of
    that kind to keep pace with the new findings that you are going
    to come up with with the new money that is going into research?
        Dr. Varmus. Senator, all of the centers of the CDC work
    extremely closely with the Institutes of the NIH. As I
    mentioned to you during the recess, when I was down at the CDC
    a couple of years ago, I was very impressed with how much
    interaction goes on. I would be happy to provide you with the
    long list of collaborative enterprises we are engaged in with
    the CDC.
        As you may also know, the Department of Health and Human
    Services developed a health research initiative that includes
    not only NIH but also the CDC and the AHCPR. We try to
    coordinate our research activities through that research fund,
    and we believe that we do perform complementary activities.
        All that being said, the CDC is not the only instrument by
    which the findings that NIH generates are transmitted to the
    public. The NIH has a very deep investment in prevention
    research; we spend over $3 billion in prevention research
    activities. We have considerable outreach through public health
    communications and direct contact with professional groups and
    with patient groups. We have an elaborate computer outreach and
    telephone outreach. We prepare instructive manuals on many
    topics. So we consider the CDC to be our partners in doing that
    phase of work, which we also agree is very important.
        The National Library of Medicine has a special set of
    skills that are applied to telemedicine--to making medical
    information accessible to the public--and it might be useful to
    hear from Dr. Lindberg on that topic.

                           Diabetes research workshop

        Senator Cochran. I want to ask you about a couple of other
    things and if I have time in my 5 minutes, I will ask for
    additional information on that subject.
        I would like for you to give us a status report or update,
    or one of your colleagues, on the last conference that you had
    on diabetes research.
        I know there was a recent meeting of a diabetes research
    working group. I would like to know, if you could tell us, what
    the outcome of these meetings have been? Does the budget
    reflect a request for additional funding to implement any of
    the recommendations that might have been made?
        Dr. Varmus. We have had a number of important meetings,
    perhaps the most central of which was a workshop held early
    last September to look for unexplored opportunities in diabetes
    research. That was a propitious time for such a meeting because
    the Balanced Budget Act of 1997 also included a research
    initiative of $30 million per year for 5 years directed toward
    type I diabetes. The workshop provided a blueprint for that
    research.
        In addition, there has been increasing interest in response
    to the high rates of diabetes, especially in some of our
    minority populations and as a consequence of the increasing
    role obesity plays in our society.
        I think Dr. Gorden, from NIDDK, who has taken the lead role
    in coordinating research carried out by many Institutes of the
    NIH on diabetes related topics, might want to comment briefly.
        Dr. Gorden. Senator Cochran, good afternoon.
        Senator Cochran. Good afternoon. It is good to see you, a
    fellow Mississippian. Let's all rejoice. [Laughter.]
        Dr. Gorden. We hope we are doing very well, Senator. I
    would just echo what Dr. Varmus has said. Really, the momentum
    that was generated at the September 4 meeting which Dr. Varmus
    participated in has carried through. We have a working group
    that has been congressionally authorized, that is starting to
    meet and will meet again at the end of this month, which will
    help us define a clearer blueprint for what we think we need to
    build in the future.
        But we think we have put in place strategies that relate to
    both treatment and even new strategies that relate to
    prevention. We are really at the interface of trying to
    discover causes of diabetes, of which there are many.
        So we think we have things in place that are going to
    address all of those important issues. As for the support we
    have gotten from the community in terms of planning and helping
    us, in terms of outreach, as you have mentioned before, we have
    also put into place an education program in collaboration with
    the CDC. This is a very active, very new program that was just
    inaugurated now in order to translate some of the discoveries
    that we have already accomplished.
        So there is really a very good mood in the community right
    now, a very positive movement, and I think we are all very
    excited about the prospects.

                           Children learning to read

        Senator Cochran. Thank you very much.
        Let me ask my final question to Dr. Duane Alexander, who is
    Director of the National Institute of Child Health and Human
    Development.
        Last year, during our hearing, we talked about research
    that had been done by this national institute and the fact that
    there were findings that really were not being used by other
    agencies of Government or by school districts. This is in the
    area of how to deal with the problem of children learning to
    read.
        There were congenital and other factors that were
    discovered that were important in these situations. I would
    like for Dr. Alexander, if he could, to give us a status on the
    results of our efforts last year. We included language in our
    committee report about developing a national panel to translate
    the research into programs that could be used in the classroom
    for teacher education and for helping diagnose and screen
    children who had learning difficulties.
        I do want to put in the record, if the chairman will
    permit, a copy of the statement by Dr. Alexander last year and
    our committee report to remind us of what we had done last
    year.
        Senator Specter. Without objection, it will be made a part
    of the record.
        Senator Cochran. Thank you.
        [The information follows:]
                       Reading Development and Disorders
        As requested, the statement provided for the record last year by
    Dr. Alexander follows:
        ``I think that it is important to point out that our intensive
    research efforts in reading development and disorders is motivated to a
    great extent by our seeing difficulties learning to read as not only an
    educational problem, but also a major public health issue. Simply put,
    if a youngster does not learn to read, he or she simply is not likely
    to make it in life. Our longitudinal studies that look at children from
    age five through their high school years have shown us how tender these
    kids are with respect to their own response to reading failure. By the
    end of the first grade, we begin to notice substantial decreases in the
    children's self-esteem, self-concept, and motivation to learn to read
    if they have not been able to master reading skills and keep up with
    their age-mates. As we follow them through elementary and middle school
    these problems compound, and in many cases very bright youngsters are
    deprived of the wonders of literature, history, science, and
    mathematics because they cannot read the grade-level textbooks. By high
    school, these children's potential for entering college has decreased
    to almost nil, with few choices available to them with respect to
    occupational and vocational opportunities.
        ``In studying approximately 10,000 children over the past 15 years,
    we have learned the following:
      --``At least 20 percent, and in some states 50 to 60 percent, of
            children in the elementary grades cannot read at basic levels.
            They cannot read fluently and they do not understand what they
            read.
      --``However, the majority of these children--at least 90 to 95
            percent--can be brought up to average reading skills if: (a)
            children at-risk for reading failure are identified during the
            kindergarten and first grade years; and, (b) early intervention
            programs that combine instruction in phonological awareness,
            phonics, and reading comprehension are provided by well trained
            teachers. If we delay intervention until nine-years-of-age (the
            time that most children are currently identified),
            approximately 75 percent of the children will continue to have
            reading difficulties through high school. While older children
            and adults can be taught to read, the time and expense of doing
            so is enormous.
      --``We have learned that phonological awareness--the understanding
            that words are made up of sound segments called phonemes--plays
            a causal role in reading acquisition, and that it is a good
            predictor because it is a foundational ability underlying basic
            reading skills.
      --``We have learned how to measure phonological skills as early as
            the beginning of kindergarten with tasks that take only 15
            minutes to administer--and over the past decade we have refined
            these tasks so that we can predict with 92 percent accuracy who
            will have difficulties learning to read.
      --``The average cost of assessing each child during kindergarten or
            first grade with the predictive measures is between $15 to $20
            depending upon the skill level of the person conducting the
            assessment. This includes the costs of the assessment
            materials. If applied on a larger scale, these costs may be
            further decreased.
      --``We have learned that just as many girls as boys have difficulties
            learning to read. The conventional wisdom has been that many
            more boys than girls have such difficulties. Now females should
            have equal access to screening and intervention programs.
      --``We have begun to understand how genetics are involved in learning
            to read, and this knowledge may ultimately contribute to our
            prevention efforts through assessment of family reading
            histories.
      --``We are entering very exciting frontiers in understanding how
            early brain development can provide us a window on how reading
            develops. Likewise, we are conducting studies to help us
            understand how specific teaching methods change reading
            behavior and how the brain changes as reading develops.
      --``Very importantly, we continue to find that teaching approaches
            that specifically target the development of a combination of
            phonological skills, phonics skills, and reading comprehension
            skills in an integrated format are the most effective ways to
            improve reading abilities.
        ``At the present time, we have held several meetings with officials
    from the USDOE and have discussed how these findings can be used across
    the two agencies. As an example of this collaboration, NICHD and USDOE
    have been developing a preliminary plan to determine which scientific
    findings are ready for immediate application in the classroom and how
    to best disseminate that information to the Nation's schools and
    teachers.''
        The excerpt from the Senate Committee report accompanying the
    fiscal year 1998 appropriations bill and addressing reading development
    and disorders is as follows.
        ``The Committee is impressed with the important accomplishments
    reported from the NICHD research program on reading development and
    disability, and is eager to have this information brought to the
    attention of educators, policymakers, and parents. Noting the fact that
    the NICHD is already collaborating with the Department of Education,
    the Committee urges the Director of the NICHD in consultation with the
    Secretary of Education, to convene a national panel to assess the
    status of research-based knowledge, including the effectiveness of
    various approaches to teaching children to read. The Committee
    recommends that the panel be comprised of 15 individuals, who are not
    officers or employees of the Federal Government and include leading
    scientists in reading research, representatives of colleges of
    education, reading teachers, educational administrators, and parents.
    Based on its findings, the panel should present a report to the
    Secretary of Health and Human Services, the Secretary of Education, and
    the appropriate congressional committees. The report should present the
    panel's conclusions, an indication of the readiness for application in
    the classroom of the results of this research, and, if appropriate, a
    strategy for rapidly disseminating this information to facilitate
    effective reading instruction in the schools. If found warranted, the
    panel should also recommend a plan for additional research regarding
    early reading development and instruction. The Committee looks forward
    to discussing the findings of the report during the hearing on the
    fiscal year 1999 budget.'' (Senate Report No. 105-58, p. 86).

                         research on reading disability

        Senator Cochran. Then I would ask Dr. Alexander for his
    response on the status of that initiative.
        Dr. Alexander. Senator Cochran, the research on reading
    disability and how children most effectively can be taught to
    read has continued to make excellent progress, both at the
    level of studying instructional methods as well as basic
    science studies of the brain processes involved in learning to
    read and blockages to that process.
        I am very happy to report to you that the national reading
    panel has been appointed. We had excellent cooperation and
    collaboration with the Department of Education in soliciting
    nominees for this panel and selecting them.
        We have put together a panel with outstanding expertise and
    diversity. The first meeting of that panel will be held on
    April 24 at the NIH, and we will be working very hard to try to
    complete the panelists' charge and get a report back to this
    committee by November.
        Senator Cochran. Thank you very much, and I commend you for
    your leadership and your rapid response to the initiative that
    we started last year.
        Thank you very much.
        Dr. Alexander. Thank you, Senator.
        Senator Cochran. Thank you, Mr. Chairman.
        Senator Specter. Thank you, Senator Cochran.
        Senator Bumpers.

                                 Grant funding

        Senator Bumpers. Thank you, Mr. Chairman.
        Dr. Varmus, if you had all the money in the world and we
    were living in a perfect world, how many of those 24,221
    applications would you have approved?
        Dr. Varmus. That's a tough question, Senator, because, as
    you know, they are not of equal quality. Some of them are of
    extremely high quality. People who have had tremendous
    experience in reviewing such applications would say that
    perhaps 30 to 40 percent are of real obvious merit and below
    that it is a gradient. Where you cut off is somewhat arbitrary.
        It is important to distinguish, in my view, among three
    different kinds of applications. First are applications from
    first-time investigators, people who have never had a grant but
    have been trained, sometimes by NIH training programs. We would
    like to see them get at least one shot at showing what they can
    do as an independent investigator. Then there are applications
    which come from people who have already had support. They tend
    to do better than the newer applicants.
        Then there are people who have had previous support and are
    applying for another grant, as opposed to continuing a previous
    grant. You could argue that there is, perhaps, less imperative
    to have those people receive a second, third, or sometimes even
    a fourth grant.
        So I think it is important to disaggregate those numbers a
    little bit. But, overall, I would say that something in the
    range of between 30 and 40 percent of the total applications
    should be funded.

                         average length of Grant awards

        Senator Bumpers. Just quickly, what is the average length?
    Do you determine the length of the grant on the front end?
        Dr. Varmus. We do.
        Senator Bumpers. What is the average length?
        Dr. Varmus. The average length at present is roughly 4
    years.
        Senator Bumpers. And, of course, you allow justification
    for extension of that if, at the end of the 4 years, there is a
    justification for extending it?
        Dr. Varmus. Well, it is not a question of justification.
    One has to reapply. That is what I mean by a competitive
    renewal.
        Senator Bumpers. Yes.
        Dr. Varmus. Those applications tend to do about twice as
    well as applications for a new grant.

                       declining efficacy of Antibiotics

        Senator Bumpers. Dr. Varmus, I don't know whether it was
    Newsweek or Time magazine that had a big story this week on a
    continuing story that is moderately alarming, and that is about
    the declining efficacy of antibiotics in certain diseases.
        Do we tinker with what we have and try to strengthen it or
    do we look for new solutions in the case like that? What do we
    do?
        First of all, I assume that is correct.
        Dr. Varmus. Yes; we are having increasing problems. There
    is no doubt about that.
        Dr. Fauci, whose Institute addresses this problem every
    day, might want to comment. We do take this as a very serious
    problem. It is related to inappropriate use of antibiotics, to
    the fact that there are mechanisms of bacteria and viruses that
    allow for resistance to develop against antimicrobial agents
    like penicillin, that you are familiar with, and others.

                                 cure for Ebola

        Senator Bumpers. Before we go to Dr. Fauci, as I am
    interested in his comments on that, do we do anything there?
    Are we doing any research in this country to speak of to find a
    cure for ebola?
        Dr. Varmus. We have some grant applications on ebola virus
    that are being funded by the NIAID. Whether there are any
    efforts being made to look for treatment or cure, I think it is
    important to point out, Senator, that traditionally we have had
    very few drugs for treatment of viral illnesses.
        One of the remarkable things about the way in which we have
    advanced on the AIDS front is that we have developed several
    powerful drugs to treat HIV infection. Those have served as
    models for how we might go about attacking other viral
    infections.
        Many other viruses make enzymes required for duplicating
    the viral genes, for making enzymes that chop up viral
    proteins, so-called proteases. HIV enzymes are now serving as
    models for how we go about approaching other viral infections,
    and those strategies are being considered in the context of
    many other viral infections, including ebola virus.
        Tony, do you want to comment here?
        Dr. Fauci. Yes; we have a handful of grants. One very fine
    investigator that we are supporting is looking at a vaccine for
    ebola.
        We have another grant or two looking at therapeutic
    approaches, which, as Dr. Varmus said, is very difficult.
    Viruses are one of the more problematic microbes to develop
    antimicrobial therapy for. But it is not a dead issue with
    regard to attempts to develop appropriate antimicrobials.

                             Antibiotic resistance

        I might mention in response to your previous question about
    how we are approaching antibiotic resistance, we consider that
    to be under an area of emphasis called emerging and reemerging
    microbes, which we placed a significant amount of effort on in
    the past couple of years, and particularly in the budget that
    we are defending here today. In emerging and reemerging
    microbes, one of the more important for our country is the
    development of microbes that are resistant to antibiotics. A
    particularly problematic area that we are facing now, where we
    actually moved some money in the middle of the fiscal year into
    the area is the recent occurrence, first in Japan and then in
    the United States, of vancomycin resistant staphylococcus
    aureus. This is a very substantial problem because vancomycin
    has been essentially the last firewall against staphylococcus
    aureus and we are seeing partial resistance now.
        We have a new antibiotic, synercid, which we believe will
    be the next line of drugs against this. But that is just one
    microbe.
        Approximately 70 percent of hospital acquired infections
    are, in fact, antibiotic resistant to at least one or more of
    the antibiotics. So it is a significant problem.
        But as I mentioned, we are addressing it in our initiative
    in this and previous years on emerging and reemerging microbes.
        Senator Bumpers. Do you think you are doing all you can do?
    Do you have all the money to do everything you can do?
        I see this as a really major, major health problem for the
    whole world.
        Dr. Fauci. As others have said, I don't think we could ever
    say that we are doing everything we could do. But I can assure
    you, Senator, that we have made this a major priority in the
    Institute.
        Senator Bumpers. Thank you, Dr. Fauci.
        Thank you, Mr. Chairman.
        Senator Specter. Thank you very much, Senator Bumpers.

          international collaborations on Infectious disease outbreaks

        Senator Faircloth.
        Senator Faircloth. Thank you, Mr. Chairman.
        Senator Bumpers, I could not help but think of that old
    joke that if Dr. Varmus had all the money in the world, he
    could farm for a couple of years. [Laughter.]
        Senator Bumpers. This is not the Agriculture Committee,
    Senator Faircloth. [Laughter.]
        Senator Faircloth. Dr. Varmus, we welcome you. I attended
    last week's rally to add my support for increased funding for
    NIH. As I said then, I will say again. If we could find $18
    billion for the IMF, we certainly can find the same amount of
    support to find a cure for the diseases that are ravaging this
    Nation and the world as a whole.
        This morning, I stood on the steps of the Capitol under a
    50-foot pink ribbon, and we spoke of the hope we have that we
    will find a cure for breast cancer. You are certainly at the
    helm of that ship that we hope will be bringing a cure quickly.
        Under your leadership and with the help of your Institute
    directors and many, many talented researchers, we are getting
    closer every day to the cure for cancer and many other dreaded
    diseases that have plagued generations and generations of
    people.
        As you know, I introduced legislation last year asking that
    an institute for biomedical imagery be established at the NIH.
    As Senator Frist and I work together to see what we can do to
    get more research done in this area, we are certainly
    appreciative of your support.
        Dr. Varmus, I have been deeply disturbed about your
    decision to discontinue the National Institutes of Health DNA
    Advisory Committee. Public objection has saved the committee,
    but you decided to relinquish their approval responsibilities
    to the FDA.
        The FDA can only grant approvals based on safety and
    efficiency. FDA cannot address the ethical and moral
    implications of the new gene therapies which the National
    Institutes of Health committee did address.
        I wish and would like for you to reconsider this decision
    as these new therapies deserve a more careful review than they
    are going to get from the FDA. I thank you.
        Mr. Chairman, I have one brief question, which I will
    direct to whomever may wish to answer.
        The Hong Kong flu outbreak last year demonstrated the need
    for global preparedness and the rapidity with which microbes
    and diseases can be spread around the world. We may and we will
    face future epidemics whose virulence could catch our existing
    public health networks unprepared.
        What are we doing in research and what are the
    opportunities that NIH has pursued internationally to reduce
    the risk of future outbreaks?
        I read something in a popular publication--I'm not sure
    what it was, though I believe it was Time--that the Asian flu,
    I believe it was, of World War I actually took several months
    to move from its beginning point somewhere in Kansas to the
    battlefields of Verdun. Of course, now it would go overnight.
        Dr. Varmus. This year's Hong Kong episode illustrates very
    nicely the way in which we try to respond to those threats and
    also illustrates very nicely an issue that Senator Cochran
    brought up about how we work with the CDC.
        Dr. Fauci, whose Institute was involved in that response,
    might want to comment briefly.
        Dr. Fauci. Yes, Senator. There was a Public Health Service/
    DHHS flu pandemic plan that was put into effect immediately
    upon the identification of the first case in May 1997 and then
    the clusters in December. That was a plan that involved
    multiple agencies, both within and outside of HHS, and in HHS
    it was predominantly the Centers for Disease Control. You know
    from reading and seeing in the media the important role that
    they played there from a surveillance standpoint.
        The NIH role is fundamentally that of research, and we
    played a role with the CDC because, initially, the H5N1 that
    was isolated a couple of decades ago, was put in our
    repository. We, in fact, made antibodies to it, so that when
    the CDC needed antibodies immediately to make kits to do
    surveillance in Hong Kong, the surrounding areas, and in our
    own State and territorial health departments, the NIH made that
    available to them.
        The surveillance was done in collaboration with the CDC and
    this was effective.
        I might add that we were also able to supplement one of our
    grants. Dr. Varmus used his Director's reserve to move money
    over to immediately supplement one of our grantees who played a
    major role in the decision in Hong Kong to destroy the chickens
    which, as you know, essentially put an end to the epidemic
    there.
        Again, this is part of our emerging microbes effort and is
    continuing. It is also a major priority in this year's budget
    for us.
        Senator Faircloth. Thank you so much, Doctor.
        Thank you, Mr. Chairman.

                              Ergonomics research

        Senator Specter. Thank you very much, Senator Faircloth.
        We have kept you here a long time and we don't want to keep
    the progress of medical research in abeyance much longer. I do
    want to ask you one more question, Dr. Varmus, and that is with
    respect to the ergonomics issue. I know that you have already
    discussed this in detail with Bettilou Taylor, my clerk and
    very, very able staffer.
        Dr. Varmus. Yes; she is.
        Senator Specter. She has the sharpest pencil on Capitol
    Hill.
        Last year, Senator Harkin and I consolidated or eliminated
    134 programs in our subcommittee to save $1.5 billion for the
    $907 million. These programs were added to NIH and others to
    guaranteed student loans, because that is where we consider the
    priorities to be.
        Ms. Taylor had the conversation with you about the letter
    which was received from a number of Members of the House on
    this ergonomics issue. The letter had a line about ``Thank you
    for agreeing to fund the National Academy of Sciences
    comprehensive peer review of all available scientific
    literature examining the cause and effect relationship between
    repetitive tasks in the workplace and musculoskeletal
    disorders.'' The letter further states, ``Studies estimated the
    cost of $890,000 and it may take 24 months to complete.''
        I understand that you advised Ms. Taylor that you did not
    agree to that type of study and that you felt that the NIOSH
    report was quite good, but that maybe the solution would be
    simply to have a workshop to allow independent people to
    evaluate the quality of the NIOSH report and answer questions
    to see if there was any basis on how that study was carried
    out.
        The concern I have is we have prohibited any regulations on
    ergonomics for 1 year and the understanding was that would be
    the end of it. This has been a very contentious issue and we
    want to be free at the end of this fiscal year, September 30,
    to move ahead on this very important subject. If there can be
    some modest study, if one is needed, that will not go beyond
    the fiscal year. What is your thinking on the subject as of
    this date?
        Dr. Varmus. Senator Specter, we are continuing to have
    conversations with the academy about how such a study could be
    done. But, of course, I took careful notice of the letter you
    sent to me on February 4, in which you stated that you were
    going to have conversations with the Members of the House who
    have been corresponding with me. I look forward to hearing
    about the results of your conversations with them.
        I am open to suggestions. As Secretary Shalala said when
    she was here on March 10, I am basically in a holding pattern
    until I hear about how the two Appropriations Committees would
    like to try to reconcile their differences.
        In the meantime, we are trying to work with the academy on
    a kind of arrangement that would be a reasonable one and would
    do something expeditiously.
        Senator Specter. How long would that take?
        Dr. Varmus. We are not entirely clear yet. We have talked
    with them about bringing in some experts in this field who
    could give us some advice about how close we could come to
    providing either answers to Mr. Livingston's questions or their
    view about the extent to which we could answer the questions
    with existing knowledge.
        The House is not asking for additional research to be done.
    They are asking for further review of the literature beyond the
    review that was done by NIOSH.
        Senator Specter. That all can be accomplished before
    September 30?
        Dr. Varmus. I would think it could be, sir. I have made
    that view clear to the President of the academy Bruce Albert.
        Senator Specter. So there has been no agreement by you to
    conduct a study that might take 24 months at $890,000?
        Dr. Varmus. No.
        I have been very clear with my friends in the House that we
    are willing to entertain their request and we would like to do
    something, but we have not committed ourselves to a time or a
    cost.
        Senator Specter. OK.
        Dr. Varmus. I look forward to hearing from you about how we
    should proceed in this issue.
        Senator Specter. Well, we have not come to grips on that
    and my instinct is that we probably won't. I think the
    understanding we reached last year, which is that by September
    30 we are going to move ahead, is really the one we are going
    to be moving on. If there can be some relatively brief study,
    hopefully at a low cost, as you see fit, but not to delay us.
        We did not prohibit a study. We only prohibited
    regulations. We want to be free to act however the will of the
    Senate may be as of September 30. What you have just said is
    consistent with that.
        Dr. Varmus. As you know, I am in the middle here. But I
    would like to do things in good faith for both parties.
        Senator Specter. That is not an unusual position for you
    given your pay grade as Director of NIH. That is a big position
    and there is a big middle. [Laughter.]

       Prepared Statements of Senator Tom Harkin and Senator Larry Craig

        We have also received statements from Senators Harkin and
    Craig which will be inserted in the record at this point.
        [The statements follow:]

                    Prepared Statement of Senator Tom Harkin

        I want to welcome Dr. Varmus and his colleagues from NIH
    today and I look forward to working with all of you during the
    appropriations process this year. NIH is the premier medical
    research institution in the world. The research funded by NIH
    is key to maintaining the quality of our health care and key to
    finding preventive measures, cures and the most cost effective
    treatments for the major illnesses and conditions that strike
    Americans.
        But I must say that I am concerned about how we're going to
    get the money to give NIH the increase that both Senator
    Specter and I would like to provide. Last year, the entire
    Senate went on record in support of doubling funding for
    biomedical research. But only a third of the Senate supported
    us when we tried to make good on that commitment by proposing
    an amendment to the budget resolution which increased funding
    in the health account to provide adequate funding for NIH and
    other health problems.
        This year we have the same thing happening again. The
    budget resolution now being debated on the Senate floor, is--to
    put it kindly--extremely short sighted when it comes to support
    for finding cures, more cost effective treatment and
    preventions for the many diseases and disabilities that hit
    millions of Americans every year.
        The sponsors of the budget resolution claim to have
    included $1.5 billion for an NIH increase. But that is just
    smoke and mirrors. The resolution partly funds the purported
    increase with cuts of $600 million in other public health
    programs--programs like community health centers and CDC
    prevention programs--cuts we cannot afford to make. The
    resolution also includes reductions in other functions
    affecting this subcommittee, including the pot of money for
    Head Start and Ryan White AIDS programs. Under the nondefense
    discretionary levels included in the budget resolution, we
    could not even do a continuing resolution at last year's level
    much less provide NIH with a significant increase.
        The budget resolution before us makes crystal clear that
    the only way--the only way--we can devote the resources we need
    to health research--and to stop robbing Peter to pay Paul--is
    by going outside the regular discretionary spending process.
    The only way to adequately support medical research is through
    another mechanism. I believe the best other mechanism is that
    called for in S. 441, the National Fund for Health Research
    Act, that Senator Specter and I have introduced.
        This year, we may have the opportunity to use proceeds from
    bipartisan, comprehensive tobacco legislation for medical
    research. In fact, increased funding for NIH is the one area
    about which tobacco bills introduced by Senators from both
    sides of the aisle agree. But the budget resolution does not
    allow us to do that. Senator Specter and I are working on an
    amendment to the budget resolution which will make those
    tobacco proceeds available for biomedical research. We ask your
    support for that amendment.
        The budget resolution, as now drafted, shortchanges
    Americans' health and shortchanges efforts to control health
    care costs and keep Medicare solvent in the long run.
                                    ------

                  Prepared Statement of Senator Larry E. Craig

        I would like to thank the Chairman for holding this hearing
    today regarding budget requests for the National Institutes of
    Health (NIH) for fiscal year 1999. I look forward to learning
    more about some of the scientific advances that have been made
    over the last year at the NIH, as well as the goals and long-
    term projects planned for the coming year. Past
    accomplishments, as well as future plans should be taken into
    account as we look at ways to appropriately allocate funds to
    the various programs within the NIH.
        For the last several months, my staff and I have been
    hearing from various groups representing a broad range of
    diseases that get their research dollars through the NIH. The
    resounding message we hear from all of these groups is that
    their interests are not being adequately addressed in the way
    of funding. Each group has extremely valid reasons for wanting
    more funding and I find it difficult to pick and choose which
    disease should get more research money. Each disease is
    important and each one has far-reaching impacts on our country.
    I think it is crucial that we decide on what level of funding
    is appropriate and then distribute those funds with a sense of
    fairness.
        I applaud the NIH for the work they have done in developing
    new therapies and cures for diseases that will help resolve
    some of our country's greatest health problems. The long-term
    investments they have made in the areas of medical research and
    training will help to achieve many more new discoveries.
    Furthermore, sustained growth in funding for the NIH will help
    build upon past scientific achievement, address present medical
    needs and anticipate future health challenges.
        I do believe the NIH should be given funding adequate to
    support research that moves us toward cutting-edge treatments
    and prevention efforts, while helping to reduce overall health
    care costs. However, as we all know, there are harsh budget
    realities that we must work within and that is why we are here
    today. We must find a way to provide the appropriate level of
    funding for these programs while being fiscally responsible.
        I am strongly committed to fiscal responsibility. I also
    realize that the subcommittee is operating under significant
    budget constraints and will have to make difficult choices
    among competing programs. My hope is that the recommendations
    for NIH funding are made with the objective of searching for
    cost-effective solutions.
        We can make significant strides in the field of medical
    research while still working toward a balanced budget.
    Balancing the budget is all about setting priorities. If we
    discipline ourselves and set priorities now, while moving
    toward and keeping a balanced budget, that will be the best way
    to preserve our ability to fund our priorities in the future.
        I hope we will be able to shed some light on what these
    priorities must be as we continue to look for ways to
    adequately fund these very important programs, while working
    within our means. I look forward to hearing the testimony of
    all of our witnesses here today. Your expertise will be
    extremely valuable to me throughout this process.

                         Additional committee questions

        Senator Specter. This is a fascinating committee to chair
    because there are so many troubled people with ailments. We are
    almost at the 2 hour mark since we were convened here. So we
    are going to recess.
        I want to say that there are many questions that we are
    going to submit for the record and ask you about. People have
    come to this subcommittee to meet with problems on
    osteoporosis, colon cancer, Batten's disease, juvenile
    diabetes, drug abuse, scleroderma, breast cancer, amyotrophic
    lateral sclerosis, spinal cord injury, sudden infant death
    syndrome, polycystic kidney disease, end stage renal disease,
    schizophrenia, cystic fibrosis, lymphoma, lupus--just to
    mention a few. We are very much concerned about all of them, as
    I know you are.
        We will fight hard to get you additional funding because we
    think it is very much in the national interest to do so.
        Dr. Varmus. We are very grateful for your support, Senator.
    Thank you.
        [The following questions were not asked at the hearing, but
    were submitted to the Department for response subsequent to the
    hearing:]
                         Additional Committee Questions
                                bipolar disorder
        Question. Last year's Senate Labor-HHS-Education Appropriations
    report called for an NIMH research plan on bipolar disorder. This
    request is a clear indication that, as you have acknowledged publicly,
    there is too little bipolar illness research being funded by NIMH. This
    appears to be the case, particularly in the area of clinical research.
    As you know, bipolar disorder is among the most disabling of mental
    illnesses. The Subcommittee understands that NIMH has taken some steps
    to increase bipolar disorder research funding. (a) Please describe what
    NIMH is doing as part of its current budget on manic-depressive illness
    research. How many new studies are being funded on this illness? What
    else, if anything, does NIMH intend to do to assure more research on
    bipolar disorder in fiscal year 1999 and beyond?
        Answer. NIH in general and NIMH, in particular, are committed to
    moving forward in research on bipolar disorder. Let me describe two
    major initiatives currently in progress for fiscal year 1998. First, in
    the NIMH Genetics Initiative, and as part of its effort to identify
    genetic factors in bipolar disorder, the Institute will continue to
    build up its national resource of DNA sample from patients and their
    family members. Second, we have issued a solicitation for a five year
    contract (``Treatment of Bipolar Disorder'') to launch a major public
    health study on ways to develop optimal treatment of bipolar disorder
    in adults and in geriatric populations. The study will assess the long-
    term impact of different treatments on a broad range of clinical and
    functional outcomes. Data from this study will inform treatment
    practice in community settings. Other studies are examining treatments
    for adolescents with bipolar disorder. Furthermore, we intend to
    increase research on the neurobiological underpinnings of bipolar
    disorder as well as clinical, behavioral, and epidemiological work that
    will be useful in finding ways to prevent this disorder.
        At this time, it is not possible to predict how many studies on
    bipolar disorder will be funded in fiscal year 1999. This depends upon
    how many grant applications are submitted by independent investigators,
    and how scientifically sound and appropriate these applications are
    judged to be through the peer review process.
        As outlined above, NIMH intends to explore all avenues to increase
    research on bipolar disorder as rapidly as the growing fundamental
    science base allows scientifically rigorous research studies to be
    undertaken.
                             translational research
        Question. NIMH has frequently noted the need to support
    ``translational'' research. However, for many policy-makers, patients
    and families, the definition of translational research remains unclear.
    Would you describe for the Subcommittee what you mean by translational
    research? How does NIMH intend to implement this kind of research and
    make relevant to the advance of severe mental illness treatment? What
    specific programs and policies does NIMH intend to put forward to
    advance translational research?
        Answer. The term, translational research, is meant to describe a
    type of scientific inquiry that crosses usual conceptual and
    disciplinary boundaries. Historically NIH's support of biomedical
    research has focused on two major categories: basic biology and
    clinical research. Translational research seeks to translate ``back and
    forth'' between these two largely separate domains. It is anticipated
    that this will result in accelerated scientific progress that is
    directly applicable to clinical disorders. It is important to note that
    this is viewed as a bi-directional process, i.e., clinical research
    informing, as well as being informed by, basic research and vice-versa.
    A couple of examples may clarify the concept. Developmental
    neurobiology and genetics are both highly relevant to mental disorders.
    In both instances, hypotheses in clinical research are shaped by
    observations in basic research and vice-versa. The cognitive deficits
    observed in schizophrenia coupled with structural anomalies in the
    brains of schizophrenics have encouraged developmental neurobiologists
    to investigate the possible role of aberrant brain development in the
    etiology of schizophrenia. Conversely, the identification of a growing
    number of genes required for the precise specification of brain
    structure during development has given rise to clinical studies focused
    on the anatomic substrates of abnormal mental function. It is my belief
    that fostering translational research will enrich both basic and
    clinical research and will speed progress toward a complete
    understanding of mental disorders.
        Implementation of this kind of research will require a continuing,
    close collaboration between basic and clinical mental health
    researchers. NIMH has begun to develop and strengthen such
    collaborations in research through specific research support
    mechanisms. For example, several recently published NIMH program
    announcements call for the development of four types of research
    centers focused on translational research. One type of center, the
    Silvio O. Conte Centers for the Neuroscience of Mental Disorders, will
    support the integration and translation of basic and clinical
    neuroscience research on severe mental illnesses, while other centers
    will focus on related research areas.
        Translational research requires collaboration between scientists
    from multiple disciplines, an approach which, historically, has not
    been emphasized in research on mental illnesses. NIMH stimulates and
    sustains activity in translational research on severe mental illnesses
    through career-development mechanisms, which provide support for young
    clinical investigators during the formative stages of their careers
    until they become fully independent researchers. In addition, small
    grant awards provide support for pilot projects and for first-time
    grants for young NIMH investigators. These awards can be used to
    explore translational and other research studies that would be
    difficult to fund under traditional support mechanisms. In addition, an
    NIH-wide RFA, Clinical Research Curriculum Award, is intended to
    stimulate the inclusion of high-quality, multidisciplinary didactic
    training as part of the career development of clinical investigators.
                              research priorities
        Question. There is concern among many that NIH in general, and the
    NIMH in particular, desire to invest less in disease-oriented and
    clinical research, and more in basic scientific research. Please
    describe for the Subcommittee what you think is the appropriate balance
    at NIMH between basic research funding and clinical and services
    research. Does NIMH intend to invest more in basic research? If so, how
    much more?
        Answer. Research on the causes, treatment, and prevention of mental
    illnesses is integral to the mission of the National Institute of
    Mental Health (NIMH); indeed, this research is the primary focus of all
    NIMH programs. Mental illnesses are diverse and, even though science is
    rapidly making enormous strides, very little is known about the causes
    of any of these illnesses. We do know that the key to these illnesses
    lies in basic research on the molecular and cellular changes in the
    brain and on understanding how the brain is changed by these diseases
    to produce the behavioral manifestations of these illnesses. This is
    the only way that we will ever understand how to most effectively
    treat, or to prevent, mental illnesses. NIMH basic research is directed
    toward understanding the changes in the brain and behavior that
    determine mental disorders.
        At the same time we must continue to apply what we already know to
    clinical studies and services for patients. Thus, support for clinical
    research and health services research by NIMH is also expanding. The
    NIMH assesses the balance between all these elements of its research
    endeavors and makes changes in emphasis as the scientific and clinical
    opportunities for studies warrant.
        In shaping its research program, NIMH periodically establishes
    research priorities, then continues to evaluate these priorities in the
    light of accumulating research-based knowledge. The appropriate balance
    between basic research funding and clinical and services research
    varies somewhat over time as advances in science create new
    opportunities to address specific research questions and to explore new
    avenues to treatment or prevention, or as marked changes in the mental
    health-care landscape--such as the advent of managed care--create new
    public mental health questions. NIMH relies on the National Advisory
    Mental Health Council (NAMHC), composed of both expert scientists and
    representatives of the public, to continually monitor the Institute's
    program balance and to assist in setting and reviewing research
    priorities. The NAMHC reviews and approves all research grants awarded,
    and, in addition, through special workgroups and task forces, the
    Council undertakes comprehensive, in-depth reviews of major segments of
    the NIMH research program and these reviews produce quite specific
    recommendations for program directions and emphasis.
        Based on recent recommendations by the National Advisory Mental
    Health Council and on emerging scientific opportunities, the NIMH
    intends to increase support for important areas of basic research as
    well as a broad spectrum of patient-oriented research--including
    clinical research, services research, and translational research that
    will accelerate the incorporation of basic research findings into
    clinical care. However, at this time, it is not possible to attach
    dollar amounts to these investments.
                                 schizophrenia
        Question. Schizophrenia is the most severely disabling mental
    disorder and is among the most severe illnesses that afflict mankind.
    The statistics bear this point out; (a) schizophrenia strikes in young
    adulthood usually resulting in a lifetime of severe disability, (b)
    consumers with schizophrenia account for nearly 25 percent of all those
    receiving disability payments from the federal government, (c)
    schizophrenia costs the nation $32 billion each year, (d) consumers
    with schizophrenia occupy 40 percent of all hospital beds in the United
    States, (e) 10 to 15 percent of its victims commit suicide. While there
    has been important treatment advances in the 1990's, much has to be
    learned about this disease. We still do not understand what causes this
    illness, we have no diagnostic markers for schizophrenia, and
    treatments are but palliatives and not cures. By NIMH's own accounting,
    investment in schizophrenia research modestly declined in the first
    part of this decade--by approximately 10 percent. Given the severity of
    this illness and a record of decreasing research investment, what does
    NIMH plan to do to advance our understanding and treatment of
    schizophrenia? How much money is needed in this area of research? What
    are the most important barriers to research advances in schizophrenia,
    in your view? How can Congress assist you in conquering this terrible
    disease?
        Answer. Schizophrenia research continues to have a prominent place
    in NIMH programs. The Institute is committed to studies of the
    neurobiological substrates of schizophrenia, its neurodevelopmental
    origins, and the inheritance of and expression of vulnerability genes
    in the brain, as well as other factors that may trigger or exacerbate
    schizophrenia. For example, the NIMH Genetics Initiative has provided
    new funding to augment the number of patient samples available for
    gene-finding efforts in schizophrenia. Efforts are also underway to
    characterize exactly which of the Gamma aminobutyric acid (GABA) brain
    regions and which neurons are affected. There are preliminary data to
    suggest that small GABA interneurons, in particular, may be abnormally
    ``connected'' in patients with schizophrenia, while there is a growing
    body of data pointing towards the involvement of specific emotional and
    higher cognitive centers of the brain. This localization is consistent
    with many of the behavioral manifestations of schizophrenia.
    Neurochemical theories of schizophrenia also continue to be studied,
    and there is growing evidence pointing toward the possible involvement
    of excitatory neurotransmission involving glutamate.
        While we do not yet have a cure for this devastating illness, in
    the past few years, three new, ``atypical'' antipsychotics have become
    available. These represent major therapeutic advances, since they are
    better-tolerated, and preliminary evidence suggests that they may be
    more effective than traditional antipsychotics. NIMH has initiated
    clinical studies to determine if these new treatments are indeed more
    effective, and if so, in which patient groups they are best used.
        Over the last 5 years NIMH has cofunded, with the Agency for Health
    Care Policy and Research (AHCPR), the Schizophrenia Patient Outcomes
    Research Team (PORT). The mission for this PORT was to identify and
    analyze the outcomes and costs of various treatments for schizophrenia;
    to determine the most cost-effective means to treat or manage the
    condition; and to develop and test methods for reducing inappropriate
    or unnecessary variations in treatment. The same investigative team was
    funded recently to conduct a field trial of a methodology for assessing
    the quality of care provided to patients with schizophrenia.
        The fiscal year 1999 President's Budget request will permit NIMH to
    take advantage of the most important immediate research opportunities.
        There are a number of reasons why progress in understanding
    schizophrenia and finding a cure has been slow. First and foremost,
    schizophrenia is a disease unique to humans. There is no animal or
    tissue model that accurately reflects the manifestations of the disease
    in man, and this necessarily limits the investigations that can be
    performed. Many of the powerful methods for studying molecular or
    cellular processes that have led to rapid advances in our understanding
    of other illnesses cannot be applied to schizophrenia, since they
    involve destruction or severe disruption of the tissues that are being
    studied.
        There are other barriers as well. Schizophrenia is difficult to
    treat and few people with the diagnosis--even those who respond well to
    treatments--return to their pre-illness level of functioning. Because
    of this, we need to go beyond therapeutic studies and start thinking
    about prevention. Yet we know little about factors that influence the
    course of this illness. The NIMH is developing research to aid in
    identifying indicators of risk for onset of disease, relapse, poor
    functional outcomes, and suicide. The programs will also translate
    emerging findings from the basic sciences into new strategies for
    prevention and early intervention. We are hopeful of substantial
    progress in the next decade. There is also a lack of understanding of
    how the newer atypical antipsychotics work. Their mechanism of action
    is very complex, affecting multiple brain transmitter systems. This
    complexity may be a critical feature of their greater efficacy, and
    will remain a central focus of research efforts in the near future.
        With the funds requested in the fiscal year 1999 President's Budget
    Request and the flexibility to use these funds in areas of greatest
    opportunity, NIMH will be able to accelerate research on schizophrenia.
                             supply of researchers
        Question. As I am sure that you will agree, there is a great need
    to attract new researchers and clinicians into psychiatry--in the areas
    of genetics and severe mental illnesses in children and adolescents in
    particular. Could you please comment on the problems you see in terms
    of the human resources available to study and treat these serious brain
    disorders? What do you intend to do to recruit new and talented
    individuals to these fields? How can Congress assist you in this
    activity?
        Answer. Several high-priority research areas such as the genetics
    of mental illnesses and childhood and adolescent mental illnesses are
    drawing on a very small cadre of investigators, many of whom have
    pioneered these fields. However, as these areas of research develop and
    expand, progress depends on the availability of more well-trained
    investigators. The National Institute of Mental Health (NIMH) will
    develop strategies to attract more researchers into these critical
    areas. For example, in the area of pediatric mental illness, most
    researchers are drawn from the small groups of clinically trained child
    psychiatrists and child psychologists. Given the length of clinical
    training, many potential investigators are diverted (often for
    financial reasons) into non-research careers. However, while there are
    only 5,000 child psychiatrists nationwide, there are over 100,000
    pediatricians, adult psychiatrists, and neurologists, from whose ranks
    new child mental health-focused investigators could be drawn.
        NIMH anticipates two major activities in this area. (1) The
    Institute will issue a new career award to attract researchers such as
    neurologists, adult psychiatrists, and psychologists, who have not
    typically studied in this age group to encourage them to learn about
    how to do clinical studies of children and adolescents and to redirect
    their efforts. A similar strategy will be employed for other shortage,
    high priority research areas. (2) NIMH will develop supplements to
    existing research grants for young investigators who are interested in
    studying childhood psychopathology or other similar high priority
    areas.
        The fiscal year 1999 President's Budget Request was developed after
    lengthy examination and discussion of scientific opportunities and
    research needs, and NIMH feels that this level of funding will provide
    good support for strengthening the recruitment of researchers into
    critical areas of study.
                                  tuberculosis
        Question. How does the morbidity and mortality due to tuberculosis
    compare with the disease burden for other infectious diseases? What is
    the impact of TB on economic development?
        Answer. Tuberculosis (TB) kills approximately 3 million people each
    year, making it the leading cause of death due to a single infectious
    agent globally. In comparison, all acute lower respiratory infections
    combined were responsible for 3.9 million, malaria for 1.5-2.7 million,
    and HIV/AIDS for approximately 1.5 million deaths in 1996. TB accounts
    for more than one quarter of all preventable adult deaths in developing
    countries. One-third of the world's population is infected with the TB
    bacillus, and someone in the world is newly infected by TB every
    second. In the United States there were 19,855 cases of tuberculosis
    reported in 1997. The World Health Organization estimates that between
    now and the year 2020, nearly one billion more people will be newly
    infected with Mycobacterium tuberculosis, the bacterium that causes TB,
    200 million will develop active disease, and 70 million will die.
    Causing even greater concern, is the estimate that up to 50 million
    people may already be infected with drug resistant strains of
    tuberculosis.
        According to a recent study from the Battelle Centers for Public
    Health Research and Evaluation, published in the Archives of Internal
    Medicine, the United States spends an estimated $700 million per year
    on TB treatment and control. The impact of tuberculosis on economic
    development is particularly dramatic because most often affects
    individuals during their wage-earning years. A report recently issued
    by the WHO estimates that, if India, which has 2 million new cases of
    TB annually, spent the equivalent of $200 million per year on an
    effective TB control strategy, the tangible benefits to the Indian
    economy would be worth at least $750 million per year. In addition, if
    this epidemic is not adequately controlled, greater spread of multi-
    drug resistant TB will result, potentially creating a far more serious
    impact on global health and economics. In the United States, it costs
    approximately $2,000 to treat a typical case of drug sensitive
    tuberculosis, while treating a case of multi-drug resistant TB costs up
    to $250,000.
        Question. In the long-term, what is the best way to control and
    prevent tuberculosis and multi-drug resistant tuberculosis?
        Answer. In the long run, the most effective tool for preventing
    tuberculosis would be a TB vaccine. Controlling TB will also depend on
    the development of new and improved diagnostic and therapeutic tools--
    including therapies that would shorten and simplify the course of
    treatment, drugs active against currently resistant bacteria, and more
    sensitive and specific diagnostic methods suitable to low income as
    well as industrialized countries. NIH is actively supporting research
    in all these areas.
        The most effective current tool available for controlling
    tuberculosis is a strategy known as Directly Observed Treatment, Short-
    course or DOTS. Antibiotics can effectively cure drug-sensitive cases
    of tuberculosis and reduce development of additional drug resistant
    cases, but the treatment requires that patients take combinations of at
    least four antibiotics daily for a minimum of six months. DOTS ensures
    that patients comply with this difficult regimen by having health care
    workers observe patients swallowing every dose of their medications.
    Using a similar approach, the CDC along with state and local health
    authorities have made enormous headway since 1992 in controlling TB in
    the United States. In this same time period, the WHO Global
    Tuberculosis Programme has been focusing considerable resources to
    control the global epidemic by implementing DOTS as widely as possible.
    Despite these admirable efforts, only about 10 percent of patients
    worldwide with active TB disease currently have access to DOTS
    programs. The effectiveness of this resource-intensive control strategy
    is limited in many parts of the world by financial, logistical and
    political obstacles. Efforts to implement DOTS more widely are crucial
    to control this disease. However, it is estimated that even with a
    sustained global DOTS program, as many as 70 million people will die of
    TB in the next two to three decades.
        Question. How big a priority is tuberculosis research at NIAID? How
    actively is NIAID trying to develop a TB vaccine? When can we hope to
    have an effective tuberculosis vaccine?
        Answer. Tuberculosis research is a very high priority at NIAID. The
    TB research budget increased 1,311 percent from 1990-1999. NIAID
    supports a broad-based program of research on TB and its causative
    agent, Mycobacterium tuberculosis, consisting of basic and applied
    studies to better understand the biology, pathogenesis and immunology
    of TB, develop new tools for molecular epidemiologic studies, improve
    diagnostic and treatment strategies and advance more effective
    vaccines. Currently, NIAID supports more than 100 grants for basic and
    applied TB research. One grant is to the Institute for Genomic Research
    (Rockville, Maryland) to support the sequencing of the entire genome of
    a recent, clinical isolate of virulent M. tuberculosis. Progress has
    been rapid in the past year and sequencing is near completion. This
    will have significant implications for the development of future TB
    diagnostics, therapeutics and vaccines.
        Development of a TB vaccine is a critical part of NIAID's overall
    TB research strategy, and it is our most important long-range goal. An
    effective TB vaccine is necessary to conquer the global epidemic, but
    to achieve this goal a number of years of testing will be needed.
    Recent technological advances such as sequencing the genome of the
    pathogen provide a solid foundation for the additional steps that must
    be taken. These include further basic research into the genetic make-up
    of the pathogen and the human protective immune response; development
    of vaccine candidates and animal models, and conduct of clinical trials
    with promising candidates. Once trials are completed, efforts will
    focus on vaccine production, licensure, and distribution. With a
    sustained effort and commitment, an effective TB vaccine can be
    achieved.
        Question. How does funding for tuberculosis research at NIAID
    compare with funding for research on HIV and other infectious diseases?
        Answer. Research on tuberculosis continues to be a high priority at
    NIAID. In fact, spending increases for TB research have outpaced both
    those for AIDS research and for the Institute's spending on all non-
    AIDS infectious diseases. Over the past decade, NIAID support for
    tuberculosis research increased 1,311 percent. In fiscal year 1990,
    NIAID provided $2.7 million in funding for tuberculosis research, and
    in fiscal year 1999, we estimate that support will be approximately
    $35.7 million. In comparison, support for AIDS research for the same
    period at NIAID increased 94 percent, from $394 million in fiscal year
    1990 to $766.2 million in fiscal year 1999. Likewise, funding for all
    non-AIDS infectious diseases increased 70 percent, from $241.6 million
    in fiscal year 1990, to $411.9 million in fiscal year 1999.
        Question. Dr. Barry Bloom is chairing a committee that will be
    reporting back to Secretary Shalala with recommendations on
    tuberculosis vaccine development. How do you intend to make use of
    these recommendations?
        Answer. In March 1996, senior staff in the Office of the Secretary
    met with the Secretary's Advisory Council on the Elimination of
    Tuberculosis (ACET). During the meeting, the Council emphasized the
    importance of a national effort to develop an effective TB vaccine to
    meet the United State's goal of TB elimination. The Secretary's Office
    responded by requesting creation of a national strategy for TB vaccine
    development for her consideration. Subsequently, the ACET and the
    National Vaccine Program Office asked NIAID to convene a workshop to
    develop this strategy, since NIAID routinely assembles outside experts
    to provide recommendations and strategies for future efforts. At
    NIAID's request, Dr. Barry Bloom chaired the resultant workshop, A
    ``Blueprint for TB Vaccine Development,'' held March 5-6, 1998. A
    report from that meeting is currently being prepared for Secretary
    Shalala's consideration. NIAID believes TB vaccine development is an
    important area of current and future research and looks forward to
    receiving Secretary Shalala's response to its report.
        Question. What tuberculosis research is being done outside of NIH,
    both in the U.S. and globally?
        Answer. Both within the United States and globally, the majority of
    public sector and academic TB research is funded by the NIH; however,
    other significant efforts in U.S. TB research include those being
    pursued by the Centers for Disease Control and Prevention (CDC),
    focused largely on improving control and surveillance of tuberculosis,
    and by industry. Only a handful of large pharmaceutical companies
    appear to have major TB research programs focused on drug development
    or, in even fewer companies, vaccine development. Several biotechnology
    companies are also involved in R&D of improved TB diagnostics,
    therapies or vaccines. Unfortunately, many companies have decided not
    to pursue TB research because of financial and intellectual property
    issues that make identifying an ``adequate'' global market difficult.
        In 1995, the WHO Global TB Programme attempted to ascertain the
    funding level of global TB research. The 13 institutions that responded
    to the survey (none of which were from private industry) spent a total
    of $92 million, approximately $62 million of which was NIH funding
    (approximately $34 million from NIAID). The remaining four highest
    funders were the U.S. CDC ($17 million), the Medical Research Council
    of South Africa ($3.6 million), the Medical Research Council of the
    United Kingdom ($2.4 million) and the Robert Wood Johnson Foundation in
    the U.S. ($1.65 million).
                                     ______

                  Questions Submitted by Senator Thad Cochran
                         iom study on clinical research
        Question. As you know, I am a cosponsor of the Clinical Research
    Enhancement Act based on the recommendations of a 1994 report of the
    Institute of Medicine. Over the past three years, this Subcommittee has
    raised serious concerns about the major obstacles confronting clinical
    research through which our investment in NJ-U's basic research efforts
    pays off with better patient care. Other than responding with modest
    intramural initiatives, you have asked that we await a report from your
    advisory panel on clinical research. Recently, that panel issued its
    report and, not surprisingly made recommendations almost identical to
    those of the IOM.
        Dr. Varmus, why did the NIH not proceed with these initiatives
    three years ago when they were recommended by the IOM?
        Answer. As you stated, the ground work examining the state of our
    nation's clinical research enterprise was conducted by the Institute of
    Medicine (IOM). This study, which was carried out from 1991-1994 and
    was partially funded by NIH, addressed a number of the important issues
    concerning clinical research, including its role of clinical research
    in the delivery of health care, the status of the clinical research
    infrastructure, and the need for well-trained clinical investigators.
    Although the 1994 IOM report was thorough and addressed a range of
    relevant issues its recommendations were very broad and were aimed at
    both the private and public sector entities that sponsor, conduct, or,
    in some way, play a role in clinical research. These include the
    accreditation and certification organizations, professional societies,
    universities, academic medical centers, industry, and the Federal
    Government.
        Because NIH is but one of these entities and has a unique role, I
    responded to the 1995 Appropriations Committee report language that
    requested NIH to act on the recommendations of the IOM report by
    convening the NIH Clinical Research Panel (CRP). That panel was charged
    with examining specifically the role of NIH in ensuring the health of
    the Nation's clinical research infrastructure. To this end, the CRP was
    asked to examine several important areas of NIH-supported clinical
    research including, but not limited to, the General Clinical Research
    Centers (GCRC's), the NIH Clinical Center (CC), the recruitment and
    training of future clinical researchers by NIH, the conduct of NIH-
    sponsored clinical trials, and peer review of clinical research
    supported by NIH.
        The CRP was also asked to deliberate on a number of issues that
    were not prominent concerns at the time of the IOM study, but reflect
    the rapidly changing clinical research environment today. These include
    the expansion of managed care, the emphasis on training primary care
    physicians, and the extensive transformation of the academic health
    care infrastructure.
        By the time the CRP report was completed in December 1997, a number
    of the panel's recommendations were already being implemented. The
    complete report is available on-line at http://www.nih.gov/news/crp/
    97report/index.htm.
        Question. And, what do you plan to do immediately to rectify this
    situation and make up for lost time?
        Answer. NIH was implementing the recommendations of the Clinical
    Research Panel as they were brought forward. For example, the
    recommendation to track that part of the NIH budget devoted to clinical
    research was implemented by the creation of a prospective system to
    monitor the grants and other awarded funds which are devoted to
    clinical research. The recommendation to create a Clinical Research
    Training Program was implemented immediately. The creation of the new
    programs of career enhancing awards for clinical researchers continues
    this pattern.
        Question. It is my understanding that the number of first-time
    physician applicants for research projects grants declined by 30
    percent between 1994 and 1996? At that rate, we will have no new
    physician applicants by the year 2000.
        Answer. We have noticed a reduction in the number of new physician
    applicants for NIH research grant support between 1994 and 1997. In
    1997, the NIH received 1,769 applications from individuals with the
    M.D. degree who had never received NIH research project grant support.
    This number is approximately the same as observed in 1996 and is 22
    percent below the peak observed in fiscal 1994.
        To address this important issue, the NIH has recently announced new
    career award mechanisms designed to offer at least 80 young physicians
    new training opportunities in clinical research each year. This same
    initiative will also increase opportunities for mid-career clinical
    researchers who will serve as mentors. In addition, the initiative will
    support the development of high-quality instruction in clinical
    research methodology. We are hopeful that these new awards will
    ultimately increase the number of physicians submitting applications
    for clinical research grants. To provide some indication of the
    magnitude of this initiative, we estimate that, if all of the entry
    level awards supported by this program apply for research project
    grants after completing their career awards, there will be a greater
    than 10 percent increase in applications from physicians each year for
    several years into the future.
        The NIH has also requested an increase in NRSA stipends designed to
    improve the attractiveness of NIH training opportunities. We hope this
    change will reverse recent reductions in the number of young clinicians
    engaged in postdoctoral research training. To attract bright young
    clinicians into NIH research careers, I believe that the NIH must
    modify its training and career award programs to accommodate changing
    revenue streams within the academic health center. We will continue to
    monitor application rates from clinicians in the future.
        Question. First, can you tell us whether this trend continued in
    1997, and are you not alarmed by this stunning decline?
        Answer. As I have described, the number of new physician applicants
    has declined slightly and we are taking measures to encourage
    additional applications in the clinical area. However, our concern over
    this decline is mitigated by the fact that when we look at overall
    awards made to all those holding MD degrees, including both first-time
    applicants and those who have previously held NIH awards, there has
    actually been an increase. In fiscal year 1994 the NIH made more than
    1,700 awards for new and competing projects to MD's, and this number
    has gradually but steadily increased to more than 2,000 in fiscal year
    1997.
                                     ______

               Questions Submitted by Senator Christopher S. Bond
                        polycystic kidney disease [pkd]
        Question. I understand that there have been a number of recent
    breakthroughs in Polycystic Kidney Disease, leading many knowledgeable
    scientists to believe that effective therapies might be available for
    PKD patients in the near term. Is this true?
        Answer. In the last two years, dramatic progress has been made in
    understanding the cause of PKD. The genes that are mutated in the two
    commonest forms of PKD (PKD1 and PKD2) have been cloned and sequenced
    and the protein structures deduced. We are beginning to understand the
    possible function of this protein, called polycystin, which is
    defective in patients with PKD1. This exciting finding may offer new
    insights into the mechanisms which cause renal cysts to form and grow,
    and is providing possible strategies by which to interfere with cyst
    growth. There is reason for optimism that this may lead to treatments
    which prevent progressive renal failure in patients with these
    diseases.
        Question. If so, why has the PKD portfolio at NIDDK been reduced
    substantially in the last two years to a surprisingly small $5.2
    million projected for this year?
        Answer. While it is true that NIDDK funding for PKD research dipped
    in fiscal year 1997, overall the program has grown consistently and
    substantially over the past decade. This growth has occurred because of
    the scientific opportunities including the discovery referred to above.
        From its start at about $1.5 million in fiscal year 1988, NIDDK
    funding for PKD research will reach an estimated $7.5 million in fiscal
    year 1998. About $5.2 million is for continuing noncompeting projects
    and the remaining $2.3 million is for new and competing renewal awards
    that have already been funded or that we anticipate funding. The fiscal
    year 1998 amount is a 19 percent increase over the fiscal year 1997
    total of $6.3 million and represents a return to the peak funding for
    PKD research, which was $7.5 million in fiscal year 1996.
        Question. The Appropriations Committees of both the House and
    Senate have recommended increased funding for PKD research for the past
    6 years. How do you account for the very modest $5.2 million projected
    for this research in the present year?
        Answer. As stated above, NIDDK funding for PKD research will reach
    an estimated $7.5 million in fiscal year 1998. The $5.2 million of the
    fiscal year 1998 is for continuing noncompeting projects and the
    remaining $2.3 million is for new and competing renewal awards that
    have already been funded or that we anticipate funding.
        Question. Is the NIH ignoring the concerns of the Senate and House?
        Answer. The NIH is, by no means, ignoring the concerns of the House
    and Senate. To capitalize on discoveries and encourage increased
    research on PKD, NIDDK has sponsored successful scientific meetings and
    solicitations for grant applications. Meetings held in 1995, 1996, and
    1997 allowed researchers to benefit from the presentations and comments
    of peers, fostered collaborations and helped formulate subsequent NIH
    research solicitations. Since 1985 the NIDDK has issued six Requests
    for Applications and Program Announcements (PA) to increase interest in
    PKD research. The most recent was a PA with a $2.5 million targeted
    funding level.
        Question. A number of the top administrators and scientists at the
    NIH have recently argued that PKD research is the hottest thing going
    on in kidney research. Some have characterized it as the most promising
    area in all of biomedical research. What kind of priority setting is
    going on at the NIH when the PKD research portfolio has been reduced by
    30 percent in the past two years?
        Answer. The statement that the PKD research portfolio has been
    reduced by 30 percent in the past two years is inaccurate. The
    estimated fiscal year 1998 funding amount for PKD research represents a
    19 percent increase over fiscal year 1997. The NIH has a solid
    commitment to PKD research and we are optimistic about the future of
    NIH-funded research on PKD.
        The NIH and the Polycystic Kidney Research Foundation have been
    involved in planning a new initiative for fiscal year 1999 to develop
    better methods to assess progression of PKD using state-of-the-art
    radiographic imaging techniques. This study should provide the needed
    tools to measure treatment outcomes in future trials. Also relevant to
    process in learning more about PKD is a new initiative to identify
    genetic loci and genes that either protect people from or predispose
    them to progressive kidney failure, the so-called nephropathy
    susceptibility gene initiative. As you know, many people at risk for
    renal disease, including some PKD-gene carriers, do not develop renal
    disease, while others progressively lose kidney function. It is
    expected that these studies will help to explain this phenomenon.
                                priority setting
        Question. We have all witnessed a significant increase in the NIH's
    budget over the past few years. I am concerned about how the NIH sets
    priorities. What are the primary factors utilized at the NIH for
    setting these priorities for research?
        Answer. The principles and mechanisms that guide the NIH in the
    continuous activity of managing its budget are comprehensively
    discussed in a recent NIH document, ``Setting Research Priorities at
    the National Institutes of Health.'' The basic theme of the priority
    setting booklet is that the NIH builds its budget by evaluating current
    scientific opportunities and public health needs while maintaining
    strong support for investigator-initiated research. A copy of this
    document is attached for your information.
     Attachment--Setting Research Priorities at the National Institutes of
                                     Health
                                    overview
        Given the importance of medical research in fighting disease and
    improving the nation's health, the enormous range of possible subjects
    of research, and the thousands of talented investigators who seek
    funding, the National Institutes of Health (NIH) must make choices
    about where and how it spends its money, approximately $13 billion in
    fiscal year 1997.
        The process of choosing is routinely called setting priorities, a
    phrase that is shorthand for an elaborate application of principles and
    mechanisms the NIH uses for evaluation and judgment. Making choices is
    complex and often difficult: the NIH's mission and its history
    demonstrate that no one thing--no single disease, no single
    investigator, no single Institute, no single method of funding
    research--comes first or claims permanent priority over others. The
    principles and mechanisms that guide the NIH in the continuous activity
    of managing its budget are the subject of this booklet. Some
    observations about the influences and facts that condition the process
    may add clarity. It is important, however, to keep in mind that this
    booklet describes the ways things work at the NIH now; it is neither a
    justification nor a defense of a system that has succeeded, but which
    also is imperfect.
    Managing the NIH's budget requires many decisions
        There are 21 Institutes and Centers (called Institutes for
    convenience) within the NIH. By law each must be funded and each is
    committed to certain domains of medical science (e.g., cancer, heart
    disease, aging, mental health). Their existence sets rough limits on
    both the current budget and future budgets.
        The appropriations process, from the President's request through
    final passage of the bill by the Congress, obligates each Institute to
    determine how to allocate its own funds among many different activities
    of science--including investigator-initiated grants, the intramural
    research program, and research training, among others. These decisions
    are tailored to the Institute's research objectives.
        Each Institute also decides which specific research grant
    applications to fund among those proposed by researchers working at
    universities or other research centers and whether to emphasize certain
    research topics within its domain.
        The net effect of these decisions determines how much of the entire
    NIH budget is devoted to work in certain scientific disciplines (e.g.,
    neurosciences, microbiology, genetics) or on certain diseases.
        It is also important to note that past decisions--from the creation
    of an Institute to the establishment of research centers to the
    awarding of grants to individual investigators (averaging four years)--
    have longer lives than the annual appropriations. This leaves only a
    part of the entire budget available each year for new opportunities.
    Assessing research according to money spent on specific diseases is
            imprecise
        Public and congressional inquiries about how the NIH spends its
    money often focus on the amounts given to certain Institutes or devoted
    to research on a specific disease.
      --Research on any disease is not confined to one Institute, and no
            Institute is dedicated to a single disease. An Institute's
            budget is an inadequate measure of support for research on
            specific diseases. Research into many diseases is often carried
            on in several Institutes simultaneously, e.g., several
            Institutes are supporting research on Alzheimer's disease.
      --It is also extremely difficult to assign the large investments in
            basic research to any one disease. For example, the number of
            grants specifically devoted to heart attacks is smaller than
            the number of grants awarded for research on cardiac muscle
            biology and lipid metabolism, which have obvious and promising
            implications for understanding, preventing, and treating heart
            attacks.
      --From long experience, we know that research aimed at one target
            often hits another, e.g., a gene causing breast cancer in mice
            plays a role in the development of brain tissue. It is
            impossible to attribute research and discoveries like this to
            one disease.
        There is, consequently, no ``right'' amount of money, percentage of
    the budget, or number of projects for any disease.
    There are limits to planning science
        Science, dealing with the unknown, is inherently unpredictable (see
    ``How Science Works'' later in this booklet). Moreover, unforeseen
    crises and opportunities may require the NIH and individual scientists
    to abandon their plans or change the direction and focus of their
    research. Consider two examples:
      --The emergence of new diseases (AIDS or Ebola), the rise of
            importance of others as our society changes (Alzheimer's
            disease), and the resurgence of old ones (tuberculosis) all
            require urgent attention. The expense of supporting new and
            unforeseen research, however, does not displace the need to
            continue investigations into heart disease, muscular dystrophy,
            arthritis, or diabetes.
      --Unplanned and untargeted basic research on DNA in the 1960's and
            1970's permanently changed the way medical research is done.
            These studies furnished the ground for the biotechnology
            industry that provides important therapeutic products, which we
            would otherwise not have, and set the stage for the Human
            Genome Project that has revolutionized our approach to
            virtually all disease.
        Consequently, slightly over half, on average, of each Institute's
    budget supports the best research grant proposals regardless of
    specific applicability to prevention and treatment of a disease, but in
    expectation that their results will contribute to advances against
    diseases within their purview as well as diseases in other Institutes
    and to our knowledge generally.
        It is also true, however, that a decision to increase support of
    one area of medical science--by design, according to a directive, or in
    response to a critical opportunity--now usually comes at the expense of
    something else and affects the planning of future research.
        Decisions to create new Institutes or to expand research into
    specific diseases were historically accompanied by very large increases
    in the NIH budget. No programs had to be cut or attenuated. This is no
    longer the case. Consequently, directives to spend more on a specific
    disease or the need to respond to swiftly emerging threats (e.g.,
    Ebola) constrain spending on other diseases or on fundamental research.
    Various criteria shape the NIH's budget
        Some general criteria, which condition the allocation of resources,
    are both influential and continuous.
      --The NIH has an obligation to respond to public health needs, as
            judged by the incidence, severity, and cost of specific
            disorders. Calculating these needs is difficult, and there is
            not always a clear correlation between expense and results.
      --The NIH applies stringent review for scientific quality on all
            research proposals in order to return the maximum possible on
            the public's investment in medical research.
      --As an administrator of science, the NIH has learned that many
            significant advances occur when new findings, often unforeseen,
            expand experimental possibilities and open new pathways for the
            imagination. Not all problems are equally approachable, no
            matter their importance to public health. Pursuit of a rare
            disease may often have unexpected benefits for more common
            problems. By the same token, increased spending on a disease is
            wasteful when there are neither promising pathways to follow
            nor an adequate number of qualified investigators to fund.
      --The NIH's portfolio must be large and diverse. Because we cannot
            predict discoveries or anticipate the opportunities fresh
            discoveries will produce, the NIH must support research along a
            broad--in fact, expanding--frontier.
      --The NIH must continue to support the human capital and material
            assets of science. To this end, the NIH's budget supports
            research training, acquisition of equipment and instruments,
            some limited construction projects, and grantee institutions'
            costs of enabling the research programs.
    To develop its research programs, the NIH seeks advice from many
            sources
        The complexity of both planning budgets and spending money are
    apparent. With no claim to a monopoly on good ideas, the NIH seeks
    opinions and counsel from many quarters:
      --The extramural scientific community, including both individual
            researchers and professional societies.
      --Patient organizations and voluntary health associations which may
            deal directly with the NIH or indirectly through Congress and
            the public media.
      --The Congress and the Administration.
      --The NIH staff.
        How the NIH solicits and acquires opinion and advice is detailed in
    ``The Institutes'' and ``The Role of the NIH Director,'' the last two
    sections of this booklet. Some examples include:
      --Review groups of accomplished investigators evaluate grant
            applications for merit.
      --Each Institute convenes national advisory councils to review
            policy, with members from the public and from the medical and
            scientific communities.
      --Every year, the NIH holds conferences and workshops to gather
            opinions and ideas on specific scientific, health, ethical, and
            administrative questions. For example, a Parkinson's workshop
            recently brought together clinicians and geneticists who
            together identified a chromosomal locus (and more recently the
            gene) that predisposes to the familial form of the disease.
            Their findings will also attract new investigators and could
            lay the groundwork for advances against the more common (non-
            familial) form of the disease.
      --The NIH uses advisory groups of outside experts to assess trans-NIH
            activities (e.g., the reviews of the NIH intramural research
            program and AIDS research program) and to recommend budgetary
            and programmatic improvements.
      --In addition to consultations with the Congress, patient
            organizations, and the Administration, Institute directors and
            staff seek opinions from other Federal agencies for both
            budgetary and programmatic insight, e.g., OMB and DHHS.
        The final responsibilities for the complex and imperfect process of
    evaluating opinion, assembling the individual Institutes' portfolios,
    and determining expenditures remain with the NIH Director and the
    directors of the Institutes.
    Evaluating opportunities and public health needs is complex
        The NIH builds its budget by evaluating current opportunities and
    public health needs while maintaining strong support for investigator-
    initiated research. The NIH's requests for increases in funding for
    specific Institutes are based on proposals that: Exploit new
    discoveries, such as the isolation of new genes for human disease;
    encourage study of diseases that are only now able to be understood
    because of recent new discoveries; and strengthen technologies
    applicable to many disciplines and diseases, e.g., computer science,
    imaging, or gene mapping.
        The emphasis the NIH places on funding unsolicited proposals from
    investigators from individual laboratories (investigator-initiated
    research) does not dismiss the efforts of advocates of disease-oriented
    research or propose they should not do more to advance their causes.
    Nor does the emphasis erect a wall between basic research and clinical
    research. The Parkinson's disease workshop mentioned above and others
    on autism, spinal cord injury, and diabetes mellitus have proved how
    profitable such collaboration can be.
        It is also a responsibility of scientists to explain science and
    scientific progress to the public. Medical science is slow and
    difficult; its advances do not occur at equal rates on all fronts; the
    long-term relevance of basic science to treating human disease may be
    hard to see; scientists may be inexpert in explaining the connection
    between their work and the nation's health. The many criteria,
    standards, and influences that all operate simultaneously on the NIH
    are of themselves complex. There is, however, another component:
    science is not like other businesses. To explain this proposition, the
    next section expands on some ideas already here and presents some new
    ones.
                               how science works
        Although the word ``science'' comes from the Latin scientia meaning
    ``known things,'' scientists and the practice of science exist because
    of what we do not know. The aim of science is to move what we do not
    know into the realm of known things and then, with a greater store of
    knowledge, begin again, as if advancing a frontier. This basic truth
    about science makes it different from other enterprises. Many
    industries normally manage their resources, labor, and money to produce
    the same or similar products over and over. Science deploys its
    resources and talents to explore new areas and produce fresh results,
    which are not endlessly replicated, but which prepare the way for
    future and different explorations.
        The many disciplines of medical research contribute to our store of
    knowledge and to one another, and all deserve exploration and funding.
    Discoveries that will increase our knowledge of the causes,
    progression, and treatment of asthma, for example, may stem from
    epidemiological, clinical, and molecular research, conducted by teams
    of investigators building on the discoveries of their predecessors,
    including those in other fields.
        Since it is impossible to know with certainty which area will
    produce the next important discovery, the community of science, of
    which the NIH is a part, has to be open to all ideas. No one field has
    all the answers, but investigators in many different fields can ask the
    questions that will provide more knowledge about disease and health.
        The uncertainty of where the most valuable discovery lies makes the
    setting of priorities tremendously difficult. But this uncertainty also
    fosters a creative and collaborative tension within the scientific
    community (and among the various Institutes at the NIH) which in turn
    imposes the discipline of evaluation, competition, and productivity on
    the choices we make about spending public money.
        To approach it differently, science and the management of science
    are neither chaotic nor navigation by dead reckoning. Given the NIH's
    internal rigor and the legitimate interests of the public, including
    advocacy and patient groups, the Congress, and other scientists,
    expenditures for medical research are always in public view. Though
    different from other enterprises, science has businesslike aspects:
    Applications for grants are subject to peer review (which is discussed
    later in this booklet) and rated for merit, and investigators define
    and justify the goals and budgets of their research with precision.
        It is a striking characteristic of science that it requires both
    creativity and precision to generate ideas and results. The precision
    with which investigators and administrators describe the targets and
    outcomes of research, however, cannot alter the inescapable truth that
    many of the results of research are unpredictable, given the pursuit of
    unknown things. The investigator examining patients with ataxia
    telangiectasia, a rare genetic disease, who discovers something new
    about the origins of cancer has not ``stumbled'' on a discovery, but
    rather has put himself or herself in a position to make the discovery
    and to bring it into the realm of known things which would not have
    happened otherwise.
        This unpredictability has three important implications of its own.
        First, science is by nature structured and self-correcting so that
    either a predicted or an unforeseen discovery has the advantage of
    adding to basic scientific knowledge and giving new direction to
    further inquiries. This self-correction, carried out under public
    scrutiny of the results, means that science operates in a dynamic
    marketplace in which an absolute or top-down control would be stifling.
    Control from the top or by directive grows inefficient as workers
    duplicate one another's labor or merely produce the same results; it
    tends to be slow to respond to new discoveries which can make the
    original grand design obsolete over night. Science's self-correction,
    on the contrary, demands more approaches and is quicker to adapt to
    change.
        Second, scientific work is not a commodity that can simply be
    bought. Shifting priorities is more than the redistribution of
    dollars--more money alone does not solve problems. Recruiting new
    talent by advertising a new scientific opportunity, inviting scientists
    in allied fields to look across the fence, and training new
    investigators to work in a new area will produce more meritorious
    applications for funding and, most important, better results in the
    treatment of human disease.
        Third, science and its administrators must constantly reevaluate
    and often change their priorities in light of new discoveries. Very
    simply, science itself sets its priorities as it refreshes and enlarges
    our knowledge: The more we know, the better the questions we can ask
    and the more wisely we can spend our money.
        It is by asking as many questions as we can and by prudently
    spending what we have that the NIH can identify and pursue the most
    promising medical priorities. As priorities shift and acquire sharper
    focus, we are better able to look across the spectrum of scientific
    disciplines and of diseases. Our constantly renewed knowledge enables
    us to examine, for example, the effects of pesticides not on one kind
    of cancer but on all cancers, or to ask the next big question--what
    turns genes on or off?--with the confidence that we will soon begin to
    find answers which in turn will allow us to target diseases like
    Alzheimer's disease, cancer, and diabetes.
        There are many reasons that America is blessed with a robust
    community of medical science and that the NIH is the world's greatest
    medical research organization. The freedom to explore, the training in
    our colleges and universities, an enthusiastic public, and an
    understanding Congress have all contributed to the nation's preeminence
    in medical research. And so, in part, has the community of science
    itself because of its abilities to refresh its priorities in order to
    seek opportunities that are ripe for pursuit and capture.
        The rest of this booklet describes the principles and processes by
    which the NIH and its Institutes set their priorities and make their
    choices. It will also consider in greater detail the roles played by
    the Congress and the Administration, by professional societies, and by
    organizations focused on particular diseases in funding the research
    that brings what we do not know into the realm of known things.
                                 nih's history
        Decisions made in the NIH's early years still shape the agency's
    structure and activities. The NIH as we know it today is rooted in
    Constitutional language establishing the promotion of the general
    welfare as a goal of government. Throughout this country's history,
    citizens have looked to government to provide health care to specific
    populations, for collection of vital statistics on health, and for
    sanitation and control of infectious diseases. Although the NIH was
    born on Staten Island in 1887, with another name and a mission to
    conduct research on infectious diseases, the modern NIH took shape
    shortly after World War II, when science came to be seen as a public
    good and supporting health research became a focus for public and
    congressional enthusiasm and funding.
        In 1946, the NIH intramural research program (the research
    conducted by government scientists on the NIH campus in Bethesda,
    Maryland, since 1938) was joined by the NIH extramural research
    program. This occurred when wartime government medical research
    contracts at universities and medical schools around the country were
    transferred to the NIH and converted into grants. The transfer was an
    important event, for it firmly established the importance of enlisting
    scientists in the country's medical schools and universities in the
    national research effort against disease.
        Just after the extramural research program began providing grants
    to scientists in universities and medical schools, the NIH recognized
    it needed a system to help select the highest quality research grant
    applications for funding. This rapidly evolved into the NIH peer review
    system, which relies chiefly on non-government scientists to review
    grant applications for scientific merit.
        The NIH also recognized that supporting research demands a greater
    commitment than simply funding individual research projects. Since
    1947, NIH grants have included compensation to the institutions where
    the research is to be conducted for the expenses of maintaining the
    research facilities and for administering the grants. Training future
    generations of laboratory and clinical researchers also became an
    established goal of federal funding of science.
        The intramural research program on the Bethesda campus--which
    primarily focused on basic or laboratory science--was enhanced by the
    opening of its research hospital, the Clinical Center, in 1953. This
    addition acknowledged the importance of translating discoveries made in
    the laboratories to the bedside, and provided a way of taking questions
    raised through observation of patients back to the laboratory for
    exploration. The need to fund both laboratory research and clinical
    research thus became an established principle.
        Encouraged by the availability of public funding, growing numbers
    of investigators around the country--many of them trained on the
    Bethesda campus--directed their efforts to basic and clinical research
    and applied to the NIH for research grants.
        The NIH cultivated the cadre of talented, well-trained scientists
    eager to propose their ideas to the NIH for funding, thus creating the
    investigator-initiated research application as a way of tapping the
    best ideas to understand and combat disease.
        The following two decades saw significant increases in funding for
    the NIH and the development of new programs. New Institutes continued
    to appear in response to legislative or executive decisions. The
    establishment of each new Institute represented a decision about the
    priority to be given to a disease or class of diseases (for example,
    the National Institute of Allergy and Infectious Diseases was
    established in 1948 and the National Institute of Neurological Diseases
    and Blindness in 1950), to aspects of the human life span (the National
    Institute of Child Health and Human Development was established in 1963
    and the National Institute on Aging in 1974), and to broad areas of
    basic research and technology (the National Institute of General
    Medical Sciences was established in 1963 and the National Library of
    Medicine became a component of the NIH in 1968). Each of the NIH
    Institutes has been provided a separate, annual budget from the
    Congress, thus positioning each of them as a primary locus for setting
    priorities and making budget decisions within their domains. (See
    Appendix for list of Institutes)
                       how the nih funds medical research
        Most of the NIH's budget supports the individual research projects
    conceived of and conducted by either government scientists working on
    the NIH campus or scientists based elsewhere, at universities, medical,
    dental, nursing, and pharmacy schools, schools of public health, non-
    profit research foundations, and private research laboratories. These
    scientists have been trained in one or more disciplines of science and
    are committed to enhancing knowledge related to human health and
    disease through research. NIH support of these research projects
    includes the salaries of scientists and technicians and the cost of
    equipment such as lasers or computers; of supplies such as chemicals
    and test tubes; and of procedures conducted with research patients.
        Funding medical research also includes paying the costs associated
    with research, such as maintenance of buildings, electricity and
    library services, care of laboratory animals, and salaries of
    administrative staff who, for example, handle the financial aspects of
    the grants and set up review panels to ensure that patients
    participating in research are adequately protected. This is true for
    all research, whether conducted in the intramural program by government
    scientists or through the extramural program by scientists in
    universities and medical schools or by scientists working in industry.
    These associated costs account for about 30 percent of the total cost
    of research projects.
        In fiscal year 1996, approximately 11 percent of the NIH budget was
    spent in the intramural program and more than 83 percent of the NIH
    budget was used to fund research by scientists working elsewhere across
    the country (see FIGURE 1). In the extramural program, the NIH
    emphasizes funding investigator-initiated applications that originate
    with individual scientists. These Research Project Grants (or RPG's)
    can fall anywhere along the continuum of medical research, from
    molecular and cellular investigations to studies of new drugs to treat
    human illness. In fiscal year 1996, the NIH funded approximately 25,000
    RPG's; the most common type, known as an R01 grant, supports a single
    project and a single principal scientist. Some Research Project Grants
    are program project grants, which support multi-disciplinary projects
    conducted by several investigators working on different aspects of a
    research problem. Yet another way the NIH supports research is through
    research centers. This type of grant is awarded to research
    institutions under the leadership of a center director and a group of
    collaborating investigators. Center grants fund multi-disciplinary
    programs of medical research and also support the development of
    research resources, aimed at integrating basic research with applied
    research and promoting research on clinical applications.
        Another part of the NIH's budget is spent on research and
    development contracts, which are awarded to non-profit and commercial
    organizations for work requested and overseen by the NIH staff. For
    example, development of the drug taxol for treating breast and ovarian
    cancer resulted from NIH contracts aimed at developing better methods
    for isolating the anti-cancer agent from the Pacific yew tree and for
    clinical trials of its efficacy.
        The NIH also supports training that enables young scientists to
    become skilled investigators who are available to apply their talents
    to future medical challenges. Trainees, who are at the predoctoral or
    postdoctoral level, are supported through grants either to individuals
    or to institutions such as medical schools and universities. Most of
    the cost is for stipends for the students. In recent years, the NIH has
    focused on enhancing the quality of training and improving the
    prospects for under-represented minorities rather than on increasing
    the total number of students in research training.
        An imperative of supporting medical research is making a commitment
    to scientists to fund their work for a period of time sufficient for
    the projects to produce results. Research takes time. NIH grants are
    awarded for an average of four years; therefore, the bulk of each
    Institute's annual budget is already committed to funding the remaining
    years of research projects. The need to continue funding projects over
    multiple years is an important criterion when deciding to fund new
    projects. Accordingly, in any given year, only about 25 percent of the
    total funds allocated for research projects is available to fund new
    projects that may change the course of a line of research or move
    research into an entirely new area.
              assessing health needs and scientific opportunities
        Deciding how and where to distribute the NIH's money--that is,
    determining the requirements of basic and clinical research,
    identifying whether a grant, contract, or center is the best means of
    funding a particular area of research, and responding to the emergence
    of new medical problems and new patient advocacies--is a challenge the
    NIH must face each year. It requires fresh assessment of the nation's
    health needs and renewed evaluation of scientific opportunity. Yet
    there are many ways of assessing health needs and many facets to
    identifying, and sometimes creating, scientific opportunities.
    Assessing the health needs of the nation
        The NIH is responsible for conducting research on the broad array
    of health problems affecting people in this country, but it cannot
    simply allocate funds to research on one disease or another according
    to a set formula. There are many possible ways of measuring the health
    needs of the nation and distributing research funds, each with
    advantages and drawbacks. If health needs alone were used to gauge
    priorities, research funds might be distributed based on: The number of
    people who have a particular disease; the number of deaths caused by a
    disease; the degree of disability produced by a disease; the degree to
    which a disease cuts short a normal, productive, comfortable lifetime;
    the economic and social costs of a disease; and the need to act rapidly
    to control the spread of a disease.
        Using any one of these criteria to make funding decisions would
    produce a different result:
      --Funding according to the number of individuals affected would
            emphasize common diseases, but might have a limited effect on
            overall health and survival (for example, much research would
            be done on the common cold and allergies and little on
            childhood cancers).
      --Funding according to the number of deaths would neglect chronic
            diseases that produce long-term disability and high costs to
            society (diseases such as mental illness and arthritis would be
            neglected).
      --Funding according to disability or economic cost raises questions
            about how well disability or economic costs can be quantified,
            and whether only the direct costs of medical care should be
            counted or whether indirect costs (e.g., lost productivity),
            which are difficult to measure, should also be included.
      --Funding according to the economic cost of illness would under-fund
            diseases that result in a short illness and rapid death (this
            choice would provide a great deal of funding for Alzheimer's
            disease and muscular dystrophy and little, or none, for sudden
            infant death syndrome or certain types of cancer).
      --Funding based solely on immediate dangers to public health may
            divert funds from areas of research of much broader long-term
            impact (this choice would mean that a great deal of research
            would be done on AIDS and tuberculosis and little on
            Parkinson's disease and asthma).
        All of these criteria for weighing health needs are justifiable,
    yet applying any one of them exclusively would cause the neglect of
    some classes of diseases altogether. Moreover, any of these criteria
    used exclusively would, for example, under-fund research on rare
    diseases, research that has taught us much about the diseases
    themselves and a great deal about normal human biology, other diseases,
    and new approaches to treatment. For example, ataxia telangiectasia,
    xeroderma pigmentosum, and Bloom's syndrome are very rare inherited
    disorders that lead to an increased risk of cancer and hypersensitivity
    to ultraviolet radiation, X-rays, and some chemicals that cause
    mutations in DNA. Nonetheless, research into these diseases has not
    only helped people with those conditions, but has provided considerable
    knowledge about the causes of cancer in general.
    Funding the continuum of research, from basic inquiries to clinical
            applications
        Clearly, it is not easy to determine how to allocate funds
    according to the impact of various diseases. But the problem is
    actually much more complex than it appears, because while the NIH
    focuses much of its research on combating specific diseases and much of
    its funding supports research projects that are of obvious relevance to
    specific diseases, the NIH also places a high priority on funding basic
    research. These basic research projects may appear initially to be
    unrelated to any specific disease, but might prove to be a critical
    turning point in a long chain of discoveries leading to improved
    health. Each of the NIH Institutes supports basic research likely to
    advance particular areas of science that might prove relevant to
    clinical problems important to that Institute's mission. By supporting
    disease-related and basic research projects simultaneously, the NIH can
    achieve both near-term improvements in the diagnosis, treatment, and
    prevention of specific diseases as well as long term discoveries in
    basic science that in time will produce great advances in our ability
    to understand, treat, and prevent disease or delay its onset.
        Consequently, the NIH uses no one measure exclusively, but all of
    these measures to assess the nation's health needs. The evidence of
    improved health in the past 50 years overwhelmingly demonstrates the
    importance of complementary accomplishments in basic and applied
    research. To continue improving the nation's health, the NIH also
    factors into its funding decisions current and evolving scientific
    opportunities.
    Assessing scientific opportunities
        Assessing scientific opportunities is no less complex than
    evaluating health needs. It requires expertise in various scientific
    fields, breadth of vision across many disciplines, and judgment to
    determine the likely yield from making investments in particular areas
    of research. It is never known with certainty which scientific areas
    will produce the greatest returns soonest. At any given time, moreover,
    some fields are judged to be progressing more rapidly than others and
    more likely to repay the investment in them by yielding great
    discoveries that advance knowledge. Scientific opportunities may arise
    from many sources, from a single technological development, or from a
    scientific ``breakthrough.'' Often the breakthrough or even the
    knowledge accumulated is in an area that appears only remotely related
    to the area where it will have its greatest impact. Recognition of
    these scientific opportunities allow investigators to approach
    previously unanswered questions in new ways.
      --Basic Research Often Contributes to Specific Diseases.--The
            unexpected contribution of basic research to specific diseases
            is evident in the case of recombinant DNA research, sometimes
            calledgenetic engineering. NIH support of basic research on
            enzymes and genes over many decades, exciting and challenging
            to scientists but initially with no apparent relevance to
            practical applications or human disease, has led to a host of
            new drugs and diagnostics. For example, in the mid-1980's human
            growth hormone produced by recombinant DNA methods was approved
            for treating certain growth problems in children. This
            synthetic human growth hormone proved to be safer than using
            pituitary-derived human growth hormone extracted from cadavers,
            which had been found to transmit the virus causing Jakob-
            Creutzfeldt disease, a deadly neurological disorder. In
            addition, recombinant DNA techniques revolutionized how
            biological research is done and gave rise to a new industry--
            biotechnology. This technology, in just over a decade, has had
            a profound impact upon medicine, agriculture, and the chemical
            industry.
        Work in blood lipid research and heart disease illustrates how
    health needs and scientific opportunities coincide. Nearly 50 years
    ago, the NIH identified research on coronary heart disease as an
    important health priority. This disease is caused by atherosclerosis,
    the build up of lipids (fatty substances) in the heart's main arteries,
    which can block blood flow and thereby cause the death of heart
    tissue--that is to say, a heart attack. Progress in this area was slow
    at first, but then scientists began to associate lipids (such as
    cholesterol, carried in the blood) with the development of
    atherosclerosis in humans. In the early 1960's, research on the NIH
    Bethesda campus led to a way of classifying various types of lipid
    abnormalities in families. This work led to meaningful associations
    between variations in lipid metabolism and atherosclerotic heart
    disease. In addition, through carefully planned, long-term
    epidemiologic studies (studies of the occurrence and distribution of
    disease in large groups of people), the understanding emerged that risk
    factors such as blood cholesterol levels and cigarette smoking, as well
    as high blood pressure (which was recognized much earlier as a
    predictor of premature death) can make people susceptible to disease.
    Identifying scientific opportunities in basic, clinical, and
    epidemiological research on lipid metabolism has resulted in phenomenal
    progress in understanding the underlying processes that lead to
    atherosclerosis, as well as its prevention and treatment.
        Benefits from this research include the development of cholesterol
    lowering drugs and changes in behavior (less dietary fat, no smoking,
    more exercise), with a dramatic decrease in age-adjusted mortality from
    heart disease as a consequence. Still, many challenges in coronary
    heart disease remain. Future targeted areas of research include an
    analysis of why cholesterol accumulates in artery walls and ways to
    facilitate its removal, and prevention of the accelerated form of
    atherosclerosis which causes between 30 and 40 percent of grafts to
    become narrowed again after bypass surgery.
        Capitalizing on scientific opportunity depends, in part, on
    individual scientists designing specific research projects they believe
    have the greatest significance and offer the best chance of producing
    important knowledge. Therefore, the NIH places great reliance on
    investigator initiated research--projects conceived by individual
    scientists and submitted to the NIH to undergo review by other
    scientists and be considered for funding. Sometimes, the NIH solicits
    research applications through Program Announcements (PA's) and Requests
    for Applications (RFA's), as described in more detail later in the
    booklet. Review for scientific merit is conducted by groups of
    predominantly non-government scientists (with knowledge in a relevant
    area) convened as panels called study sections. Currently, there are
    about 100 study sections, which normally meet three times a year to
    review grant applications.
        The merit of a research proposal is assessed by several criteria,
    including: the importance of the problem or question; the innovation
    employed in approaching the problem; the adequacy of the methodology
    proposed; the qualifications and experience of the investigator; and
    the scientific environment in which the work will be done. Currently,
    slightly more than one in four grant applications received by the NIH
    is ultimately funded. (See FIGURE 2)
        In addition to judging the scientific merit of individual research
    grant applications, the study sections, in aggregate, have another
    important effect on the science supported by the NIH. After each study
    section reviews and rates the grant applications assigned to it by NIH
    staff, the relative ratings of applications from all study sections are
    then integrated. Because, for the most part, grants are funded in order
    of their rating relative to other applications in the same field, the
    fact that a study section has been constituted in a particular area
    usually guarantees that at least some applications in that area of
    science will be funded. Because of this effect, the NIH must monitor
    changes occurring in science to ensure that study sections, as a group,
    are appropriately constituted so that they can assess the research
    applications in all areas of scientific endeavor. The creation of new
    study sections, the restructuring of established study sections, and
    the use of special panels has such an important effect upon the areas
    of science funded by the NIH that any proposed changes of the study
    sections are carefully evaluated.
      --Breakthroughs Bring New Opportunities.--As an example of a
            breakthrough offering new opportunities, consider recent
            discoveries in the causes of obesity, which have stimulated the
            NIH to invest more money in this particular area of research.
            Obesity affects nearly one-third of the U.S. population. It is
            associated with an increased risk of high blood pressure, high
            blood cholesterol, and Type II diabetes (or non-insulin
            dependent diabetes) and is an independent risk factor for
            coronary heart disease and osteoarthritis. Obesity has been
            studied for many years from many perspectives, and is of
            interest to at least 10 NIH Institutes. But the problem has
            remained intractable. Recently, scientists have found that mice
            and rats with certain inherited mutations that predispose to
            obesity lack a hormonal mechanism for maintaining healthy
            patterns of eating and activity. Through this mechanism, the
            animals--and, presumably, humans--regulate diet and exercise
            through the brain's response to a hormone, called leptin, that
            is produced by fat cells. Although it appears likely that this
            hormone is itself deficient in a significant number of obese
            people, the isolation of the genes for leptin and the leptin
            receptor has already deepened our understanding of metabolism
            and stimulated additional fundamental research. Encouraged by
            the new findings, more and more scientists are moving into this
            field of investigation. This is likely to expand knowledge of
            the causes of obesity, hasten the development of more effective
            medical therapies for weight problems, and ultimately help to
            reduce the prevalence of many chronic, obesity-related
            diseases.
                                 the institutes
        The NIH is made up of 21 Institutes and Centers, each with a
    separate, annual budget from the Congress and, most critical to the
    question of priorities, each with a mission established by the
    Congress. To decide which grants to fund and which programs to support
    in terms of its mission, the director of each Institute confers with
    the Institute's program leaders. Like the director, they are scientists
    knowledgeable in research relevant to the Institute's mission and
    responsible for administering that area of research. The director also
    confers with members of the Institute's national advisory council (as
    mandated by the Congress), which meets three or four times a year to
    review all grant applications eligible for funding (after peer review)
    and to make recommendations on matters of policy and research emphasis.
    The council, which is composed of both scientific and public members
    with expertise relevant to the Institute's mission, may also make
    recommendations to the Institute director about funding particular,
    meritorious grants that are seen as very important but which may not
    have received the best scores from scientific reviewers. The council
    may also review and comment on special initiatives proposed by the
    Institute or, for example, on research training policies.
        The director engages in discussions with scientists in the
    extramural program and intramural investigators, with groups of
    patients and their families interested in research on particular
    diseases, with professional and scientific groups, with representatives
    of the Administration and members of Congress, and with the public.
    (See FIGURE 3)
        Advice is sought on many issues, including: The potential impact of
    particular research areas on human health; the critical scientific
    opportunities; gaps in knowledge that merit special effort; the cost of
    specific research projects and their benefits; economic issues,
    including the potential effects of the research on quality of life; the
    balance between intramural and extramural research; the balance among
    laboratory research, clinical research, and epidemiological research;
    and the specific type of funding to use for various research areas, for
    example, selecting among grants, contracts, and support of centers (see
    definitions of the types of funding).
    Funding the highest quality science
        The advice an Institute director receives from many sources on the
    factors enumerated above provides much of the information needed to
    decide which grants and programs to support and which programs to
    initiate or eliminate.
        As described earlier, research projects emerge from the creativity,
    skill, and knowledge of extramural scientists who submit grant
    applications to the NIH. These are reviewed by panels of scientists who
    are expert in the proposed field of research. Intramural scientists are
    also peer reviewed by special groups called Boards of Scientific
    Counselors, consisting of scientific experts chosen mainly from outside
    the government. Thus, it is the highest rated projects that form the
    backbone of the science funded by the Institutes and by the NIH. The
    outstanding ideas of scientists objectively rated for their own merit
    and against publicly stated criteria, like those listed in the previous
    section, guide the funding decisions of the NIH.
    Creating research opportunities
        While over half of the Institutes' funds support grant applications
    submitted by scientists working in universities, medical schools, other
    professional schools, and independent research centers on subjects they
    deem important, there is also a complementary process within the
    Institutes to look at broad areas of science and identify areas of
    research where special emphasis is warranted. The scientific program
    leaders in the Institutes help identify scientific opportunities or
    techniques ripe for application by staying abreast of the scientific
    literature and attending conferences and meetings of professional
    societies where new basic and clinical findings are presented and
    debated. If, for example, an Institute is convinced that a particular
    area of science offers opportunity, but extramural scientists are not
    generating research proposals in that area, the Institute may decide to
    organize a workshop or conference to identify specific scientific needs
    and opportunities, stimulate research applications, and attract
    scientists into the field. Or if an Institute wants to encourage
    extramural scientists to apply their particular skills to a new
    challenge, Institute program leaders may generate a concept that will
    become a Program Announcement (PA), an ongoing request for applications
    in a broad area of interest, or a Request for Applications (RFA), a
    one-time request for applications addressing a specific scientific
    area. While only a small percentage of an Institute's funds is spent on
    research generated in response to RFA's and PA's, this modest
    investment has been a catalyst for scientific progress.
        Although funding is usually determined by the scientific merit of
    research applications, an Institute may determine that an area of
    research is of such great promise that funding is provided even if the
    grant application does not have as high a relative rating as other
    applications. Only the Institute director has the authority to make
    this decision and it requires his or her awareness of the whole picture
    of the Institute's mission. The Institute director may determine that
    some laboratory research areas are in need of greater attention and
    require more funding or that some areas are ripe for translating
    laboratory or animal studies to patients in clinical research studies.
    The Institute director would discuss these decisions with council
    members (and others) before funding this research.
        The Institutes may also collaborate on common research interests or
    to advance certain topics of research. For example, both the National
    Institute of Neurological Disorders and Stroke and the National Heart,
    Lung, and Blood Institute are interested in stroke, and five
    Institutes--the National Institute of Arthritis, and Musculoskeletal
    and Skin Diseases, the National Institute on Aging, the National
    Institute of Dental Research, the National Institute of Diabetes,
    Digestive and Kidney Diseases, and the National Institute of Child
    Health and Human Development--are interested in osteoporosis. Each
    Institute brings a different perspective and interest to an issue, so
    their collaborations encourage a multi disciplinary approach to
    research problems. Sometimes, Institutes cofund research projects that
    are important to the mission of each.
      --Collaborative Success Story.--An example of a cross-Institute
            collaboration that has produced a distinct benefit is the
            collaboration between the National Institute of Neurological
            Disorders and Stroke (NINDS) and the National Human Genome
            Research Institute (NHGRI) in Parkinson's disease. Parkinson's
            disease is one of the most devastating and prevalent
            neurodegenerative disorders. The advent of dopamine replacement
            therapy in the 1960's provided significant improvement for many
            patients, but the effectiveness of the treatment declines over
            time and there are troublesome side effects. There has been
            great interest among both patients and researchers to develop a
            more effective treatment or even to prevent the disease, but
            the mechanism of Parkinson's disease is not sufficiently
            understood.
          In 1995, a group of scientists called together by NINDS and other
            Institutes concerned with Parkinson's disease reached the
            unexpected conclusion that Parkinson's disease is likely to
            have a stronger genetic component than was previously thought.
            NINDS subsequently issued a program announcement inviting
            research grant applications in the genetics of Parkinson's. In
            addition, a collaboration involving NHGRI intramural scientists
            and NINDS grantees was established to study the genetics of
            families affected by Parkinson's. In November 1996, scientists
            from the NHGRI and NINDS and their collaborators at Robert Wood
            Johnson Medical School and in Italy announced they had
            pinpointed the location of a gene responsible for some cases of
            Parkinson's disease, showing that a single gene alteration can
            cause the disease. In June 1997, the specific responsible gene
            was identified. Learning where the protein product of the gene
            is located in nerve cells and how it works may help scientists
            design treatments for all forms of Parkinson's disease--not
            only inherited cases, but also those with no familial risk.
    The Intramural Research Program
        The Institutes sometimes also co-fund research programs with
    agencies outside the NIH when a scientific opportunity is ripe for both
    agencies. For example, the National Cancer Institute has collaborated
    with the Department of Defense on breast cancer studies, and the
    National Heart, Lung, and Blood Institute has worked with the Health
    Care Financing Administration on clinical trials of lung reduction
    surgery in the late stages of emphysema.
        Most of the Institutes have intramural research programs. Amounting
    to approximately 11 percent of the total NIH budget in fiscal year
    1996, they focus on specific health problems of special concern to a
    particular Institute and conduct basic research that may not target a
    specific disease, but relates to the overall mission of the Institute.
    As with extramural research, program adjustments, driven by scientific
    opportunity, are constantly being made to the intramural research
    programs. The Institute intramural research programs are led by
    scientific directors, outstanding scientists who, with the Institute
    director, are responsible for organizing and administering both
    laboratory and clinical research. They undergo peer review by a Board
    of Scientific Counselors, which advises the director of the Institute
    on the importance and quality of the programs, thus providing yet
    further scrutiny of the distribution of resources to particular
    research areas and scientists. The intramural programs of the
    Institutes are also reviewed by the national advisory councils and,
    sometimes, by additional panels of outside experts convened to address
    specific issues.
        Ideas from outside the NIH also influence research choices. For
    example, in 1971 President Nixon signed the National Cancer Act, making
    cancer research a national priority. The Congress, responding to
    constituents, has also influenced NIH priorities by occasionally
    identifying research areas that the Institutes should consider more
    intensely. The Institute directors meet with congressional members and
    staff throughout the year, and formally during the annual budget
    hearings, to discuss the research advances of each Institute during the
    past year and describe their plans for the next. Through both the
    Administration and Congress, as well as through patient advocacy
    groups, the public influences the Institutes' decisions. In addition,
    the national advisory councils set up by each Institute and other NIH
    advisory committees include members specifically designated as
    ``public'' representatives. Proposals and opinions from scientists, the
    Congress, the Administration, and the public assure that the Institutes
    establish their priorities in the light of many views. Ultimate
    responsibility for the allocation of financial and other resources of
    an Institute rests with the Institute director. After careful
    evaluation of all of the factors described above, the Institute
    director determines how and where the Institute's resources will be
    distributed.
      --IRP Flexibility and Concentrated Expertise.--Two particular
            characteristics of the NIH intramural research program proved
            advantageous at the start of the AIDS epidemic, even before the
            disease was named. First, the intramural program has the
            flexibility to redirect resources and expertise quickly when an
            urgent research problem or public health threat is recognized.
            In addition, the intramural program has a concentrated
            expertise focused exclusively on research, and an atmosphere
            that encourages discussions and collaborations across
            disciplines.
          Intramural scientists studying the immune system and virologists
            studying the cause of AIDS were able to draw on colleagues in,
            for example, the dental, neurological, and eye Institutes for
            consultations on particular clinical manifestations of AIDS. An
            informal series of patient conferences was set up at the very
            beginning of the epidemic, in the early 1980's. This
            concentrated effort led to major accomplishments in AIDS
            research by the NIH intramural program, for example: a detailed
            description of the effects of HIV on the immune system;
            development of a treatment for a viral infection,
            cytomegalovirus, causing blindness in AIDS patients; early
            development of policies to screen blood donors (and hence to
            prevent the further spread of AIDS through the blood supply);
            understanding of the unusual proteins encoded by HIV genes;
            development of a blood test for HIV; formulation of hospital
            guidelines for working safely with AIDS patients; and early
            studies of the first treatment for AIDS, the drug AZT.
                          the role of the nih director
        Though each Institute within the NIH determines how it will deploy
    its talent and funds, the NIH Director plays an active role in shaping
    the agency's activities and outlook. With a unique and critical
    perspective on the whole of the NIH, the Director is responsible for
    providing leadership to the Institutes and for constantly identifying
    needs and opportunities, especially for efforts that involve multiple
    Institutes. The Director stays in touch with each Institute's
    priorities and accomplishments through regular senior staff meetings,
    discussions with scientific interest groups (scientists who have
    interests in a specific area and can provide guidance in solving
    scientific questions), and briefing sessions with Institute directors.
    The Director also seeks advice from special panels of experts convened
    to address issues that are of interest to more than one Institute,
    e.g., reviews of NIH support of research relevant to human gene
    therapy, the NIH investment in clinical research, the operation of the
    NIH intramural research program, and the effectiveness of the NIH peer
    review procedures. In addition to this flow of information from
    scientists, the Director is advised through discussions with the
    Administration, usually through the Department of Health and Human
    Services (DHHS), and with the Congress.
        Within the NIH, the NIH Director is primarily responsible for
    advising the President on his annual budget request to Congress on the
    basis of extensive discussions with the Institute directors. The
    formulation and presentation of the NIH budget provides an established
    framework within which priorities are identified, reviewed, and
    justified. A key strategy of the NIH Director in the past few years is
    the identification of Areas of Research Emphasis, broad categories of
    NIH-sponsored research that show extraordinary promise and
    productivity. Each year, the NIH Director requests proposals from the
    Institutes for areas of research that would benefit from special
    emphasis. Six broad areas of emphasis have been identified for fiscal
    year 1998; five of these, including ``Biology of Brain Disorders,''
    ``New Approaches to Pathogenesis,'' ``New Preventive Strategies Against
    Disease,'' ``Genetic Medicine,'' and ``Advanced Instrumentation and
    Computers,'' were also identified in fiscal year 1997. A new Area of
    Research Emphasis, ``New Avenues for Development of Therapeutics,''
    emerged from consideration of Institute proposals for new initiatives
    for fiscal year 1998. The Institutes are encouraged to develop new
    initiatives within these Areas of Research Emphasis and to respond to
    emerging health needs through both inter- and intra-Institute efforts.
    The NIH Director uses these proposals to build the President's budget
    in order to ensure that new initiatives are meritorious and timely and
    that budget increases are used to capitalize on recent scientific
    developments. The Director has two additional tools to identify and
    fund NIH research efforts. First, the Director may, following a clearly
    defined process, transfer up to one percent of the total NIH budget
    among Institutes. Second, the Director has a Discretionary Fund. Both
    are used to jump start particularly exciting or urgent areas of
    research:
      --Transfer funding from the Director typically follows extensive
            discussions between and among the NIH Director and the
            Institute directors, and advice from outside experts to
            identify particular research initiatives that reflect NIH-wide
            priorities, show real promise, or reflect an emerging need that
            requires a timely infusion of funds. DHHS, the Administration,
            and congressional appropriations subcommittees are then
            notified of the NIH intent to transfer the money. No single
            Institute can lose more than one percent of its appropriated
            funds in this process.
      --The NIH Director uses the Discretionary Fund, as appropriated for
            this purpose by the Congress, to support specific research
            opportunities that arise during the course of a year that would
            otherwise have to wait until the following year for funding.
            The NIH Director can, in this way, provide early support to
            research by giving additional funds to a single Institute or to
            several Institutes. The NIH Director can also use these funds
            to respond to specific requests from the Congress or to a
            public health emergency. One way the Director's Discretionary
            Fund has been used in recent years is to fund the Shannon
            Awards (named after an illustrious former NIH Director), which
            provide some funding for deserving projects that could not be
            paid for within the available budget. This is a means of
            keeping investigators, especially new investigators, active
            scientifically until funding becomes available for supporting
            their research applications.
        Program offices in the Office of the Director are also responsible
    for enhancing some of the cross-Institute coordination of, for example,
    minority health, women's health, disease prevention, rare diseases,
    behavioral and social science research, and complementary and
    alternative medicine. Another program office is the Office of AIDS
    Research, which has been given broad legislative authority to plan,
    coordinate, evaluate and budget all NIH AIDS research. Like the other
    offices within the Office of the Director, it funds research through
    the various Institutes. The NIH is strongly committed to identifying,
    developing, and pursuing research that reflects broad approaches to
    understanding human illness and health.
        Many diseases under study at the NIH require the input of more than
    one Institute. While the Institutes themselves enjoy close collegial
    relationships and employ a number of mechanisms to foster their
    collaborations, the NIH Director has a unique overview of the range of
    endeavors across the entire NIH. The Director thus can influence all
    the Institutes to focus on matters of importance to them all.
                                   conclusion
        All of the activities described here have the common purpose of
    informing the NIH of scientific opportunities and of important needs in
    public health. Recognizing needs--and establishing priorities among
    them--stimulates the most promising medical research and advances our
    knowledge. The continuing dialogue between the public and scientists
    ensures a system that is both stable and responsive--a system that
    effectively and efficiently meets its goal to improve the nation's
    health through medical research.
           appendix--nih institutes and centers \1\--date established
    ---------------------------------------------------------------------------
        \1\ Each with a separate annual budget from the Congress.
    ---------------------------------------------------------------------------
        National Cancer Institute (NCI)--1937
        National Eye Institute (NEI)--1968
        National Heart, Lung, and Blood Institute (NHLBI)--1948
        National Human Genome Research Institute (NHGRI)--1989
        National Institute on Aging (NIA)--1974
        National Institute on Alcohol Abuse and Alcoholism (NIAAA)--1970
        National Institute of Allergy and Infectious Diseases (NIAID)--1948
        National Institute of Arthritis and Musculoskeletal and Skin
    Diseases (NIAMS)--1986
        National Institute of Child Health and Human Development (NICHD)--
    1963
        National Institute on Deafness and Other Communication Disorders
    (NIDCD)--1988
        National Institute of Dental Research (NIDR)--1948
        National Institute of Diabetes and Digestive and Kidney Diseases
    (NIDDK)--1950
        National Institute on Drug Abuse (NIDA)--1974
        National Institute of Environmental Health Sciences (NIEHS)--1966
        National Institute of General Medical Sciences (NIGMS)--1963
        National Institute of Mental Health (NIMH)--1946
        National Institute of Neurological Disorders and Stroke (NINDS)--
    1950
        National Institute of Nursing Research (NINR)--1986
        National Library of Medicine (NLM)--1968, became a part of the NIH
        National Center for Research Resources (NCRR)--1956
        John E. Fogarty International Center (FIC)--1968
                     nih working group on priority setting
        Stephen I. Katz, Chair, Director, National Institute of Arthritis
    and Musculoskeletal and Skin Diseases
        Anne Thomas, Co-Chair, Associate Director for Communications,
    National Institutes of Health
        Marvin Cassman, Director, National Institute of General Medical
    Sciences
        Rex Cowdry, Acting Deputy Director, National Institute of Mental
    Health
        Patricia Grady, Director, National Institute of Nursing Research
        Suzanne Hurd, Director, Division of Lung Diseases, National Heart,
    Lung, and Blood Institute
        John McGowan, Deputy Director, National Institute of Allergy and
    Infectious Diseases
        Ken Olden, Director, National Institute of Environmental Health
    Sciences
        Mary Miers, Chief, Science Policy and Analysis Branch, National
    Institute of Neurological Disorders and Stroke
        Al Rabson, Deputy Director, National Cancer Institute
        Helen Simon, Chief, Office of Program Planning and Evaluation,
    National Institute of Arthritis and Musculoskeletal and Skin Diseases
        Lana Skirboll, Associate Director for Science Policy, National
    Institutes of Health
        Harold Slavkin, Director, National Institute of Dental Research
        Harold Varmus, Ex-Officio, Director, National Institutes of Health
        Judith Whalen, Associate Director for Science Policy, Analysis, and
    Communication, National Institute of Child Health and Human Development
                                  sarcoidosis
        Question. Have there been any recent breakthroughs which have
    provided insight into the cause or causes of sarcoidosis?
        Answer. The cause(s) of sarcoidosis is a question that has recently
    received increased attention. The National Heart, Lung, and Blood
    Institute (NHLBI) supports two major clinical studies which are
    investigating the cause of or contribute to development of sarcoidosis.
        In one, ``A Case-Control Etiologic Study of Sarcoidosis'' (ACCESS),
    investigators will use information obtained from study participants to
    identify environmental exposures, family characteristics, and co-
    existing diseases that contribute to sarcoidosis. In addition, blood
    samples will be analyzed to pinpoint exposure to infectious agents or
    genetic variations that may occur more frequently in sarcoidosis
    patients than in a control population. Information about relatives with
    sarcoidosis will be used to determine the frequency of familial disease
    and to provide preliminary information about the inheritance pattern of
    the disease.
        In another study, ``Genetic Epidemiology of Sarcoidosis,'' the
    investigators will conduct analyses in a large population of African-
    Americans, which may explain the pattern of inheritance of sarcoidosis
    and the role of major and minor genes in the development of the
    disease. Moreover, the investigators will look for an association of 50
    specific candidate genes with the development of sarcoidosis. In
    addition, the NHLBI supports a study on the role of the immunologic and
    inflammatory processes mediating the granulomatous inflammation seen in
    pulmonary sarcoidosis.
        Although these studies are not yet far enough along to provide
    answers to the question of the cause of sarcoidosis, final results of
    the investigations should improve our understanding of sarcoidosis and
    identify avenues of more specific investigation.
                               pediatric research
        Question. Are efforts underway to focus more resources on the
    diseases and illnesses that affect our nation's infants and children?
        Answer. The NIH supports a large and varied pediatric research
    portfolio, which is more than $1.6 billion in fiscal year 1997. This
    includes studies ranging from those to better understand normal
    developmental processes, from the prenatal period through adolescence,
    to studies concerning specific children's diseases and health problems.
    These studies and activities include basic biological and behavioral
    research, clinical trials, health services research, and efforts in
    public health education.
        Most recently, the NIH made a formal commitment to increase the
    participation of children in NIH-supported clinical research. Medical
    treatments applied to children are often based on testing done in
    adults. Problems can arise from this situation because children have
    different reactions and physiologic responses than do adults.
    Additionally, scientifically-evaluated treatments are less available to
    children due to previous barriers to their inclusion in research
    studies. To address these concerns, the National Institute of Child
    Health and Human Development (NICHD), in conjunction with the Office of
    Extramural Research, established a trans-NIH working group to develop a
    policy and an implementation plan for requiring applicants proposing
    research involving human participants to describe their plans for
    including, or justification for excluding, children in the project.
    Based on these efforts, the NIH published guidelines on the inclusion
    of children in research in the NIH Guide for Grants and Contracts, and
    the formal policy will be implemented starting October 1, 1998.
        The fiscal year 1997 NIH Appropriation also included $5 million to
    fund a Pediatric Research Initiative. The funding level for this
    initiative was increased to $38.5 million in fiscal year 1998. These
    funds have been allocated to various Institutes and Centers to
    encourage innovative pediatric research and collaborative efforts in
    three designated areas: pediatric therapeutics, developmental
    abnormalities, and pediatric asthma. These areas were selected because
    of their significant impact upon child health. For example, drugs are a
    critical component of pediatric care. However, the majority of drugs
    administered to children have not been tested in pediatric populations.
    New drugs for treating childhood illnesses need to be developed, and
    appropriate testing of available drugs must be done so that they can be
    used safely and effectively in children. Developmental abnormalities
    are another important aspect of child health. While they stem from
    diverse causes, many have an underlying genetic component. Most
    developmental abnormalities are relatively rare, but collectively, they
    have a profound effect on the health and quality of life of the
    Nation's children. Finally, asthma is a major chronic disease involving
    obstruction of the bronchial airways. Its prevalence and severity in
    children is increasing in the U.S., particularly in minority
    populations.
        The health and well being of our Nation's children is paramount.
    Medical research conducted and supported by the NIH is an indispensable
    element for ensuring continued and steady improvement in the health and
    quality of life of children. The NIH continues its strong commitment to
    research that addresses both the disorders that affect infants,
    children, and adolescents and the factors that enhance and promote
    normal, healthy development. NIH-supported pediatric research will
    continue to yield and expand important advances in understanding,
    diagnosing, treating and preventing illnesses that affect children
    throughout all stages of development.
                              cloned human embryos
        Question. Does the NIH support legislation which bans the creation
    of cloned human embryos?
        Answer. The NIH does not support legislation that would ban the use
    of somatic cell nuclear transfer using human cells in order to
    investigate, and hopefully, someday, produce cells and tissues that may
    be used to prevent and treat serious and life-threatening diseases and
    other medical conditions. I do, however, believe that the use of
    somatic cell nuclear transfer cloning to create a human being is
    untested, unsafe, and morally unacceptable. However, we agree with the
    National Bioethics Advisory Commission that this issue must continue to
    be debated. Therefore, I support the President's bill that would
    include a ban on the use of somatic cell nuclear transfer cloning
    techniques to create a human being, with a five-year sunset provision
    to provide for further review of the ethical and scientific issues
    associated with the use of somatic cell nuclear transfer and that would
    protect important biomedical research.
                                     ______

                 Questions Submitted by Senator Lauch Faircloth
                              research priorities
        Question. There is concern among many that NIH in general, and the
    NIMH in particular, desire to invest less in disease-oriented and
    clinical research, and more in basic scientific research. Please
    describe for the Subcommittee what you think is the appropriate balance
    at NIMH between basic research funding and clinical and services
    research. Does NIMH intend to invest more in basic research? If so, how
    much more?
        Answer. Research on the causes, treatment, and prevention of mental
    illnesses is integral to the mission of the National Institute of
    Mental Health (NIMH); indeed, this research is the primary focus of all
    NIMH programs. Mental illnesses are diverse and, even though science is
    rapidly making enormous strides, very little is known about the causes
    of any of these illnesses. We do know that the key to these illnesses
    lies in basic research on the molecular and cellular changes in the
    brain and on understanding how the brain is changed by these diseases
    to produce the behavioral manifestations of these illnesses. This is
    the only way that we will ever understand how to most effectively
    treat, or to prevent, mental illnesses. NIMH basic research is directed
    toward understanding the changes in the brain and behavior that
    determine mental disorders.
        At the same time we must continue to apply what we already know to
    clinical studies and services for patients. Thus, support for clinical
    research and health services research by NIMH is also expanding. The
    NIMH assesses the balance between all these elements of its research
    endeavors and makes changes in emphasis as the scientific and clinical
    opportunities for studies warrant.
        In shaping its research program, NIMH periodically establishes
    research priorities, then continues to evaluate these priorities in the
    light of accumulating research-based knowledge. The appropriate balance
    between basic research funding and clinical and services research
    varies somewhat over time as advances in science create new
    opportunities to address specific research questions and to explore new
    avenues to treatment or prevention, or as marked changes in the mental
    health-care landscape--such as the advent of managed care--create new
    public mental health questions. NIMH relies on the National Advisory
    Mental Health Council (NAMHC), composed of both expert scientists and
    representatives of the public, to continually monitor the Institute's
    program balance and to assist in setting and reviewing research
    priorities. The NAMHC reviews and approves all research grants awarded,
    and, in addition, through special workgroups and task forces, the
    Council undertakes comprehensive, in-depth reviews of major segments of
    the NIMH research program and these reviews produce quite specific
    recommendations for program directions and emphasis.
        Based on recent recommendations by the National Advisory Mental
    Health Council and on emerging scientific opportunities, the NIMH
    intends to increase support for important areas of basic research as
    well as a broad spectrum of patient-oriented research--including
    clinical research, services research, and translational research that
    will accelerate the incorporation of basic research findings into
    clinical care. However, at this time, it is not possible to attach
    dollar amounts to these investments.
                                 schizophrenia
        Question. Schizophrenia is the most severely disabling mental
    disorder and is among the most severe illnesses that afflict mankind.
    The statistics bear this point out; (a) schizophrenia strikes in young
    adulthood usually resulting in a lifetime of severe disability, (b)
    consumers with schizophrenia account for nearly 25 percent of all those
    receiving disability payments from the federal government, (c)
    schizophrenia costs the nation $32 billion each year, (d) consumers
    with schizophrenia occupy 40 percent of all hospital beds in the United
    States, (e) 10 to 15 percent of its victims commit suicide. While there
    has been important treatment advances in the 1990's, much has to be
    learned about this disease. We still do not understand what causes this
    illness, we have no diagnostic markers for schizophrenia, and
    treatments are but palliatives and not cures. By NIMH's own accounting,
    investment in schizophrenia research modestly declined in the first
    part of this decade--by approximately 10 percent. Given the severity of
    this illness and a record of decreasing research investment, what does
    NIMH plan to do to advance our understanding and treatment of
    schizophrenia? How much money is needed in this area of research? What
    are the most important barriers to research advances in schizophrenia,
    in your view? How can Congress assist you in conquering this terrible
    disease?
        Answer. Schizophrenia research continues to have a prominent place
    in NIMH programs. The Institute is committed to studies of the
    neurobiological substrates of schizophrenia, its neurodevelopmental
    origins, and the inheritance of and expression of vulnerability genes
    in the brain, as well as other factors that may trigger or exacerbate
    schizophrenia. For example, the NIMH Genetics Initiative has provided
    new funding to augment the number of patient samples available for
    gene-finding efforts in schizophrenia. Efforts are also underway to
    characterize exactly which of the Gamma aminobutyric acid (GABA) brain
    regions and which neurons are affected. There are preliminary data to
    suggest that small GABA interneurons, in particular, may be abnormally
    ``connected'' in patients with schizophrenia, while there is a growing
    body of data pointing towards the involvement of specific emotional and
    higher cognitive centers of the brain. This localization is consistent
    with many of the behavioral manifestations of schizophrenia.
    Neurochemical theories of schizophrenia also continue to be studied,
    and there is growing evidence pointing toward the possible involvement
    of excitatory neurotransmission involving glutamate.
        While we do not yet have a cure for this devastating illness, in
    the past few years, three new, ``atypical'' antipsychotics have become
    available. These represent major therapeutic advances, since they are
    better-tolerated, and preliminary evidence suggests that they may be
    more effective than traditional antipsychotics. NIMH has initiated
    clinical studies to determine if these new treatments are indeed more
    effective, and if so, in which patient groups they are best used.
        Over the last 5 years NIMH has cofunded, with the Agency for Health
    Care Policy and Research (AHCPR), the Schizophrenia Patient Outcomes
    Research Team (PORT). The mission for this PORT was to identify and
    analyze the outcomes and costs of various treatments for schizophrenia;
    to determine the most cost-effective means to treat or manage the
    condition; and to develop and test methods for reducing inappropriate
    or unnecessary variations in treatment. The same investigative team was
    funded recently to conduct a field trial of a methodology for assessing
    the quality of care provided to patients with schizophrenia.
        The fiscal year 1999 President's Budget request will permit NIMH to
    take advantage of the most important immediate research opportunities.
        There are a number of reasons why progress in understanding
    schizophrenia and finding a cure has been slow. First and foremost,
    schizophrenia is a disease unique to humans. There is no animal or
    tissue model that accurately reflects the manifestations of the disease
    in man, and this necessarily limits the investigations that can be
    performed. Many of the powerful methods for studying molecular or
    cellular processes that have led to rapid advances in our understanding
    of other illnesses cannot be applied to schizophrenia, since they
    involve destruction or severe disruption of the tissues that are being
    studied.
        There are other barriers as well. Schizophrenia is difficult to
    treat and few people with the diagnosis--even those who respond well to
    treatments--return to their pre-illness level of functioning. Because
    of this, we need to go beyond therapeutic studies and start thinking
    about prevention. Yet we know little about factors that influence the
    course of this illness. The NIMH is developing research to aid in
    identifying indicators of risk for onset of disease, relapse, poor
    functional outcomes, and suicide. The programs will also translate
    emerging findings from the basic sciences into new strategies for
    prevention and early intervention. We are hopeful of substantial
    progress in the next decade. There is also a lack of understanding of
    how the newer atypical antipsychotics work. Their mechanism of action
    is very complex, affecting multiple brain transmitter systems. This
    complexity may be a critical feature of their greater efficacy, and
    will remain a central focus of research efforts in the near future.
        With the funds requested in the fiscal year 1999 President's Budget
    Request and the flexibility to use these funds in areas of greatest
    opportunity, NIMH will be able to accelerate research on schizophrenia.
                             supply of researchers
        Question. As I am sure that you will agree, there is a great need
    to attract new researchers and clinicians into psychiatry--in the areas
    of genetics and severe mental illnesses in children and adolescents in
    particular. Could you please comment on the problems you see in terms
    of the human resources available to study and treat these serious brain
    disorders? What do you intend to do to recruit new and talented
    individuals to these fields? How can Congress assist you in this
    activity?
        Answer. Several high-priority research areas such as the genetics
    of mental illnesses and childhood and adolescent mental illnesses are
    drawing on a very small cadre of investigators, many of whom have
    pioneered these fields. However, as these areas of research develop and
    expand, progress depends on the availability of more well-trained
    investigators. The National Institute of Mental Health (NIMH) will
    develop strategies to attract more researchers into these critical
    areas. For example, in the area of pediatric mental illness, most
    researchers are drawn from the small groups of clinically trained child
    psychiatrists and child psychologists. Given the length of clinical
    training, many potential investigators are diverted (often for
    financial reasons) into non-research careers. However, while there are
    only 5,000 child psychiatrists nationwide, there are over 100,000
    pediatricians, adult psychiatrists, and neurologists, from whose ranks
    new child mental health-focused investigators could be drawn.
        NIMH anticipates two major activities in this area. (1) The
    Institute will issue a new career award to attract researchers such as
    neurologists, adult psychiatrists, and psychologists, who have not
    typically studied in this age group to encourage them to learn about
    how to do clinical studies of children and adolescents and to redirect
    their efforts. A similar strategy will be employed for other shortage,
    high priority research areas. (2) NIMH will develop supplements to
    existing research grants for young investigators who are interested in
    studying childhood psychopathology or other similar high priority
    areas.
        The fiscal year 1999 President's Budget Request was developed after
    lengthy examination and discussion of scientific opportunities and
    research needs, and NIMH feels that this level of funding will provide
    good support for strengthening the recruitment of researchers into
    critical areas of study.
                                     stroke
        Question. As a member of the Congressional Heart and Stroke
    Coalition, I am particularly concerned about NIH resources devoted to
    stroke. Stroke will cost this nation an estimated $43.3 billion in
    medical expenses and lost productivity in 1998, including more than $7
    billion in direct Medicare and Medicaid expenditures. Yet, the
    President's fiscal year 1999 budget would allow only $88.5 million for
    the National Institute of Neurological Disorders and Stroke-supported
    stroke research. Actual fiscal year 1997 funding for NINDS stroke
    research was a mere $76.8 million. Actual fiscal year 1997 overall NIH
    stroke research funding was only $143.1 million.
        How do you account for this inequitable allocation for resources to
    stroke? What are you doing to rectify this situation?
        Answer. Stroke is a serious health problem as shown by its rank as
    the third leading cause of death in the U.S. Stroke is one of 600
    disorders which lie within the mission of the National Institute of
    Neurological Disorders and Stroke (NINDS). As with other disorders,
    allocation of resources is the culmination of a number of factors
    including scientific opportunities and public health burden. NINDS and
    other Institutes at NIH have long been committed to stroke research. I
    would like to highlight just some of the advances and major
    contributions that have been made by NIH in the prevention and
    treatment of stroke. For example, tremendous progress has been made in
    preventing stroke by controlling high blood pressure. But there are
    other risk factors and the more we understand and control these, the
    more we can prevent stroke. NINDS clinical studies have demonstrated
    that many strokes can be prevented by either medical or surgical means.
    Beginning in 1987, NINDS funded clinical trials to evaluate the use of
    a surgical procedure, known as carotid endarterectomy, in which a
    blockage in the carotid artery is removed. The studies were designed to
    look at the severity of the blockage and whether the patients in the
    study already had a stroke or warning signs of a stroke. Now that the
    results that describe which patients can benefit from the surgery have
    been published, patients and their physicians have important
    information that they need to make health care decisions. There is now
    no question that surgery benefits patients who have 70 percent or
    greater stenosis or narrowing of the carotid arteries. The most recent
    result, announced in 1998, shows that, for symptomatic patients with
    stenosis of 50-69 percent, surgery may be worthwhile. For people with
    symptoms, but less than 50 percent stenosis, surgery is not as
    beneficial. Another prevention strategy, for which NINDS initiated
    clinical trials is to evaluate the relative benefits of aspirin and
    warfarin to prevent stroke in patients who have irregular heart beats
    or atrial fibrillation. Results from the study, announced in 1990,
    1994, and 1996 demonstrated that both aspirin and warfarin can be
    beneficial and provided information as to whether the use of aspirin or
    warfarin may be preferable, depending on other factors about the
    patient. NINDS also has ongoing a number of clinical trials that will
    further benefit people at risk for stroke. These include a study of
    vitamin intervention for stroke, stroke prevention in African
    Americans, and the use of estrogen to decrease the risk of a repeat
    stroke in postmenopausal women who have already had at least one
    stroke.
        In 1996, the FDA approved the first emergency treatment for stroke
    based on data from an NINDS-supported clinical trial. Research in
    animal models, followed by clinical observations, had led the NINDS to
    design and initiate a clinical trial to evaluate tissue plasminogen
    activator (t-PA) as an emergency treatment to be used within three
    hours of the onset of the most common type of stroke--that due to a
    blockage of a major vessel. In the clinical trial, the drug, t-PA, was
    administered within three hours of a stroke so as to dissolve the
    offending clot and restore blood flow. The results show that t-PA
    increases a person's chances for a recovery with minimal or no
    disability by 30 percent when given within three hours.
        What all of these findings have done, has been to change the way
    physicians, scientists, and the public think about stroke. Stroke can
    be prevented in many cases, but when it occurs, like a heart attack, it
    is a medical emergency that requires quick action so as to begin
    treatment as soon as possible while the effects of the injury can still
    be reversed. This is just the beginning, however. As with many of the
    other brain disorders, such as epilepsy, Parkinson's disease, multiple
    sclerosis, and neurodevelopmental disorders in children, progress in
    stroke research is benefitting from advances in molecular biology,
    brain imaging, and other scientific fields. For example, by
    understanding how the brain reacts to stroke, scientists are trying to
    find ways that can protect the brain until t-PA or a similar treatment
    can restore the blood flow. These neuroprotective modalities still will
    have to be administered very rapidly, hopefully in the ambulance or
    first thing upon arrival in an emergency room so that as many brain
    cells can be protected as possible before there is irreversible damage.
    Several activities are under way to further progress in stroke
    research. NINDS has joined with several other institutes to encourage
    new research on ``Symptom Management for Chronic Neurological
    Conditions'' which may benefit survivors of stroke. NINDS also expects
    to fund additional clinical studies in stroke and has taken steps to
    encourage new clinical trials by making available planning grants for
    support for the design of a clinical trial and the organization of an
    effective research group. Also, in the development of the fiscal year
    1999 budget, I have included stroke research as an area of emphasis.
        Research on stroke is an excellent example of how opportunity and
    need have together produced a high level of return on our research
    investment. We are proud of the progress that has been made against
    stroke and pledge continued support to strengthening and advancing
    efforts in stroke research.
                    chronic obstructive lung disease [copd]
        Question. Recent information collected by NIH shows that only two
    diseases over the past 30 years have shortened average life expectancy,
    HIV and COPD. Can you tell me what is being done at the National Heart,
    Lung, and Blood Institute (NHLBI) to address the public health
    implications of COPD, and what should Congress be doing to address the
    disease?
        Answer. Chronic Obstructive Pulmonary Disease (COPD), is a major
    public health burden in the United States; the major risk factor is
    cigarette smoking. The National Heart, Lung, and Blood Institute
    (NHLBI) considers research on COPD to be a high program priority and
    has devoted considerable resources to it. In addition to a significant
    research effort to study the basic mechanisms that lead to the lung
    damage that occurs in COPD patients, the Institute supports several
    clinical trials. Most noteworthy is the Lung Health Study, a project
    that is underway in ten clinical centers, which will follow individuals
    with early signs of COPD to learn more about the natural history of the
    disease process once it begins. The Institute also supports a study on
    the efficacy of lung volume reduction surgery in patients with advanced
    disease.
        Given the knowledge base that has been developed by NHLBI, coupled
    with new molecular technologies that have revolutionized biomedical
    research, the future holds great promise to learn even more about COPD
    and to translate these findings into programs that will have an impact
    on public health. For example, we believe that it is now possible to
    identify the genetic risk factors that predispose an individual to COPD
    and to lung cancer caused by smoking. The NHLBI will conduct a workshop
    this fall that will include epidemiologists, experts in pulmonary
    medicine, and those with experience in using molecular techniques to
    study large populations, as a first step in developing a long range
    program plan in this area. The NHLBI and the National Cancer Institute
    have also initiated discussions to develop programs to explore the
    relationship of COPD and lung cancer. These efforts will require
    significant input from the scientific community.
        Two public health initiatives from the NHLBI were initiated in
    1997. One, the National Lung Health Education Program, designed to
    develop strategies for early detection of lung damage through
    measurements of pulmonary function, represents a partnership with
    several major medical organizations. The other, global Strategy for
    Detection and Management of COPD, represents a cooperation with the
    World Health Organization to develop a comprehensive program of early
    detection (especially using lung function measurements), appropriate
    disease management strategies (for those with a diagnosis of COPD) and
    use of aggressive smoking cessation (and smoking avoidance) programs.
        Through this comprehensive program of research to examine
    mechanisms of lung damage, clinical research and outreach initiatives,
    with major new directions targeted to programs of primary prevention,
    the NIH is confident that more progress can be reported in the future
    to address the public health implications of COPD.
                                bipolar disorder
        Question. Last year's Senate Labor-HHS-Education Appropriations
    report called for a National Institute of Mental Health (NIMH) research
    plan on bipolar disorder. This request clearly indicates that, as you
    indicate publicly, there is too little bipolar illness research being
    funded by NIMH. This appears to be the case, particularly in the area
    of clinical research. As you know, bipolar disorder is among the most
    disabling of mental illnesses. The Subcommittee understands that NIMH
    has taken some steps to increase bipolar disorder research funding.
    Please describe what NIMH is doing as part of its current budget on
    manic-depressive illness research. How many new studies are being
    funded on this illness? What else, if anything, does NIMH intend to do
    to assure more research on bipolar disorder in fiscal year 1999 and
    beyond?
        Answer. NIH in general and NIMH, in particular, are committed to
    moving forward in research on bipolar disorder. Let me describe two
    major initiatives currently in progress for fiscal year 1998. First, in
    the NIMH Genetics Initiative, and as part of its effort to identify
    genetic factors in bipolar disorder, the Institute will continue to
    build up its national resource of DNA sample from patients and their
    family members. Second, we have issued a solicitation for a five year
    contract (``Treatment of Bipolar Disorder'') to launch a major public
    health study on ways to develop optimal treatment of bipolar disorder
    in adults and in geriatric populations. The study will assess the long-
    term impact of different treatments on a broad range of clinical and
    functional outcomes. Data from this study will inform treatment
    practice in community settings. Other studies are examining treatments
    for adolescents with bipolar disorder. Furthermore, we intend to
    increase research on the neurobiological underpinnings of bipolar
    disorder as well as clinical, behavioral, and epidemiological work that
    will be useful in finding ways to prevent this disorder.
        At this time, it is not possible to predict how many studies on
    bipolar disorder will be funded in fiscal year 1999. This depends upon
    how many grant applications are submitted by independent investigators,
    and how scientifically sound and appropriate these applications are
    judged to be through the peer review process.
        As outlined above, NIMH intends to explore all avenues to increase
    research on bipolar disorder as rapidly as the growing fundamental
    science base allows scientifically rigorous research studies to be
    undertaken.
                             translational research
        Question. NIMH has frequently noted the need to support
    ``translational'' research. However, for many policy-makers, patients,
    and families, the definition of translational research remains unclear.
    Would you describe for the Subcommittee what you mean by translational
    research? How does NIMH intend to implement this kind of research and
    make relevant to the advance of severe mental illness treatment? What
    specific programs and policies does NIMH intend to put forward to
    advance translational research?
        Answer. The term, translational research, is meant to describe a
    type of scientific inquiry that crosses usual conceptual and
    disciplinary boundaries. Historically NIH's support of biomedical
    research has focused on two major categories: basic biology and
    clinical research. Translational research seeks to translate ``back and
    forth'' between these two largely separate domains. It is anticipated
    that this will result in accelerated scientific progress that is
    directly applicable to clinical disorders. It is important to note that
    this is viewed as a bi-directional process, i.e., clinical research
    informing, as well as being informed by, basic research and vice-versa.
    A couple of examples may clarify the concept. Developmental
    neurobiology and genetics are both highly relevant to mental disorders.
    In both instances, hypotheses in clinical research are shaped by
    observations in basic research and vice-versa. The cognitive deficits
    observed in schizophrenia coupled with structural anomalies in the
    brains of schizophrenics have encouraged developmental neurobiologists
    to investigate the possible role of aberrant brain development in the
    etiology of schizophrenia. Conversely, the identification of a growing
    number of genes required for the precise specification of brain
    structure during development has given rise to clinical studies focused
    on the anatomic substrates of abnormal mental function. It is my belief
    that fostering translational research will enrich both basic and
    clinical research and will speed progress toward a complete
    understanding of mental disorders.
        Implementation of this kind of research will require a continuing,
    close collaboration between basic and clinical mental health
    researchers. NIMH has begun to develop and strengthen such
    collaborations in research through specific research support
    mechanisms. For example, several recently published NIMH program
    announcements call for the development of four types of research
    centers focused on translational research. One type of center, the
    Silvio O. Conte Centers for the Neuroscience of Mental Disorders, will
    support the integration and translation of basic and clinical
    neuroscience research on severe mental illnesses, while other centers
    will focus on related research areas.
        Translational research requires collaboration between scientists
    from multiple disciplines, an approach which, historically, has not
    been emphasized in research on mental illnesses. NIMH stimulates and
    sustains activity in translational research on severe mental illnesses
    through career-development mechanisms, which provide support for young
    clinical investigators during the formative stages of their careers
    until they become fully independent researchers. In addition, small
    grant awards provide support for pilot projects and for first-time
    grants for young NIMH investigators. These awards can be used to
    explore translational and other research studies that would be
    difficult to fund under traditional support mechanisms. In addition, an
    NIH-wide RFA, Clinical Research Curriculum Award, is intended to
    stimulate the inclusion of high-quality, multidisciplinary didactic
    training as part of the career development of clinical investigators.
                               clinical research
        Question. Failure of NIH to Respond: As you know, several members
    of the Labor/HHS/Education Appropriations Subcommittee are co-sponsors
    of the ``Clinical Research Enhancement Act'' based on the
    recommendations of a 1994 report of the Institute of Medicine (IOM).
    Over the past three years, the Subcommittee has raised serious concerns
    about the major obstacles confronting clinical research through which
    our investment in NIH's basic research efforts pay off with better
    patient care. Other than responding with modest intramural initiatives,
    the NIH has asked that the Subcommittee await a report from the
    Director's Panel on Clinical Research. Recently, that panel issued its
    report and made recommendations almost identical to those of the
    Institute of Medicine. Why didn't NIH just proceed with these
    initiatives three years ago when they were recommended by the IOM? And
    what does NIH plan to do immediately to rectify this situation and make
    up for lost time?
        Answer. As you stated, the ground work examining the state of our
    nation's clinical research enterprise was conducted by the Institute of
    Medicine (IOM). This study, which was carried out from 1991-1994 and
    was partially funded by NIH, addressed a number of the important issues
    concerning clinical research, including its role in the delivery of
    health care, the status of the clinical research infrastructure, and
    the need for well-trained clinical investigators. Although the 1994 IOM
    report was thorough and addressed a range of relevant issues, its
    recommendations were very broad and were aimed at both the private and
    public sector entities that sponsor, conduct, or, in some way, play a
    role in clinical research. These include accreditation and
    certification organizations, professional societies, universities,
    academic medical centers, industry, and the Federal Government.
        Because NIH is but one of these entities and has a unique role, I
    responded to the 1995 Appropriations Committee report language that
    requested NIH to act on the recommendations of the IOM report by
    convening the NIH Clinical Research Panel (CRP). That panel was charged
    with examining specifically the role of NIH in ensuring the health of
    the Nation's clinical research infrastructure. To this end, the CRP was
    asked to examine several important areas of NIH-supported clinical
    research including, but not limited to, the General Clinical Research
    Centers (GCRC's), the NIH Clinical Center (CC), the recruitment and
    training of future clinical researchers by NIH, the conduct of NIH-
    sponsored clinical trials, and peer review of clinical research
    supported by the NIH.
        The CRP was also asked to deliberate on a number of issues that
    were not prominent concerns at the time of the IOM study, but reflect
    the rapidly changing clinical research environment today. These include
    the expansion of managed care, the emphasis on training primary care
    physicians, and the extensive transformation of the academic health
    care infrastructure.
        By the time the CRP report was completed in December 1997, a number
    of the panel's recommendations were already being implemented. The
    complete report is available on line at (http://www.nih.gov/news/crp/
    97report/index.htm).
        NIH was implementing the recommendations of the Clinical Research
    Panel as they were brought forward. For example, the recommendation to
    track that part of the NIH budget devoted to clinical research was
    implemented by the creation of a prospective system to monitor the
    grants and other funds awarded which are devoted to clinical research.
    The recommendation to create a Clinical Research Training Program was
    implemented immediately. The creation of the new programs of career
    enhancing awards for clinical researchers continues this pattern.
        Question. Decline in Physician-Scientists: The number of first-time
    physician applicants for research project grants declined by 30 percent
    between 1994 and 1996. At that rate, we will have no new physician
    applicants by the year 2000. First, does this trend continue in 1997,
    and is the NIH alarmed by this stunning decline?
        Answer. We have noticed a reduction in the number of new physician
    applicants for NIH research grant support between 1994 and 1997. In
    1997, the NIH received 1,769 applications from individuals with the
    M.D. degree who had never received NIH research project grant support
    previously. This number is approximately the same as that observed in
    1996 and is 22 percent below the peak observed in fiscal 1994.
        To address this important issue, the NIH has recently announced new
    career award mechanisms designed to offer at least 80 young physicians
    new training opportunities in clinical research each year. This same
    initiative will also increase opportunities for mid-career clinical
    researchers who will serve as mentors. In addition, the initiative will
    support the development of high-quality instruction in clinical
    research methodology. We are hopeful that these new awards will
    ultimately increase the number of physicians submitting applications
    for clinical research grants. To provide some indication of the
    magnitude of this initiative, we estimate that, if all of the entry
    level awardees supported by the program apply for research projects
    grants after completing their career awards, there will be a greater
    than 10 percent increase in applications from physicians each year for
    several years into the future.
               funding for the general clinical research centers
        Question. The IOM and the Director's Panel on Clinical Research
    identified the General Clinical Research Centers (GCRC's) as a critical
    resource for patient-oriented research. Both reports recommended that
    these be funded more generously. The GCRC budget has declined as a
    proportion of the NIH budget from 3 percent in 1968 to 1 percent for
    the current year. Given all the obstacles and challenges confronting
    clinical investigation, shouldn't the lion's share of the funding
    increase for the National Center for Research Resources should be
    allocated to the GCRC's? Has the NIH considered using the NIH
    Director's discretionary fund or transfer authority for this purpose?
        Answer. There is no question that the General Clinical Research
    Centers (GCRC) are a critical resource for clinical research for NIH.
    We agree that it is important to support the GCRC's at a level required
    to permit appropriate patient oriented clinical research as supported
    by the NIH categoric institutes. The NIH commitment to do so is
    indicated by recent statistics. Between fiscal year 1993 and the fiscal
    year 1999 President's budget request, resources for GCRC's have grown
    about 43 percent, the same percentage increase as NIH as a whole, and
    the proportional relationship between the two has remained constant
    over that period. This reflects the condition of research as a whole,
    and the necessary balance between basic studies and the translation of
    research results to patients.
        I have no plans currently to use the Discretionary Fund or the
    transfer authority to increase funding for the General Clinical
    Research Centers. I believe that the level of funding requested for the
    GCRC's in the President's Budget is appropriate.
                                     ______

                   Questions Submitted by Senator Larry Craig
                               nutrition research
        Question. I anticipate that NIH is involved in a great deal of
    research exploring the relationship between nutrition and various
    health conditions and diseases. Would you tell the committee about this
    research, which Institutes are involved, and any future plans for this
    important area of study?
        Answer. You are correct. Nutrition is one of the most widely cross-
    cutting research areas at the National Institutes of Health (NIH). All
    of the Institutes, as well as the Clinical Center, the National Center
    for Research Resources, and several offices in the Office of the
    Director provide funding for nutrition research. This encompasses basic
    and clinical studies on the role of nutrients in health and disease.
    Nutrition research is coordinated across the NIH by the NIH Nutrition
    Coordinating Committee (NCC), which also has served to facilitate
    interactions relating to physical activity and health. The NCC includes
    liaison members from a number of other agencies of the Department of
    Health and Human Services, as well as from the Departments of
    Agriculture and Defense.
        By definition, nutrition research funded by the NIH includes
    studies to assess the consequences of food or nutrient intake and
    utilization in the intact organism, and the metabolic and behavioral
    mechanisms involved, including investigation of variables in nutrient
    intake at the cellular and subcellular level. The 17th Report of the
    NIH Program in Biomedical and Behavioral Nutrition Research and
    Training, published in January 1997, contains an extensive overview of
    recent nutrition research funded by the NIH. Numerous examples are
    cited, ranging from studies of the molecular genetics in the control of
    energy balance to research on the role of diet in lowering blood
    pressure to the effectiveness of nutrient support in cancer treatment
    to studies of nutritional factors in cognitive development and
    behavior. This report is available from the NIH Division of Nutrition
    Research Coordination, located in the National Institute of Diabetes
    and Digestive and Kidney Diseases (NIDDK).
        As far as future plans are concerned, each Institute at the NIH has
    plans that reflect the role of nutrition research in its overall
    programs. In addition, trans-NIH nutrition research efforts are led by
    the NCC. Currently, such initiatives include consideration of studies
    of the neuroendocrine basis of obesity, the prevention of obesity, and
    the role of physical activity and nutrition in health. These reflect
    the interest of many NIH Institutes in obesity as an underlying cause
    of disease, and the recognition that progress in obesity research has
    tremendous potential to improve public health.
        Question. Within NIH, is there a single ``advisory committee,'' or
    some other coordinating entity responsible for overseeing nutrition-
    related research? If not, do you think the Institutes could benefit
    from the establishment of such an entity?
        Answer. Yes, the NIH Nutrition Coordinating Committee (NCC)
    facilitates communications regarding nutrition research, both among the
    NIH institutes and with liaison agencies in the Departments of Health
    and Human Services, Agriculture, and Defense. This body has been
    responsible for the development of several trans-NIH nutrition research
    initiatives. The NCC is administered within the National Institute of
    Diabetes and Digestive and Kidney Diseases' Division of Nutrition
    Research Coordination, which represents the NIH on numerous other
    interagency committees concerning nutritional issues.
        I think the NCC is doing a good job. It has been quite active in
    fostering nutrition research at the NIH and in involving other Federal
    agencies in this area. Currently a number of the NIH Institutes, as
    well as the Centers for Disease Control and Prevention (CDC) and the
    Department of Defense, are working through the NCC to develop trans-NIH
    initiatives in obesity research.
        Question. To what extent do health professionals with nutrition
    expertise advise NIH on its research activities and funding priorities?
    How many registered dietitians and other nutrition professionals serve
    on NIH advisory committees and review panels? Could you tell us on
    which panels they serve?
        Answer. Nutrition research is widely dispersed throughout all of
    the NIH Institutes, reflecting the interdisciplinary nature of this
    field. Nutrition researchers are essential in advising NIH by serving
    on Institute advisory councils, participating in workshops, and on peer
    review groups and through dialog between professional societies and the
    NIH. I cannot provide you with an exact number of nutrition advisors to
    the NIH, because most nutrition researchers are not organizationally
    located in nutrition departments. In addition, most registered
    dieticians (RD) involved in research cite higher degrees and do not
    necessarily inform us that they have RD degrees.
        Some examples of representation of nutritionists in NIH activities
    are: The NIDDK-sponsored National Task Force on Prevention and
    Treatment of Obesity comprises primarily nutrition researchers. The
    NIDDK always includes a member of the nutrition research community on
    its advisory council and also has an exofficio representative from the
    Beltsville Human Nutrition Research Center of the Department of
    Agriculture. The National Heart Lung and Blood Institute (NHLBI) Expert
    Panel to Develop Clinical Guidelines on the Identification, Evaluation,
    and Treatment of Overweight and Obesity in Adults comprises people of
    different expertise, however most have been involved in some aspect of
    nutrition related research. The NHLBI advisory council currently
    includes a nutrition researcher who also is an epidemiologist and has a
    Ph.D., M.P.H., and R.D. degrees. Nutritionists and registered
    dietitians are represented as advisors on NHLBI's national education
    programs including the Coordinating Committees of the National
    Cholesterol Education Program and the National High Blood Pressure
    Education Program. They play important roles in advising these programs
    on a variety of educational programs on nutrition-related strategies
    and materials, including those targeting special populations.
        Regarding the peer review of nutrition, a considerable body of
    nutrition research is reviewed in the Nutrition Study Section, whose
    members are primarily nutrition researchers. However, nutrition
    research also is widely reviewed in a large number of other study
    sections, due to its interdisciplinary nature. This dispersal ensures
    the best review for each particular application.
                                    diabetes
        Question. Dr. Varmus, diabetes impacts the very young as well as
    older Americans. I know that NIDDK leads diabetes research. What roles
    do other institutes, such as the National Institute of Child Health and
    Human Development (NICHD) and the National Institute on Aging (NIA),
    have for diabetes given the impact the disease has on their key
    constituencies? What is the role of other institutes which oversee
    areas where diabetes causes devastating complications, such as
    blindness, heart disease, stroke, and amputations?
        Answer. The NICHD has a broad program of research in diabetes.
    Diabetes is the most common endocrine disorder that occurs during human
    gestation. With the introduction of insulin therapy and the
    implementation of rigorous glucose control, the incidence of maternal
    and fetal mortality has been reduced to that observed in the general
    obstetric population whose members have normal glucose tolerance.
    However, subtle morbidities persist. A longitudinal study aims at
    clarifying changes in maternal carbohydrate metabolism in women with
    gestational diabetes (GDM) in early and late gestation. These women are
    at risk of developing type 2 diabetes over the two to three decades
    after their pregnancies. This explains the importance of pursuing a
    longitudinal study. In addition, the knowledge acquired will lead to
    improvements in the diagnosis and treatment of GDM, based on the
    understanding of the pathophysiology of the disorder.
        Other research supported by the NICHD is aimed at understanding the
    genetic and environmental causes of disease in order to develop
    strategies to prevent both type 1 and type 2 diabetes. By supporting
    immunogenetic research in multiply-affected families, the NICHD played
    a key role in discovering that type 1 diabetes is an autoimmune
    disease. The NICHD built on this discovery by providing partial support
    for the world's largest, most comprehensive study of the natural
    history of type 1 diabetes, the NIDDK's Diabetes Control and
    Complications Study. A major accomplishment of this ongoing study has
    been to enable doctors to predict the rate of conversion from having no
    disease to clinical diabetes in close relatives of type 1 diabetics.
    This important advance paved the way for the Diabetes Prevention Trial-
    1, supported by the NIDDK, NICHD, and NIAID, which is designed to delay
    or prevent the onset of type 1 diabetes by attenuating the body's
    autoimmune attack on the beta cells of the pancreatic islets.
        The NIA is collaborating with the NIDDK on new research initiatives
    on the prevention and treatment of diabetic complications. Specific
    areas of interest to the NIA include: (1) age-related changes in
    pancreatic cell function (e.g., altered insulin production or
    response), and (2) implications of age-related physiologic changes on
    the rates of progression of complications in older people with type 1
    diabetes.
        Type 2 diabetes and its cardiovascular complications (e.g.,
    atherosclerosis, hypertension) pose a significant health problem to
    older adults, yet the processes involved in the development of diabetic
    complications are not clearly understood. Ongoing NIA-supported
    research has been examining the role of impaired glucose metabolism and
    insulin resistance in the development of vascular problems associated
    with diabetes. Moreover, NIA scientists are studying 2,000 of the
    participants in the Baltimore Longitudinal Study of Aging to address
    the question of whether complications of diabetes occur at comparable
    plasma glucose levels in younger and older individuals and to determine
    the incidence rates for overt clinical diabetes, coronary heart
    disease, stroke, and mortality among these aging persons.
        The majority of diabetic patients suffer from, and ultimately
    succumb to, some form of cardiovascular disease (CVD) such as heart
    attack, stroke, congestive heart failure, and peripheral vascular
    disease, but why diabetes causes excess CVD and how such complications
    can best be prevented is not well understood. The NHLBI supports a
    range of studies to understand the basic mechanisms underlying this
    propensity of diabetes to develop CVD and the reasons why other CVD
    risk factors (e.g., high blood pressure, dyslipidemia) tend to co-occur
    with diabetes. The Institute also conducts trials of CVD treatments,
    such as revascularization procedures, to identify the best approaches
    to be used in diabetics. On the horizon are new approaches to therapy
    that may facilitate glucose control and lead to a lower risk of CVD
    complications. These new avenues are being pursued vigorously.
        The National Eye Institute (NEI) has an extensive portfolio of
    diabetes-related research, and is an active participant in the NIH
    diabetes initiative. One area of particular priority is the study of
    diabetic retinopathy, which is often associated with the growth of
    abnormal new blood vessels (neovascularization). Recent work has
    identified several agents involved with retinal neovascularization.
    Vascular endothelial growth factor (VEGF) and pituitary gland factors,
    such as growth hormone and insulin-like growth factor-1, are possible
    causative agents. Systemic inhibition of these substances may have
    therapeutic potential.
        Other diabetes research that the NEI is pursuing is related to the
    role of protein kinase C (PKC) in retinal neovascularization. VEGF
    functions by binding to receptors on the surface of cells lining the
    retinal blood vessels. This can result in activation of an
    intracellular signaling pathway involving PKC. An orally-administered
    inhibitor of PKC has been developed and has been shown to be effective
    in improving retinal blood circulation and in preventing the growth of
    blood vessel cells under laboratory conditions. The NEI is working with
    the pharmaceutical industry to set up human clinical trials of this
    inhibitor.
        Diabetes is the most common cause of peripheral neuropathy (nerve
    damage) in the United States, a complication that affect about 60
    percent of people with the disease. The National Institute of
    Neurological Disorders and Stroke (NINDS) supports studies of the
    neurological complications of diabetes. This work includes research
    into the possible causes of neuropathy, including the role of
    deficiencies in neurotrophic factors. Other studies focus on the
    mechanisms underlying the pain that characterizes diabetic neuropathy.
                      primary pulmonary hypertension [pph]
        Question. Primary pulmonary hypertension (PPH) is a rare,
    progressive, and fatal heart/lung disease that strikes mostly females.
    Following report language in the fiscal year 1996 NIH Appropriations
    bill, a program announcement was issued encouraging researchers in
    primary pulmonary hypertension to submit proposals. How many have you
    received and how many are being funded? If few have been received and/
    or funded, how can this be rectified?
        Answer. The study of primary pulmonary hypertension is a high
    priority for the NHLBI, and it supports several projects related to
    this disease. The program announcement ``Cellular and Molecular
    Mechanisms of Primary Pulmonary Hypertension'' resulted in 12
    applications to date. One new project has been funded and three
    additional projects which are highly meritorious scientifically will be
    reviewed at the May 1998 meeting of the National Heart, Lung, and Blood
    Advisory Council. Three applications will be reviewed at study section
    meetings in June. The new projects in response to this announcement
    will address innovative and creative approaches to this devastating
    disease.
        We will evaluate the success of the program announcement after we
    have had a chance to see how many additional applications are submitted
    during the remainder of this calendar year. The pulmonary research
    community has shown an increased level of interest in this disease. If
    only a small number of applications are available, we will consider
    other mechanisms to stimulate high quality research in this important
    area of lung research.
        Question. Although progress has been made in this area, there are
    no animal models of PPH. This is typically a necessity for research
    proposals to be deemed worthy. How are allowances made for this problem
    and how well versed in this rare disease are the scientists who read
    and rate the PPH proposals?
        Answer. Although there is no single animal model that mimics
    primary pulmonary hypertension in its entirety, there are a number of
    animal models that have been used for many years to study pulmonary
    hypertension in general. Information gained from these studies is
    providing new understanding of how the pulmonary circulation is
    controlled and what might go wrong in PPH. In addition, genetically
    altered animals are now being used to study pulmonary hypertension. One
    of the objectives of the program announcement discussed previously is
    the development of an animal model that mimics PPH.
        We feel there is adequate expertise on the study sections to review
    the applications. In fact, the current chairman of the study section
    that reviews most of the PPH applications has spent his entire research
    career working on pulmonary hypertension. In addition, when it is felt
    that there is not appropriate expertise to review a particular
    application among the regular study section members, special ad hoc
    members are invited to do the review.
        Question. One of the drugs, prostacyclin, used to treat PPH is
    extremely expensive. One estimate places the cost of the drug alone at
    an average of $5,000 monthly for each of the 1,000 patients nation-wide
    on this drug--a bill of $5,000 monthly and $60,000,000 yearly for these
    patients. How is NIH supporting or planning to support research to find
    an effective treatment that is manageable cost-wise for the PPH victims
    and the American public?
        Answer. The focus at NIH is aimed at supporting basic research
    projects to determine the fundamental cellular and molecular factors
    underlying the disease. It was through such projects, leading to an
    understanding of the basic mechanisms that regulate the pulmonary
    circulation, that the drug, prostacyclin, was discovered to be useful
    in PPH. We believe that further investigations into pulmonary vascular
    biology, including the role of nitric oxide in regulating pulmonary
    vessels, and the role that genetic factors may play in the familial
    form of PPH, will eventually lead to new approaches and strategies for
    treating PPH.
                                     ______

                   Questions Submitted by Senator Tom Harkin
                          behavioral science research
        Question. Dr. Varmus, this Committee remains very interested in
    behavioral science research at NIH. Over many years, we have encouraged
    NIH to pay significant attention to health problems that involve
    behavior, either as a cause or as a symptom.
        For example, smoking is a behavior that leads to cancer, emphysema
    and other diseases. Illegal drug use is a behavior that leads to AIDS
    and other diseases. Of course we need research on cancer, emphysema and
    AIDS, but we also need research on the behaviors themselves. What leads
    young people to take up smoking or to start abusing drugs? What can we
    do to discourage these behaviors? Or, to take other examples, are there
    effective interventions to discourage unhealthy behaviors like
    violence, child abuse, and teen pregnancy?
        Answer. Tobacco use usually begins in early adolescence, typically
    by age 16. Almost all first time tobacco use occurs before young people
    graduate from high school. If adolescents can be kept tobacco-free,
    most will remain tobacco-free for the rest of their lives.
        Almost all adolescents will, at some time, feel pressured to try
    tobacco. Peers, siblings, and friends are powerful influences. The most
    common situation in which a cigarette is tried is when a young person
    is with a friend who already smokes. Particularly susceptible to peer
    influences are adolescents who lack parental support and involvement in
    their lives.
        Young people are sensitive to perceived signals that smoking is the
    norm. These include visible public smoking, the availability of
    cigarettes to minors, and the widespread promotion and advertising of
    tobacco products. Cigarette advertising appears to increase young
    peoples' risk of smoking by conveying the message that smoking has
    social benefits and that it is far more common than it really is.
        Young people may be repeatedly exposed to outdoor billboards
    portraying apparent benefits of tobacco use, especially in inner-city
    neighborhoods. Increasingly, tobacco companies market their products
    through promotional activities that reach youth. Cigarette ads visually
    associate smoking with independence, adventure-seeking, and physical
    attractiveness--themes that appeal to young people. Young people with
    low self-esteem are particularly receptive to this message.
        Young people who come from a low-income family and have fewer than
    two adults living in their household are especially at risk for
    becoming smokers. Female and male adolescents are now equally likely to
    smoke, but male adolescents are substantially more likely than females
    to use smokeless tobacco products. White adolescents are more likely to
    smoke and to use smokeless tobacco than are black and Hispanic
    adolescents. Insufficient knowledge of the health consequences of
    smokeless tobacco use is also a factor.
        Behavioral risk factors for tobacco use include low levels of
    academic achievement and of involvement in school activities, and lack
    of skills required to resist influences to use tobacco.
        The National Institute on Drug Abuse (NIDA) recently issued a
    research-based guide to preventing drug use among children and
    adolescents. Researchers have identified many risk factors, each of
    which represents a challenge to the psychological and social
    development of an individual. While many people mistakenly believe that
    ``the drug problem'' emerges during adolescence, research conducted
    over several decades has made it clear that drug use in adolescence has
    much earlier roots. Factors that affect early development of children
    in the family are probably the most crucial, such as: chaotic home
    environments, particularly those in which parents abuse substances or
    suffer from mental illnesses; ineffective parenting, especially of
    children with difficult temperaments and conduct disorders; and lack of
    mutual attachments and nurturing. Other risk factors include
    inappropriately shy and aggressive behavior in the classroom; failure
    in school performance; poor social coping skills; affiliations with
    deviant peers; and perceptions regarding approval of drug-using
    behaviors in the school, peer, and community environments.
        The development of prevention programs provides knowledge of which
    protective factors make it less likely that young people will use
    drugs. The most salient protective factors include strong bonds within
    the family; parental monitoring with clear rules of conduct within the
    family unit and involvement of parents in the lives of their children;
    success in school performance; strong bonds with prosocial institutions
    such as the family, school, and religious organizations; and adoption
    of conventional norms about drug use.
        In addition, the availability of drugs, trafficking patterns, and
    beliefs that drug use is generally tolerated also influence the number
    of young people who start to use drugs.
        Studies have shown that educational efforts can effectively reduce
    the onset of tobacco use among adolescents. Promising results have been
    seen in school-based programs that teach young people how to resist
    social influences to smoke. School-based smoking-prevention programs
    that identify social influences to smoke and teach skills to resist
    those influences have demonstrated consistent and significant
    reductions in adolescent smoking prevalence, and effects have lasted
    one to three years. Programs to prevent smokeless tobacco use that are
    based on the same model have also demonstrated modest reductions in the
    initiation of tobacco use.
        Such programs are even more successful when they are supported in
    both the adolescent's home and community. The effectiveness of school-
    based smoking-prevention programs appears to be enhanced and sustained
    by comprehensive school health education and by community-wide programs
    that involve parents, the mass media, community organizations, or other
    elements of an adolescent's social environment.
        Though school-based anti-smoking programs can be effective, more
    aggressive measures also appear to be needed. Raising the price of
    cigarettes appears to discourage youth from trying tobacco. Econometric
    studies indicate that increases in the real price of cigarettes
    significantly reduce cigarette smoking among both young people and
    adults.
        Also effective are strongly enforced laws that prohibit the sale of
    tobacco to young people, and policies in the school, workplace, and
    community that restrict smoking. A crucial element of prevention is
    access: adolescents should not be able to purchase tobacco products in
    their communities. Active enforcement of age-at-sale policies by public
    officials and community members appears necessary to prevent minors'
    access to tobacco. Communities that have adopted tighter restrictions
    have achieved reductions in purchases by minors.
        A 1994 report from a committee of the Institute of Medicine,
    Growing Up Tobacco Free: Preventing Nicotine Addiction in Children and
    Youths, recommends tougher regulation of tobacco ads so that all
    features of advertisements and promotions that appeal to youths and
    influence them to use tobacco are eliminated. In addition, the report
    indicates that governments and private organizations should reinforce
    the emerging view of smoking as an unaccepted behavior. Other programs,
    such as paid anti-smoking advertisements, and smoke-free zones in
    schools and workplaces, can help generate a ``tobacco-free norm.'' The
    IOM report also recommends that support for research on tobacco use by
    children and adolescents be increased, including studies of smoking
    trends among different ethnic groups.
        Concerning drug use, effective prevention programs have been
    carried out which make use of family relationships, peer relationships,
    the school environment, and the community environment. The most
    effective programs involve all of these for sustained periods of time.
        Since the most vulnerable periods for drug use among youth are
    transitions, between one developmental stage to another, or when there
    are difficult life changes, prevention programs often are designed for
    particular transition periods.
        While none of the prevention programs tested so far have eliminated
    drug use among young people, a variety of programs have demonstrated
    substantial reductions in use or delayed onset of use, both of which
    are important outcomes in terms of the long-term burdens of drug use.
        The NIH has had a longstanding program of research on aggressive
    and violent behavior in children and youth so I will focus the major
    part of my comments on this topic.
        It has been shown that the best hope for high-risk children is to
    interrupt the development of the pattern of violence early on.
    Researchers funded by the NIMH are studying interventions for young
    children designed to prevent serious behavior problems from developing.
    While preventive interventions aimed at single risk factors, have had
    only modest and short-lived effects, more promising are programs that
    are coordinated and long-term. NIMH studies suggest that these programs
    should span the first several years of school, with particularly
    intensive interventions during the transitions, such as school entry
    and from elementary to middle school. NIMH is now testing models of
    early prevention that are aimed at improving the lives of high-risk
    children in multiple domains, by not only teaching the children better
    coping skills, but by also training their teachers and parents in the
    skills and knowledge that will improve the environments in which these
    children live. Communities also have participated in the intervention
    planning and delivery.
        Other NIMH research focuses on interventions targeted toward older
    youth who display chronic serious aggressive behavior. Once a chronic
    pattern of aggressive behavior is established, it is highly resistant
    to change. In contrast to the generally ineffective, punitive
    interventions for youth delinquency, several NIMH funded interventions
    have had success in preventing delinquent behavior to become chronic in
    at-risk and seriously troubled youth. One of the most promising
    approaches is the Specialized Foster Care (SFC) Program. The SFC model
    provides the opportunity for intensive, individualized treatment in a
    nonrestrictive family setting. This type of foster care is an enhanced
    by providing the foster parents with substantial training in intensive
    monitoring, consistent discipline, and positive reinforcement.
        The SFC program was based on NIH research findings which showed
    that at-risk and delinquent youths should not be grouped together
    during treatment. Instead, these youth should be isolated as much as
    possible from each other, while maximizing their interaction with pro-
    social youth and with adults who have received special training. In
    comparison to the usual group care arrangements, therapeutic foster
    care has resulted in half as many self-reported offenses, fewer
    runaways, and half the number of arrests, in the 18 month period
    following placement. While other programs targeting this population
    have failed to produce lasting results, this type of foster care was
    able to sustain its positive effects, with reductions in serious
    delinquency persisting for at least one year after the intervention
    ended. During the past decade an increasing number of Specialized
    Foster Care programs have been setup. In addition to successful
    intervention, therapeutic foster care has demonstrated a significant
    cost savings, approximately $2,000 less per month than the cost of
    group care.
        While much progress has been made in the area of research on youth
    violence research, a 1998 National Research Council report ``Violence
    in Families: Assessing Prevention and Treatment Programs,'' noted that
    very little intervention research has been conducted on family
    violence. A recent NIH initiative is designed to help address this gap.
    Entitled ``Violence against Women and Violence within the Family, this
    Request for Applications (RFA) encouraged research on the abuse of
    children and the elderly, partner violence, sexual violence, and
    multiple episodes of family violence. This trans-NIH funding program to
    focus on violence was coordinated by the Office of Behavioral and
    Social Science Research (OBSSR) and co-sponsored by five NIH institutes
    and two other NIH Offices, in collaboration with the National Institute
    of Justice (NIJ), the National Center on Child Abuse and Neglect, and
    the Centers for Disease Control and Prevention (CDC).
        Ten research grants were awarded and include studies of
    interventions for treating domestic abuse in Latino families,
    protecting battered women, healing the children of battered women,
    preventing abuse of the elderly by care givers, and treating violent
    adolescent males from abusive homes.
        Effective programs to prevent teenage pregnancy have been shown to
    share several common characteristics. First, they clearly focus on
    reducing one or more sexual behaviors that lead to unintended
    pregnancy. They propose a small number of specific behavioral goals,
    such as delaying the initiation of sexual activity, use of
    contraception, and providing a clear message by continually reinforcing
    a strong stance on these behaviors. Next, the behavioral goals,
    teaching methods and materials must be appropriate to the age, sexual
    experience, and culture of the students. Third, effective programs must
    be based on solid theoretical approaches previously shown to be
    effective in influencing other health-related risky behaviors. Fourth,
    effective programs should continue long enough to complete their
    planned activities. Fifth, teaching methods should provide personalized
    messages while giving accurate information about the risks of
    unprotected intercourse and the ways of avoiding it. They must address
    the social pressures that adolescents experience and teach and practice
    of communications, negotiation, and refusal skills. Finally, effective
    programs must have teachers or peers who believe in the programs and
    then provide appropriate training for them.
        Question. In addition to understanding behavior as a cause of
    disease, we need to better understand behavior as a symptom. For
    example, NIH should look into the behavioral consequences of dementia
    and other neurological or mental disorders.
        In light of the clear connection between behavior and health, what
    recent steps have you taken to encourage basic and applied behavioral
    research at NIH? In your view how well is the Office of Behavioral and
    Social Science Research integrated into the work of NIH?
        Answer. Many such efforts are underway at NIH. For example, the NIH
    Office of Behavioral and Social Science Research (OBSSR) recently
    announced a special trans-NIH, interagency Request for Applications
    (RFA) focusing on ``Innovative Approaches to Disease Prevention through
    Behavior Change.'' The RFA invites applications to test interventions
    designed to achieve long-term health behavior change. The health
    behaviors of interest--tobacco use, physical inactivity, improper diet,
    and alcohol abuse--are among the top ten causes for premature mortality
    and morbidity. The initiative is being co sponsored by four other NIH
    Offices and 11 NIH Institutes, with additional funding from the
    American Heart Association.
        Another recent OBSSR RFA was designed to help build the research
    capacity of the behavioral and social sciences. In collaboration with
    the National Center for Research Resources (NCRR), National Institute
    of Nursing Research (NINR), National Institute on Drug Abuse (NIDA),
    and National Institute of Dental Research (NIDR), the OBSSR sponsored a
    request for applications for ``Educational Workshops in
    Interdisciplinary Research.'' This RFA invited grant applications to
    develop and conduct short-term educational workshops in
    interdisciplinary research. Designed to foster cross-disciplinary
    communication and research collaborations, the RFA emphasized
    facilitating the integration of different fields of social and
    behavioral sciences research and/or the integration of these areas with
    the more biological fields. Ten projects were supported under this
    initiative. Because it was so successful, the OBSSR expects to reissue
    the RFA in fiscal year 1999, with participation from several additional
    NIH Institutes.
        Another trans-NIH initiative, cosponsored by eight institutes and
    three offices of the NIH, is a program announcement (PA) entitled
    ``Methodology and Measurement in the Behavioral and Social Sciences.''
    This just-issued PA encourages research on methodology and measurement,
    in order to improve the quality and scientific power of data collected
    in the behavioral and social sciences.
        The National Cancer Institute (NCI), in conjunction with the
    National Institute of Child Health and Development (NICHD), NIDA, NIDR,
    the National Institute of Mental Health (NIMH), and NINR, has issued an
    Request for Applications (RFA) for grants applications to study
    interventions for ``Prevention and Cessation of Tobacco Use by Children
    and Youth in the U.S.''
        In addition to these trans-NIH activities, projects are also
    underway at the individual NIH Institutes to encourage basic and
    applied behavioral research.
      --NIA's program announcement ``Social Cognition and Aging'' invites
            basic research and training grant applications to study how
            representations of social events, societal and cultural norms
            and personal characteristics influence behavior, reasoning,
            emotion and motivation.
      --NHLBI's ``Nutrition Academic Award'' encourages the enhancement of
            medical school curricula to increase opportunities for
            students, house staff, faculty, and practicing physicians to
            learn nutrition principles and clinical practice skills with an
            emphasis on preventing cardiovascular diseases.
      --One of NIAAA's recent RFA's, seeks to stimulate assessments of
            alcohol-related HIV preventive interventions that have the
            potential for reducing the risk of transmission of HIV in
            alcohol using, abusing, and dependent populations. Other NIAAA
            RFA's encourage research to examine the ``Effects of Alcohol
            Advertising on Underage Drinking,'' as well as studies of the
            efficacy of ``Treatment for Adolescent Alcohol Abuse and
            Alcoholism.''
      --NICHD recently offered an RFA to continue the ``Family and Child
            Well-being Research Network'' cooperative agreements
            investigating the relationship of family factors to child
            welfare.
      --Under its new RFA, ``Mental Health Research for Survivors of
            Torture and Related Trauma,'' the NIMH is inviting grant
            applications for research on the extent and nature of mental
            health problems related to torture within the U.S., and on the
            effectiveness of interventions for survivors of torture.
      --Because benefits from combination medication regimens for HIV can
            be sustained only if rigorous adherence to precise dosing
            requirements is maintained, NINR's program announcement, ``
            Understanding and Improving Antiretroviral Regimen Adherence,''
            encourages research on factors influencing adherence and
            nonadherence, and on methods to improve and assure adherence
            and compliance to drug therapy regimens for HIV.
      --A recent NIMH program announcement invites applications for
            ``Centers for Behavioral Science Research in Mental Health.''
            The purpose of these Centers is to provide integrated multi
            disciplinary research environments in which to pursue questions
            focused on basic behavioral science related to mental health
            and mental disorders. NIMH also has a program announcement,
            ``Specialized Mental Health Intervention Research Centers,''
            designed to provide the scientific infrastructure to facilitate
            assessment of treatments for major mental disorders, and of the
            preventive and rehabilitative interventions related to those
            treatments.
      --In partnership with NINDS and the National Down Syndrome Society,
            NICHD is inviting research grant applications that address
            various aspects of cognition and behavior in individuals with
            Down Syndrome (DS). Areas of interest include the developmental
            and neurological mechanisms underlying characteristic loss of
            function, approaches toward preserving or improving level of
            function, and methods to assess the effects of various
            interventions.
      --NIDCD has a new program announcement for studies on the assessment
            of the efficacy of behavioral treatments, as well as the use of
            computational neuroscience models and other new approaches to
            investigate higher cognitive functions in communication, such
            as perception, discrimination, plasticity, multisensory
            integration, learning, language and memory.
        As you know, Congress established the Office of Behavioral and
    Social Sciences Research (OBSSR) to facilitate the growth and
    development of health-related behavioral and social sciences research
    at the NIH. Although the office is relatively new, I believe the OBSSR,
    under the direction of Dr. Norman Anderson, has made significant
    progress in fulfilling its trans-institute mission.
        The OBSSR has initiated several activities that integrate
    behavioral and social science into the overall work and mission of the
    NIH. One of the first tasks it undertook was to establish a definition
    of behavioral and social science research that could be used
    consistently across the institutes so as to assess and monitor progress
    in this area. This definition is now used across all of the institutes
    to report funding in behavioral and social sciences.
        Developing initiatives designed to stimulate research in the
    behavioral and social sciences at NIH has been a major activity of the
    OBSSR. The office works very closely with the institutes to encourage
    them to enhance their behavioral and social sciences research
    portfolios. To date, the OBSSR has facilitated four trans-NIH
    collaborations including RFA's on Family Violence; Interdisciplinary
    Training Workshops; Strategies for Health Behavior Change; and a
    Program Announcement that encourages proposals for methodological
    research. Because this is such an important role for the OBSSR, and to
    ensure that the NIH is addressing the most critical behavioral and
    social science questions, I have asked Dr. Anderson, the Director of
    OBSSR, to begin a formal process to establish priorities for research
    in behavioral and social sciences. These priorities will be established
    with input from a wide constituency of scientists, advocacy
    organizations, and the public. This assessment will then be used to
    assist the OBSSR as it works with the institutes to increase their
    funding of behavioral and social science.
        The OBSSR has also sponsored conferences and established working
    groups that have the wide participation of NIH institutes and centers.
    For example, the Science of Self-Report Conference addressed an issue
    of immense interest to all of the institutes. Because of the demand for
    information on this topic, the conference proceedings will be published
    this year. Currently, the OBSSR, in collaboration with the Office of
    Disease Prevention, is organizing a conference on prevention to be held
    this fall. Entitled, ``The Science of Prevention: Contributions from
    Behavioral and Social Research'' the conference will report on NIH
    research that demonstrates how behavioral and social programs can
    prevent health problems, can make it less likely that such problems
    will develop among high-risk individuals, and can assist in the
    management of chronic health problems so that relapse is less likely.
        NIH Working Groups are integral to cross-institute collaboration,
    and the OBSSR has organized and/or participated in several, including
    the Child Abuse and Neglect Working Group and the Working Group on
    Psychoneuroimmunological Research. Most recently, the OBSSR has
    organized a Working Group on the Behavioral Assessment of Transgenic
    Animals to devise a comprehensive, standardized battery of behavioral
    tests for examining such animals. Currently, no comprehensive battery
    of tests exists which severely limits their use in the study of
    diseases such as Alzheimer's disease, schizophrenia, and depression.
        I know you are aware of the efforts NIH has been making to refine
    our peer review system, and to integrate the review of grant
    applications from the former ADAMHA institutes into the reviews done by
    the Center for Scientific Review (CSR). The OBSSR is playing an
    integral role in this endeavor, organizing and chairing a special
    working group, the NIH Behavioral and Social Sciences Review
    Integration Working Group. The goals of this group are: to assure that
    the study sections in the fields of behavioral and social science
    reflect the current state-of-the-science; to create a structure that
    can adapt to future developments in science: and, to ensure high
    quality peer review that identifies the most meritorious applications.
        Another measure of how well the OBSSR is integrated into the work
    of NIH has to do with my appointment of Dr. Anderson to critical NIH
    committees. For example, because of the importance of the perspective
    of OBSSR, I have appointed Dr. Anderson to the search committees for
    the Directors of NIMH, the National Institute of Neurological Disorders
    and Stroke, and National Institute of Deafness and Other Communication
    Disorders. In addition, Dr. Anderson serves on the Peer Review
    Oversight Committee (PROG), which is charged with evaluating the peer
    review process across NIH.
        Finally, in order for me to be better informed about this important
    field, I have asked Dr. Anderson to organize periodic briefings for me
    on new developments in research on behavioral and social sciences.
                               research training
        Question. As you know, the National Academy of Sciences has
    proposed detailed recommendations regarding training of researchers
    under the National Research Service Awards program. Among its
    suggestions, the Academy urged NIH to increase training awards in the
    fields of behavioral science, health services research, nursing, and
    oral health.
        What steps, if any, has NIH taken to implement the recommendations
    of the National Academy of Sciences?
        Answer. In its 1994 report Meeting the Nation's Needs for
    Biomedical and Behavioral Scientists, the National Academy of Sciences
    (NAS) recommended an increase in the number of National Research
    Service Award (NRSA) training positions in the areas of behavioral
    science, nursing research, oral health research, and health services
    research. In the same report, the NAS also recommended a substantial
    increase in NRSA stipends, which was considered to have priority over
    increases in numbers of training positions. Within the fiscal year 1997
    and 1998 budgets NIH was able to provide small stipend increases for
    predoctoral trainees and postdoctoral fellows having up to one year of
    previous experience. Once stipend levels are increased, the NIH focus
    on the need for increased training positions in the fields of
    behavioral science, health service research, nursing and oral health.
    The NIH has also asked the NAS, in its new study to help identify
    scientific fields which will benefit from increased training support.
    In the course of this study, the eleventh in the series of
    Congressionally mandated studies of the NIH training program, the NAS
    will be reviewing human resource needs in all biomedical and behavioral
    fields and will report its findings and recommendations shortly after
    the end of this calendar year. The fiscal year 1999 President's Budget
    requests an increase of 25 percent in stipends over fiscal year 1998
    levels.
                               clinical research
        Question. Failure of NIH to Respond: As you know, in 1994, the
    Institute of Medicine published a report expressing concern about the
    decline of clinical research in this country. Over the past three
    years, this Subcommittee has raised serious concerns about the major
    obstacles confronting clinical research through which our investment in
    NIH's basic research efforts pays off with better patient care. Other
    than responding with modest intramural initiatives, you have asked that
    we await a report from your advisory panel on clinical research.
    Recently, that panel issued its report and, made recommendations almost
    identical to those of the IOM. Dr. Varmus, what do you plan to do to
    rectify this situation and make up for lost time?
        Answer. Although many of the final recommendations overlapped with
    those directed in the IOM report, the recommendations from the Clinical
    Research Panel, which I appointed, extended the recommendations of the
    IOM report.
        NIH did not wait to implement the recommendations of the Clinical
    Research Panel until it completed its work in 1997. Recommendations
    were addressed as they were brought forward by the Panel. For example,
    the recommendation to track that part of the NIH budget devoted to
    clinical research was implemented by the creation of a prospective
    system to monitor the grants and other awarded funds devoted to
    clinical research. The recommendation to create a Clinical Research
    Training Program was implemented immediately. The creation of the new
    program of career enhancing awards for clinical researchers continues
    this pattern.
        Question. Decline of Physicians: It is my understanding that the
    number of first-time physician applicants for research projects grants
    declined by 30 percent between 1994 and 1996? First, can you tell us
    whether this trend continued in 1997, and your reaction to this
    decline?
        Answer. The reduction in the number of first-time applicants with
    the M.D. degree seems to have leveled off in fiscal 1997 to about 22
    percent below the peak observed in fiscal 1994. Nevertheless, the
    participation of physicians in NIH research training programs is
    considered essential and any erosion in the number of applications from
    physicians is viewed with considerable concern. To address this
    important issue, the NIH has recently announced a new set of career
    award mechanisms: one is designed to offer new training opportunities
    in clinical research to at least 80 young physicians each year. Another
    will increase opportunities for mid-career clinical researchers who
    will serve as mentors to beginning investigators. The third will
    support the development of high-quality didactic instruction in
    clinical research methodology. We are hopeful that these new awards
    will ultimately increase the number of physicians submitting
    applications for clinical research grants. To provide some indication
    of the magnitude of this initiative, we estimate that, if all of the
    entry level awardees supported by this program apply for research
    project grants after completing their career awards, there will be a
    greater than 10 percent increase in applications from physicians each
    year for several years into the future.
        Question. Related to this issue, I am concerned that you have
    eliminated the R29 grant, which has been useful in helping get young
    investigators established. Certainly, with the steep decline we are
    already seeing in first-time physician applicants, it is important that
    steps be taken to assure that the elimination of the R29 does not
    exacerbate the problem. It is my understanding that you believe that
    steps can be taken to assure special consideration of new applicants
    within the peer review process, but that many in the research community
    do not share your optimism. Please tell us how you plan to assure
    special status for new applicants, how you plan to monitor any trends
    in the success of new applicants, and what you plan to do to
    immediately correct any negative effects of the elimination of the R29.
        Answer. Our new policy, to use the regular R01 research project
    grant application and designate specifically which come from new
    investigators, was adopted after careful analysis. It was found that
    the R29 mechanism often was not actually advantageous for new
    investigators, as it involved limitations on funds and required a five-
    year time commitment as well as a minimum of 50 percent effort. Under
    the new approach, these restrictions do not exist.
        To ensure a fair review for new investigators, NIH staff are
    carefully explaining the new policy to scientific peer review panels
    and advisory boards and councils, the application form has been revised
    to allow new investigators to indicate their status and to ensure that
    reviewers can clearly identify those applications. To stabilize the
    number of new investigators entering the research system, the NIH has
    committed to supporting at least the same number of new investigators
    as in fiscal year 1998; The goal is to ensure that new investigators
    receive sufficient resources to sustain their research programs and to
    maintain the same influx of investigators in order to promote a healthy
    medical research system in the future.
        Question. Funding for General Clinical Research Centers: The IOM
    and your panel identified the General Clinical Research Centers as a
    critical resource for patient-oriented research and both reports
    recommended that these be funded more generously. It is my
    understanding that the GCRC budget has declined as a proportion of the
    NIH budget from 3 percent in 1968 to 1 percent for the current year.
    Given all the obstacles and challenges confronting clinical
    investigation, how much of the funding increase for the National Center
    for Research Resources should be allocated to the GCRC's? In addition,
    have you considered using your discretionary fund or transfer authority
    for this purpose?
        Answer. There is no question that the General Clinical Research
    Centers (GCRC) are a critical resource for clinical research for NIH.
    We agree that it is important to support the GCRC's at a level required
    to permit appropriate patient oriented clinical research as supported
    by the NIH categoric institutes. The NIH commitment to do so is
    indicated by recent statistics. Since fiscal year 1993, the increase
    for the GCRC's has matched that of the NIH as a whole, and that
    relationship has remained the constant over that time. This reflects
    the condition of research as a whole, and the necessary balance between
    basic studies and the translation of research results to patients.
        I have no plans currently to use the Discretionary Fund or the
    transfer authority to increase funding for the General Clinical
    Research Centers. I believe that the level of funding requested for the
    GCRC's in the President's Budget is appropriate.
        Question. Peer Review: An outside advisory committee concluded that
    clinical research is on ``an even playing field'' when reviewed by
    study sections that have a grant load for review that is at least 50
    percent patient-oriented. Last July, a report published in the Journal
    of the American Medical Association suggested that two-thirds of
    patient-oriented research grants are being reviewed by the wrong study
    sections. At a minimum, patient-oriented research should be triaged
    away from study sections that review 60 percent or more basic research
    grants. What action has the NIH taken to reform the peer review process
    to give clinical research an appropriate review?
        Answer. The Director of the Center for Scientific Review, Dr. Ellie
    Ehrenfeld, has made this a high priority issue. Soon after her arrival
    at NIH in January 1997, she retained Dr. Michael Simmons, a
    pediatrician at the University of North Carolina, Chapel Hill, to work
    with NIH staff and members of the clinical research community to find
    solutions to the clustering problem outlined in previous reports. As a
    result, she expects to establish, within this calendar year, two
    Special Emphasis Panels (SEP) for review of patient-oriented,
    translational research and small clinical trials in the areas of
    cardiovascular science and clinical oncology. These applications
    account for approximately half of the applications now reviewed by the
    type of ``low density'' study sections to which you refer.
    Subsequently, she is considering creating a third SEP related to
    ``Human Investigations'' for review of applications related to patient
    oriented, to translational research and for small clinical trials that
    will be collected in a group from among proposals usually reviewed in
    several ``low-density'' study sections. In all cases, the principal
    investigators will be informed of this option for review by the new SEP
    and asked if they wish to have their applications so reviewed. Thus,
    they may choose to cluster their clinically-oriented applications in
    the SEP or distribute them to one of the many study sections that can
    accommodate the diversity of diseases, biology, organ system, and
    technology being studied.
        Question. Defining Clinical Research: When the Institute of
    Medicine issued its report, it defined clinical research in such a
    manner that only 10-15 percent of NIH research project grants qualified
    as ``patient-oriented.'' Many of the researchers who have contacted me
    take issue with the definition used by your panel, which concluded that
    30 percent of grants are ``patient-oriented''. What underlies this
    difference in grant classification?
        Answer. Clinical research, defined by the Clinical Research Panel
    that I appointed, refers to research conducted using human subjects (or
    material of human origin, such as tissues or specimens and human
    cognitive phenomena) for which an investigator directly interacts with
    human beings. It includes research on mechanisms of human disease,
    therapeutic interventions, clinical trials, development of new
    technologies, epidemiologic and behavioral studies, and outcomes and
    health services research. The IOM addressed only a part of the clinical
    research spectrum defined above and also limited its analysis to that
    subset of grant applications reviewed by the Center for Scientific
    Review (formerly the Division of Research Grants); the Clinical
    Research Panel noted that over 50 percent of clinical research grant
    applications are reviewed by units within the other NIH Institutes and
    Centers.
        Question. Should the NIH use the more conservative IOM definition
    to assure that new initiatives are properly focused on clinical
    research?
        Answer. Clinical research is a broad field. As defined by NIH,
    clinical research has changed the face of modern medicine. A generation
    ago, most of the treatment and prevention strategies that are so
    successful today were unknown. Transplantation of the kidney, heart,
    lung, and liver extends the lives of those who, just a decade or two
    ago, would have had no hope. New surgical techniques and medical
    devices, including pacemakers and artificial joints, save lives and
    restore the quality of life for many people. High blood pressure and
    its deadly consequences, such as stroke and heart attack, are
    treatable. Modern pharmacotherapies allow those suffering from mental
    illnesses like depression and schizophrenia to lead productive lives.
    Today, because of the pace of science and the breadth of discovery, the
    time frame between a new laboratory finding and an innovative treatment
    for human disease is greatly foreshortened. Clinical research is, more
    than ever, a vital link in the research continuum by which the public
    ultimately benefits in the form of new treatments and prevention
    strategies. Many of these examples would not have been captured by the
    IOM definition of clinical research.
        Dr. Ehrenfeld also has established the Panel on Scientific
    Boundaries for Review as an ad hoc working group of the CSR Advisory
    Committee to undertake a comprehensive examination of the principles
    governing organization of all CSR study sections. Among the issues they
    will consider is the dilemma, which extends beyond clinical research,
    of meeting needs for in-depth expertise on the one hand and the
    requirement for scientific breadth on the other.
                   participation of multicultural scientists
        Question. What is the NIDCD doing to promote existing opportunities
    for participation by scientists from multicultural populations in
    communication disorders research? Are there any plans to make
    additional research opportunities available?
        Answer. The National Institute on Deafness and Other Communications
    Disorders (NIDCD) uses a number of training mechanisms for scientists
    from multicultural populations to participate in communication
    disorders research. In particular, the NIDCD Partnership Program was
    launched with the support of the Office of Research on Minority Health
    (ORMH) in 1994. It is a pilot program designed to maximize
    opportunities for underrepresented individuals to become involved in
    research in human communication. Undergraduate and graduate students,
    medical students, faculty, and administrators at the Morehouse School
    of Medicine/Atlanta University Complex (MSM), the University of Puerto
    Rico (UPR), the University of Alaska System (UAS), and Gallaudet
    University have participated in the Program. Collaborations have
    included experiences in the laboratory, in program management, grants
    management, planning and public affairs, as well as curriculum
    development and workshops.
        In addition, the NIDCD uses a number of research and development
    mechanisms to attract multicultural scientists, including Postdoctoral
    Training Programs, Opportunities for Foreign Scientists, College and
    Postbaccalaureate Student Programs, High School and Undergraduate
    Student Programs, and Summer Programs.
        The NIDCD is an active participant in the NIH-wide NRSA program for
    Predoctoral Fellowship Awards for Minority Students and for Students
    with Disabilities. In fiscal year 1998, the NIDCD, in collaboration
    with the ORMH reissued a request for applications for a small grants
    program to support the dissertation research of minority students in
    the sciences of human communication. To date, this program has resulted
    in ten grant awards. In fiscal year 1996 and 1997, the Institute and
    the ORMH issued a program to foster the research career development of
    faculty in minority academic institutions in the sciences of human
    communication, resulting in five awards.
        An important vehicle for the research training is the Research
    Supplements Program for Underrepresented Minority Individuals and the
    Research Supplements Program for Individuals with Disabilities. This
    program provides funds to supplement regular research grants for
    studies performed by persons in such groups.
        The anticipated growth of the Institute's research grant portfolio
    in fiscal year 1999 will provide us with the opportunity to increase
    the size of our research training and career development enterprise.
    The NIDCD expects to continue previously implemented programs and to
    consider the implementation of new targeted programs to increase the
    flow of the investigator pipeline into the sciences of human
    communication.
        The NIDCD will participate in the following new NIH-wide research
    career development award initiatives for fiscal year 1999: (1) the
    Mentored Patient-Oriented Career Development Award, (2) the MidCareer
    Investigator Award in Patient Oriented Research, and (3) the Clinical
    Research Curriculum Award. The current NIDCD portfolio of career
    development awards already includes a large proportion of clinician-
    scientists developing patient-oriented (clinical) research programs
    (approximately 75 percent) as well as basic research programs
    (approximately 25 percent).
        This past September the NIDCD called an expert panel together to
    provide recommendations for the future of the Partnership Program.
    Among the key recommendations were: (1) to continue the Partnership
    Program and maintain pilot status so that tracking of participants can
    be continued; (2) to expand the program to extramural grantee
    institutions that serve large numbers of the disadvantaged groups in
    order to increase research training opportunities for additional basic
    and clinical scientists; and (3) to enable larger numbers of
    researchers to be trained, NIDCD-funded grant holders should be
    systematically incorporated into the program. Responding to the ad hoc
    expert panel recommendations, NIDCD is planning to expand this program
    into the extramural community. The Institute proposed the EXTRA!
    Partnership program to support this expansion and it will be supported
    in part by ORMH funding.
              communication disorders in multicultural populations
        Question. We are aware that attention is being given to stroke and
    Sickle Cell Anemia in Minority populations. Are there any plans to
    expand research relative to the variety of communication disorders that
    occur as a result of other conditions that may be prevalent in
    multicultural populations?
        Answer. In May 1997, NIDCD cosponsored, with Howard University, and
    with funding from ORMH, a national conference entitled ``Communication
    Disorders and Stroke in African American and Other Cultural Groups:
    Multidisciplinary Perspectives and Research Needs''. A number of
    research needs were identified by the speakers, by audience
    participants and by a post-conference committee which formulated a
    series of research recommendations. It recommended that research goals
    might be best accomplished through the establishment of centers focused
    on communication disorders and stroke in African-American and other
    cultural groups.
        In anticipation of the establishment of such centers, a program of
    exploratory grants (P20) is being developed in conjunction with ORMH.
    These grants would allow potential applicants the necessary start-up
    and preparation funds and time, thereby allowing those institutions
    which do not have a long history of NIH funding to develop critical
    components and enhance the likelihood of successful competition during
    peer review. Historically Black Colleges and Universities and
    universities/medical centers with access to significant numbers of
    minority individuals will be encouraged to apply.
                     ethnic balance among research subjects
        Question. We also understand that the Institute is to ensure that
    there is a racial and ethnic balance among research subjects. What is
    the NIDCD doing to ensure that research being conducted incorporates
    this kind of balance?
        Answer. The NIH Peer Review System ensures that, for clinical
    studies, there is an appropriate racial and ethnic balance among
    research subjects. NIH policy requires that minorities be included in
    all research involving human subjects, and the NIH Revitalization Act
    of 1993 requires that there be monitoring of such inclusion. In
    response to the Revitalization Act, a centralized database was
    developed by the Center for Scientific Review (CSR) to assist in
    tracking demographic information. In January of 1995, such information
    was required for all NIH supported Phase III clinical trials. An NIH-
    wide committee was established to coordinate these activities. Each
    month, the committee meets to discuss further implementation of the
    gender/minority tracking system. NIDCD is represented in each of these
    meetings. To provide additional follow-up, NIDCD health science
    administrators contact individual principal investigators if problems
    are noted.
                                thyroid disease
        Question. An estimated 13 million Americans have thyroid disorders,
    more than half of which remain undiagnosed. The symptoms of the disease
    may often be ignored or misdiagnosed, with women and the elderly being
    most at risk. If left untreated, thyroid disease can cause long-term
    complications, elevating cholesterol levels which may lead to heart
    disease and cause menstrual irregularities which may lead to
    infertility. Given the large numbers of Americans impacted by various
    thyroid disorders, what research is underway at the NIDDK and other
    Institutes to further the accurate diagnosis and treatment of thyroid
    disease?
        Answer. NIH supports a great deal of research on thyroid diseases
    and conditions. More than 200 research projects, NIH-wide, received
    support in fiscal year 1997 (some 62 of these by NIDDK). In the area of
    diagnosis, there are 55 research efforts underway, and in the treatment
    area, 107. New developments in both the diagnosis and treatment of
    thyroid diseases depend on an understanding of the interactions of
    thyroid hormone (TH) with an amazing variety of other hormones, of the
    metabolic effects of TH, and of the regulation of metabolism by enzymes
    throughout the body as well as in the nucleus of each individual cell.
    Thyroid hormone is a member of the ``steroid/retinoid/thyroid'' family
    of hormones that directly interact with the genetic material in the
    nucleus of the cell. Some of the specific conditions under study
    include autoimmune disorders (thyroiditis, Graves' (hyperthyroid)
    disease, the role of the TH receptor in autoimmunity and in the
    development of hearing disorders, and disorders of growth and
    development of body organs, as well as cancer); endocrine dysregulation
    in HIV/AIDS; polyendocrine interrelationships, including the effect of
    TH on pituitary hormone function; the mechanisms and effects of TH
    actions on carbohydrate metabolism and diabetes, on obesity and
    atherosclerosis, and on heart and brain function; the genes linked to
    thyroid disease; hypothyroidism, including screening of the population;
    resistance to TH; and environmental effects on the thyroid. To sum up,
    the interactions of TH that must be dealt with in designing approaches
    to diagnosis and therapy are extremely complex, but are under intensive
    research at NIH.
                            tax credits for research
        Question. I read Monday that House Republicans are proposing using
    revenues raised from higher cigarette taxes to pay for a ``medical
    innovation tax credit'' intended to stimulate medical research. Drug
    and biotech companies could take the credit for amounts they spend on
    clinical trials to test new drugs and medical devices at academic
    medical centers.
        Dr. Varmus, are you familiar with the House proposal? If so, what
    is your reaction to the proposal?
        Answer. I am not familiar with the House proposal that you mention.
    I am aware of similar legislation recently introduced in the Senate (S.
    1885) by Senator D'Amato (R-NY), ``The Medical Innovation Tax Credit,''
    which would enable pharmaceutical companies to deduct an amount, equal
    to 20 percent of certain medical innovation expenses, for clinical
    research testing activities conducted at specified academic
    institutions such as medical schools, teaching hospitals, and not-for-
    profit hospitals.
        Question. Is this type of tax credit a smart way to fund biomedical
    research? How would you weigh the benefits of enacting this type of tax
    credit versus increasing funding for NIH?
        Answer. Tax credits are one way to encourage medical research, and
    the Administration has been supportive of innovations such as the
    Research and Experimental Tax Credit. But tax credits serve to energize
    the research that is primarily of interest to private industry, i.e.,
    applied research for product development.
        NIH funding supports undirected or fundamental research; in fact,
    the cornerstone of NIH's success is support for individual research
    projects that are designed and conducted by scientists at universities,
    and other private and public research institutions by the award of
    grants and within the NIH intramural program. These study protocols
    capitalize on the most promising science rather than the development of
    a specific product. This fundamental or ``undirected'' research not
    only advances our understanding of human biology and of the mechanisms
    of disease, but also identifies opportunities for the development of
    new ways to diagnose, treat, and possibly cure or prevent disease. This
    basic research that NIH supports provides the foundation upon which the
    private sector builds the applied research that it funds.
        Federally-sponsored and private sector research have different yet
    complementary roles in the biomedical research enterprise. While a tax
    credit will encourage applied research as specifically related to work
    in the private sector, it is not a substitute for increasing the
    funding for NIH. If tax benefits are provided in lieu of increasing the
    NIH budget, then there will be a net loss for the NIH as well as for
    our national biomedical research enterprise.
                         office of alternative medicine
        Question. Dr. Varmus, last year's conference report provided that
    at least $7 million of the $20 million made available for the Office of
    Alternative Medicine would be for peer reviewed research grants that
    respond to program announcements by the Office of Alternative Medicine.
    We had urged you to use these funds to support quality clinical trials
    that can validate promising alternative therapies.
        Dr. Varmus, what progress has been made this year to respond to our
    report language and to increase the number of clinical trials studying
    alternative therapies.
        Answer. On December 19, 1997, I convened a meeting of NIH Institute
    and Center directors and representatives from other federal agencies
    including the Center for Disease Control and Prevention, the Agency for
    Health Care Policy and Research, and the Food and Drug Administration
    to address the development of clinical trials in complementary and
    alternative medicine (CAM). This group met with the Director of the
    Office of Disease Prevention and the Director of the Office of
    Alternative Medicine (OAM) to discuss promising initiatives. This
    meeting and subsequent work with the OAM resulted in the following new
    initiatives being developed for fiscal year 1998. Also, OAM's
    commitment of $1.9 million to the National Institute of Mental Health
    for funding the St. John's Wort clinical trial is ongoing.

                                                                 In millions

    Research Centers. A request for applications to fund up to four
        new research center programs in alternative medicine was
        released and applications were reviewed on April 2-3. These
        grants will fund centers for alternative medicine focusing on
        cardiovascular disease, AIDS, addiction and pediatrics at
        approximately $1 million each.................................$4.0
    Acupuncture and Osteoarthritis. A request for applications to
        study the effect of acupuncture in the treatment of
        osteoarthritis in the knee was issued and the applications
        reviewed on April 13. Based upon this peer review an estimated
        cost of the projected budget has been increased from $0.5 to
        $0.75 million. This study will be a large clinical trial to
        evaluate the effect of acupuncture on this widespread disease.  .75
    Cancer. The OAM and the NCI are planning to begin the testing of
        two CAM cancer interventions beginning this year, one of which
        is shark cartilage. Estimated cost is $0.50 each.............. 1.0
    Acupuncture Clinical Trials. A program announcement developed by
        OAM and seven other Institutes was released in March to
        solicit applications for pilot trials of acupuncture for a
        number of conditions. These applications will be reviewed on
        July 15.......................................................  .75
    Field Investigations. CDC--A physician has been assigned by the
        CDC, and supported by the OAM, to do several field
        investigations, in concordance with OAM's original
        Congressional mandate. Up to four such field investigations
        will be finished by August 1998...............................  .065
    Intramural Projects. The OAM intends to fund two intramural
        research projects at $0.125 million each in CAM related
        research. Six applications from NIH intramural scientists have
        been received and funding is anticipated in July. An
        intramural panel of scientists have been convened to review
        the applications..............................................  .250
    Intramural Clinical Fellow. In collaboration with the NIAAA, an
        intramural clinical fellow has been identified to work on the
        use of acupuncture in alcohol abuse. In addition to testing
        abstinence, neurochemical and neurophysiological parameters
        will be studied using Magnetic Resonance Imaging (MRI),
        functional MRI and SPECT (SPECT)..............................  .285
                            -----------------------------------------------------------------
                            ________________________________________________
          Total fiscal year 1998 OAM Initiatives...................... 7.100

                             conclusion of hearings

        Senator Specter. Thank you for being here and that
    concludes our hearings. The subcommittee will stand in recess
    subject to the call of the Chair.
        [Whereupon, at 3:50 p.m., Wednesday, April 1, the hearings
    were concluded, and the subcommittee was recessed, to reconvene
    subject to the call of the Chair.]

      DEPARTMENTS OF LABOR, HEALTH AND HUMAN SERVICES, AND EDUCATION, AND
              RELATED AGENCIES APPROPRIATIONS FOR FISCAL YEAR 1999

                                  ----------

                                           U.S. Senate,
               Subcommittee of the Committee on Appropriations,
                                                        Washington, DC.

                           NONDEPARTMENTAL WITNESSES

        [Clerk's note.--The subcommittee was unable to hold
    hearings on nondepartmental witnesses, the statements and
    letters of those submitting written testimony are as follows:]
                              DEPARTMENT OF LABOR
      Prepared Statement of W. Ron Allen, President, National Congress of
                                American Indians
                                  introduction
        Good morning Chairman Spector, Vice-Chairman Harkin and
    distinguished members of the Appropriations Subcommittee on Labor,
    Health and Human Services, and Education. Thank you for the opportunity
    to present testimony regarding the President's budget request for
    fiscal year 1999 Indian programs and services. My name is W. Ron Allen.
    I am President of the National Congress of American Indians (``NCAI''),
    the oldest, largest and most representative Indian advocacy
    organization in the nation, and Chairman of the Jamestown S'Klallam
    Tribe located in Washington State. The National Congress of American
    Indians was organized in 1944 in response to termination and
    assimilation policies and legislation promulgated by the federal
    government which proved to be devastating to Indian Nations and Indian
    people throughout the country. NCAI remains dedicated to advocating
    aggressively on behalf of the interests of our 230 member tribes on a
    myriad of issues including the critical issue of adequate funding for
    Indian programs.
                the president's fiscal year 1999 budget request
    Department of Labor
        The Native American programs authorized under Section 401 of the
    Job Training Partnership Act (JTPA) (Public Law 102-477) is the primary
    source of Indian program funding under the Division of Indian and
    Native American Programs (DINAP) in the Department of Labor (DOL). The
    secondary funding source, which surrounds the Welfare-to-Work (WtW)
    program, was authorized by Congress as part of last year's balanced
    budget act. Together, these two programs represent DOL's main source of
    support for employment and training services provided to American
    Indian and Alaska Native workers--the most seriously disadvantaged
    segment of the American workforce.
        Native American workers benefit from two special provisions in
    JTPA. First, the Native American program under Section 401 of Title IV
    provides comprehensive employment and training services for youth and
    adults on a year-round basis in all portions of Indian country--on and
    off-reservation. Second, JTPA contains a special set-aside of funds to
    cover services to Native youth in reservation areas, including Oklahoma
    and Alaska, under the JTPA Summer Youth program.
        In analyzing the current need for job training opportunities for
    Native Americans, NCAI recommends that not less than $65 million be
    provided for the Section 401 program in fiscal year 1999, an increase
    of nearly $12 million over the President's request of $53.8 million. It
    should be noted that while the President's budget reflect a general
    increase in JTPA programs, tribal JTPA programs where the only programs
    that did not receive additional funding. Mr. Chairman, this is
    unacceptable. Tribal JTPA program funding must be increased to ensure
    better job opportunities for tribal members. In addition, NCAI
    recommends that no less than the full amount of the President's fiscal
    year 1999 budget request of $15.8 million be provided for the tribal
    set-aside in the Title II-B Summer Youth program in the summer of 1999.
    In this way, Congress will help assure that tribal youth are better
    prepared to enter the workforce.
        With $30 million authorized over the next two fiscal years for the
    tribal component of the WtW program, $15 million is expected to be
    released by DINAP in fiscal year 1998, with the remainder being made
    available in fiscal year 1999. This program will provide employment
    services for long-term welfare recipients. Under the current law,
    federally-recognized tribal governments along with 13 named Alaska
    Native organizations are eligible for the special 1 percent set-aside
    of WtW money. So far, over 65 WtW plans for Indian and Native American
    (INA) have been submitted to the DINAP, with a little over 100 tribes,
    intertribal consortia and Alaska Native groups covered under these
    plans.
        However, since the inception of the WtW program, the Office of
    Management and Budget (OMB) has held up release of funds for tribal
    plans, insisting that the money be made available only in quarterly
    installments. Such limitations are complicating the administration of
    these programs at both DINAP and the tribal level. Furthermore, there
    are no provision in the law that limit such release of funds to INA-WtW
    plans. NCAI asks this Committee to ensure that the authorized funding
    levels for tribal WtW is made available to tribes in a timely manner,
    without excessive regulatory requirements being developed by the
    Administration beyond those required under current law.
    Department of Health and Human Services
                Administration for Native Americans
        The Native American Programs Act (NAPA), which is administered by
    the Administration for Native Americans (ANA), is the only federal
    program serving all Native Americans regardless of where they live or
    their tribal affiliation. The NAPA promotes self-sufficiency of
    American Indians and Alaska Natives by encouraging local strategies in
    economic and social development. This promotion is critical in
    overcoming the paramount obstacles of social and economic
    underdevelopment in many Native American communities.
        NCAI supports the President's fiscal year 1999 budget request of
    $34.9 million for the ANA, an amount equal to the current enacted
    funding level. The ANA projects that in fiscal year 1999, grant
    applicants will total 725. Of these, 225 grants are projected to be
    awarded under the fiscal year 1999 budget request. A total of 175 will
    be ``new starts'' grants, and 50 will be continuation grants. ANA also
    anticipates awarding 21 contracts in fiscal year 1999. These grant and
    contract awards will include financial assistance for social and
    economic development and governance, training and technical assistance,
    research, and demonstration and evaluation projects.
        Financial support of these projects are expected to result in
    sustained improvements in the social and economic conditions of Native
    Americans within their communities, while increasing the effectiveness
    of Indian tribes and Native American organizations to achieve their own
    social and economic goals. Such goals include the expansion and
    creation of businesses and jobs in many areas including tourism,
    specialty agriculture, arts and crafts, cultural centers, light
    manufacturing, health care systems, housing, day care, fishing, and
    other natural resource development. Other benefits include increased
    capacity-building and infrastructure development for tribes and
    organizations, particularly through the development of codes, court
    systems, and the revision of existing tribal constitutions.
        Native American Program assistance through the ANA has moved many
    tribal and Native programs from dependency on federal services, or
    operating federally-mandated programs, to developing and implementing
    their own discrete projects. ANA continues to serve a large and diverse
    base of Native American communities and organizations, many of which
    have little in the way of resources and lack sustainable economic
    development opportunities. Congress is urged to support the tribal
    self-sufficiency goals promoted by the ANA through supporting the
    President's fiscal year 1999 budget request for this agency.
                Administration for Children and Families
        The enactment of the Personal Responsibility and Work Opportunity
    Reconciliation Act of 1996 (welfare reform) (Pub. L. 104-193),
    generated a myriad of issues that impact tribal governments. The most
    critical of these issues is the ability of tribes to enjoy equal
    treatment under the welfare reform law as sovereign governments,
    similar to that afforded to the states. As tribes have previously
    stated ``welfare reform is one of the greatest changes to occur to
    Indian country since the enactment of the Indian Reorganization Act''.
    What many tribes perceive welfare reform as being, is the devolution of
    the federal trust responsibility to the states as well as an
    encroachment upon the government-to-government relationship that exists
    between Indian tribes and the federal government.
        As an initial response to this law, tribal governments directed
    NCAI to develop and submit to Congress a set of tribally specific
    amendments to the welfare reform law. If adopted, these amendments
    would have resolved many of the tribal leaders initial concerns.
    However, only those tribal amendments that the DHHS included in their
    welfare reform technical corrections package were considered by
    Congress and included in last year's balanced-budget act. As I have
    stated previously, empowerment of tribal governments only works if
    federal funding levels are there to ensure such transition of powers.
    Unfortunately, the President's fiscal year 1999 budget does not provide
    any new discretionary funding sources that allow for such transitions
    in the area of tribal welfare reform initiatives.
        Most tribal communities continue to suffer from a lack of adequate
    infrastructure, economic development and other community improvement
    factors necessary to properly administer their own welfare reform
    programs. In order to achieve these community development goals, tribes
    must have adequate funding for economic development, technical
    assistance, data collection, construction, job training, children and
    family support services, housing, transportation, alcohol and substance
    abuse programs and tribal enforcement plans. If federal support is not
    offered to help tribes create jobs, sustainable economies and community
    well being, welfare reform may lead to forced relocation, or even
    starvation, for many Native American families.
        The President's fiscal year 1999 budget request again fails to
    provide the Division of Tribal Services (DTS) its own discretionary
    program authorization and budgetary line-item. Because of this, the DTS
    continues to be forced to borrow scarce resources from other agency
    programs in order to provide services to tribal governments in the
    areas of Temporary Services for Needy Families (TANF) and Native
    Employment Works (NEW) laws. The ACF has tried to provide necessary
    funding to carry-out these duties, but it has become more and more
    obvious that without line-item funding authorization for the DTS, the
    ever-increasing needs of Indian tribes surrounding these welfare reform
    programs will not be met.
        NCAI urges Congress to immediately authorize $10 million in initial
    line-item funding for the DTS. As part of this authorization, NCAI asks
    Congress to also expand the DTS role beyond just TANF and NEW, to
    include welfare reform related tribal services under the ACF including
    child care, child support and enforcement, and child protection
    services. Creating a more streamlined approach to serving tribal
    governments welfare reform program needs will benefit all parties
    involved in providing, obtaining and accounting for these services.
    NCAI also calls upon Congress to hold oversight hearing on welfare
    reform's impacts on Indian country. In this way, tribal leaders can
    report directly to Congress on their needs, goals and objectives
    surrounding the conversion of tribal cash assistance populations into
    tribal workforce populations.
                Administration on Aging
        Within the Older Americans Act (Public Law 89-73), there are four
    provisions that are of special importance and interest to Native
    American elders. The first is Title VI: Grants for Native Americans.
    The purpose of this title to promote the delivery of supportive
    services, including nutrition services to older American Indians,
    Alaska Natives, and Native Hawaiians. NCAI requests that the full $30
    million authorized for Title VI be appropriated in fiscal year 1999.
    Funding under Title VI provides key ``front-line'' services for 229
    programs serving reservation elders, including congregate and home-
    delivered meals, transportation and a wide variety of other elder
    related services.
        The second provision is Title V: Community Service Employment for
    Older Americans. This program provides funds to ten national sponsors,
    including the National Indian Council on Aging (NICOA), to train low
    income elders through community service agencies. NCAI requests an
    appropriation of $463 million for Title V programs in fiscal year 1999,
    with at least $5.4 million earmarked for Indian elder programs. The
    Title V program is especially important for Indian country due to the
    significant need for our Indian elders to acquire job skills and
    supplement their very limited incomes.
        The third provision is Title IV: Training, Research, and
    Discretionary Projects and Programs. Activities supported under Title
    IV have helped organizations such as NICOA gather knowledge about the
    problems and needs of Indian elders, and design and test innovative
    services to meet the needs of this rapidly-increasing population.
    Additionally, Title IV provides the only source of training funds for
    Title VI program directors. For fiscal year 1999, NCAI requests
    $630,000 in appropriated funding under Title IV, with at least
    $130,0000 earmarked for a continuing grant to NICOA to gather
    information on Indian elders and to quantify their needs. The remainder
    should be directed to grants for training and development of Title VI
    services providers to better serve Indian elders.
        The forth and final provision is Title VII: Allotments for
    Vulnerable Elder Rights Protection Activities, Subtitle B: Native
    American Organization Provisions. Subtitle B was intended to assist in
    prioritizing elder rights issues and carrying out elder rights
    protection activities in Indian country. With deteriorating economic
    and social conditions in much of Indian country, elder abuse is on the
    rise. Prevention programs for tribes throughout its elder communities
    are desperately needed, and yet, no funds have ever been provided for
    Subtitle B, despite an authorization level of $5 million. State
    programs currently received $4.5 million for ombudsman services and
    $4.7 million for prevention of elder abuse programs, however, these
    programs seldom, if ever, reach Indian country. Mr. Chairman, we
    request that the full $5 million be appropriated in fiscal year 1999
    for these tribal programs under Part B of Title VII.
        Within the next sixty days Congress is expected to undertake
    reauthorization of the Older Americans Act (OAA), which includes many
    tribally-specific programs highlighted above, that serve our Native
    American elders. Our tribal cultures teach us to humbly respect our
    Indian elders as the teachers of our traditions to us and our children.
    We urge Congress to honor this respectfulness by reauthorizing the OAA
    and fully fund all Indian elder programs under this Act.
                Health Resources and Services Administration
        Given the size and distribution of the American Indian and Alaska
    Native population--less that 2 million--it comes as no surprise that
    most communities are typically not well informed, nor skilled, when
    interacting with formal government programs or answering to their
    requirements. This limitation is felt in most program and policy
    arenas, and especially so in the context of the evolving U.S. health
    care domain. HIV/AIDS programs--as microcosms of this health care
    transformation--manifest the entire breadth of these complications and
    problems.
        Federal support of HIV/AIDS work in Native communities falls into
    four principal categories. The first of these, the National Institutes
    of Health, is a highly competitive venue, requiring very sophisticated
    scientific skill and considerable resources. Work through the
    Institutes in Native communities is based in university settings, and
    if a local Native population is involved in research design
    preparation, it is typically on a minor level. The second entity, the
    Centers for Disease Control and Prevention (CDC), is more active in
    providing education and prevention to Native populations, but these are
    subject to state and local controls. CDC procedures require local
    Community Planning Councils that set priorities and require competitive
    grant proposals to obtain funding. These procedures circumvent the
    trust responsibilities between the Federal and AI/AN governments, and
    they create near-impossible situations for Native funding
    possibilities. Even if a community has the resources and capacity to
    assemble a quality proposal, actual population numbers are often too
    small to satisfy council priorities for higher levels of efficacy for
    each dollar spent.
        The third means of support is through the Health Resources and
    Services Administration (HRSA), specifically the Ryan White CARE Act
    (Public Law 104-146). This support is the most available source for
    Native American HIV/AIDS care, but it is not without its own
    complications. Ryan White monies are distributed through it various
    titles, only one--Title V--addresses the federal government's
    responsibility to the AI/AN population. Part F of Title V, authorizes
    the Special Projects of National Significance (SPNS) program and is
    funded at 3 percent of the total amounts appropriated for Titles I-IV.
    Part F also identifies a priority to support the development of
    innovative care programs in Native communities. However, no continuing
    Title V monies are available for Native programs while Ryan White
    continues to receive increased funding. NCAI is concerned that the
    Native American provision has not been funded to the extent that the
    increase in the overall titles would lead us to expect. We ask this
    Committee to insure that there is a set-aside under Ryan White Title V
    for Native Americans that equals no less than $3 million to provide
    AIDS care.
        The fourth category, the Indian Health Service (IHS), seems a
    reasonable locus to handle these allocations, but IHS has failed to
    identify HIV/AIDS as a priority, leading to the dissolution of its
    national HIV/AIDS pharmaceutical support program and its national AIDS
    office. This trend will continue to escalate as the IHS increasingly
    decentralizes and turns over its responsibilities to tribal programs.
    Clearly, IHS does not have a history--nor, more importantly, a future--
    in providing care to AI/AN peoples living with HIV/AIDS, especially
    those located in urban areas. Of all the federal programs with monies
    available for HIV/AIDS programs in Native communities, Ryan White has
    the most potential in the near future.
    Department of Education
        For Indian children and adults attending public schools on or near
    reservations, the fiscal year 1999 budget request will not be afforded
    them programs that improve their educational opportunities. For fiscal
    year 1999, the Department of Education's Office of Indian Education
    (OIE) request is $66 million, a modest increase of $6.3 million over
    fiscal year 1998. Of this amount, approximately 1,250 local education
    agencies will receive an additional $2.2 million increase over fiscal
    year 1998 to provide supplemental programs--tutoring, counseling, and
    curriculum development--to over 448,000 Indian students attending
    public schools. Also included in this request is $3.3 million to
    reinstate OIE's discretionary grant program for Indian children.
        In fiscal year 1996, funding for the discretionary grants programs
    (Indian children and adult education) and the National Advisory Council
    on Indian Education (NACIE) were zeroed out. This unfortunate trend is
    proposed to continue in fiscal year 1999. Although we support the $66
    million request for the formula grant program, which will help met the
    special educational and culturally related academic needs of Indian
    students, and are pleased that the discretionary funding for Indian
    children has been restored, we continue to urge the reinstatement of
    OIE's discretionary grant program for Indian adults and funding for
    NACIE. These programs not only improve the educational opportunities
    for Indian adults, but provide funding for educational personnel
    development, demonstration projects, and fellowships which are all
    necessary for the future of all Indian students.
        Also, under the Improving America's Schools Act (Public Law 103-
    382), OIE is authorized to make grants to Indian tribes to plan and
    develop a centralized tribal entity that would: coordinate all
    education programs operated by the tribe; develop education codes for
    schools; provide support services and technical assistance to schools
    serving children of the tribe; and perform child-fund screening
    services for pre-school age children to ensure proper placement and to
    coordinate the provision of any needed special services. Under the law,
    $3 million is authorized for these grants; however, no funding has ever
    been appropriated. Per Resolution No. SFE-97-041, we request that $3
    million be allocated in fiscal year 1999.
        In the Office of Special Education and Rehabilitative Services,
    Indian tribes receive up to 1.5 percent of the funds appropriated for
    the Vocational Rehabilitation State grants which $2.3 billion has been
    requested for fiscal year 1999. Of this amount, tribes will receive
    $17.3 million, an $1.9 million increase from fiscal year 1998. Per
    Resolution No. SFE-97-033C, there is a need for an additional $4.5
    million above last years level. This additional funding would allow
    tribes the opportunity to provide 11 more culturally appropriate
    Vocational Rehabilitation (VR) services to their members with
    disabilities. Furthermore, Per Resolution No. SFE-97-034SC, new funding
    is needed to provide technical assistance and training to existing and
    proposed American Indian VR programs.
                                   conclusion
        Mr. Chairman, we urge the Congress to fulfill its fiduciary duty to
    American Indians and Alaska Native people and to uphold the trust
    responsibility as well as preserve the Government-to-Government
    relationship, which includes the fulfillment of health, education and
    welfare needs of all Indian tribes in the United States. This
    responsibility should never be compromised or diminished because of any
    Congressional agenda or party platform promises. Tribes throughout the
    nation relinquished their lands as well as their rights to liberty and
    property in exchange for these on-going services as well as this trust
    responsibility. The President's fiscal year 1999 budget is a positive
    step towards acknowledging the fiduciary duty owed to tribes.
        We ask that the Congress consider the funding levels in the
    President's budget as the minimum funding levels required by Congress
    to maintain these services and the federal trust responsibility. The
    consensus of Indian country is that the federal government's budgetary
    process has failed to provide for effective services and minimum to
    raise the living standards of Indian communities consistent with non-
    Indian communities. In order for federal government to reasonably
    expect tribal government to truly achieve the self-determination, self-
    governance and self-sufficiency goals mutually identified by the
    federal government and the tribal governments will not be achieved
    unless meaningful increases are provided for Indian programs and
    services.
        Mr. Chairman, this concludes my statement. Thank you for allowing
    me to present for the record, on behalf of our member tribes, the
    National Congress of American Indians' initial comments regarding the
    President's fiscal year 1999 budget.
                                     ______

       Prepared Statement of Patricia E. Markey, Legislative Consultant,
                         United Distribution Companies
        Mr. Chairman and members of the Subcommittee: United Distribution
    Companies (UDC) is a group of companies providing natural gas
    distribution service to customers chiefly in the Midwest and Northeast.
    Nearly half of all LIHEAP-recipient households heat with natural gas.
    UDC companies are deeply committed to meeting the energy needs of all
    our customers, in particular, those of low and fixed-income. Our member
    companies are a vital part of the communities we serve.
        Mr. Chairman, earlier this year, frigid weather struck the
    Northeast, as well as other parts of our country. Many people had a
    very difficult time dealing with the severity of the storms. It only
    takes one day of frigid weather to lead to disaster. Last winter,
    certain regions of the country experienced record cold weather coupled
    with record levels of snowfall. In particular, some Midwestern areas
    suffered through brutal weather well below zero for extended periods of
    time that forced some states to virtually shut-down. To compound the
    severity of the problem, as the weather began to turn bitter, prices
    for fuel oil, propane gas, and in some states natural gas rose
    dramatically over previous levels. Oil prices skyrocketed and propane
    prices doubled and tripled in some areas of the country.
        These conditions challenged and stressed the ``average'' American
    household, but to millions of low-income elderly, disabled and working
    poor families this confluence of factors became overwhelming. The
    choices many were forced to make were untenable; however, the situation
    that many low-income families face in trying to meet their home energy
    needs is difficult even under ``normal'' circumstances. Most of us can
    take the comfort of a warm home during the winter, or some means of
    cooling in the heat of summer for granted. Try to imagine what it would
    be like if you did not have the resources to secure these basic
    necessities. For millions of seniors, disabled, working-poor families,
    and others across this country, LIHEAP is more than economic
    assistance, it is a lifeline for health and safety. No one can go
    without heat in the winter. Mr. Chairman, in the coming months you and
    your colleagues will work to craft necessary spending measures for
    fiscal year 1999 that will set the fiscal spending priorities for the
    next year, as well as maintain the course towards a balanced budget. As
    you chart the course to continue to protect our nation's fundamental
    health, education and social services priorities, we ask you to provide
    critical funding for home energy assistance for low-income Americans.
                         liheap funding recommendation
        Mr. Chairman, we applaud you, Senator Harkin and the other members
    of this subcommittee for your tireless efforts last year to fashion a
    broad bipartisan Labor-HHS-Education spending bill. We also commend you
    for your leadership to move towards restoring necessary funding for
    energy assistance. This year, on behalf of all of our residential
    customers--especially the low-income customers who live in our
    communities--we urge you to continue on this course and to restore
    critical funding for LIHEAP. We ask for your support for the Low Income
    Home Energy Assistance Program, and urge that this Subcommittee and the
    Congress adopt the following in the fiscal year 1999 Labor, HHS and
    Education Appropriations Bill: Provide an appropriation of at least
    $1.319 billion for the fiscal year 1999 LIHEAP; provide an ``advance
    appropriation'' of at least $1.319 billion for the fiscal year 2000
    LIHEAP; and eliminate the set-aside for the Leveraging Incentive
    Program.
        In addition to the funding above, UDC also endorses the
    continuation of the ``Emergency Contingency Fund,'' consistent with
    LIHEAP's authorization statute, which authorized $600 million. However,
    in our view, the emergency funds should not be used in lieu of
    regularly appropriated funds for LIHEAP. It is essential that the
    states have the necessary monies to assist needy households and not be
    subject to the vagaries of the release of emergency monies.
        After a careful review of the facts, UDC is urging a restoration of
    LIHEAP core funding to at least the $1.319 billion level. In recent
    years, funding for the program has dropped precipitously. The National
    Energy Assistance Directors' Association (NEADA) estimated that between
    fiscal year 1995 and fiscal year 1997, 1.3 million needy households--
    many of them elderly or disabled--lost necessary aid due to
    insufficient funds. We believe that the $1.319 billion in regular
    appropriations is the bare minimum amount necessary to enable the
    restoration of crucial aid to those households that lost LIHEAP
    assistance over the past two years.
        The U.S. Department of Health and Human Services reports that
    between fiscal year 1981 and fiscal year 1995, the number of federally-
    eligible households has risen 45 percent; during this same time,
    however, LIHEAP funding was cut from $1.85 billion to $1.419 billion.
    The fiscal year 1998 funding for the program is even lower--$1 billion.
    In turn, the number of households assisted dropped dramatically. In
    1981, over 7 million eligible households received LIHEAP aid; however,
    last year only 4.5 million needy households were assisted with LIHEAP
    benefits. Reduced federal funding has also resulted in smaller
    assistance grants for those in need of LIHEAP.
        We applaud the Congress for recognizing the pivotal role that
    advance appropriations plays in the implementation of LIHEAP by the
    states, and we urge you to continue to give the states the necessary
    tools to plan the next year's program prior to the next heating season.
    In the past, piecemeal funding had a disruptive effect on the states'
    abilities to plan and implement their LIHEAP Programs. An advance
    appropriation of at least $1.319 billion for fiscal year 2000 is
    central to the effective administration of the program.
        UDC shares the views expressed last April on LIHEAP before the
    House Subcommittee on Early Childhood, Youth and Families. Witnesses
    questioned the value of the Leveraging Incentive Program given the
    inadequacy of funding. UDC would like to go a step further than that,
    and recommend the elimination of the Leveraging Incentive Program.
    Unfortunately, LIHEAP has not been funded at the levels the Congress
    intended when the Leveraging Program was designed. The legislative
    history makes clear that the Congress intended that leveraging monies
    only be appropriated as supplemental funding to the full authorized
    amount--more than $2 billion.
        Congress ought not to penalize low-income seniors and families
    living in states that do not mandate programs for low-income
    households, or do not have casino revenues for lifeline programs
    dedicated to vulnerable citizens. There is no ``level playing field''
    in the states when it comes to leveraging. Also, recent changes in the
    federal rules on leveraging marginalize the benefit of states'
    leveraging efforts. The paperwork burden on the states for qualifying
    for leveraging is disproportionate to the size of the program. We
    question the value of continuing the effort at LIHEAP's current
    funding. Such constraints also make the Residential Energy Assistance
    Challenge (R.E.A.Ch.) Program unrealistic. In addition, R.E.A.Ch. is
    duplicative of other ongoing efforts.
                            broad support for liheap
        During the first session of the 105th Congress, you and Senator
    Harkin, as well as, several other key members of the Senate led the
    effort to restore critical funding for LIHEAP. Mr. Chairman, we are
    sure that you are also aware of the congressional letters--with broad
    bi-partisan support--urging the restoration of LIHEAP in the fiscal
    year 1999 Budget.
        In addition, the National Governors' Association (NGA) supports
    maintaining adequate federal funding for LIHEAP. The NGA has endorsed
    LIHEAP as a targeted block grant that provides the states with the
    necessary flexibility to best assist the elderly, disabled, and
    working-poor households in meeting their home energy needs. The
    Governors have also urged the Congress to continue to provide advance
    appropriations for LIHEAP to avoid unnecessary disruption in the
    program.
        Another long-standing supporter of LIHEAP, the National Association
    of Regulatory Utility Commissioners (NARUC)--representing the state
    regulatory bodies responsible for regulating the rates and services of
    electric and gas utilities throughout the United States--has also had a
    longstanding policy urging the Congress to reject any further cuts or
    rescissions to LIHEAP. In its most recent action, NARUC has urged the
    Congress to provide at least $1.3 billion for fiscal year 1999 and
    fiscal year 2000, and to continue to provide advance appropriations.
    LIHEAP is recognized as the foundation for many low-income programs
    authorized/mandated by the state public utility commissions.
                the need: liheap helps seniors and the disabled
        Let us examine the households that actually receive LIHEAP. Of the
    5.5 million households which received LIHEAP assistance in fiscal year
    1995, approximately 70 percent of these families had annual incomes of
    less than $8,000. In fact, in Pennsylvania and Iowa, 61 percent and 87
    percent respectively, of LIHEAP recipients earned less than $8,000. Yet
    despite this low income, the majority of recipient households are not
    receiving public assistance. As an example, in Illinois, 70 percent of
    LIHEAP-recipient households are not on welfare.
        On average, one-third of LIHEAP households are elderly. States,
    such as Maine, South Dakota, Georgia, Tennessee, South Carolina,
    Nevada, and Louisiana, and Arkansas find more than 40 percent of their
    LIHEAP recipient households include an elderly person. Four states
    represented on your subcommittee, Mississippi, Texas, South Carolina
    and Nevada had approximately 60 percent of recipient households which
    included an elderly person(s). Due to federal cuts, many of these
    households may have lost assistance. For example, in Pennsylvania, 25
    percent of seniors that received LIHEAP in fiscal year 1995 lost all
    benefits in fiscal year 1997 due to cuts. Finally, nationwide, nearly
    one-quarter of the households served include a disabled member. The
    following 17 states had in excess of 30 percent of LIHEAP-recipient
    households with a disabled member: New Hampshire, Mississippi, North
    Carolina, Idaho, Texas, South Carolina, Arkansas, Nevada, Wisconsin,
    Arizona, Georgia, Oregon, Tennessee, Kentucky, Louisiana, California,
    and Illinois.
        According to a 1994 report by Oak Ridge National Laboratory, many
    low-income households' expenditure for residential energy (their energy
    burden) exceeds 30 percent of income. The report also states that all
    the low-income households which are federally eligible for LIHEAP spend
    over $1,000 per year or 10 percent of income on energy. Typically, low-
    income households pay four times the percentage of monthly income for
    energy costs than an average household in America pays. In Illinois,
    the average family pays 5.9 percent of its income on home energy in
    winter, while the average low-income family pays between 20-37 percent
    of income for these energy bills.
     assistance critical to poor making transition out of welfare/working
                                      poor
        One of the primary goals of the 104th Congress was to secure a
    comprehensive reform of our nation's welfare system. A key underlying
    principle of the legislation is to assist low-income families and
    individuals become/remain self-sufficient. LIHEAP is such a program;
    LIHEAP is the antithesis of welfare. LIHEAP is designed to address the
    needs of low-income families in meeting their annual energy expenses.
    LIHEAP promotes self-sufficiency; it protects these families on the
    edge of poverty from falling deeper into debt, and allows them to have
    more control over their lives and their resources. LIHEAP will become
    all the more important as more welfare recipients make the transition
    to employment.
        Working-poor households account for approximately one-third of the
    LIHEAP-recipient population. Changing dynamics in the work place,
    including inadequate and stagnating wages, part-time employment, and
    fewer benefits are swelling the ranks of the working poor. Some of
    these households have learned that a job does not necessarily get you
    out of poverty. To illustrate, on December 10, 1997, Catholic Charities
    USA released the results of its 1996 survey--the most comprehensive
    report available of private social services and activities. It reported
    that increasingly, working people are coming to them in crisis. This
    organization provided emergency food and shelter to almost 7.9 million
    people in 1996. Over half of those assisted were not on welfare. They
    need help with grocery or utility bills to make it to the next
    paycheck. For many, the choices are between heat and food, rent,
    medicine for a child, or bus fare to work. Catholic Charities has cited
    that there are not enough ``decent'' jobs; therefore, many people will
    not have ``the safety net of minimum benefits, and our agencies simply
    do not have the resources to handle the increased demand.'' Thus,
    everyone has not benefited from the economic expansion.
        Low-income families struggle to stay together. With resources
    stretched thin, a meaningful LIHEAP benefit helps families face daily
    challenges to pay for basic necessities. If you take away or reduce
    their energy assistance, that is one more push toward dependence. These
    families are worth the investment of a LIHEAP benefit to keep them
    independent. LIHEAP fosters independence rather than dependence. It
    helps low-income people stay off welfare.
                           health and safety concerns
        In attempting to argue that LIHEAP is no longer needed, program
    critics have misrepresented ``shut-off'' moratoria as a ``safety-net''
    in protecting low-income families. In those states in which moratoria
    exist, the moratoria may provide some protection for low-income
    consumers, but no long-term protection. Moreover, moratoria do not
    exist in all states (including cold weather states). In fact, the NARUC
    survey on ``uncollectibles'' catalogues the states policies on ``shut-
    offs,'' and illustrates that the states' policies vary greatly. In
    addition, moratoria do not govern unregulated fuels--such as propane,
    fuel oil, or wood; often do not govern emergency situations; and do not
    relieve low-income families of the ultimate obligation to pay for their
    home energy costs when the moratoria end. In addition, HHS reports that
    nearly one-third of LIHEAP-recipient households use bulk fuels; thus,
    are unprotected. In states such as Wisconsin, Minnesota and New
    Hampshire between 30 to 40 percent of their low-income households use
    unregulated fuels.
        With higher payments for home heating fuel, low-income families
    face tough choices: heat-or-eat; go further into debt which will
    jeopardize their ability in the future to become self-sufficient; or
    use potentially unsafe alternative methods to heat which could result
    in tragedies. Elderly households might use single room space heaters
    and turn their thermostats down; these actions will increase the risk
    of hypothermia for these customers. Yet other low-income customers will
    move households together to make ends meet. Tragically, overcrowded
    substandard housing, and the improper use of space heaters have proven
    to have disastrous consequences in our communities.
                       targeted liheap block grant works
        Mr. Chairman, LIHEAP works! As designed by the Congress, LIHEAP is
    a block grant that is targeted to assist low-income households with the
    costs of home energy. While there are broad federal guidelines for
    LIHEAP, the states are encouraged to tailor their programs to best meet
    their individual needs. The Governors determined what agencies should
    administer the program, what eligibility standards will be used, how
    benefits will be structured, the guidelines for the crisis program, and
    the range of assistance to be rendered.
        In addition to program flexibility, the administrative costs of the
    program are minimal--in the range of seven to eight percent. This
    ensures that the majority of LIHEAP dollars (generally 92 to 93
    percent) are directed to energy assistance benefits for the low-income
    families that it was intended to help. Carry-over funds are minimal and
    typically run about 3 percent in most years. Late funding decisions by
    the Congress have unfortunately forced some states to further restrict
    eligibility and to reserve additional start-up funding for September.
            liheap is the centerpiece of private and utility efforts
        The burden of low-income household needs does not rest solely on
    the Federal Government. Our member companies are involved in and
    concerned about the well-being of our communities--both in economic and
    human terms. The states and the private sector recognize their
    responsibility to contribute to the needs of these consumers.
        UDC member companies have developed a host of innovative and
    effective programs to assist their low-income consumers; these include:
    operating and/or contributing to fuel funds; providing discounts and
    credits to low-income customers; providing partial or full waivers of
    home energy connection and reconnection fees, and late payment charges;
    partial or full waiver of home energy security deposits; and partial
    forgiveness of home energy arrears. Moreover, many of our companies are
    involved in various energy conservation/management activities. Overall,
    millions of dollars each year are dedicated to assisting the low income
    with their fuel bills. However, these efforts and most other private
    efforts are built around LIHEAP as their cornerstone.
        Private charitable efforts alone cannot ``take up the slack'' for
    reduced federal funding. Two months ago, Caroline Myers, Executive
    Director of the Crisis Assistance Ministry in Charlotte, North
    Carolina, testified on this subject before the House Labor, HHS, and
    Education Appropriations Subcommittee on behalf of an organization
    which she chairs, the National Fuel Funds Network (NFFN). NFFN's member
    fuel funds are organizations that raise private contributions in their
    local communities to help low-income households pay their home energy
    bills. Fuel funds range from small church groups which distribute
    hundreds of dollars in a single neighborhood to large independent
    organizations which distribute millions of dollars across a state. Fuel
    funds may be a division of a large, social service agency or they may
    be operated by a local utility or energy company. NFFN's testimony went
    into further detail about some of the other private sector programs
    that exist to help bridge the gap between federal LIHEAP funding and
    the need that exists throughout the nation. Her testimony illustrated
    that private efforts cannot make up for adequate LIHEAP funding.
     changing energy policies and utility restructuring create uncertainty
        More than 50 percent of low-income households in this country heat
    their homes with natural gas. Federal and state policies favoring
    greater competition in both the electric and natural gas industries
    have shifted significant costs away from industrial customers, and
    other users with energy alternatives, to residential customers. These
    households are now paying a higher share of the costs of purchasing and
    transporting natural gas today than they did in 1980, when LIHEAP was
    first created. Thus, low-income households continue to face increasing
    energy burdens.
        Last year, in testimony before the House Subcommittee on Early
    Childhood, Youth and Families, Joel Eisenberg, Senior Analyst for
    Public Policy at Oak Ridge testified on the potential impact of the
    restructuring of the electric industry on low-income households. He
    stated that there is ``substantial uncertainty as to whether
    residential consumers in general, and low-income consumers in
    particular, will benefit from these changes to a significant degree. In
    some places there is concern that residential rates may actually
    increase.'' Eisenberg noted that momentous change in the electric and
    gas industry is in process. He cited recent data for the natural gas
    industry from the Energy Information Agency (EIA) which indicate that
    between 1985 and 1995, savings for residential consumers have been
    relatively small so far--in the range of 1 percent.
        Deregulation and increasing competition create intense financial
    pressures on gas and electric utilities. As a result, these companies
    cannot afford to shoulder the responsibility associated with serving
    low-income households without government support in the form of
    continued LIHEAP funding. Since its inception, LIHEAP has been a strong
    and successful public-private partnership that has worked to address
    the problem. If government pulls out of this partnership, a serious
    financial hardship will be created for our low-income citizens.
                                   conclusion
        Mr. Chairman, last April's House hearing examined the LIHEAP
    Program. Witnesses included Members of Congress, as well as
    representatives from the states, and the private and public sectors.
    The panel included a representative from a local agency and a former
    LIHEAP-recipient.
        Mr. Specter, the witnesses gave a strong endorsement of LIHEAP and
    the need for more adequate funding. They told compelling stories about
    low-income households who have benefited from the program. The Maryland
    LIHEAP-recipient described her situation as the primary wage earner for
    a family of five. Behind in her utility payments, this divorced mother
    was scheduled to be disconnected. Qualifying for LIHEAP was the
    linchpin to securing continued utility service and working out a long-
    term repayment schedule.
        The witness representing a local agency recounted information about
    numerous beneficiaries of the program, including a divorced mother in
    her thirties with three young children. Recently diagnosed with cancer,
    this mother had to quit her job in January when she developed side
    effects to the chemotherapy. This forced her to go onto AFDC and file
    for disability. Her income dropped from $1,600 to $406 per month;
    consequently, she fell behind in her utility bills. LIHEAP helped
    bridge the gap during this crisis. As the House witness cited, ``This
    is an example of the kind of situation that can plunge a self-
    sufficient working family into poverty.''
        Mr. Chairman, the changes in the welfare system adopted in the last
    Congress will have profound implications. As families move from
    dependence towards independence, they will need targeted supplemental
    assistance. Families in transition normally start at, or near, minimum
    wage levels. In order for them to continue working and gaining
    employment experience, so that they can be eligible for better jobs in
    the future, they need help to maintain a basic standard of living from
    programs such as LIHEAP.
        As the winter ends, problems for the poor do not! The spring brings
    collections pressures on unpaid heating bills. Without the safety-net
    afforded through LIHEAP low-income households could lose gas and
    electric service. The truth is simple. LIHEAP is a public-private
    partnership program that works for low-income households and helps to
    make energy service available and more affordable to them.
                                     ______

     Prepared Statement of Roy O. Priest, President, National Congress for
                       Community and Economic Development
        The National Congress for Community Economic Development (NCCED) is
    pleased to submit this testimony on the fiscal year 1999 Labor, Health
    And Human Services, Education, and Related Agencies Appropriations
    legislation before the Subcommittee. NCCED is the national trade
    association for over 2200 non-profit community based organizations
    known as ``CDC's'' who are committed to community-based economic
    development. NCCED's members are actively involved in housing
    renovation and construction, real estate development, industrial and
    small business development, employment generating activities and other
    programs to revitalize their communities.
        NCCED is able to provide the Subcommittee with concrete and
    invaluable insight into how the Jobs Opportunities for Low Income
    Individuals Program, the Community Economic Development Grants Program
    (OCS) and other so-called Welfare-to-Work programs are, and can be used
    to revitalize communities throughout the country. CDC's are actively
    using these programs to strategically redevelop economically depressed
    urban and rural areas. CDC's have more than 25 years of experience in
    evaluating community needs for housing, economic development and social
    services.
        Our successful use of funding from both the private and public
    sectors, including corporations, banks, foundations, individuals, and
    local, State and Federal government sources stands as proof positive of
    our ability to support the well-meaning objectives of the
    Administration and Congress.
          jobs opportunities for low income individuals program (joli)
        The Job Opportunities for Low Income Individuals (JOLI) Program was
    originally authorized as a demonstration under Section 505 of the
    Family Support Act of 1988 and was recently expanded in the Personal
    Responsibility and Work Opportunity Reconciliation Act of 1996. The
    success of the JOLI program was recognized when Congress dropped its
    demonstration status and increased the authorization from $6.5 million
    to $25 million. JOLI's mandate is to create job and business
    opportunities for welfare recipients and other low income individuals.
    The program is administered by the Office of Community Services (OCS)
    within the Department of Health and Human Service (HHS) and is designed
    to evaluate what strategies are effective in transitioning individuals
    from welfare to work. Under the program, grants are provided to
    private, nonprofit corporations to make investments in local business
    enterprises that will result in the creation of new private sector jobs
    for low-income individuals. Fifty-six nonprofit organizations have been
    funded through the JOLI program since 1990 and are using their funds to
    implement a range of job creation strategies including self-employment,
    business expansion and business creation. HHS estimates that these JOLI
    investments will lead to 3,875 new jobs and the establishment of 1,708
    new micro-businesses.
        In fiscal year 1998, only $5.5 million was made available to CDC's
    and other organizations. Unfortunately, the President's budget request
    for fiscal year 1999, as in the past three years does not include a
    request for the JOLI Program. This is a highly competitive program that
    if funded at the fiscal year 1998 level still will not meet the
    capacity of CDC's and other organizations to implement key job creation
    strategies. In 1997, 188 applications were submitted nationwide
    requesting a total of $76.4 million. Only ten programs were funded.
        In some of your States, examples of the number of grant requests is
    very illustrative:
      --Seven applications requesting $3,168,499 came from Pennsylvania.
            Only one was funded at $499,216.
      --Three applications came from South Carolina requesting $534,909.
            None were awarded funding.
      --Six applications requesting $2,623,589 came from Washington. None
            were funded.
      --Six applications requesting $2,843,003 came from Missouri. Only one
            was funded.
        NCCED supports and would urge funding of the JOLI program at its
    authorized level of $25 million in your fiscal year 1999 bill. JOLI is
    the only permanent federal program whose principal mission is to create
    job and business opportunities for welfare recipients and other low
    income individuals. These funds will be critical to CDC's struggling to
    create new employment and business opportunities for welfare
    recipients' transitioning off welfare.
                  community economic development grants (ced)
        Section 681 of the Community Services Block Grant Act authorizes
    the Discretionary Authority of the Secretary of Health and Human
    Services. Under this authority, the Secretary can make grants to
    private, nonprofit organizations through the Office of Community
    Services (OCS) for a variety of activities. Under the Community
    Economic Development (CED) grant program, OCS has the authority to make
    grants to Community Development Corporations (CDC's) to promote
    business and employment opportunities in urban and rural low-income
    communities.
        CED is a competitive, discretionary grant program whose funds go to
    support business and economic development projects launched by CDC's.
    Most CED grants are used to finance commercial real estate development,
    including manufacturing and industrial facilities, business incubators,
    and public facilities--investments with the potential to generate new
    jobs and lead to a more stable employment and business environment in
    economically depressed areas.
        Because of the unique nature of this program, there is great demand
    for CED discretionary funding. In 1996 alone, 335 applications for CED
    were submitted, but only 71 grants were awarded due to limited funding.
    CED grants average $500,000 and competitive CDC applications must
    demonstrate their ability to leverage private sector investment and
    create new jobs at a competitive cost.
        The most recent data compiled on CED funds found that some $26
    million in CED funds has been invested in low-income communities. This
    investment leveraged an additional $51 million in other financing and
    created some 4,500 jobs. Since its inception, the CED program fund has
    been responsible for the creation of more than 20,000 permanent jobs in
    poor communities. By regulation, 75 percent of the jobs created under
    CED go to low income individuals.
        Again, examples of the number of grant requests from some of your
    States is very illustrative:
      --Seven applications came from North Carolina requesting $2,425,000,
            but only one award of $550,000 was made.
      --Five applications came from Alabama requesting $1,273,178, but none
            received funding.
      --14 applications came from Pennsylvania requesting $3,652,323, but
            only three won awards totaling $798,000 [This program helped
            the Mon Valley Initiative create a small business incubator.]
      --Two applications came from Washington requesting $1,049,312, but
            only one was awarded $500,000.
      --Four applications came from Missouri requesting $1,097,993 but only
            one was awarded $500,000.
      --Three applications came from South Carolina requesting $534,909,
            but none were awarded funding.
        The CED program is unique among federal economic development
    programs. No other federal program exclusively targets investment
    capital to low-income communities, using community organizations as a
    vehicle to invest in job-generating businesses. In many poor urban
    communities and rural areas, there is a constant shortage of investment
    capital. Private financial institutions are often unwilling to provide
    the most important element in a community development project--equity
    capital. CED funds fill this critical capital gap.
        NCCED supports the continuation of CED funding at a minimum at its
    current level of $23.7 million for fiscal year 1999. CED is a major
    source of support for the efforts of community based organizations to
    generate jobs and business development opportunities for low-income
    persons. Recently complied data on the benefits of previous grants
    found that grantees leveraged or raised almost twice the amount of
    money that they had received in CED grant funds--almost $55 million--
    from other sources.
        Between 1991-95, the CED program created over 4,200 jobs of which
    94 percent were filled by low-income and unemployed people or people
    receiving public assistance. At a time when we are seeing real progress
    in moving people from welfare to work, NCCED is confident that the
    investment of $23.7 million in fiscal year 1999--the same as in fiscal
    year 1998--for the CED program will continue to serve as a catalyst for
    the levels of private and public sector investment that will assure
    that we reach our national goal of creating 20,000 permanent jobs for
    low-income people.
                                   conclusion
        NCCED is pleased to submit this testimony on the fiscal year 1999
    Labor, Health and Human Services, Education, And Related Agencies
    Appropriations. We urge your support and inclusion of funding in your
    fiscal year 1999 bill for the Jobs Opportunities for Low Income
    Individuals Program and the Community Economic Development Grants
    Programs at their current fiscal year 1998 levels.
                                     ______

             Prepared Statement of the National Job Corps Coalition
        Mr. Chairman and members of the Subcommittee, it is an honor to
    submit to you the National Job Corps Coalition's (NJCC) testimony and
    request for full funding of Job Corps in fiscal year 1999. Thanks to
    your support, more than 69,000 of America's most at-risk youth have had
    the resources necessary to become productive, tax-paying citizens each
    year. Your support for full funding of Job Corps is testimony to your
    commitment to serve this difficult population--economically
    disadvantaged youth with multiple barriers to employment. Through Job
    Corps, they have a second chance.
        You and the members of the Subcommittee have a responsibility to
    invest in programs that work and yield returns for America's tax
    dollars. Job Corps is a cost-effective program that continues to
    produce tangible results.
        For more than 30 years Job Corps has consistently and competently
    demonstrated its ability to address our country's need to educate and
    train economically disadvantaged youth. In Program Year 1996 (July
    1996-June 1997), 80 percent of all Job Corps student left the program
    to join the workforce, enlist in the military, or enroll in higher
    education. However, the true value of Job Corps can best be appreciated
    by considering the immense costs to our country from the alternative
    paths these at-risk youths may have taken such as chronic unemployment
    or dead-end jobs, criminal activity or welfare assistance. There is no
    doubt that Job Corps is a sound investment that merits continued
    support.
    Center Operations
        The NJCC's request for fiscal year 1999 Job Corps funding totals
    $1.317 billion. This includes $1.144 billion for base level operations
    at 118 Job Corps centers nationwide. These funds will ensure that Job
    Corps provides full-time comprehensive residential education and
    support services to Job Corps' approximately 69,700 students in 46
    states. Funding at this level will also ensure that all new Job Corps
    centers initiated in 1993-94 are fully operational by the end of 1999.
    Facility Construction and Rehabilitation
        Historically, Job Corps centers have been located in previously
    used facilities such as former hotels, military bases, orphanages, and
    seminaries. More than 50 percent of Job Corps' facilities nationwide
    are over 30 years old. The renovation and rehabilitation of these
    structures was seriously underfunded in the 1980's and 1990's. The
    failure to sufficiently fund Job Corps facility needs led to a
    substantial backlog of repairs. Structures that were old when Job Corps
    acquired them, often remain in service beyond their useful lives. At
    some centers, this has affected program performance, threatened safety
    and health codes, or violated building codes. The NJCC's request of
    $89.4 million for facility construction and rehabilitation will help to
    prevent continued deterioration of structures and mechanical systems
    and make further inroads into this backlog of unmet repair needs. To
    expedite the review and construction process, Job Corps is
    investigating options such as design-build.
    Center Relocations
        Centers located in cramped, inadequate, or unsafe structures where
    needed modifications are not cost-effective or are unrealistic due to
    site size, need to be relocated to suitable facilities. Relocating
    these centers will enhance their results by removing barriers that
    impede performance. It will also decrease maintenance costs. Thanks to
    your support for funding in fiscal year 1998, the Cleveland Job Corps
    center will be relocated this year. The fiscal year 1999 NJCC request
    asks for $20.5 million to relocate one of four such remaining Job Corps
    centers--Jacksonville, Atlanta, Cincinnati and Little Rock. These
    centers have been on the Department of Labor's relocation list for more
    than 10 years. By funding these relocations, Job Corps will be able to
    fulfill congressional intent which encouraged the Department to
    relocate centers that are in poor physical condition, particularly
    where it is a deterrent to center performance.
    Modernization of Equipment and Facilities
        Emerging new technologies and a constantly changing job market are
    challenges that Job Corps faces when trying to ensure student training
    meets the needs of today's employers, and students in turn are placed
    into high growth occupations that yield higher placements into stable,
    full-time jobs. Outdated or obsolete tools, equipment, and materials
    hamper Job Corps' ability to adequately train students in modern
    occupations and meet the needs of employers. By upgrading Job Corps
    vocational offerings and modernizing equipment and facilities, Job
    Corps will be able to prepare students for jobs of the 21st century and
    beyond.
        The NJCC requests $15.4 million as the second installment of a five
    year plan to continue to invest in the modernization of Job Corps'
    vocational training and facilities. Job Corps, working closely with
    workforce development entities and employers, will be able to intensify
    its existing efforts to review and update curricula and to modernize
    its vocational offerings, equipment and programs. This will also enable
    Job Corps to convert or substantially modernize an estimated 50 percent
    of its 1,500 vocational classes, facilities and equipment into new or
    substantially updated trades.
    Upgrade of Classroom and Dormitory Furnishings
        In addition, the replacement of equipment and furnishings used
    throughout Job Corps campuses has received low budgetary priority over
    the years. Many centers are in need of funds to replace torn and
    tattered equipment and furnishings. Improving the campus environment
    will help Job Corps enhance student retention rates through better
    daily experiences. In turn, this will encourage students to stay in the
    program, complete training and achieve higher outcomes such as learning
    gains, GED's and quality placements.
        Job Corps is successful in training students because it simulates
    the workplace environment in its classrooms and shops. The NJCC's
    request includes $5.1 million for this purpose. This will help ensure
    Job Corps students have access to up-to-date workstations, tools,
    computers and furnishings. For many disadvantaged youth, a Job Corps
    campus is the only home they know. Replacement of worn furniture in
    dormitories will help Job Corps maintain a living environment that is a
    comfortable and safe haven for learning.
    Incremental Expansion
        Since 1990, Congress has supported the goals of the Job Corps 50-50
    Plan, a long-term initiative to strengthen and enhance existing Job
    Corps services and programs while incrementally opening 50 new centers
    to serve 50 percent more youth each year. Currently, Job Corps has the
    capacity to enroll 67,000 new students each year--14 percent more after
    a decade of incremental expansion. However, this represents only a
    fraction of Job Corps' at-risk youth target population. Census reports
    indicate that five million young people aged 16-24 live in families
    with poverty level incomes. The jobless rate of teenagers and young
    adults is higher than that of adults due to less education and
    training.
        Disadvantaged youth will continue to need help in acquiring
    academic, vocational and social skills provided by Job Corps to become
    self-sufficient members of the nation's workforce. In addition, our
    country will need to fill jobs to remain competitive in the world
    economy. This can only be done if employers have access to a national
    network of skilled entry-level workers. During the last decade,
    Congress has twice called upon Job Corps to expand services to
    disadvantaged young people by opening new Job Corps centers in
    communities not being served. Job Corps responded quickly.
        An investment of $33 million in targeted funds will ensure
    continued incremental expansion of five new facilities to more
    adequately serve this population. It will also help to fulfill
    congressional intent, as stated in the fiscal year 1998 Conference
    Report for Labor, Health and Human Services, Education, and Related
    Agencies, ``to examine low-cost options for serving more at-risk youth
    through Job Corps, such as expanding slots at existing high-performing
    centers, constructing satellite centers in proximity to existing high
    performing centers, particularly in States without Job Corps campuses,
    and developing new centers where suitable facilities can be provided to
    Job Corps at no cost.'' The Committee will be making a wise, cost-
    effective investment in Job Corps expansion.
    Job Corps/Head Start Partnerships
        Historically, Job Corps has had difficulty increasing the number of
    women served through Job Corps due to a shortage of child care
    services. An estimated 10 percent of students entering Job Corps each
    year have dependents. More and more Job Corps students are single
    parents who cannot enroll in the program unless provisions for their
    children can be made. With a shortage of child care services on Job
    Corps campuses, Job Corps' single parents are put on waiting lists for
    enrollment. In addition, new legislation has left a void in child care
    services for disadvantaged youth seeking job training skills. Under
    Welfare Reform, the Child Care and Development Block Grant was
    established as the primary child care subsidy program for low-income
    families. This block grant provides vouchers to single parents to help
    pay for child care, but does not cover costs to build or retrofit
    existing facilities for use as child care facilities. Job Corps'
    students who are parents are considered the ``working poor'' and are
    not a priority for child care vouchers.
        The NJCC's request is $10 million above the Administration's
    request to provide additional child care services on Job Corps
    campuses. This one-time infusion of $10 million will build or retrofit
    up to 10 child care facilities on up to 10 Job Corps campuses
    nationwide. These funds will also help to fulfill congressional intent
    in fiscal year 1998 Appropriations language which encouraged Job Corps
    to develop linkages with the Head Start program.
        A collaborative partnership between Job Corps and Head Start will
    allow both programs to maximize the use of limited resources to serve
    their targeted populations--low-income youth and children. It will also
    serve geographic and demographic areas not being served by established
    programs. Finding suitable child care facilities is often a prohibitive
    factor to Head Start in serving its targeted population. Job Corps can
    help fill this need. Job Corps will provide quality child care
    facilities and Head Start will operate 10 child care programs. Building
    additional child care facilities on Job Corps campuses will allow Head
    Start and Job Corps to jointly serve up to 350-400 additional children
    and their parents annually. This will help facilitate program
    enrollment of and/or completion by Job Corps' single parents who will
    be able to receive the education, training and parenting skills needed
    to become productive members of society; and their children will
    receive Head Start's comprehensive, quality child care services. The
    community surrounding the Job Corps center will also benefit from
    enrollment at these quality child care facilities and from partnerships
    developed through this collaboration.
    Job Corps/Community Partnerships
        Job Corps centers are emerging as an integral part of America's
    changing and growing workforce development system. Through strong
    partnerships with One-Stop career centers, close relationships with
    local employers, increasingly visible community projects, innovative
    school-to-work training, and on-line communication between Job Corps
    and workforce development entities, Job Corps operates on the premise
    that state and local involvement is a prerequisite for success. Through
    these linkages, Job Corps will enhance their services to ensure an
    optimal experience for Job Corps students.
    Conclusion
        By funding the NJCC's request for fiscal year 1999 at $1.317
    billion, the Subcommittee will help to reduce the number of young
    Americans who depend on public assistance by breaking the cycle of
    poverty and welfare dependence. As more and more Americans strive to
    make the transition from welfare to work, cost-effective education and
    training programs will be vital to their success.
        Job Corps is a national, residential education and vocational
    training program with a proven history of results that justify its
    costs. In addition, Job Corps is a trusted program that capitalizes on
    public-private partnerships, quality programs and fiscal integrity to
    offer the disadvantaged youth of our nation a brighter future.
    Moreover, Job Corps helps to keep America competitive in the global
    economy by providing a pool of qualified entry-level workers who
    comprise a significant and growing portion of the nation's workforce.
        Mr. Chairman and members of the Subcommittee, it is with great
    pleasure that we submit to you testimony on behalf of the National Job
    Corps Coalition. We thank you for your continued leadership and
    dedication to America's disadvantaged youth. Through your continued
    support, more than 69,000 young people who participate in Job Corps
    each year will have the opportunity for a better, more self-sufficient
    future. Thank you.
                                     ______

       Prepared Statement of Kay Guinane, Consulting Attorney, National
                              Consumer Law Center
    Introduction
        Mr. Chairman and Members of the Committee, the National Consumer
    Law Center appreciates the opportunity to submit written testimony
    regarding appropriation of funds for the Low Income Home Energy
    Assistance Program (LIHEAP) for fiscal year 1999. This testimony is
    submitted on behalf of our low income clients, who live with an
    increasing threat of loss of utility service due inability to pay.
        The National Consumer Law Center (NCLC) is a nonprofit corporation
    dedicated to the interests of low income consumers. Founded in 1969,
    NCLC provides specialized legal support and consulting services to low
    income customers, their advocates, government agencies and private
    attorneys in all aspects of consumer and utility law. NCLC has helped
    utilities, regulatory commissions and advocates design low income
    affordability programs in dozens of states over the past several years.
    NCLC has published leading reports on the impacts of energy costs on
    the poor as well as manuals on related law.\1\
    ---------------------------------------------------------------------------
        \1\ Manuals relating to utility service include ``Access to Utility
    Service'', ``Tenants Rights to Utility Service'', The Regulation of
    Rural Electric Cooperatives'', and ``A Guide to Low-Income Energy
    Efficiency''.
    ---------------------------------------------------------------------------
        NCLC is a strong supporter of the Low Income Home Energy Assistance
    Program, as it is the primary safety net between low income consumers
    and disconnection of utility service. It is efficiently designed to
    target benefits to households most in danger of losing that vital
    service. However, without adequate funding, LIHEAP cannot get the job
    done. In fiscal year 1999 Congress has the opportunity to restore this
    program to a level of funding sufficient to provide the protection and
    assistance that low income households desperately need. On behalf of
    our low income clients we urge Congress to appropriate no less than
    $1.437 billion, the fiscal year 1994 level, for fiscal year 1999 and an
    advance appropriation for fiscal year 2000 of at least $1.6 billion.
    Emergency funding is also necessary.
    The Need for LIHEAP
        In fiscal year 1998 the overall funding level for LIHEAP reached an
    all time low. This was primarily because no emergency funds were
    released, due to relatively mild winter weather. However, the ongoing
    crisis low income households face in maintaining utility service did
    not change significantly as a result of weather patterns. Instead, the
    impact of reduced funding has meant lower levels of assistance for
    fewer households.
        The human impact of these lower funding levels were confirmed in a
    telephone survey of some of our clients. In Illinois the LIHEAP program
    opened and closed again in October, when funds ran out. Throughout the
    winter things were ``going crazy with shut offs'', according to Lillian
    Drummond of the South Austin Coalition Community Council in Chicago.\2\
    In many cases, LIHEAP assistance payments were not large enough to
    induce the utilities to reconnect. In East St. Louis, Illinois the
    story is much the same. Joe Hubbard, who has been with the Catholic
    Urban Program for thirty six years, says ``This is the roughest I've
    ever seen.'' He explains that since the cold weather never got severe
    enough to invoke state winter protection rules (below 32 degrees
    Fahrenheit for a 24 hour period), disconnections were allowed. Then
    when the weather did turn colder, households could not get reconnected.
    ``Those people are out there lost,'' he stated.\3\ Both Drummond and
    Hubbard cite increasing use of disconnection by utilities as a
    collection mechanism, which most impacts the elderly and working poor.
    ---------------------------------------------------------------------------
        \2\ Telephone Survey, NCLC, March 27, 1998, Interview Lillian
    Drummond, Staff, South Austin Coalition Community Council, Chicago,
    Ill.
        \3\ Telephone Survey, NCLC, March 27, 1998, Interview with Joe
    Hubbard, Staff, Catholic Urban Program, East St. Louis, Ill.
    ---------------------------------------------------------------------------
        In Wichita, Kansas diminished LIHEAP funds have also resulted in
    increasing difficulties for low income households. Sunflower Community
    Action reports that the LIHEAP program ran out of money early, with
    many households being shut off. Food pantries, United Way, the
    Salvation Army and other community based organizations are scrambling
    to help, but lack resources needed to get households reconnected.\4\
    ---------------------------------------------------------------------------
        \4\ Telephone Survey, NCLC, March 27, 1998, Interview with Laura
    Dungan, Staff, Sunflower Community Action, Wichita, Kansas.
    ---------------------------------------------------------------------------
        The most chilling report on the impact of utility disconnection
    comes from Timothea Howard, Lead Organizer of the Columbia Heights/Shaw
    Family Support Collaborative in Washington, D.C. She states that ``for
    a significant number of households loss of utility service is a
    contributing factor to children going into foster care.'' When families
    cannot stretch their incomes to pay for food, rent and utilities, they
    tend to pay for rent and food first, not realizing that landlords will
    report utility disconnections. Living without utility service is
    considered neglect, which results in removal of children from the home
    by protective services.\5\ Surely it would be more humane and cost
    effective to keep the family together by providing energy assistance.
    ---------------------------------------------------------------------------
        \5\ Telephone Survey, NCLC, March 27, 1998, Interview with Timothea
    Howard, Lead Organizer, Columbia Heights/Shaw Family Support
    Collaborative, Washington, D.C.
    ---------------------------------------------------------------------------
        Census statistics also show a widespread need for the LIHEAP
    program. Between 13.4-26 percent of U.S. households are eligible,
    according to statutory standards. (See Table I)

       TABLE I.--HOUSEHOLDS ELIGIBLE FOR LIHEAP OF 91,993,582 TOTAL HH IN
                                  UNITED STATES
    ------------------------------------------------------------------------
                                                               Percent total
                  Poverty level                   No. HH            HH
    ------------------------------------------------------------------------
    Greater of 60 percent SMI \1\ or 150          24,136,925              26
     percent poverty........................
    150 percent poverty or below............      18,718,748              20
    125 percent poverty or below............      14,796,445              16
    110 percent poverty or below............      12,335,430            13.4
    ------------------------------------------------------------------------
    \1\ State Median Income.

    Source: 1990 Census, HHS Http://www.acf.dhhs.gov/liheap/census.htm.

        LIHEAP is well designed to channel benefits to those most in need,
    and LIHEAP recipients tend to be on the low end of the poverty scale.
    For example, in fiscal year 1995 40 percent of households that received
    assistance were under 75 percent of the poverty level.\6\ And although
    low income households consume 16 percent less heating energy than the
    average residential household and pay 14 percent less for it \7\,
    energy costs take up a huge proportion of their average $10,048 annual
    income.\8\
    ---------------------------------------------------------------------------
        \6\ U.S. Dept. of Health and Human Services, Report of Congress for
    Fiscal Year 1995: Low Income Home Energy Assistance Program, p. 30
    Table 12.
        \7\ Oak Ridge National Laboratories, ``The Scope of the
    Weatherization Assistance Program: Profile of Population in Need''
    March, 1994, p. 2.5.
        \8\ Ibid.
    ---------------------------------------------------------------------------
        The proportion of energy costs to household income is called the
    energy burden. In 1995 NCLC completed a study that illustrated the
    disparity in energy burden between average residential and low income
    households. We found the burden for the average residential household
    is 3.8 percent, while low income households pay far more. For example,
    a TANF household pays an average of 26 percent of their income on
    energy and recipients of Social Security pay 14 percent.\9\
    ---------------------------------------------------------------------------
        \9\ National Consumer Law Center, ``Energy and the Poor: The Crisis
    Continues'', January 1995 Ch. II.
    ---------------------------------------------------------------------------
    Impact of LIHEAP Funding Reductions
        The proportion of those households that actually receive assistance
    has decreased as funding levels have plunged in the past four years.
    For example, in fiscal year 1994, 6 million households received
    assistance from LIHEAP \10\, but by fiscal year 1997 a 30 percent
    reduction in funds resulted in loss of assistance to approximately 1.7
    million households, a 28.4 percent cut back. (See Table II and III).
    With funding levels falling even lower in fiscal year 1998, a 42.5
    percent overall reduction from fiscal year 1994, more households are
    losing assistance.
    ---------------------------------------------------------------------------
        \10\ U.S. Dept. of Health and Human Services, Report to Congress
    for Fiscal Year 1995: Low Income Home Energy Assistance Program, p. 29.
    ---------------------------------------------------------------------------
        Who is hit hardest by these program cuts? A survey by the National
    Energy Assistance Directors Association (NEADA) released in September,
    1997, showed that of the 1.2 million households that lost LIHEAP
    assistance between fiscal year 1995 and fiscal year 1997, 313,000 had
    at least one elderly member and 156,000 had at least one disabled
    member. Of the remaining 731,000 households it is likely that 43
    percent, or 314,330, had children.\11\
    ---------------------------------------------------------------------------
        \11\ According to a study by Oak Ridge National Laboratories, ``The
    Scope of the Weatherization Assistance Program: Profile of Population
    in Need'', March, 1994, p. xii, 43 percent of LIHEAP eligible
    households have children.
    ---------------------------------------------------------------------------
        The NEADA study also found that states have responded to LIHEAP
    budget cuts in a variety of ways, including ``increasing the share of
    benefits to those with the highest energy burdens and special needs
    groups including the elderly and disabled, reducing overall program
    benefit levels, and reducing the eligibility ceiling.'' \12\
    ---------------------------------------------------------------------------
        \12\ Ibid.

                               TABLE II.--DECLINE IN LIHEAP FUNDING SINCE FISCAL YEAR 1994
    ----------------------------------------------------------------------------------------------------------------
                                                                            Percent     Total (Regular,    Percent
                                                         Regular + Lev/   change from     Lev/REACH +    change from
                     Fiscal year 1994                      REACH \1\ =    fiscal year    emergency) =    fiscal year
                                                         $1,437,392,360       1994      $1,737,392,360       1994
    ----------------------------------------------------------------------------------------------------------------
    Fiscal year 1995..................................    $1,319,202,479         -8      $1,419,202,479        -19
    Fiscal year 1996..................................       900,000,000        -37       1,080,000,000        -38
    Fiscal year 1997..................................     1,000,000,000        -30.5     1,215,000,000        -30
    Fiscal year 1998..................................     1,000,000,000        -30.5     1,000,000,000        -42.5
    ----------------------------------------------------------------------------------------------------------------
    \1\ Funds for leveraging state and local funds and the Residential Energy Assistance Challenge Option.

    Source: HHS, www.acf.dhhs.gov/programs/liheap/approp.htm.

     TABLE III.--HOUSEHOLDS RECEIVING LIHEAP ASSISTANCE, FISCAL YEAR 1994-97
    ------------------------------------------------------------------------
                                                                   Percent
                                                                 change from
                     Program year                   HH assisted  fiscal year
                                                                     1994
    ------------------------------------------------------------------------
    Fiscal year 1994..............................    6,000,000           NA
    Fiscal year 1995..............................    5,500,000         -8.5
    Fiscal year 1996-97...........................    4,300,000        -28.4
    ------------------------------------------------------------------------
    Sources: For fiscal year 1994-95, HHS Fiscal Year 1995 Report to
      Congress: LIHEAP, p. 29. For fiscal year 1996-97: National Energy
      Assistance Directors Association Survey, Sept. 12, 1997.

        Decreases in LIHEAP funding have been shown to increase the
    incidence of utility disconnections. Those that do not receive LIHEAP
    assistance are almost twice as likely to be shut off.\13\ The
    consequences of disconnections are well documented and include: Health
    and safety risks associated with alternate heat and lighting sources,
    such as kerosene heaters and candles; Hunger and malnutrition;
    Hyperthermia and hypothermia; Eviction and increase in homelessness;
    and Diminished educational performance by students with high mobility.
    ---------------------------------------------------------------------------
        \13\ NCLC Testimony regarding LIHEAP Appropriations, to House
    Committee on Appropriations, May 1996.
    ---------------------------------------------------------------------------
    Time is Right to Restore LIHEAP Funding
        Congress has been successful in bringing the deficit under control.
    However, LIHEAP has contributed more than its share to this effort,
    suffering a cumulative loss of $1.1 billion since fiscal year 1985. As
    the nation moves toward a balanced budget, we must also move toward
    balance in our priorities, making sure that basic necessities, such as
    heat in the winter, are available to those who can least afford it.
    LIHEAP has immense impacts for a relatively small budget, and should be
    restored to a level of funding that truly protects the health and
    safety of vulnerable low income Americans.
    The Need for Advance Appropriations
        The LIHEAP program needs to go into operation prior to the heating
    season so that state agencies can begin the process of taking
    applications. They need to know LIHEAP funding levels early in order to
    implement the program at a time when it can effectively prevent shut
    off of utility service: during the harshest part of the winter. For
    this reason, NCLC requests that Congress include an advance
    appropriation for fiscal year 2000 in its LIHEAP appropriation this
    year.
    Conclusion
        The ongoing crisis low income households face in maintaining their
    utility service has been exacerbated by sharp drops in LIHEAP funding
    over the past four years. In fiscal year 1999 Congress has the
    opportunity to restore this program to a level of funding that will
    avoid disconnections and the threats to health and safety that go with
    them. We ask Congress to fund the program at a level of no less than
    $1.437 billion in fiscal year 1999.
                                     ______

     Prepared Statement of Phillip Furmanski, Ph.D., Dean, Faculty of Arts
     and Science; Chairman and Professor of Biology on Behalf of A Center
       for Cognition, Learning, Emotion and Memory at New York University
        I appreciate this opportunity to submit testimony before the
    Subcommittee to discuss a project of scientific research which is not
    only an important priority for New York University, but which we
    believe will advance national interests through enhanced scientific
    understanding of normal brain development as well as the many
    disabilities, disorders and diseases that erode our ability to think
    and learn.
        Our project addresses the research and programmatic priorities of
    this subcommittee. We strongly support the goals presented in the
    Conference Report accompanying the November 7, 1997 Appropriations for
    the Departments of Labor, Health and Human Services and Education for
    fiscal year 1998. That report, for example, encouraged the National
    Institute of Child Health and Human Development to support, and I
    quote, ``research in the area of brain development, mechanisms that
    underlie learning and memory, the acquisition and storage of
    information in the nervous system, and the neural processes; underlying
    emotional memories as they relate to intellectual development and
    cognitive growth.'' We thank the Subcommittee for taking the time to
    consider and give its support to the important research being conducted
    in this area. We at New York University firmly believe that in the
    coming decades, a federal investment in mind and brain studies will
    repay itself many times over.
        To implement the Subcommittee's goal, New York University is
    undertaking to establish a Center for Cognition, Learning, Emotion and
    Memory. This Center will draw on the University's strengths in the
    fields of neural science, biology, chemistry, psychology, computer
    science, and linguistics to push the frontiers of our understanding of
    how the brain develops, function malfunctions, matures, and ages. In
    addition, as a major training institute, the Center will help prepare
    the next generation of interdisciplinary brain scientists.
        To establish this Center, New York University is seeking $10.5
    million over five years to support and expand the research programs of
    existing faculty, attract additional faculty and graduate and
    postgraduate trainees, and provide the technical resources and
    personnel support that will allow us to create a premier, world class
    scientific enterprise. Individual researchers in the science programs
    at NYU compete for investigational support through traditional routes,
    quite effectively. However, these traditional funding sources do not
    address the specific need for establishment of a new cross-disciplinary
    area of scientific study, particularly one that transcends biomedicine,
    psychology, education, computer science, cognitive science, and
    linguistics. Nor do they provide the extensive funding necessary for
    faculty and student support and personnel and technical resources.
        Exploration into the fundamental neurobiological mechanisms of the
    nervous system can help educators, health care providers, policy
    makers, work force managers, and the general public by enhancing our
    understanding of normal brain development and function in both children
    and adults, thereby helping us to detect and correct impediments that
    affect our ability to learn, to think, and remember, and to mature as
    productive members of family and society. Research in this area will
    ultimately contribute to a better understanding of how children learn
    at different stages; how educators can improve students' retention and
    memory; how childhood and adult learning is shaped by different
    cognitive styles; how aging affects memory; and how diseases alter
    memory.
        There are enormous potential applications for early childhood
    intervention, teacher training, educational technologies, job training,
    and retraining, and diagnosis and treatment of mental and memory
    disorders. These applications directly address national concerns which
    were identified most recently in President Clinton's State of the Union
    address, and by the Departments of Labor, Health and Human Services,
    and Education.
        New York University is well poised to make important contributions
    in this area. Founded in 1831, the University today is the largest
    private university in the United States, with over 49,000 students
    representing a broad range of backgrounds and coming from every state
    and over 120 foreign countries. NYU comprises thirteen schools,
    colleges, and divisions and is known for the excellence of its schools
    of law, medicine, film, and business; the Institute of Fine Arts; the
    Courant Institute of Mathematical Sciences; and departments in the
    Faculty of Arts and Science, notably neural science, chemistry,
    biology, psychology, French, English, philosophy, anthropology and
    economics. Located in the heart of the world's most cosmopolitan and
    diverse city, New York University is a leading national--and in many
    fields, international--center of scholarship, teaching and research. It
    is one of twenty-nine private institutions constituting the
    distinguished Association of American Universities, and is consistently
    among the top U.S. universities in funds received from federal sources
    and from private foundations.
         cognition, learning, emotion and memory studies at nyu (clem)
        The Center for Cognition, Learning, Emotion, and Memory will be an
    interschool, interdisciplinary unit linking faculty, students, programs
    and resources from several schools of New York University. These are
    the Faculty of Arts and Science, Courant Institute of Mathematical
    Sciences, School of Medicine, School of Education, and Center for
    Digital Multimedia. CLEM, to be housed at the University's Washington
    Square campus within the Faculty of Arts and Science, will be the locus
    for laboratory research and training in fundamental neurobiological,
    psychological and computational studies of the nervous system. In
    addition, CLEM will be a point of convergence for faculty and students
    seeking to incorporate these research perspectives into their own work
    in education, medicine, and technology, and seeking as well to enrich
    laboratory research with interdisciplinary collaboration and conceptual
    bridges.
        The new Center will be administratively housed within the NYU
    Department of Neural Science. This department includes affiliated
    investigators from biology, chemistry, psychology, physics, computer
    science, medicine, and mathematics. It is a national center of research
    and teaching, encompassing a pre-eminent faculty, and generating
    substantial external funding from federal and state agencies as well as
    the private sector. The department holds world-class stature in the
    study of the nervous system as a sensory communications system, as a
    controller of motor activity and as a neural network that generates the
    emotional foundation of voluntary behavior. The neural sciences at NYU
    have attracted millions of dollars in generous support from, for
    example, the NIH, NSF, and EPA, the Howard Hughes Medical Institute,
    the W.M. Keck Foundation, and the Alfred M. Sloan Foundation. Its
    faculty have won prestigious awards, being named National Institutes of
    Health (NIH) Merit Awardee, Howard Hughes Medical Institute
    Investigator, National Science Foundation (NSF) Presidential Faculty
    Fellow, McKnight Foundation Scholar in Neuroscience, and MacArthur
    ``Genius'' Fellow. The department cultivates productive linkages with
    investigators from other disciplines, educational institutions, and
    research sectors. Thus, linkages between neural scientists, and
    educators in the NYU School of Education, clinicians in the NYU School
    of Medicine, and software designers, computer scientists, and graphic
    artists in the NYU Center for Digital Multimedia facilitate the
    application of scientific discoveries in the classroom, in the clinic,
    and in new technologies.
        The new Center for Cognition, Learning, Emotion, and Memory Studies
    will bring the University's many strengths in these areas more fully to
    bear on the challenges and opportunities that multi disciplinary
    studies present. The Center will provide an organizational identity,
    core resources, and common focus for the university's efforts. For
    students, it will provide an educational forum to apply knowledge
    gained in one discipline to problems in other disciplines. For
    researchers, the Center's synergistic linkages between basic science
    departments, biomedical departments, and mathematical and computational
    units will encourage intellectual cross fertilization and will permit
    the consolidation of individual efforts in multi disciplinary but in
    conceptually coordinated efforts. For colleagues in the fields of
    education, medicine, and technology, the Center will facilitate
    connections with laboratory scientists and enhance the translation of
    research knowledge into health care, educational, and commercial
    applications. The enhanced research and training that will be possible
    at the Center will attract public and private funding above and beyond
    the substantial funds, honors and recognition already awarded to the
    University's researchers, and will support the Center's continued
    growth and development.
               the case for the new center at new york university
        New York University has the resources necessary for the successful
    creation and operation of a major multi disciplinary research and
    training center. There is top-level administrative leadership, a
    commitment to science, intellectual and administrative resources,
    established frameworks for interdisciplinary and interschool
    collaboration, strengths in neuro-biological, psychological and
    computational sciences, and standing in the international scientific
    community. The Faculty of Arts and Science, which encompasses the
    College and the Graduate School, has a preeminent faculty of 560, an
    annual operating budget of $197 million, a student population of
    approximately 9,200, and over 450,000 square feet of dedicated space
    apart from shared University facilities, making it a vital center of
    teaching and research. The science enterprise is especially vigorous,
    the result of a decade-long multi-million dollar development plan to
    renovate research and teaching laboratories and recruit distinguished
    junior and senior faculty, a pioneering science curriculum for
    undergraduate non-science majors, extensive research experiences for
    undergraduate science students, and an enhanced graduate student
    training program of supervised research and teaching assistantships.
        New York University has, as part of its multi-year science
    development plan, created a world- class and widely recognized
    neuroscience program. Neural science at NYU is particularly well known
    for research in visual processing and perception, theoretical
    neurobiology, molecular and developmental neurobiology, and cognitive
    neuroscience. It has outstanding researchers and well-established
    strengths in visual neuroscience, auditory neuroscience, cognitive
    science, neuromagnetism, neurochemistry, neurobiology, behavioral
    neuroscience, mathematical modeling, and computer simulation. Recently,
    these faculty have begun to unravel the biological mechanisms
    underlying cognition, learning and memory. As an example, NYU
    scientists have made important contributions to visual processing,
    deriving the most successful methods available for studying nonlinear
    interactions in neuronal information processing; emotion, giving the
    first real glimpse into the neuroanatomy of fear; neural development,
    with landmark work on the vision system; and the neural bases for
    auditory function, including neural sensitivity to auditory motion
    stimuli.
        With these strengths, New York University is strategically placed
    to create a new and distinctive center that will produce a new
    understanding of the brain, and new ways of using that knowledge for
    improving human health and welfare. The Center for Cognition, Learning,
    Emotion, and Memory will capitalize on our expertise in physiology,
    neuroanatomy, and behavioral studies, and will build on active studies
    that range from the molecular foundations of development and learning
    to the mental coding and representations of memory. The Center will
    encompass diverse research approaches, including mathematical and
    computational modeling, human subject psychological testing, use of
    experimental models, and electrophysiological, histological, and
    neuroanatomical techniques. Examples of the kinds of research that will
    be conducted are taken from our current research efforts, which are now
    dispersed in the departments of biology, chemistry, neural science,
    psychology, and computer science: Neural scientists are investigating
    the anatomical and physiological pathways by which memory can be
    enhanced; the conditions that facilitate long-term and short-term
    memory; and the brain sites where all these memories are processed and
    stored. Neural scientists, working with computational scientists, are
    using digital imaging to characterize normal and pathological mental
    processes in humans. Developmental biologists are studying the
    molecular basis of development and learning. Vision scientists are
    studying form, color and depth perception; visual identification; the
    varieties of visual memory; and the relationship of vision and
    perception to decision and action. Neural scientists are studying the
    neuroanatomy and physiology of emotion. Physicists are taking magnetic
    measurements of brain function that trace the decay of memories.
    Behavioral scientists are studying learning and motivation, acquisition
    of language, memory and aging Neurobiologist and psychiatrists are
    conducting clinical studies of patients with nervous system disorders,
    especially memory disorders. These existing researchers are well
    recognized by their peers and have a solid track record of sustained
    research funding from federal agencies and private foundations.
        As we move through the last years of the ``Decade of the Brain,''
    NYU, through this new Center, is strategically positioned to lead and
    contribute to accomplishment of the goals of this important initiative.
    Establishment of this Center requires support to bring together
    investigators in the different disciplines that address cognition,
    learning, and memory. Centralized core resources are required to
    facilitate collaboration and add efficiency to the research and
    training functions. New faculty who specifically bridge the disparate
    areas of knowledge and expertise need to be hired and ``set up.''
    Support must be provided to attract students to this new area and to
    promote work in this area, particularly for those from groups
    traditionally underrepresented in the sciences.
        While other academic institution are also conducting research into
    brain studies, New York University has special strengths in important
    emerging research directions that are central to this Subcommittee's
    goals, as stated in its November 1997 Conference Report. To elaborate,
    vision studies at NYU follow an integrated systems approach that has
    been shown to be the only successful approach to unraveling this
    complex system, and that has established NYU as an internationally
    known center for neuroscience studies in vision. The interest in
    vision, a key input to learning, is associated with focused studies on
    the learning process, particularly, the interaction with memory and
    behavior. These researchers are exploring hard and exciting questions:
    How does vision develop in infancy and childhood? How does the brain
    encode and analyze visual scenes? What are the neural mechanisms that
    lead to the visual perception of objects and patterns? How do we
    recognize letters and numbers? How do perceive spaces, depth, and
    color? How we does the brain move from vision and perception to
    planning and action? How does the brain process what we see?
        NYU scientists are also at the frontier of studies in the
    neuroanatomy and physiology of emotion, a new area of exploration that
    complements studies of how perceptions, thoughts, and memories emerge
    from brain processes. Work recently conducted at NYU and elsewhere has
    established the biological basis of emotions and the patterns by which
    they are expressed within the neural circuits that crisscross the brain
    and project through the body. The new studies have found that there are
    multiple systems in the brain, each having evolved for different
    functional purposes, and each producing different emotions. For
    instance, emotions of fear evolved to help animals survive and
    reproduce in hostile environments; the amygdala, a tiny structure in
    the brain, reacts to stimuli and triggers a physiological response,
    including a rush of adrenaline, a process which constitutes the
    ``emotion'' of fear. Work being conducted at NYU also suggests that the
    neural circuits supporting the expression of emotions were highly
    conserved through evolution. They persist, unconsciously, in our daily
    behavior, and shape our reactions to events well before we rationally
    and consciously process the event.
        Scientists at NYU are using behavioral testing physiological
    recording of neural activity, and neuroanatomical user tracing to ask,
    what are the neuroanatomical pathways for the formation of emotions and
    emotional memories? How do we learn and remember emotions? These
    studies have crucial applications for education, health care, and
    social welfare, and address such questions as: How can emotions, such
    as fear, facilitate or undermine the learning process? Do emotionally
    stressful situations affect our ability to remember facts, retrieve
    information, perceive events and objects? How can we enhance memory in
    stressful situations? How can we better diagnose and treat emotional
    disorders--which commonly characterize psychiatric disorders?
                             research applications
        Research conducted in the Center for Cognition, Learning, Emotion
    and Memory Studies will have diverse applications for health,
    education, and social welfare.
        Early Childhood and Education: Research into the learning process
    as it relates to attention and retention holds important implications
    for early childhood development. Although most of the human brain
    development is completed by birth, the scientific findings on brain
    development generated by researchers at NYU point clearly to windows of
    learning opportunity--that open and close--with important implications
    for when children best learn. Understanding how, when and under what
    conditions learning proceeds can lead to practical applications for
    parents, care givers and educators. In the midst of a national debate
    on education reform, thousands of educational innovations are being
    considered without the advantage of a fundamental understanding of the
    learning process. CLEM researchers, coupled with educational
    psychologists and their expertise in normal childhood development , can
    contribute to a better understanding of how parents can stimulate their
    children's cognitive growth, how children learn at different stages and
    use different styles, how educators can accommodate those styles, and
    how educational technology can be harnessed to stimulate interest and
    increase retention and memory. Findings can be quite specific, pointing
    for example, to critical or sensitive periods for acquiring particular
    skills in, for example, basic numeric concepts, writing, or foreign
    language. These findings are crucial to national efforts in early
    childhood education, and improve teaching and learning in the
    elementary grades.
        At NYU, these research efforts will be enhanced by our scholars and
    research conducted in our School of Education, and our Center for
    Digital Multimedia, which brings together educators, laboratory
    scientists and software designers who explore how interactive
    multimedia technologies enhance learning and develop prototype teaching
    models.
        Advances in Biomedical and Behavioral Research: Research conducted
    in our Center will by its nature address the loss of memory through
    aging or disease (including Alzheimer's), as well as disorders of
    emotional systems that commonly characterize psychiatric disorders.
    Many of the most common psychiatric disorders that afflict humans are
    emotional disorders--malfunctions in the way emotional systems learn
    and remember--and many of these are related to the brain's fear system.
    Neurobiological studies of emotion and emotional memory in the brain
    will generate important information about the brain systems that
    malfunction in, for example, anxiety, phobias, panic attacks, and post-
    traumatic stress disorders. Research into the brain mechanisms of fear
    will help us understand where our emotions come from, why these
    emotional conditions are so hard to control, and what goes wrong in
    emotional disorders. Ultimately, the research will generate clues for
    prevention and treatment of emotional disorders, focusing perhaps on
    the ways in which unconscious neural circuitry can in effect, be
    altered or inhibited.
        Job Training and Retraining: Research into the fundamental
    processes of cognition and learning, emotion and memory will help
    address the persisting challenge which the nation faces in training new
    recruits to the labor force, preparing welfare recipients to move into
    the labor force, retraining workers dislocated from downsized
    industries, and retraining workers in new technologies. Basic
    scientific research into neural and psychological mechanisms can help
    rationalize job training programs and increase their effectiveness.
        Mr. Chairman, this concludes my testimony. I fully support the
    goals of this Subcommittee, and I thank you for the opportunity to
    testify before you today.
                                     ______

        Prepared Statement of Scott Allswang, Chairman of the Board of
           Trustees, Crohn's and Colitis Foundation of America, Inc.
        Mr. Chairman, thank you very much for the opportunity to present
    the views of the Crohn's and Colitis Foundation of America (CCFA)
    regarding fiscal year 1999 appropriations for the National Institutes
    of Health (NIH), and the Centers for Disease Control and Prevention
    (CDC).
        My name is Scott Allswang and I currently have the honor of serving
    as the chairman of the CCFA Board of Trustees. Founded in 1967, the
    Crohn's and Colitis Foundation of America is a non-profit research
    organization dedicated to finding the cause of, and cure for, Crohn's
    disease and ulcerative colitis. The Foundation is committed to a
    nationwide coordinated research program aimed at conquering these
    chronic and devastating intestinal diseases that continue to baffle
    medical science.
        Crohn's disease and ulcerative colitis are serious inflammatory
    diseases that affect the gastrointestinal (GI) tract. Crohn's disease
    may occur in any section of the GI tract but is predominately found in
    the lower part of the small intestine and the large intestine.
    Ulcerative colitis is characterized by inflammation and ulceration of
    the innermost lining of the colon. Because Crohn's disease and
    ulcerative colitis behave similarly, they are grouped together as
    inflammatory bowel disease (IBD). Both diseases present a variety of
    symptoms including; severe diarrhea, crampy abdominal pain, fever, and
    rectal bleeding.
        It is estimated that over 2 million people are afflicted with
    either Crohn's disease or ulcerative colitis, roughly half of that
    number for each disease. Unfortunately, IBD impacts disproportionately
    on young people, with most cases being diagnosed before age 30.
    However, it is not uncommon for patients to be diagnosed in their
    sixties, seventies or later in life. Most IBD patients require long
    term medical therapy and multiple surgeries. Thus, while not considered
    a fatal illness, IBD is a debilitating, chronic condition that can lead
    to intense suffering and morbidity.
        My involvement with CCFA began in 1989, the year that my teenage
    son Jason was diagnosed with Crohn's disease. I have watched him
    persevere despite the devastating symptoms, potent treatments, and
    numerous hospital stays that keep interrupting his young life. Soon
    after Jason's diagnosis, I started volunteering my time to the local
    chapter of CCFA. I made a commitment that I would do all I could to
    help. When you have a way to fight back, you don't feel helpless
    anymore. Jason became involved as well, and throughout the years, we
    have recruited other volunteers to join us. As a co-owner of an
    insurance company, I also have provided numerous hours of consultation
    for IBD patients on issues related to insurance. All over the country,
    people who suffer from IBD and the friends and family who love them are
    giving themselves to CCFA, much like Jason and myself.
                      inflammatory bowel disease research
        Mr. Chairman, I would like to take this opportunity to express
    CCFA's deep appreciation for this Subcommittee's long-standing support
    of NIH and CDC. I would also like to convey a special word of thanks to
    Senator Reid for his invaluable support of IBD research over the years.
    Moreover, I would like to thank you Mr. Chairman, for your leadership
    in providing the National Institutes of Diabetes and Digestive and
    Kidney Diseases (NIDDK) with a 7.4-percent increase in fiscal year
    1998. Together with the National Institute of Allergy and Infectious
    Diseases (NIAID), NIDDK supports the majority of IBD research within
    NIH.
        Although we have made significant progress in recent years in the
    fight against Crohn's disease and ulcerative colitis (due in great part
    to NIDDK's 10-year IBD Strategic Plan implemented in 1993), IBD remains
    among the most challenging disorders affecting the digestive tract. The
    two million people and their families currently living with IBD are
    pinning their hopes for a better life on medical advancements made
    through NIH and CCFA sponsored research. For this reason, CCFA strongly
    supports the concept of doubling the NIH budget over the next five
    years. Regarding fiscal year 1999, the CCFA joins with the Ad Hoc Group
    for Biomedical Research Funding in recommending a 15-percent increase
    for NIDDK, NIAID, and NIH overall as a first step toward achieving this
    goal. Moreover, the CCFA encourages the Subcommittee to increase IBD
    research funding within NIDDK and NIAID from the current $17 million to
    $35 million over the next five years.
        Throughout its 30 year existence, CCFA has recognized the
    importance of working closely with NIH. Virtually all IBD researchers
    funded through NIDDK and NIAID are former CCFA grant recipients. This
    unique partnership has enabled us to sharpen the cutting edge of an
    innovative IBD research grant awards program and CCFA co-sponsored
    scientific symposiums.
        Some of the most promising IBD research in recent years has focused
    on translating findings from studies conducted on animal models to
    humans with IBD. These animal models have enabled researchers to form
    the current hypothesis that Crohn's disease and ulcerative colitis are
    caused by a malfunctioning immune system, wherein components of the
    patient's immune system over-react to normal intestinal bacteria. We
    know that people are susceptible to this malfunction because of their
    genetic makeup but further research is necessary to determine which
    bacteria are responsible, how these bacteria interact with the
    intestine's immune system, and which immune system components are
    involved.
        We are also trying to identify the genes that are responsible for
    making people susceptible to IBD. It is believed that there are several
    types of each disease, and hence, multiple genes are involved. Once we
    understand which immune system components and genes are responsible in
    the different subgroups of Crohn's disease and ulcerative colitis, we
    can use this knowledge to create new and improved treatments.
        Finally, Mr. Chairman, I am pleased to report that due in part to
    CCFA's Basic Research Agenda and our partnerships with NIDDK and NIAID,
    research findings are being translated with greater speed into new
    therapies for IBD patients. By working together we have begun to
    alleviate the intense pain suffered by people with IBD, but there is a
    great deal more that needs to be accomplished. Our progress thus far
    gives us tremendous hope for the future, however, the study of new and
    promising research pathways is dependent upon increased federal funding
    for IBD research at NIH.
                          colorectal cancer prevention
        Mr. Chairman, in addition to coping with either Crohn's disease or
    ulcerative colitis, a sub-set of IBD patients are at high risk for
    developing colorectal cancer. As you may know, colorectal cancer is the
    third most commonly diagnosed cancer for both men end women in the
    United States and the second leading cause of cancer-related deaths.
    Because many IBD patients are highly susceptible to this disease, CCFA
    has a long history of actively promoting the benefits of colorectal
    cancer screening.
        Although colorectal cancer is almost entirely curable when detected
    early, recent studies have shown a tremendous need to (1) inform the
    public about the availability and advisability of screening and (2)
    educate health care providers with respect to colorectal cancer
    screening guidelines. The recently initiated National Colorectal Cancer
    Screening Awareness Program at the Centers for Disease Control and
    Prevention will address these needs by coordinating with national
    partners like the CCFA to develop an information program emphasizing
    the value of early detection. CCFA hopes that this new program will do
    for colorectal cancer screening rates what CDC's Breast and Cervical
    Cancer Screening Program has done for mammography and Pap smear
    screening compliance. Mr. Chairman, CCFA encourages the Subcommittee to
    provide CDC with $5 million (an increase of $2.5 million over fiscal
    year 1998) in fiscal year 1999 for this vital campaign.
                                   conclusion
        As we near the end of the 20th Century, the scientific community is
    on the verge of tremendous breakthroughs in biomedical research. The
    development of new technologies coupled with our growing understanding
    of the genetic code have led us to an unprecedented point in the
    understanding of human disease. With respect to Crohn's disease and
    ulcerative colitis, CCFA truly believes that we have reached a turning
    point in the fight against these devastating disorders. Thanks to this
    Subcommittee's continued support of NIH and CDC, CCFA is optimistic
    that the future will yield better treatments and eventually a cure for
    IBD.
        Mr. Chairman, once again thank you very much for the opportunity to
    present the views of the Crohn's and Colitis Foundation of America. If
    you have any questions or would like further information please do not
    hesitate to contact us.
                                     ______

         Prepared Statement of the Coalition of Northeastern Governors
        The Coalition of Northeastern Governors (CONEG) is pleased to
    provide testimony for the record to the Senate Subcommittee on Labor,
    Health and Human Services, Education, and Related Agencies as it
    considers fiscal year 2000 advance appropriations for the Low-Income
    Home Energy Assistance Program (LIHEAP). The CONEG Governors appreciate
    the support provided by the Subcommittee in maintaining this important
    program, and urge the Subcommittee to provide advance funding at the
    level of $1.1 billion for fiscal year 2000. In addition, we are
    requesting that additional funding authority be provided to allow for
    the release of emergency funds for unforeseen circumstances such as
    price spikes in natural gas or heating oil, severe winter weather and
    other potential emergencies.
        During the current fiscal year, almost 1.5 million very low income
    households in the Northeast states will receive LIHEAP assistance.
    About 40 percent of these households are disabled or elderly. Many live
    on fixed incomes or are making the difficult transition from welfare to
    work. Two-thirds of the region's LIHEAP recipients are very poor with
    annual incomes of less than $8,000 per year. For many of these
    recipient households, annual income is not sufficient to pay high
    winter heating bills, even in periods of economic growth. Many low-
    income elderly or disabled residents are forced to make a choice
    between purchasing medicine, food or energy.
        LIHEAP funds play a major role in helping to make home energy more
    affordable for low-income households in the Northeast. The percentage
    of disposable income spent on energy by low-income households can be
    significant. Program funds are targeted to those with high energy
    burdens, averaging 15 percent of household income, approximately four
    times the rate for all households. The program has been very successful
    in helping low-income households pay their energy bills, thereby
    preventing fuel supply shut-offs.
        According to LIHEAP Home Energy Data (fiscal year 1995), households
    using fuel oil usually spend more for home heating than households
    using natural gas, kerosene, LPG or electricity. In addition to having
    some of the highest electricity rates in the Unites States, the
    Northeast also has a high percentage of households that heat with fuel
    oil. Most Northeastern homes are older and have less efficient
    furnaces, further compounding the problem for low-income residents.
    Electric utility restructuring and competition, while bringing lower
    electric rates to the region, will not fully meet the needs of low-
    income households which predominately heat with fuels other than
    electricity.
        The availability of advance funding for fiscal year 1999, approved
    as part of the fiscal year 1998 Labor, Health and Human Services,
    Education and Related Agencies Appropriations Act, will play a
    significant role in helping states plan their programs prior to the
    start of the winter heating season. In the Northeast, the winter
    heating season often begins before the completion of the annual
    appropriations process. By providing advance funding, states can plan
    the orderly allocation of funds, thereby reducing administrative costs.
    It also allows states to coordinate outreach and prioritize program
    goals and components more efficiently. Traditionally, 70 percent of
    LIHEAP funds are spent during the first two quarters of the Federal
    fiscal year.
        States have established programs throughout the Northeast to
    leverage additional funds from the private sector. These programs
    include requiring margin-over-rack and oil bid programs to provide the
    lowest possible prices for heating oil; exploring options for
    purchasing natural gas through cooperative arrangements with local
    governments; and initiating partnerships with utilities to provide
    discounts and avoid shut-offs. For example, New Jersey has initiated
    the Safety Net Partnership project with utilities to avert shut-offs
    after the winter moratorium. States are also establishing closer links
    between energy conservation services and LIHEAP, thereby helping to
    reduce long-term energy bills. For example, Maine is utilizing its
    LIHEAP database to identify ``high energy users'' and targets its
    weatherization program to those households.
        States are also exploring the use of summer fill programs to
    purchase oil during the summer months when prices are low, thereby
    increasing the purchasing power of program funds. For example, in 1997,
    New Hampshire's number of emergency LIHEAP cases decreased by 10
    percent from the previous year. New Hampshire attributes the decrease
    to its summer fill program, which enables the state to address fuel
    needs in advance, while protecting eligible LIHEAP households from
    potential winter heating spikes. The reduction in emergencies means
    reduced administrative costs attributed to processing emergency cases.
    Furthermore, LIHEAP recipients do not absorb the additional costs
    associated with emergency deliveries.
        LIHEAP is an assistance program that can promote planning and
    responsibility through the use of innovative initiatives and can be a
    useful mechanism to facilitate the transition from welfare to work. New
    Hampshire allows LIHEAP recipients to participate in a program that
    promotes behavior modification and planning for future energy needs. If
    a LIHEAP recipient remains current with his/her utility provider or
    establishes a credit with his/her fuel vendor by the end of the winter
    season, the program will match the LIHEAP participant's contribution
    (not to exceed $75). This enables LIHEAP recipients to plan for their
    fall energy needs and reduce their dependency on LIHEAP.
        States have also adopted various administrative strategies designed
    to minimize the amount of program dollars that are used to operate the
    program, thereby allowing more funds to be used for assistance. LIHEAP
    administrative costs are among the lowest of human service programs.
    States pay less than $25 per household for program administration.
    Specific examples of innovative administrative strategies include the
    development of uniform application forms to determine program
    eligibility, establishment of a one-stop shopping approach for the
    delivery of LIHEAP and related program services, and the use of mail
    recertification. For example, New Jersey has initiated a program to
    streamline its service delivery process by sending payments directly to
    the utilities.
        CONEG is pleased to have had the opportunity to share its views
    with Chairman Specter and rest of the Subcommittee, and stands ready to
    provide any additional information about the importance of LIHEAP in
    meeting the home heating needs of low-income, disabled and elderly
    residents of the Northeast.
                                     ______

     Prepared Statement of Robert E. McAfee, M.D., Chair, on Behalf of the
    Join Together National Policy Panel on Addiction Treatment and Recovery
               treating addicton: america's no. 1 health problem
        Mr. Chairman, members of the subcommittee, my name is Dr. Robert E.
    McAfee, and I am to pleased to provide remarks on behalf of the
    National Policy Panel on Addiction Treatment and Recovery, convened by
    Join Together.
        I would like to thank you, Mr. Chairman, for this opportunity to
    offer our recommendations on treatment for addiction. Speaking for my
    colleagues on the Join Together Policy Panel, I hope that this hearing
    initiates a productive congressional dialogue on this issue that
    culminates in the recognition that the alcoholism and drug addiction
    are diseases, that they are treatable, and that when we make an
    investment in helping those who are dependent on alcohol and drugs to
    recover, our entire society benefits.
        When I was asked by Join Together to chair this panel of national
    experts and local advocates on substance abuse and justice system
    issues, I did so with the hope that we might recommendations that would
    be helpful to policy makers and to health care professionals in meeting
    our responsibilities and providing sound health care.
        Having had the opportunity to hold a public hearing, to interview
    experts, people in recovery, mayors and other officials, our panel
    urges that we move with dispatch to prepare and implement a strategy to
    overcome the discrimination that until now has marked the care for
    alcohol and drug dependent members of our communities.
        Our panel offers six recommendations for meeting this treatment
    disparity. Today I would like to urge the members of this subcommittee
    to consider carefully our first recommendation:
        Treatment for alcoholism and other drug addiction must be covered
    as a health benefit on an equal basis with treatment for other
    diseases.
        It is time for substance abuse treatment to be pulled into the
    mainstream of health care.
        In effect treatment should be made broadly available to all who
    suffer from addiction. The panel believes in this concept of equal
    coverage as a matter of fairness, and as a principle of sound public
    policy. Further, it should apply to everyone, whether they receive
    health care in the public system or the private system.
        For this to happen, it is essential that health care providers and
    insurers acknowledge addiction as a chronic, primary, relapsing
    disease, and treat it as any other such condition, be it hypertension,
    diabetes or arthritis. Likewise, health care purchasers, in particular
    employers and governments, must demand that full coverage of treatment
    be included as a basic element of any health benefit.
        Even though addicted persons can go through treatment and achieve
    at least temporary abstinence, some find it difficult over time to
    avoid relapse. Many people who achieve sustained remission do so only
    after a number of cycles of treatment and relapse. Understanding this
    is key to overcoming the stigma of substance abuse and to making
    treatment part of the health care mainstream. Preventing relapse, and
    maintaining recovery, requires support from our workplaces, families,
    schools and religious institutions. For many, these institutional
    supports have already eroded, and must be initiated or reinvigorated.
    This means linkages are necessary between these institutions and the
    treatment site.
    Achieving parity
        For substance-abuse treatment to be brought up to par with
    treatment of other chronic diseases, three goals must be met:
      --There must be full coverage of substance abuse treatment as a basic
            health care benefit.
      --There must be sufficient capacity to treat those in need.
      --There must be access to a variety of substance abuse treatment
            modalities when and where they are needed.
    A. Parity in coverage
        For those who need treatment, often the biggest obstacle is cost.
    For many, lack of health insurance stands as a brick wall between them
    and treatment services. Even for the insured, coverage sometimes
    excludes substance abuse treatment or, at best, provides for only bare-
    bones services.
        Unfortunately, the levels and availability of treatment services
    have in many cases declined over the past decade. The reason for this,
    in large part, is practices by health care payers that have led to cuts
    in treatment services by:
      --Setting arbitrary limits on the duration or type of treatment;
      --Emphasizing short-term savings over long-term outcomes;
      --Reducing or eliminating treatment services;
      --Putting insufficient emphasis on quality and individualization of
            care; and
      --Using gatekeepers who are poorly trained in substance abuse
            treatment and have a self interest in keeping costs down.
        Purchasers of health insurance, particularly employers and
    government, may not even be aware of these reductions in substance
    abuse services, believing that what they contracted for is being
    delivered. In fact, greater health care savings are likely to be
    achieved by expanding substance abuse treatment, not restricting it.
    Particularly at the workplace, employers stand to gain far more by
    expanded treatment services, in the form of reduced absenteeism, lower
    training costs and enhanced productivity.
        Thus, the first step towards achieving parity is to include primary
    care and specialty treatment for substance abuse in all basic health
    benefits, with appropriate services for family members, including
    children. This would probably cost insurers and managed-care providers
    nothing; the direct cost offsets would be at least equal to or greater
    than the cost of adding treatment. By not fully covering treatment,
    managed-care providers are costing themselves and their subscribers
    millions.
        Employers should not wait for managed-care providers and health
    insurers to act; they should demand coverage of substance-abuse
    treatment as a condition of doing business. As employers and major
    purchasers of health care, it is in their own self interest to do so.
    Coverage for a high quality of addiction treatment should be made an
    express term of agreements between purchasers of health care benefits
    and managed-care providers.
        For poor and elderly people, Medicaid and Medicare should likewise
    provide for substance abuse treatment at least on a par with other
    chronic diseases. State contracts with managed care providers should
    require this. State governments should set aside funding to provide
    treatment for the uninsured. Some revenue for this could come from
    taxes on alcohol and nicotine. Steps must be taken to ensure that
    people who rely on the public health care system have access to
    treatment.
        As state governments implement policies to move welfare recipients
    into the workforce, they must also devise programs to address this
    population's health needs, particularly as they relate to substance
    abuse, and to provide related housing and child-care services.
    Effective implementation of the nation's welfare-to-work reform will be
    placed in jeopardy if appropriate treatment is not coordinated with
    this initiative.
        A second step in achieving parity of coverage is to expand the
    scope of covered treatment to include the full continuum of services
    necessary to achieve appropriate outcomes and sustain recovery. This
    extends from inpatient detoxification and counseling to outpatient
    treatment and relapse prevention, and includes health and mental health
    services, educational and vocational programs, family treatment and
    support services. Treatment decisions, therefore, must be made using
    objective guidelines derived from research and clinical practice, and
    treatment must be sufficiently flexible to match the needs of the
    individual and the severity of the illness. Coverage must also provide
    for simultaneous treatment of substance abuse disorders and their
    physical and psychiatric comorbidities.
        For care providers, this means abandoning generic approaches to
    treatment in favor of more individualized therapies. Research indicates
    that the longer an individual remains in treatment, the better the
    results. The course, length, intensity and type of treatment in any
    given case should be determined based on individual diagnosis and
    clinical necessity, as determined using objective guidelines. Any
    limits on treatment days, visits or payments should be made based on
    appropriate principles as with other chronic diseases. For example,
    some patients need inpatient care for part of their recovery. These
    individuals shouldn't be required to ``fail'' in other treatment
    settings first before being placed in the most appropriate level of
    care.
    B. Parity in capacity
        To make addiction treatment the equal of treatments for other
    chronic diseases, treatment capacity must also be enhanced. Capacity
    for providing treatment must be expanded to meet the needs of both the
    private and public systems.
        At our panel's public hearing in Chicago, witnesses from both the
    private and public treatment systems testified to the limited access to
    available treatment slots. In Illinois alone, in 1996, there were an
    estimated 764,000 people in need of treatment, but the state could
    accommodate only 116,000. At any one time in Illinois, there is an
    active list of 1,500 individuals waiting for treatment. No one knows
    how many others gave up or never even tried.
        This lack of capacity for substance abuse treatment exists in stark
    contrast to the medical system's capacity to treat other diseases. If
    you fell this morning and needed your hip replaced, you could have it
    done this afternoon. But if you suffered relapse of an addiction, you
    might have to wait four weeks before getting help.
        Expanding coverage of substance abuse treatment would go a long way
    toward expanding capacity. Just as supply rises to meet demand, more
    money for treatment services would result in wider availability of
    services. But waiting for the market to respond to the demand would
    take time, and even then would require new staff, more training and
    constructing new facilities.
        Even as we seek to expand capacity, we must recognize that
    treatment resources are likely to continue to lag behind demand for
    years. Unless and until there are sufficient resources to meet demand,
    we must come up with a plan to better allocate existing treatment
    resources. In effect, we must develop a triage system, parsing out
    resources to those most in need.
    C. Parity in access
        The third greatest obstacle to getting treatment for those who need
    it is access. High cost and limited capacity, of course, are themselves
    barriers to access, but other barriers exist as well. Among them:
      --A lack of timely treatment. When a client presents for
            detoxification, immediate services should be available. This
            requires the elimination of waiting lists and of delays in
            authorizing treatment.
      --A lack of geographic proximity. This is an obvious problem in many
            rural communities, but even in cities, whole neighborhoods may
            be without any treatment services, may lack services that match
            the need, or may be unable to reach treatment due to inadequate
            public transportation.
      --A lack of linguistic, cultural, ethnic or gender competence.
        Treatment must be made linguistically, culturally, geographically
    and psychologically accessible. This means that every community should
    have access to a full range of treatment services. This does not mean
    that all services must be provided within the community; only that
    those in the community have somewhere nearby to turn for meeting their
    needs. Emergency treatment and detoxification services should be
    available around the clock for all citizens, regardless of ability to
    pay. Treatment staff must be trained to make their services easy to use
    and understand. They must be trained about issues of culture, ethnicity
    and gender, and they must be prepared to provide treatment in the
    client's dominant language.
        A significant factor in ensuring access to substance abuse
    treatment is its integration into the health and mental health care
    systems. Screening for, assessing and intervening in substance abuse
    should be part of general medical and mental health practice. Most
    importantly, substance abuse must be recognized as a primary disease
    and all primary-care physicians, nurses, psychologists and social
    workers must be trained to identify substance abuse--and the children
    of substance abusers--and to order appropriate referral. We must reach
    a point in our perception of this disease where heath and mental health
    care providers understand that failure to diagnose it under some
    circumstances would be considered malpractice. Once again, the business
    sector is ideally situated to demand substance abuse screening from its
    health providers. Treatment of addiction at any stage is economical for
    employers, but the earlier it is diagnosed, the more likely treatment
    is to be successful.
        Hovering over all of this is the stigma of substance abuse.
    Addicted people are judged to be bad, weak-willed, and often criminal.
    Many people either do not understand, or reject, the biological basis
    of the addiction. We take what is at essence a health problem and write
    it off as moral failure. We rely on the criminal justice system for
    solutions. We pass off substance abuse as someone else's problem, when
    in fact it touches all of us.
        In conclusion, Mr. Chairman, no matter what we may think about
    people who are dependent on or who abuse alcohol or drugs, we are wrong
    to push them aside. Substance abuse hurts everyone, if not directly,
    then indirectly through higher crime, unnecessary health care expenses,
    added law enforcement costs, lost workplace productivity and personal
    and family hardship.
        The solution to our nation's drug and alcohol problem is for public
    policy leaders to recognize alcoholism and addiction for what they
    are--chronic diseases, with biopsychosocial causes and manifestations,
    whose prevalence has created a public-health crisis--and to respond
    appropriately by making treatment broadly available to all who suffer
    from them. Such policies would have immediate and far-reaching effects,
    not only in reducing substance abuse and improving health, but also in
    making our communities safer, lowering our taxes, improving workplace
    productivity and reducing health care costs.
        By ``treatment,'' we mean the broadest sense of the word--a
    continuum of care that begins with diagnosis and access to appropriate
    behavioral, pharmacological and spiritual care, but that continues on
    to support the recovering addict in training for work, completing
    school, finding housing, and restoring families. To achieve this
    requires the full support of the community, assisted by federal, state
    and local services and resources coordinated across governmental and
    institutional lines. For communities that make this effort, the payoff
    in improving everyone's lives will be well worth the effort.
        I thank you, Mr. Chairman, for this opportunity to again offer
    remarks to this subcommittee. I would like to close my statement by
    offering the six recommendations of our panel, and provide the names of
    the distinguished colleagues who have worked with me to prepare and
    present them to communities across the country.
        I have also directed that our final report, Treatment for
    Addiction: Advancing the Common Good , be provided to each member of
    this subcommittee. If I, or Join Together, based at the Boston
    University School of Public Health, can provide additional information,
    I hope you and your staff will not hesitate to call upon us.
                                     0_____

         Prepared Statement of Cyrus M. Jollivette, Vice President for
                   Government Relations, University of Miami
        Mr. Chairman and Members of the Subcommittee: I am pleased to
    submit testimony on behalf of the University of Miami (UM) and Florida
    State University (FSU). Both of the institutions have long enjoyed your
    support, and my colleagues in Florida are deeply appreciative of your
    leadership, Mr. Chairman, and the Subcommittee's confidence. We
    recognize that you and your colleagues on the Appropriations Committee
    face difficult choices as you prepare for the Subcommittee's priorities
    for fiscal year 1999 and we know that you will continue to make the
    difficult choices with the best interests of the nation guiding your
    decisions. My colleagues and I hope that you will find it possible to
    fund the important initiatives detailed below in the fiscal year 1999
    appropriations cycle.
        We would like to highlight two high priority areas: the Risk
    Assessment and Intervention Lyceum proposal--a collaboration between
    the University of Miami School of Medicine and Florida State
    University; and the Minority Cancer Prevention, Control, and Treatment
    Initiatives. A copy of the statement by Dr. Clyde McCoy, Professor and
    Chair of the Department of Epidemiology and Public Health at the
    University of Miami, on behalf of the collaboration and the risk
    assessment proposal, is attached. We would once again thank the
    Subcommittee for the opportunity to testify and request your favorable
    consideration of the proposal.
    High priority minority cancer prevention, control, and treatment
            initiatives
        The Miami-based resources of the University's School of Medicine,
    the Sylvester Cancer Center, one of the oldest and for decades the only
    comprehensive cancer center in Florida, its Courtelis Research and
    Treatment Center, the Batchelor Children's Center Bone Marrow and Cord
    Blood Transplantation Pediatric Oncology Project, and its Early
    Detection Breast Cancer Program (EDP) Consortium in collaboration with
    Jackson Memorial Hospital make this concentration and coordination of
    resources, facilities, staff, research, education and treatment one of
    the most unique resources in the country in confronting and combating
    cancer in minority and ethnically diverse populations. They have an
    absolutely unique patient and data base, unparalleled in the nation for
    minority cancer. They have developed a three-part, comprehensive
    initiative designed to assist in minority cancer control, prevention
    and treatment and are requesting $7 million for this three-part
    campaign: (1) Model Minority Cancer Prevention and Control Program; (2)
    The Pediatric Oncology and Bone Marrow/Cord Blood Transplantation
    Initiative; and (3) the Early Detection Breast Cancer consortium. We
    urge the Department of Health and Human Services (HHS) to implement
    this far-reaching, multi disciplinary and coordinated campaign in
    minority cancer, control, treatment and prevention.
        (1) Model Minority Cancer Prevention and Control Program.--The
    University of Miami School of Medicine, its Sylvester Cancer Center--
    which served for decades Florida's only comprehensive center--the
    Courtelis Center for Research and Treatment and the Bachelor Children's
    Center together possess a set of unique resources which can be brought
    to bear in cancer prevention, treatment, and control, especially among
    minority populations.
        They have a unique, and unparalleled ethnically diverse, minority
    patient population base which affords them, in turn, a unique source of
    data, incidence trends and treatment outcomes information, prevention
    and control guidance that can be of invaluable assistance to our
    national health and research agencies. There is not other concentrated
    patient base that would afford the nation's research agencies with such
    a precise mirror of minority and ethnically diverse populations. We
    propose to maximize the effectiveness of the work with this critical
    population base by expanding and further targeting our work in Early
    Detection, Primary and Secondary Prevention Research, Genetic and
    Molecular Epidemiology Research, and by expanding the overall capacity
    of The Courtelis and Sylvester Centers.
        We seek $3.5 million in targeted support for the Model Minority
    Cancer Prevention and Control Program through the National Cancer
    Institute and the Office of the Minority Research. We would
    respectfully request the following language:
        ``The Committee notes the unique resources of the Sylvester Cancer
    Center and The Courtelis Center for Research and Treatment in focusing
    on minority and ethnically diverse patient populations. Indeed, there
    is probably no other data as comprehensive on both African- American
    and Hispanic cancer patients. The Committee recommends that the NIH
    consider entering into a $3.5 million cooperative agreement with these
    centers to fully access and maximize the effectiveness of this critical
    resource in cancer prevention and control.''
        (2) The Pediatric Oncology Initiative.--The second and interrelated
    initiative is the Miami-based Batchelor Project in Pediatric Bone
    Marrow and Cord Transplantation. As noted above, the concentration of
    cancer research and treatment facilities and resources at the Miami
    School of Medicine, make us one of the leading sites in the nation, in
    our work on Minority Pediatric cancer control and treatment. Two-thirds
    of all patients are African-American and Hispanic. Our cord blood
    supply for minority children is virtually unparalleled.
        We are requesting $2 million in fiscal year 1999 funding for this
    component.
        (3) Minority Breast Cancer Initiative/The Early Breast Cancer
    Detection Program (EDP).--Breast cancer is a problem of major public
    health importance in Miami-Dade County. While late stage breast cancer
    disease decreased by 21 percent in Florida, late stage breast cancer
    disease increased by 32 percent in Miami-Dade County. Thirty (30)
    percent of the 600,000 female cancer cases anticipated in 1998 will be
    breast cancer; and one in every 8.5 cases of breast cancer in Florida
    will be diagnosed for Miami-Dade County residents. Breast cancer has
    become a public health crisis.
        Working with the Sylvester Foundation and Sylvester Center, Jackson
    Memorial Medical Center, the University of Miami School of Medicine, a
    consortium of primary health care providers and the American Cancer
    Society, the University of Miami-based EDP seeks $1.5 million per year
    for five-year massive and comprehensive effort to more than triple the
    screening capacity of the EDP consortium.
        We seek to achieve at least 50 daily screenings, and reach in
    excess of 12,500 women each year. Indeed, medically under-served
    minority women who are not screened for breast cancer are at extremely
    high risk concerning the rapid progression of this disease. Breast
    cancer screening has been proven to identify early, smaller lesions
    which are more treatable and at lower cost and result in a higher
    quality of life. Mammography provides an example of a proven technology
    for reducing late stage and increasing early stage breast cancer
    detection, and the University of Miami/Jackson Memorial Medical Center
    is effectively delivering this technology especially among the
    medically under-served.
        However, the ability of the current Early Breast Cancer Detection
    Program (EDP) to meet the Miami-Dade County demand is deteriorating
    quickly due to the lack of funds. The waiting time for women seen by
    the EDP at some primary health care centers has increased to six
    months. There are more than 150,000 medically under-served women over
    the age of 40 in Miami-Dade County who are potentially in need of the
    UM/JMMC early detection program services. Under our proposal, the
    number of women screened from an average of 15 per day to 50 per day--
    or 12,500 per year.
    The Cuban Heritage Collection
        Finally, the University of Miami is seeking $4 million over five
    years from the Department of Education for a unique and historic
    initiative: The Cuban Heritage Collection. The University proposes to
    create a first-ever, multi-media resource of Cuban research and
    training materials. The Cuban Heritage Collection will be housed in an
    area specifically designed to permanently store, display, and provide
    non-destructive access to all aspects of Cuban history and culture,
    especially as it is reflected in the United States, and will be based
    on the University's existing, large and valuable Cuban collection. The
    Cuban Heritage Collection will have six major components:
      --(1) A Scholarly Collection of National and International Standing;
      --(2) A Broad Spectrum Collection reflecting the History and Culture
            of Cuba and Cubans;
      --(3) A Working Collection for Teaching, Learning, and Research;
      --(4) A Multi-Media and Multi-Format Collection;
      --(5) An Archive for Permanent Housing of Unique Materials; and
      --(6) A Collection Housed in a New Facility reflecting Cuban Culture.
            The University proposes to secure $1 million in matching funds
            from the State and private sources.
                                     ______

     Prepared Statement of Clyde B. McCoy, Professor and Chair, Department
     of Epidemiology and Public Health, Director, Health Services Research
                                     Center
        Mr. Chairman and Members of the Subcommittee: I appreciate the
    opportunity to present testimony on behalf of the University of Miami
    as well as our in-state research and education partner, Florida State
    University. We are deeply appreciative of your leadership, Mr.
    Chairman, and of the Subcommittee's confidence. We are especially
    appreciative and deeply thankful for the supportive language from your
    Subcommittee over the past two years and look forward to your continued
    support for this unique collaboration in fiscal year 1998. I fully
    understand and appreciate that at no time in the past have you and your
    Congressional colleagues faced more challenges and more constraints,
    thus we appreciate even more your willingness to consider the important
    and unique research in education partnership between two of our more
    prominent Universities. As the former campaign manager for Tom Luken,
    who served on the Hill for over 18 years, I was personally impressed
    with the dedication, commitment, and hard work that all of you put into
    serving this great country of ours. We feel strongly that the unique
    challenges that you face have never been greater than at this
    particular time in history, but there has never been a time in history
    when there has been a greater opportunity for the world to share in the
    accumulation of knowledge that could have healing and unifying
    consequences for all human populations. People around the world thirst
    and hunger for our democratic way of life which, in large part, is
    based upon scientific enterprise, which allows us to be a knowledge
    based and democratic society which prizes knowledge and objectivity,
    for supporting the health and economy of our political processes. We
    scientists are most appreciative to you for funding the most science-
    based society ever.
        The University of Miami and Florida State University Risk
    Assessment and Intervention Consortium is dedicated to reducing the
    medical and social costs of health care through the development of
    cost-efficient, effective delivery interventions. All scientific
    enterprise faces major challenges today and we feel the proposed
    University of Miami/Florida State University Risk Assessment and
    Intervention Consortium will bring together scientists from a broad
    array of traditional research disciplines to face these challenges in a
    transdisciplinary and timely manner.
        In the last 50 years, tremendous strides relative to health and
    environment have been made in the biomedical, physical, psychological,
    economic, and social sciences to improve the world's health and
    environment. It now appears that the next major breakthroughs for
    improving quality of life and reducing socioeconomic costs lie at the
    intersections between scientific disciplines and not at the core of
    these sciences. Presently, these various sciences and the institutes
    that fund them, work too independently from one another to optimally
    address the broad and inter-related nature of these problems, and most
    scientists do not fully consider specific policy implications.
    Furthermore, traditional scientific research does not allow for the
    investigation of the most threatening risks in the most timely manner.
    My own scientific research is somewhat unusual in that I have conducted
    research and published in three broad disciplinary areas of cancer,
    HIV, and substance abuse. This perspective of more than 25 years made
    me yearn for a greater scientific enterprise that allows us to reach
    across these various disciplines in order to investigate problems more
    quickly and to apply the findings in a much more rapid manner.
        We feel that our Consortium will provide a partnership between
    science and government that will assure the most optimal and cost-
    effective quality of life. The Consortium will identify individuals and
    risk groups that are at risk for specific adverse conditions, assess
    the manifestations of their risk and associated mechanisms and then
    communicate information about possible interventions and regulations to
    address such risks.
        Therefore, we feel that the model most capable both scientifically
    and administratively of combining disciplines to address policy
    implications for intervention, regulation, and control is that of
    compliance risk assessment. Risk assessment, as a field, incorporates
    scientists from a wide range of disciplines and directs their attention
    specifically to controlling, regulating, or intervening with
    populations at risk. At present, there is no identifiable, broad-based
    institution we know of that concentrates solely upon the full and
    complex range of risks utilizing multi- disciplinary and
    transdisciplinary science. The Consortium will be in a perfect position
    to improve quality of life, decrease mortality and morbidity and will
    also, through identifying risks earlier and by intervening earlier, be
    in a position to save many billions of dollars through the application
    of knowledge about early intervention.
        We know that intervention with effective prenatal programs saves a
    tremendous amount of money that otherwise would be spent on children
    after birth. The same could be said for early intervention at other
    points throughout the life cycle. Our own personal research experiences
    with the early detection of breast cancer have demonstrated through the
    screening of over 30,000 medically underserved women using an efficient
    mobile van visiting more than 12 primary health care centers that these
    programs not only save lives, but also save dollars. As is true for
    cancer, we already possess a great deal of knowledge that could be used
    to develop interventions as well as preventive strategies for many
    other diseases that present tremendous challenges throughout the world,
    such as HIV. Applying this accumulated knowledge could effect savings
    of billions of dollars for state, local, and national government, not
    only in the health arena, but also in preventing social and health
    pathologies of juveniles and young adults, as well as middle aged and
    older citizens. Early interventions would affect costs savings not only
    for public health systems, but also for the juvenile and criminal
    justice systems, the educational and welfare systems, as well as to
    private insurers and non-profit and volunteer organizations, many of
    which support interventions. With the increasing costs of
    institutionalization and public subsidies, every person whom we prevent
    from being institutionalized or dependent on public subsidies will not
    only save governmental dollars, but will also add to the economy of the
    country. Just as important, the quality of life for these individuals,
    their families, and their communities, as well as society at large,
    will be improved. It is becoming ever more apparent that we, as a
    nation, cannot afford to ignore prevention and early intervention
    strategies since crisis management is much too costly in terms of
    quality of life and unnecessary expenditures of dollars.
        Our proposed organization will be cross interdisciplinary
    boundaries to accomplish goals that, for the most part, presently are
    hampered by too much independence of the various sciences and
    institutes conducting such science. We, however, have an opportunity to
    recognize the enviable talents of academic scientists within our broad-
    based risk consortium which will forge novel and, hopefully, permanent
    collaborations between universities and policy makers.
        We thank you very much for your valuable time and stand ready to
    serve you in any way possible.
                                     ______

     Prepared Statement of the University of Medicine and Dentistry of New
                                 Jersey (UMDNJ)
        We respectfully present testimony of the University of Medicine and
    Dentistry of New Jersey (UMDNJ), the largest public health sciences
    university in the nation. The UMDNJ statewide system is located on five
    academic campuses and consists of 3 medical schools and schools of
    dentistry, nursing, health related professions and biomedical sciences.
    It also comprises a University-owned acute care hospital designated as
    the State's Level One Trauma Center, three core teaching hospitals, an
    integrated behavioral health care delivery system, a University-owned
    managed care network and affiliations with more than 100 health and
    educational institutions statewide. No other institution in the nation
    possesses resources which match our scope in higher education, health
    care delivery, research and community service initiatives with state,
    federal and local entities.
        We appreciate this opportunity to bring to your attention some of
    the University's priority projects which we believe are consistent with
    the mission of this committee. The following is an outline of each of
    these initiatives for your consideration.
                     international center for public health
        The International Center for Public Health is a strategic
    initiative that will create a world class, infectious disease research
    and treatment complex in University Heights Science Park, Newark, New
    Jersey. Science Park is located in a Federal Enterprise Community
    neighborhood. The International Center will have substantial local,
    regional, national and international impact as it addresses many
    critical social, economic, political and health related issues. The
    Center is a $78 million anchor project that will launch the second
    phase of a 50-acre, $350 million mixed-use urban redevelopment
    initiative, University Heights Science Park. The facility will total
    161,600 square feet and house three tenants: The Public Health Research
    Institute (PHRI), the University of Medicine and Dentistry of New
    Jersey's (UMDNJ) National Tuberculosis Center, one of three Federally
    funded TB centers, and the UMDNJ New Jersey Medical School Department
    of Microbiology & Molecular Genetics. The International Center for
    Public Health is a priority project for UMDNJ, Rutgers University, the
    New Jersey Institute of Technology, Essex County College and the City
    of Newark.
        The core private tenant for the International Center is PHRI. PHRI
    is an internationally prestigious, 57-year-old biomedical research
    institute that conducts a broad range of infectious disease and public
    health research. A major PHRI research focus is the study of antibiotic
    resistance to life threatening bacterial organisms, and the development
    of new antibiotics. Among its many accomplishments over the years, PHRI
    has contributed to the development of smallpox vaccine, developed a new
    diagnostic assay for influenza, conducted early experiments on
    oncogenes, cloned the gene responsible for toxic shock syndrome, and
    identified the multi-drug resistant TB strain ``W''. PHRI's current
    research centers on molecular pathogenicity, drug discovery, drug
    resistance, diagnostic and vaccine development, and gene expression.
    Scientific disciplines include virology, immunology, biochemistry,
    genetics, cell and structural biology, and regulation of cell
    development. Presently, PHRI supports a staff of 110, including 20
    Principal Investigators. These numbers will double in the move to the
    International Center.
        UMDNJ will be the primary medical center linkage and academic
    affiliation for the Public Health Research Institute. The New Jersey
    Medical School National Tuberculosis Center at UMDNJ, one of only three
    model Tuberculosis Prevention and Control Centers in the United States
    funded by the CDC, will add an important clinical component to the
    International Center, since many TB patients also manifest other
    infectious diseases. The TB Center was founded in 1993 as a response to
    the national resurgence of antibiotic resistant tuberculosis strains.
    At the time, Newark had the nation's second highest rate of TB cases
    for a major city. Rounding out the International Center's initial
    tenants will be the UMDNJ-New Jersey Medical School's Department of
    Microbiology & Molecular Genetics. The Department's relocation will add
    a staff of 100 to the Center's critical mass of microbiology research.
    Currently the 17-member faculty conducts research in control of cell
    proliferation; cellular aging; transcriptional, post-transcriptional,
    and transcriptional regulation; mutagenesis; DNA replication and
    recombination; chromosome structure and segregation; human molecular
    genetics; and molecular pathogenesis of viruses, bacteria and
    parasites.
        Together PHRI, the National TB Center and the Department of
    Microbiology & Molecular Genetics are creating a world class research
    and treatment complex that will have substantial local, regional,
    national and international impact. Other collaborators in the
    development of the International Center include the New Jersey
    Department of Health & Senior Services (NJDHSS) and the pharmaceutical
    industry. Responsible for overseeing all statewide public health
    initiatives, NJDHSS will contract with the International Center to have
    cutting edge molecular epidemiology services provided to the State of
    New Jersey. Expanding the strategic use of molecular epidemiology to
    direct public health activities will facilitate prompt identification
    and containment of emerging and re-emerging pathogens. New Jersey's
    major biomedical companies will also participate in the International
    Center. An infectious disease consortium will be developed to serve as
    a forum for disseminating fundamental research on the underlying
    molecular processes of infectious disease organisms. This research will
    contribute to pharmaceutical industry development of new drug therapies
    for antibiotic resistant microorganisms. Private industry R&D
    facilities contiguous to the International Center are also being
    explored.
        The International Center for Public Health (ICPH) is a creative and
    unique public/private partnership located in University Heights Science
    Park, Newark, NJ, that will combine: infectious disease research
    pharmaceutical industry participation, international, State and
    regional public health collaborations, high school urban and minority
    science education initiatives, urban economic and community
    redevelopment, and high technology job creation in a federally
    designated Enterprise Community.
        Through the leadership and direction of the Governor Christine Todd
    Whitman, a Memorandum of Understanding (MOU) was signed between the
    State of New Jersey, UHSP, UMDNJ and PHRI in October 1997. The MOU
    commits $60 million of State loan and grant funds toward development of
    the $78 million International Center for Public Health. Science Park is
    working closely with the New Jersey Economic Development Authority,
    through whom project bonds will be issued and 14-acres of land
    acquired. Presently the Science Park partners and International Center
    for Public Health tenants are seeking the remaining $16 million from
    Federal and private sources during 1998. Groundbreaking is scheduled
    for March 1999.
        University Heights Science Park is requesting $3 million from the
    Senate Appropriations Subcommittee on Labor, Health & Human Services
    and Education for fiscal year 1999 to support the Phase II development
    of Science Park: the construction of the International Center for
    Public Health. Such support will leverage Phase II development that
    totals $138M, and creates nearly 3,000 direct and indirect construction
    and permanent technology jobs. These funds will be used specifically
    for construction related project costs.
                      child health institute of new jersey
        Disorders of health affecting infants and children exact a terrible
    toll, in both human suffering and economic impact, on the child, family
    and the community. Consequently, State and Federal public policy
    prioritizes efforts to prevent or treat disorders of infancy and
    childhood. The prevention of conditions such as mental retardation,
    muscular dystrophy, sickle cell disease or cystic fibrosis has nearly
    incalculable benefits to society. Neither New Jersey nor New York hosts
    a research center designed and developed specifically to address issues
    of child health.
        The University of Medicine and Dentistry of New Jersey- Robert Wood
    Johnson Medical School (UMDNJ-RWJMS) proposes to develop the Child
    Health Institute of New Jersey (CHINJ), a comprehensive biomedical
    research center focused on the health and wellness of children. In this
    program, medical researchers will direct efforts towards the prevention
    and cure of environmental, genetic and cellular diseases of infants and
    children.
        The Institute will be located in New Brunswick and linked
    physically and programmatically with both UMDNJ-RWJMS and the
    Children's Hospital at Robert Wood Johnson University Hospital (RWJUH).
    This organization reinforces the relationship between essential
    biomolecular research and the treatment, prevention and cure of
    disorders of infancy and childhood. Locating the Child Health Institute
    in New Brunswick promotes the development of new partnerships among the
    Institute, the Medical School, the teaching hospitals affiliated with
    UMDNJ-RWJMS, and with the multinational pharmaceutical, biotechnology
    and chemical interests throughout New Jersey.
        The CHINJ will act as a magnet for additional growth in research
    and healthcare program development in New Brunswick and New Jersey. New
    Brunswick provides a central location in the state that offers ease of
    access and proximity to major highway systems and mass transit; this is
    essential, as no similar program exists in either New York or New
    Jersey. The state of New Jersey, which has significant concerns in the
    areas of infant mortality, neonatal HIV infection and pediatric cancer,
    will benefit directly and enormously from the unique presence and
    impact of the Child Health Institute of New Jersey.
        The Institute will focus research on the molecular and genetic
    mechanisms which direct growth, wellness, and disease. Examples of the
    Institute's research foci include: the identification and functional
    analysis of genes contributing to developmental disabilities and
    abnormal development; developmental pharmacology relating growth and
    maturation to the processes that regulate drug metabolism,
    developmental toxicity, and resistance or susceptibility to toxic
    agents; genetic and environmental influences on developmental
    immunology; the molecular mechanisms underlying brain growth and
    development; and tissue degeneration and regeneration.
        The Child Health Institute of New Jersey builds on existing
    significant strengths in genetic, environmental, and neurosciences
    research within the UMDNJ-Robert Wood Johnson Medical School and
    associated joint UMDNJ-Robert Wood Johnson Medical School-Rutgers
    University research institutes. For example, the Environmental and
    Occupational Health Sciences Institute (EOHSI) is a National Institute
    of Environmental Health Sciences (NIEHS) recognized center of
    excellence which investigates environmental influences on normal and
    disordered functions; The Cancer Institute of New Jersey (CINJ), a
    National Cancer Institute-designated Clinical Cancer Center, studies
    disordered cell growth; The Center for Advanced Biotechnology and
    Medicine (CABM) characterizes gene structure and function.
        The proposed Child Health Institute of New Jersey, which is
    formally chartered with defining developmental mechanisms, will
    complement and focus developmental programs within these Institutes and
    other areas of the University of Medicine and Dentistry of New Jersey.
        The University of Medicine and Dentistry of New Jersey seeks a $5
    million infrastructure development and targeted program assistance for
    the Child Health Institute of New Jersey. As indicated above, the
    program has already received initial funding support from Johnson &
    Johnson and the Robert Wood Johnson Foundation in the amount of
    $850,000. Efforts to obtain additional private support are underway and
    will be ongoing.
    The Dean Gallo Prostate Cancer Institute
        Prostate cancer is a particularly devastating problem in New
    Jersey. With the highest population density in the country, at 1,000
    people per square mile, we are ranked 10th of all the States in
    mortality prostate cancer. African Americans diagnosed with prostate
    cancer are twice as likely to die from it, and New Jersey is ranked 8th
    in the nation for this disease in this ethnic group. There is no
    available curable treatment for prostate cancer once it recurs, and
    when it does, it is uniformly fatal. The objectives of the Dean Gallo
    Prostate Cancer Institute are:
      --Regionally, to provide the highest standard of care, including NCI-
            approved trial therapies, to all residents of the area who
            suffer from prostate cancer. In addition, we will provide
            outreach and education in the community to generate early
            detection of the disease.
      --Nationally, to make significant contributions to the nation's war
            on this disease through basic science discoveries on how
            prostate cells become malignant, ways to prevent transformation
            to cancer, how prostate cancer cells evade therapies, and the
            development of novel treatments for advanced stages of the
            disease.
        The Cancer Institute of New Jersey (CINJ) is the only NCI-
    designated Clinical Cancer Center in the State. It is affiliated with
    the University of Medicine and Dentistry of New Jersey (UMDNJ), and is
    located at that institution's Robert Wood Johnson Medical School in New
    Brunswick, New Jersey. CINJ has over 200 members including 35 staff
    physicians, physician/scientists, and basic science researchers.
    Because of the devastating problem of prostate cancer in the state and
    in the nation, CINJ has determined to make the development of a cure
    for this disease one of its major goals. To accomplish this we have
    initiated the development of the Dean Gallo Prostate Cancer Institute,
    named for Congressman Dean Gallo, who was a tireless supporter of the
    people of New Jersey. He believed in making our state stronger by
    collaborating with his colleagues to secure federal funding for
    initiatives that improve the quality of life for all citizens.
    Tragically, he died of prostate cancer in 1994 after being diagnosed in
    an advanced stage of the disease.
        CINJ is physically located in New Brunswick but has statewide
    presence through its hospital partners and affiliates. CINJ has grown
    rapidly through the cooperative efforts of these partners and
    affiliates, generous grant support from the Robert Wood Johnson
    Foundation, Johnson & Johnson, as well as many other New Jersey based
    foundations and corporations.
        To address the specific portion of our objective to make treatment
    available to all area residents, the Dean Gallo Prostate Cancer
    Institute will be incorporated into the statewide network of affiliated
    hospitals and providers. This network allows CINJ to facilitate
    treatments and research for prostate cancer. Patients with advanced,
    incurable, prostate cancer may therefore be enrolled into clinical
    trials at several locations throughout the state. This not only allows
    us to treat more patients with novel therapies but also increases our
    ability to rapidly evaluate these therapies. CINJ is also working with
    local clinics and agencies to develop treatment plans for uninsured
    sufferers of prostate cancer.
        The proposed budget for the Gallo Institute is $9.4 million to be
    spent over a 5-year period. We expect to raise substantial funds
    through private, corporate, and other resources. We therefore seek an
    allocation of $5 million to facilitate the establishment of this
    important resource. These funds will not be used for bricks and mortar,
    but to secure the resources necessary to conquer this disease.
    Institute for Disability Prevention and Wellness
        Today, 1 out of 7 Americans--38 million people--have a disability;
    approximately 30 million Americans live with chronic pain. Millions
    suffer limited mobility brought about by injury, disease, and the
    natural process of aging. The effects are staggering: job related
    disorders themselves account for 1.9 billion days of restricted
    activity, 600 million days of bed rest, and $13 billion in health care
    costs. The impact of disability increases with the years, so that 40
    percent of the population over age 65 is affected.
        The University of Medicine and Dentistry of New Jersey--School of
    Osteopathic Medicine (UMDNJ-SOM) proposes to develop the Institute for
    Disability Prevention and Wellness (IDPW), an integrated basic science
    and clinical research program focused on the areas of pain and
    mobility. Two age groups are specially targeted: The working age adult,
    for whom these problems impact economic productivity, and the geriatric
    population particularly at the end of life for whom the quality of life
    can be improved by small changes in functional abilities.
        The Institute will be located in Stratford New Jersey and linked
    physically and programmatically with the UMDNJ-SOM, particularly
    programs in primary care, geriatrics, and basic science. It will focus
    on clinical and translational research and on development of clinical
    researchers with a dedication to primary care, and prevention and
    treatment of disability. By developing preventive models and new
    standards of care, it will arm primary care clinicians with the most
    recent knowledge and up to date methods to diagnose and treat chronic
    conditions at the most effective and least expensive stage. It will
    also allow these primary clinicians to effectively counsel their
    patients on avoidance of injury and disability by adoption of lifestyle
    practices fostering health and wellness. Through this unique emphasis
    on improving primary care, the Institute has the potential to influence
    the course--and the cost--of healthcare well into the next century.
      --To establish a center to prevent and reduce disabilities that
            impact mobility and physical functioning. In the osteopathic
            tradition, the center will use intervention techniques drawn
            from all aspects of medicine, including manual therapy as well
            as medication and exercise.
      --To promote primary and secondary wellness through lifestyle and
            behavioral modification, thereby reducing the morbidity,
            mortality and disability associated with chronic disease. For
            example, by developing new methods of treating muscle weakness
            or fatigue the Institute will be able to develop programs that
            will be applicable to persons who suffer from a wide variety of
            conditions.
      --To improve physician education at the medical student, resident,
            and faculty level by maintaining a link between clinically
            relevant problems and basic and applied research. Involvement
            in clinical trials is a key to the educational effort, as well
            as to the development of the treatments themselves.
      --To provide preventive services for patients suffering from chronic
            disease with the emphasis on quality of life and end of life
            issues.
      --To establish an extramurally funded research program, drawing on
            State and Federal as well as private resources.
        We seek $4 million to develop an Institute for Disability
    Prevention and Wellness that will focus on education, research and
    training in geriatrics, primary care and osteopathic medicine.
                                     ______

            Prepared Statement of the National Hemophilia Foundation
        Thank you for the opportunity for the National Hemophilia
    Foundation (NHF) to submit testimony to the Chairman and Members of the
    Appropriations Subcommittee on Labor, Health and Human Services,
    Education, and Related Agencies. NHF is a national voluntary health
    organization dedicated to improving the health and welfare of people
    with hemophilia, von Willebrands disease, and other bleeding disorders.
    The federally-funded hemophilia and hematologic programs provided for
    in the annual Labor, Health and Human Services Appropriations Bills are
    of great importance to the hemophilia community and to the general
    public who rely on the safety of the nation's blood supply. NHF
    appreciates the Committee's continuing support in advancing the
    research, treatment, and consumer-based patient outreach needs of the
    hemophilia community.
        Hemophilia is a lifelong hereditary blood clotting disorder
    affecting an estimated 20,000 persons in the United States. Throughout
    their lives, people with hemophilia are dependent on clotting factor to
    supply a missing protein, which allows their blood to clot normally. As
    such, the hemophilia community continues to be the first marker in the
    event of any complication or virus that contaminates the blood supply.
    Historically, the hemophilia community has been impacted by a number of
    viruses through the blood supply. While HIV has been the most
    devastating, other viruses continue to plague the hemophilia community,
    including hepatitis.
        Last year the Committee included in its fiscal year 1998 report a
    series of actions to be taken by the Public Health Service agencies to
    improve surveillance, research, patient notification, and outreach
    efforts in addressing blood safety concerns. Programs funded by the
    Committee also provided for hemophilia and bleeding disorder programs
    aimed at HIV/AIDS risk reduction and clinical studies, prevention of
    the complications of bleeding disorders, and research for a cure for
    hemophilia and related disorders.
                 advancing hemophilia research and blood safety
        With regard to programs appropriated under the Labor, Health and
    Human Services, Education Appropriations Bill, NHF strongly believes
    that research efforts should continue to:
      --Develop gene therapy technologies for hemophilia as an alternative
            to blood-based products,
      --Strengthen our knowledge about the treatment of and prevention of
            the complications of hemophilia, von Willebrands disease, and
            other bleeding disorders, and
      --Substantially improve surveillance, patient notification, and
            outreach efforts to address blood safety concerns.
                  gene therapy for the treatment of hemophilia
        For persons with hemophilia, gene therapy offers a potentially much
    less expensive treatment option that would end decades of dependence
    upon blood-derived products. In a recent report to Congress, the
    National Institutes of Health (NIH) highlighted hemophilia as one of
    the diseases most likely to be treatable through gene therapy and as a
    potential model of how gene therapy may be utilized to treat other
    genetic disorders.
        Over the past few years, the House and Senate Labor, Health and
    Human Services, Education Appropriations Subcommittees have encouraged
    the National Heart, Lung, and Blood Institute (NHLBI) to continue
    support for hemophilia gene therapy research. This year NHF is
    requesting Appropriations support to:
      --NHLBI: Provide an additional $2.5 million, doubling the level of
            support for the hemophilia gene therapy program. This will
            allow not only for renewal but also expansion of the hemophilia
            gene therapy grant program; and provide funding of an biannual
            scientific conference to advance hemophilia gene therapy
            research.
      --NHGRI/NIDDK: Coordinate research efforts between NHLBI and the
            National Human Genome Research Institute (NHGRI) and the
            National Institute of Diabetes and Digestive and Kidney Disease
            (NIDDK), working with the National Hemophilia Foundation, to
            pursue research on gene expression and immunity needed to make
            gene therapy technology available to the hemophilia community.
                research to prevent complications of hemophilia
        Because of the hemophilia community's dependence on blood products,
    hepatitis C continues to be a serious ongoing concern. More than 80
    percent of all persons with hemophilia in the United States. have been
    exposed to hepatitis C through the use of clotting factor. NHF requests
    Appropriations language encouraging:
      --NIAID/NIDDK: Increased funding of research on hepatitis at the
            National Institutes of Allergy and Infectious Disease (NIAID)
            and NIDDK, including research on optimal treatment regimes,
            access to clinical trials, development of a vaccine, and
            improved diagnostic testing for hepatitis C, as well as studies
            on the impact of multi-drug therapy on the liver. Committee
            report language should indicate that concern regarding the
            impact of hepatitis C on the hemophilia community is a
            priority.
      --NHLBI: Continued research support on preventing the complications
            of hemophilia, von Willebrands disease, and other bleeding
            disorders.
                                  blood safety
        During the 1980's, over half of all persons with hemophilia in the
    U.S. were infected with HIV through the use of contaminated blood
    products. While blood products are now inactivated for HIV, blood
    products remain susceptible to viruses and pathogens.
        For the last two years, the House and Senate Appropriations
    Committees have included in their reports accompanying the Labor,
    Health and Human Services, Education Appropriations Bill and the
    Agriculture, Rural Development, Food and Drug Administration Bill, a
    series of actions to be taken by the Public Health Service to
    substantially improve surveillance, patient notification, and outreach
    efforts in addressing blood safety concerns. These directives have led
    to marked improvements in our nation's response to potential threats to
    blood safety.
        CDC: The Labor, Health and Human Services, Education Appropriations
    Subcommittees for several years have provided funding support for the
    Centers for Disease Control's (CDC's) hematologic and hemophilia blood
    safety initiative, including efforts in blood safety and the prevention
    of complications of hemophilia. NHF requests that an additional $1
    million be made available to:
      --Fully implement a nationwide surveillance system utilizing the
            network of hemophilia treatment centers and a serum bank to
            monitor, detect and warn of adverse events in the blood supply.
      --Establish a cooperative CDC/Food and Drug Administration (FDA)
            early warning system to ensure immediate investigation of and
            action on, any possible viral contamination in the U.S. blood
            supply or blood products.
      --Expand hematologic outreach for the prevention of the complications
            of hemophilia, von Willebrands, and other bleeding disorders.
        MCHB: NHF requests report language, calling for the Maternal and
    Child Health Bureau to maintain funding support for the 140 facilities
    that comprise the hemophilia treatment centers network in order to (a)
    sustain their treatment outreach to persons with hemophilia and (b)
    ensure their participation with CDC and FDA on blood safety
    surveillance and patient notification efforts.
        Thank you for the opportunity to provide this statement to the
    Committee.
                                     ______

      Prepared Statement of David Karlson, Executive Director, Society of
                           General Internal Medicine
        Good morning, before I go into my prepared remarks, I'm going to
    ask you to step back and to imagine yourselves 10 years from now, sick,
    with a chronic illness. You still have a lot of life ahead of you, and
    you want to spend as little of it as possible in the hospital. You are
    being cared for by a doctor who is in training today. But that doctor
    hasn't been taught to care for your special needs in a home or
    outpatient setting, and worse yet, doesn't have at his or her disposal
    evidence about the most appropriate treatment that will lead to the
    best outcome for your problem. That's a real scenario-one that will
    occur, unless we fund AHCPR and Title VII programs at a level that will
    let them do their job.
        I am pleased to be here today on behalf of the Society of General
    Internal Medicine, an organization representing the nearly 3,000
    physicians who are the primary care internal medicine faculty of every
    medical school and major teaching hospital in the United States. SGIM
    members prepare medical students, residents and others to be primary
    care doctors for the 21st century and they conduct research that
    improves primary care delivery and patient care.
        Today I'd like to talk with you about two programs, AHCPR and Title
    VII.
        As you probably know, AHCPR funds support scientific study of the
    health care delivery system, providing the knowledge base that enables
    consumers, providers, the managed care industry, and others to function
    optimally in the health care system. Title VII provides outpatient and
    community- based training for those in academic institutions around the
    country, permitting the up-to-date training of primary care physicians
    for the 21st century. We believe that is in the nations' interest to
    increase funding for both of these programs.
                               title vii program
        Let's talk first about health professions training. As you know,
    medical practice has changed drastically over the last two decades,
    moving from a primarily hospital setting to the outpatient arena, and
    it will change even more in the next 10 years. In our teaching, we
    struggle daily to teach through evidence, rather than anecdote. After
    all, you want your care to be based on evidence-not anecdote.
        Unfortunately, our primary way of funding graduate medical
    education-that is, through Medicare, provides little support for
    training outside the hospital. This is a major impediment to training
    physicians who are prepared to practice in current and future
    environments and manage the ever growing population of patients with
    chronic illness. The funding level only works well if we want to train
    most doctors to practice in the past.
        General Internal Medicine/Pediatrics Title VII programs provide the
    major source of funding primary care training, permitting us to prepare
    health care professionals for 21st century practice, and to train them
    to care for underserved populations, which will in all likelihood still
    be with us.
        SGIM is particularly proud of the track record of the Title VII-
    supported General Internal Medicine grant programs. Over 69 percent of
    HRSA-funded internal medicine program graduates go on to primary care
    practice after graduation--nearly twice the rate of internal medicine
    programs without Title VII funding. Further, over 40 percent of
    internists trained through Title VII-supported programs have
    established practices in medically underserved communities in the past
    two years. You should know that the appropriation for the General
    Internal Medicine program in fiscal year 1998 was insufficient to
    permit the funding of new or competing renewal applications. While we
    recognize that your support has allowed these programs to survive at
    all, we urge you to fund Title VII at a level that actually lets it get
    the job done.
                                     ahcpr
        Let's shift gears, and talk about AHCPR. As you probably know, the
    Agency for Health Care Policy and Research is one of 3 science agencies
    in the federal budget that are necessary to maintain and improve the
    health of our nation. NIH develops new laboratory-based knowledge that
    will someday be translated to clinical application at the bedside. The
    CDC provides the science for public health. Despite this, you and I
    hear all the time the cries of alarm at the state of our health care
    system. There's a serious disconnect here. It is AHCPR that supports
    the discovery of new knowledge that can improve the health care system,
    and can identify the highest quality, most cost effective ways to get
    scientific breakthroughs into the health care delivery system in
    America. Yet, it is an agency that is seriously underfunded.
        Just like at the NIH, some of the best work comes from investigator
    initiated programs, but inadequate funding means that the AHCPR can
    support only a very small handful of individual investigators. Many
    like myself no longer even bother to prepare grant proposals for the
    AHCPR because the funding prospects are so bleak. Since 1994, the AHCPR
    has cut the number of funded investigator grants by over 50 percent.
    Ultimately, this translates into denied opportunities for the American
    public, and for you, the Congress, to make wise policy choices and save
    money. It may mean that we don't have the evidence to best treat your
    problem 10 years from now, and will have to rely on anecdote instead.
        On a positive note, let me give you a couple of examples of recent
    research released by the Agency, because it is this type of research
    that both improves quality of care and cuts health care costs, that a
    funding increase could support.
        Middle ear infection is the most frequent diagnosis requiring
    antibiotics for children in the United States. AHCPR-supported research
    at the University of Colorado found that common ear infections in
    children with less expensive antibiotics, instead of more expensive
    ones could save millions of dollars a year without changing recovery
    rates. The study estimated that in one state alone, and one program
    alone, the Colorado Medicaid program could have saved almost a half
    million dollars by implementing this change in treatment.
        Research supported by AHCPR also leads to the development of new
    technology that can be applied to make the functioning of the health
    care system more efficient. Recently, a tool to predict whether someone
    with chest pain is actually having a heart attack has been shown to
    reduce unnecessary coronary care unit admissions by 30 percent. This
    translates into 250,000 fewer critical care admissions or $3 billion
    savings per year in the U.S.-by all standards a great return on
    investment.
        In the past few years, the AHCPR has worked with private managed
    care companies to develop methods that can be used by average consumers
    to rate their local managed care plans. The Agency has also worked with
    the Health Care Financing Administration to improve way to assess
    beneficiary needs and satisfaction, for both the managed care and the
    fee-for-service system.
        AHCPR also support work in rural communities, where different
    solutions to keep primary care providers in rural areas have been
    identified.
        Just as the National Institutes of Health trains investigators to
    conduct basic research, the AHCPR trains physician-scientists to
    examine how our health care system works, and to develop more cost-
    effective approaches to make our population healthier and produce
    better health care outcomes. Both the Institute of Medicine and the
    National Academy of Sciences have called for at least tripling the
    numbers of health services researchers trained.
        In summary, the AHCPR's research programs are focused on topics of
    major concern to the Medicare and Medicaid programs and enable Congress
    and the public to discriminate between what we do, and what we know
    when we make health care decisions. In just one example alone, I've
    shown you how a small part of a $150 million investment, translates
    into cost savings of $3 billion. Its a great example of fiscal
    responsibility. On behalf of SGIM, I strongly urge you to provide a
    substantial increase to the AHCPR to expand its activities. Budget
    Recommendations
        Mr. Chairman, our funding recommendation for the Title VII Internal
    Medicine/Pediatrics programs is for $25 million this year. This will
    allow for growth within the program, but it will take closer to $50
    million if you are serious about actually getting the job done in the
    future. Our recommendation of $306 million for the entire Title VII
    program reflects the recommendation of the Health Professions and
    Nursing Education Coalition.
        For the AHCPR, we will ask you to provide the funding necessary to
    repair the damage done over the past three years to the investigator-
    initiated grant program and to the training program. We recommend an
    AHCPR budget of at least a $175 million--a $32 million increase. We
    urge that this entire increase be allocated to the extramural
    investigator-initiated grant program, with 2 million set aside for new
    training programs.
        I would like to close by thanking this Subcommittee for its strong
    support of the Title VII program and the AHCPR. I would be pleased to
    respond to questions.
                                     ______

    Prepared Statement of Ralph G. Yount, President, Federation of American
                       Societies for Experimental Biology
        Mr. Chairman, Mr. Harkin, Members of the Subcommittee: I am Ralph
    Yount, professor of biochemistry at Washington State University. I am a
    basic scientist who works on the mechanism of muscle contraction. My
    research has been funded for 37 continuous years by NIH. I serve this
    year as the President of the Federation of American Societies for
    Experimental Biology, usually referred to as FASEB. Founded in 1912,
    FASEB is the largest organization of life scientists in the United
    States with a combined membership of more than 52,000 researchers. It
    is in my role as President of FASEB that I appear before you today to
    testify in support of the goal of a 15 percent increase for the
    National Institutes of Health in fiscal year 1999 as the first step in
    doubling funding over the next five years.
        Let me note at the outset that the Federation is very pleased by
    the budget request submitted by the President, and by his strong
    statements in favor of biomedical research during the State of the
    Union address. While we are hopeful that Congress can go even further
    than the President has proposed, we appreciate that this is the first
    time since the ``War on Cancer'' was proposed in 1971 that a President
    has so aggressively supported funding for the NIH.
        Following the lead of this Subcommittee, and in particular its
    Chairman, it appears that the President and our champions on the
    Appropriations Committees--Senate and House, Republicans and
    Democrats--all now support a significant increase for NIH this year. We
    join with you in a common effort to convince the full Congress that
    this goal is fully justified and achievable.
        FASEB believes the Congress should review NIH funding decisions in
    the context of the remarkable accomplishments that past investments
    have produced, as well as the substantial evidence which exists of
    unrealized scientific opportunities. Half a century of public
    investment in the NIH has fostered the development of a biomedical
    research enterprise, which is the envy of the world. The scientific
    investigations supported by NIH have given birth to the biotechnology
    industry, fueled the activities of the pharmaceutical industry, altered
    the daily course of health care in this country for every American and
    are even changing the nature of agriculture. The list of recent
    discoveries is remarkable.
        Three examples illustrate the range of progress being made every
    day:
      --NIH supported research led to development of defined fragments of
            DNA on chips, the so-called gene chips which promise to
            revolutionize the detection of certain gene-based diseases,
            such as breast cancer.
      --NIH researchers have identified a crucial enzyme, telomerase, which
            plays a significant role in cancer, normal growth and possibly
            the fundamental process of human aging.
      --A recent NIH funded molecular genetics study has led to a possible
            method for resensitizing bacteria, critical to dealing with the
            spread of antibiotic resistant strains of these dangerous
            organisms.
        The tragedy of these examples is that so many more breakthroughs
    are possible. In 1998 NIH will be able to fund only about three out of
    ten proposals approved by study sections. The success rate for new
    investigators who have not previously had a grant is substantially
    lower--only slightly better than 1 in 10. These are abysmal and
    discouraging odds. We believe these unfunded applications and unfunded
    researchers represent the best argument for increased support for the
    NIH.
        FASEB comes to you not only as an advocate for more money, but also
    to express our views on the priorities for most effectively utilizing a
    substantial increase in NIH funding. These proposals are not ``etched
    in stone'' but represent a starting point for discussions within the
    NIH and this committee. Briefly, FASEB recommendations are that
    increased funding be invested in the following areas:
      --Fund increased numbers of research grants developed through the
            existing system of investigator initiated projects, selected
            through rigorous competitive review by scientific peers;
      --Adequately fund research projects by increasing the average size of
            grants;
      --Raise stipends for pre- and post-doctoral trainees to a living
            wage;
      --Modernize the research infrastructure--including facilities,
            instruments and clinical research support mechanisms;
      --Support a wide variety of new scientific partnerships, including
            more extensive direct support by NIH for relevant studies in
            chemistry, physics, mathematics and computational science;
      --Develop and support mechanisms for more rapidly translating
            research findings from the laboratory to the clinics and
            beyond; and
      --Increase the average length of grants to create a more stable
            research environment.
        Mr. Chairman, these are FASEB's suggestions as you and the NIH
    begin the difficult task of deciding how best to invest the increased
    resources for biomedical research that we all hope can be found. We
    have also made other policy recommendations in our formal report
    previously submitted to the committee, which we hope you will review
    carefully.
        In conclusion Mr. Chairman, we at FASEB believe this represents the
    best opportunity in a generation to expand our country's historic
    effort to improve America's health, using the tools of science. FASEB
    recognizes the challenge this represents and we pledge to use all the
    resources available to us to convince the Congress to support the
    budget allocation needed to make our mutual goal a reality.
        Mr. Chairman, this concludes my statement.
                                     ______

        Prepared Statement of Mary Woolley, President, Research!America
        Chairman Specter and members of the Senate Appropriations
    Subcommittee on Labor, Health and Human Services, Education and Related
    Agencies, Research!America thanks you for the opportunity to provide
    this written testimony on the President's fiscal year 1999 budget
    request. The testimony will specifically comment on the requested
    increases in funding for scientific research, in particular research
    conducted at the National Institutes of Health (NIH).
        Research!America, a national not-for-profit public education and
    advocacy alliance, is dedicated to making medical and health research a
    much higher national priority. On behalf of its more than 350 members--
    individuals, academic institutions, corporations and voluntary
    organizations--Research!America is proud to serve as a voice for
    citizens on the issue of medical research. The bottom line is that
    citizens want more research funded than is called for in the
    President's 1999 fiscal year budget.
        Since 1992, Research!America has commissioned both national and
    state-based public opinion polls and has regularly conducted focus
    groups to explore attitudes and identify citizens' issues and concerns
    regarding research. The poll results have consistently shown that
    citizens place their trust in research and research-based institutions
    to make the discoveries that will translate hope into cures, treatments
    and preventions.
        Along with the American Medical Association, the Ad Hoc Group for
    Medical Research, the National Health Council, the Biotechnology
    Industry Organization (BIO) and the many others concerned,
    Research!America is convinced that because we have in place an army of
    gifted researchers, and because the opportunity in science is at an
    extraordinary level, Now is the time to substantially increase funding
    for the National Institutes of Health. Now is the time to make the
    commitment toward doubling funding for medical research over the next
    five years.
        The public supports this increase as is evident from the results of
    our most recent polls completed in March of this year which found that
    in the aggregate, 60 percent of citizens surveyed say they favor
    doubling funding for medical research. Research!America has now asked
    citizens in Alaska, Connecticut, Louisiana, Michigan, Missouri, Ohio,
    Pennsylvania, Virginia, Washington, West Virginia and Wisconsin about
    doubling funding for medical research and the majority of citizens in
    every one of these states say they favor such a proposal. A national
    poll conducted by the Wall Street Journal and NBC found that, by a
    better than two to one margin (or slightly better than our findings),
    the public favors doubling the current NIH budget of 13-plus billion
    dollars over a five year period.\1\
    ---------------------------------------------------------------------------
        \1\ Wall Street Journal, February 12, 1998: 64 percent favor; 25
    percent oppose.
    ---------------------------------------------------------------------------
        With the commitment of this subcommittee, accompanied, if
    necessary, by innovative additional funding mechanisms, doubling the
    NIH budget over five years can become a reality. Research!America has
    tested several possible mechanisms for identifying additional monies to
    supplement appropriated dollars to accomplish the doubling goal. One
    possible mechanism, currently hypothetical on the national level but in
    use in some states, is to allow taxpayers who will receive a tax refund
    to designate some of that refund to a special fund for medical
    research. In our national poll conducted in 1995, 60 percent said they
    would be willing to donate a portion of their tax refund--with the
    median amount donated being $23. According to 1997 Internal Revenue
    Service figures, about 80 million taxpayers--two-thirds of those filing
    returns--expected to receive a 1996 refund. If all 60 percent from our
    poll followed through with their intent and donated an average of $23
    each, 48 million taxpayers would donate $1.1 billion for research.\2\
    ---------------------------------------------------------------------------
        \2\ Internal Revenue Service, April 1997.
    ---------------------------------------------------------------------------
        Another mechanism, very timely in light of attention on a possible
    tobacco settlement, is Research!America's finding that 68 percent
    (aggregate) of those surveyed say they favor a proposed increase of
    $1.50 per pack of cigarettes over three years with about 30 percent of
    the annual proceeds used to fund medical research.
        A third mechanism involves the projected budget surplus. Citizen
    priorities for surplus-generated dollars has been tested by various
    polls of late. When Louis Harris and Associates asked citizens this
    past November how they felt about money from a budget surplus being
    used for additional spending on current programs, 81 percent said they
    would support surplus dollars going to medical research.
        While citizens strongly support increased funding for medical
    research, they do not want doubling the budget of the National
    Institutes of Health to come at the expense of other health and science
    programs.
        When coupled with medical knowledge gained from basic and clinical
    research, behavioral and health services research can lead to effective
    prevention programs in communities across this nation. The eradication
    of small pox, the decrease in the incidence of AIDS in the United
    States, the use of t-pa to prevent the side effects of stroke are just
    a few examples of what can be accomplished when medical and public
    health research are working together. Research!America polls show that
    citizens value public health programs, which include prevention
    research, and health services research. It is not surprising that there
    is such strong interest in prevention and outcomes research, since
    everyone would agree that the ultimate goal is to eradicate, not just
    ameliorate, dreaded diseases like cancer, AIDS, diabetes, heart disease
    and stroke. This public mandate translates to achieving stronger
    support for the Centers for Disease Control and Prevention and the
    Agency for Health Care Policy and Research, in tandem with increased
    support for the NIH.
        My final point is based on a finding from our polls that strongly
    supports federal investment in basic research. It is important to
    emphasize that all science--not just medical and health science--needs
    strong support in order for our national goal of better health and
    well-being to be met. New ideas and breakthrough technologies in fields
    such as engineering, physics, mathematics and chemistry have been
    instrumental to progress in the life sciences in the past; this
    important synergy must be nurtured as we move into the next millennium.
    Proposals for increased funding for basic science conducted under the
    auspices of several federal agencies including the NIH and the National
    Science Foundation must be sustained if we are to meet our nation's
    goals.
        Doubling the NIH budget in five years is the right first step in
    achieving the great promise of research. Doubling the NIH budget in
    five years would allow the 105th Congress to place its stamp on
    history, contributing in never-before-possible ways to the health and
    quality of life of all Americans. In poll after poll, the message is
    clear that citizens back you, their Senators, when it comes to seizing
    the opportunity that science offers at this moment in our history.
        The Research!America alliance is pledged to continue working to
    ensure that research has the chance to deliver on its promise. Through
    our polls and our 435 Project we are working in communities across the
    nation to answer citizens' questions about research and to encourage
    them to speak up in support of use of their tax dollars for this
    critical priority. Concurrently, we are connecting researchers to
    citizens so they can share their work with their home town communities
    and in so doing demonstrate their accountability for the taxpayer
    dollars they spend. Nothing less than the health and well-being of my
    family, and yours and every family in America is at stake; we put our
    trust in our elected officials to make the investments today so
    tomorrow we will speak of cancer, premature heart disease, AIDS,
    diabetes and a host of other dreaded diseases, as finally conquered by
    American scientific know-how.
                                     ______

      Prepared Statement of Dr. M. Susan Smith, on Behalf of the Regional
                        Primate Research Centers Program
        Chairman Specter and Members of the Subcommittee: We the directors
    of the seven Regional Primate Research Centers thank you for the
    opportunity to submit written testimony on behalf of the Primate
    Centers Program. The seven Centers are located across the country in
    California, Georgia, Louisiana, Massachusetts, Oregon, Wisconsin and
    Washington, and each is affiliated with a distinguished university. The
    Centers receive support as part of the National Center for Research
    Resources of the National Institutes of Health (NCRR-NIH).
        Congress acted with great foresight in 1960 to establish the
    national Regional Primate Research Centers Program, in recognition of
    the importance of nonhuman primates in biomedical research. The funds
    appropriated to build the seven centers have been an excellent
    investment. As we look back over the nearly forty years since their
    establishment, it is clear that these Centers have provided specialized
    and unique scientific capabilities not available through any other
    program within the Department of Health and Human Services. The Centers
    are our nation's single major resource for the conduct of research
    which is dependent upon the use of nonhuman primates. With the ever
    increasing complexity and sophistication of research questions and
    methodologies, the Primate Centers Program is even more important today
    than when the centers were established.
        It is difficult to overemphasize the importance of nonhuman
    primates, monkeys and apes, in biomedical research. These animals share
    more than 90 percent of their genetic makeup with humans. This close
    genetic similarity makes the nonhuman primate an ideal animal model for
    the study and understanding of human health and disease processes.
    Nonhuman primates are often the vital link between basic research on
    one hand and human application on the other. In some cases, there is no
    suitable animal model, other than the nonhuman primate, for study of a
    disease. An example is AIDS, for which the nonhuman primate is the best
    and most appropriate animal model. Important scientific advancements
    resulting from nonhuman primate research abound in fields of
    neuroscience, reproduction, infectious diseases and developmental
    biology, among others. The seven Centers provide the resources,
    including the nonhuman primates, scientific expertise and specialized
    facilities and equipment, to conduct this research. Without the
    Centers, high priority biomedical research programs requiring nonhuman
    primates and supported by the NIH could not proceed. These include
    programs in AIDS and other infectious diseases, aging, cancer,
    neurodegenerative disorders such as Alzheimer's disease, senile
    dementia and Parkinsonism, heart disease, infertility, mental health
    disorders, organ transplantation, osteoporosis, Lyme disease, drug
    addiction, reproduction and behavior. These research programs address
    basic mechanisms underlying human health and disease, as well as
    development of therapy and methods of prevention of disease.
        The research programs on AIDS at the Regional Primate Research
    Centers serve as an example of the Centers' unique ability to respond
    to our nation's health needs. When AIDS was first recognized in the
    early 1980's, there were few laboratory animal models available to
    begin studies of this disease. Within a year of emergence of AIDS, the
    Regional Primate Research Centers identified a comparable disease in
    Asian monkeys, and shortly after the discovery of HIV, the virus which
    causes AIDS, the Centers identified a similar virus termed SIV or
    simian immunodeficiency virus. This virus produces a disease remarkably
    similar to AIDS and is recognized as the best animal model to study
    these types of viruses. More recently, the vaccine development programs
    within the Centers provide new hope of identifying a vaccine that may
    have the potential of preventing the disease. The Centers are also
    engaged in research to prevent the AIDS virus from being transmitted
    from HIV-infected mothers to their babies. Without the Regional Primate
    Research Centers, it is very likely that these important advances in
    the treatment and prevention of AIDS would not have occurred.
        A new area of research at the Centers has the potential to
    revolutionize the use of nonhuman primates in biomedical research. This
    research involves the use of the technique called ``nuclear transfer''
    to produce genetically identical animals. The availability of
    genetically identical nonhuman primates would provide a powerful
    resource for biomedical research because it would eliminate genetic
    variation during experimental manipulation and allow for greater
    statistical validity with fewer animals. Such a primate resource would
    be analogous to the inbred strains of mice that have greatly
    facilitated studies on biological mechanisms, disease processes and the
    development of new treatments such as gene therapy. Research at the
    Centers has proven the feasibility of using nuclear transfer to produce
    genetically identical nonhuman primates, and current studies are
    underway to develop the technology so as to produce large numbers of
    these valuable animals. There are a number of new opportunities that
    would arise from the availability of genetically identical nonhuman
    primates. (1) Gene therapy and vector development. This animal model
    would permit the use of genetic manipulations to study molecular
    processes and treatments of human disease. (2) Immunologic studies. The
    elimination of genetic variability would permit important new studies
    of autoimmune diseases, organ or cell transplantation, and HIV vaccine
    development. (3) Genetic versus environmental factors as contributors
    to disease. Without the confounding influence of genetic variability,
    it will be possible to determine the contribution of stress, the
    environment or nutrition to a variety of conditions, such as
    cardiovascular disease or behavioral abnormalities.
        In addition to their roles as research centers, the Regional
    Primate Research Centers also serve as national resources to the
    biomedical community at large and as centers of primatology. As
    national resources, the seven Regional Primate Research Centers are
    indispensable to approximately 1500 scientists from universities,
    research institutes and laboratories across the country, as well as
    scientists from around the world, whose research requires nonhuman
    primates. The Centers provide the essential elements, such the animals,
    scientific and technical expertise, materials and facilities, necessary
    to conduct their research programs. For the most part, these
    scientists' research missions serve all of the categorical institutes
    of NIH and are dependent on the Regional Primate Research Centers. The
    scope and diversity of their research and the number of institutions
    served stress the importance of the resources of the Regional Primate
    Research Centers to the national biomedical research effort. In
    addition to serving investigators on-site, the Center's tissue
    distribution programs direct more than 10,000 specimens per year to
    laboratories throughout the country.
        As centers of primatology, the Regional Primate Research Centers
    house the largest and most diverse collections of nonhuman primates in
    the world. The Centers provide access to some 16,000 nonhuman primates,
    representing 21 species, that have been proven to be valuable for
    biomedical research. Many of the species are threatened with
    extinction, are embargoed from importation, and are of unique genetic
    background or possess other distinctive biologic characteristics which
    makes them irreplaceable. This resource can never be duplicated. The
    Centers also maintain breeding colonies for which much of the
    biomedical research community is dependent. As centers of primatology,
    the Regional Primate Research Centers also contribute to our
    understanding of these extraordinary animals with respect to their
    biology, diseases and husbandry requirements, knowledge that is
    essential for their preservation and their judicious use in biomedical
    research.
        The support for the research programs at the Centers is derived
    largely from the categorical institutes of the NIH. However, the
    support for the infrastructure of the Centers is provided through the
    NCRR, NIH. The infrastructure of the Centers provides the necessary
    resources to support the research programs. Appropriations for the
    Regional Primate Research Centers have not kept up with inflation
    during the past 10 years. In fact, in absolute dollars, appropriations
    have barely risen in some years, whereas they have actually declined in
    others. When the high costs of biomedical research are taken into
    account, the budget for the seven Centers has been eroded. This has
    inevitably led to reductions in resources made available to the
    biomedical research community. This ``no growth'' funding pattern has
    greatly hindered the Centers' ability to expand its current research
    programs and will be detrimental to the development of new research
    opportunities. During this time of expanding resources in support of
    NIH, we ask that appropriations for research resources not be
    neglected. We request that this Committee in its budget deliberations
    take action to reverse the current funding pattern for the Regional
    Primate Research Centers. We are currently operating on a budget that
    is approximately 20 percent below the NIH-peer reviewed and approved
    recommended levels. We ask you to increase the funding for the Primate
    Center Program, which will not only be an investment in the seven
    Centers, but will also benefit the biomedical research interests of
    essentially all of the divisions of NIH.
        We would like to thank the Committee for their support in providing
    NCRR with construction funds, which have been specifically designated
    for the Centers during the past two years. It is essential that this
    source of funds for new construction be continued if the Centers are to
    maintain their state-of-the-art facilities and equipment. With many of
    the facilities at the Centers nearing 30-40 years of age, it is
    imperative that we retain our ability to obtain funding for new
    construction that is necessary to support new scientific opportunities
    into the next century.
                Respectfully submitted,
                        Dr. M. Susan Smith, Director, Oregon Regional
                                Primate Research Center, Oregon Health
                                Sciences University, Beaverton, OR; Dr.
                                Andrew G. Hendrickx, Director, California
                                Regional Primate Research Center,
                                University of California, Davis, CA; Dr.
                                Ronald D. Hunt, Director, New England
                                Regional Primate Research Center, Harvard
                                University, Southborough, MA; Dr. Peter J.
                                Gerone, Director, Tulane Regional Primate
                                Research Center, Tulane University,
                                Covington, LA; Dr. William Morton,
                                Director, Washington Regional Primate
                                Research Center, University of Washington,
                                Seattle, WA; Dr. Joseph W. Kemnitz, Interim
                                Director, Wisconsin Regional Primate
                                Research Center, University of Wisconsin,
                                Madison, WI; Dr. Thomas Insel, Director,
                                Yerkes Regional Primate Research Center,
                                Emory University, Atlanta, GA.
                                     ______

     Prepared Statement of the National Association of Nutrition and Aging
                               Services Programs
        Chairman Specter and members of this Senate Appropriations
    Subcommittee: Thank you for the opportunity to provide written
    testimony to you regarding the Older Americans Act. I am Mary
    Podrabsky, a provider of Congregate and Home-Delivered Meal services in
    Seattle, Washington. I am also President of the National Association of
    Nutrition and Aging Services Programs (NANASP), a membership
    organization of direct service providers of meals and other nutrition
    services across America. It is on behalf of NANASP that I present this
    testimony.
        First, Chairman Specter, I wish to thank you for your historical
    leadership and support for all the programs of the Older Americans Act
    and in particular the effort you championed last year to secure
    increased appropriations for these vital community based services. Your
    work and the work of this subcommittee has had an impact that is felt
    and greatly appreciated in communities, large and small, in every
    State, Territory and Tribal Land in this Country.
        The Older Americans Act, as you know, provides a wide range of home
    and community based services for persons sixty years and older. These
    include such services as adult day care, transportation, information
    and assistance, elder abuse protections, nursing home ombudsman
    services, senior employment, chore services, services for native
    Americans and Hawaiians, legal assistance, and congregate and home-
    delivered nutrition services. The Older Americans Act has established
    over the past thirty-three years an aging network comprised of the
    Administration on Aging, State Units on Aging, local Area Agencies on
    Aging and thousands of service provider organizations, who with paid
    and volunteer staff, provide millions of older Americans with needed
    services. It is through the provision of such services that America is
    growing old with dignity, pride and maximum independence.
        This hearing, however, is not about creating a network of quality
    aging services. That work has already been done and has evolved over
    the last three decades. This hearing is about increasing the capacity
    of that network and of aging service programs to meet the needs of a
    rapidly growing senior population. It is also about spending limited
    national resources wisely. Providing increased funding to support Older
    American Act programs, I think, accomplishes both goals.
        Congregate and Home-delivered Nutrition Services, the two primary
    services provided by NANASP members, are arguably the two most visible
    services of the Act. Congregate meals are served at over 15,000 meal
    sites throughout the country, providing 127 million meals a year to 2.3
    million people. Home-delivered meal programs, more commonly referred to
    as Meals-on-Wheels, provided 115 million meals to nearly 1 million
    homebound seniors.
        Nutrition Programs, authorized through Title III and, more recently
    Title VI, of the Older Americans Act, are now in their 25th year of
    operation and are considered a wonderful success story. During the last
    reauthorization of the Act, the U.S. Congress authorized the Department
    of Health and Human Services to conduct a comprehensive two year
    evaluation of the Elderly Nutrition Program to include both congregate
    as well as home-delivered nutrition services. The results of this
    exhaustive evaluation, conducted by Mathematica Policy Research, Inc.
    of Princeton, NJ, were published in June, 1996. The results ``show that
    the Elderly Nutrition Program has succeeded in accomplishing its
    mission of improving the nutritional intakes of elderly people, as well
    as in decreasing their social isolation.'' The evaluation also ``shows
    that the program is evolving to meet the changing needs of older people
    brought on by shifting demographics and changes in the health care
    system and public policy environment.'' Finally, the evaluation results
    state that ``the Elderly Nutrition Program is a highly successful
    program that has a positive influence on an overwhelming majority of
    its participants.''
        Congress stipulated in the Older Americans Act that services would
    be targeted to certain individuals by stating that ``preference will be
    given to providing services to older individuals with greatest economic
    need and older individuals with greatest social need, with particular
    attention to low-income minority individuals.'' The same Mathematica
    study cited above found that ``about one-third of Title III congregate
    participants and one-half of Title III home-delivered participants have
    incomes at or below the DHHS poverty threshold.'' Also, with regard to
    minority targeting, the study concluded that ``overall, racial and
    ethnic minorities constitute 27 percent of congregate and 25 percent of
    home-delivered participants'' and that ``almost all Title VI
    participants are members of minority groups, compared with 14 percent
    of the overall population age 60 and older.'' Furthermore, ``nearly
    four times as many Title III participants and nine times as many Title
    VI participants are low-income minorities, compared with the overall
    population age 60 and older.''
        Okay! The program works. It does what it is supposed to do. That
    places it in pretty select company, but does that necessarily mean its
    funding should be increased? I would say no, not necessarily, but there
    is more. For every federal Title III dollar spent on congregate
    nutrition services an additional $1.70 is raised from other sources.
    The amount of leveraging is substantially higher for Title III home-
    delivered nutrition services. This kind of leveraging of public dollars
    in congregate and home-delivered meal programs make this a wise
    investment and a model public/private partnership.
        To be eligible to receive home-delivered meals, a participant needs
    to be, with few exceptions, not only sixty years of age or older, but
    also homebound. Often, the receipt of a meal is the only service
    required for these individuals to be able to remain in their own home.
    Home-delivered meals can be provided to a home bound person for an
    entire year for less than the cost of one overnight stay in the
    hospital! Audrey Baker , blind and recovering from a broken back, whose
    story is told in the attached article, must not be forced to wait any
    longer for meals. And Helen McCleery of San Diego, described in the
    same article, should not be required to find her food in dumpsters. It
    is just possible that for those in need of this service, it may be one
    of the best spent health care dollars.
        For most Nutrition Services providers in the Country, home-
    delivered meals are increasing at a rate that far exceeds their
    capacity to meet the need. Four out of ten programs show a waiting list
    for home-delivered meals. One out of ten congregate meal providers have
    waiting lists, but there are not sufficient funds in these programs to
    establish new sites or to perform outreach efforts to locate isolated
    older persons in need of the services available at the congregate meal
    sites.
        Funding for the programs and services of the Older Americans Act
    have simply not kept pace with the increasing costs of providing the
    services and this at a time of historical low inflation.
        This fact, coupled with the steadily increasing numbers of frail
    older persons in need of the services, has stretched program capacity
    to its limits. There are no savings to be achieved by reducing services
    provided in the home and community if the only option remaining is more
    expensive institutional care. We must, as a Nation, provide for the
    most appropriate, least expensive service option possible at the
    earliest possible time. Only then can we be assured that we are
    spending dollars wisely. As we turn to face the new millennium, let us
    be able to face our mothers and grandmothers as well.
                                     ______

        Prepared Statement of Patricia Deitch, Chief Executive Officer,
    Philadelphia Health Services, on Behalf of the National Association of
                            Community Health Centers
        Mr. Chairman and Members of the Subcommittee my name is Patricia
    Deitch. I am the Chief Executive Officer of Philadelphia Health
    Services. On behalf of the National Association of Community Health
    Centers, I am pleased to provide the Subcommittee with testimony in
    support of the urgent need to increase funding to $926 million for
    fiscal year 1999 for the Consolidated Health Centers Program (i.e.,
    community, migrant, homeless, and public housing health centers).
    Health centers share a common mission of providing quality and cost-
    effective health care to patients in urban and rural medically
    underserved areas, and it is for this mission and service to the nation
    that we ask the Subcommittee's continued strong support.
        First, I would like to thank the Subcommittee for its support of
    the consolidated health centers program over the past two years. Under
    the leadership of Chairman Specter, appropriations for the program have
    increased by $68 million in that period one in which the Subcommittee
    had to face many difficult choices among worthwhile programs. We are
    particularly indebted to Senator Christopher Bond and Senator Ernest
    Hollings for their efforts on our behalf during the last two years. We
    also would like to extend our best wishes to Senator Dale Bumpers in
    his final year of a tremendous career in public service. Arkansas
    health centers will miss his leadership and health centers throughout
    the nation will never forget his strong support of our program.
        The $68 million increase this committee has approved for health
    centers over the past two years is an investment towards providing
    services to uninsured patients and previously unserved patients.
    However, much more work needs to be done. The $68 million increase has
    only enabled health centers to serve approximately 250,000 people which
    is less than one percent of the nation's approximately 42 million
    uninsured people. Rising number of uninsured patients, coupled with
    eroding grant, Medicaid and other revenues, place health centers in a
    financial squeeze which literally threatens their viability. Most
    existing health centers have not seen an increase in their grant
    dollars for the past eight years, yet are being inundated with
    escalating numbers of uninsured. In the past three years alone, the
    number of uninsured people seeking care at health centers has increased
    by over one million.
        The financial squeeze health centers are experiencing is forcing
    many to cut services, staff and/or hours in order to remain operative.
    Nowhere are these trends more evident than in the State of Pennsylvania
    and at my health center, Philadelphia Health Services (PHS). We serve
    over 23,000 patients in our two Philadelphia locations. Between 1996-
    1997, we have had a 6.4 percent decrease in our total revenue, while
    the number of uninsured patients has increased by 46 percent. The
    number of uninsured grew eight times faster between 1996-1997 than the
    previous year. In addition, we have experienced a 7.6 percent reduction
    in Medicaid revenues between 1996-1997. Medicaid losses for PHS will
    contribute to a $600,000 deficit in fiscal year 1998.
        In an effort to minimize the negative impact of Medicaid changes
    and declining revenues, PHS took several steps to contain costs while
    working toward identifying ways to increase revenues. For example,
    after closing our in-house laboratory due to financial constraints, we
    eliminated several necessary lab tests. Patients must now go to the
    costly hospital emergency room to receive a lab test. We have also had
    to discontinue our school-based wellness centers which provided on-site
    preventive, diagnostic educational services to junior high elementary
    children. In addition, our doctors were once able to visit patients
    that have been admitted into area hospitals to evaluate their
    conditions. Unfortunately, we have been forced eliminate this practice.
        In the past three years, PHS has been forced to eliminate 19
    positions including a pediatrician, physician assistant, an internist,
    health educator, and a nurse. We are unable to eliminate any additional
    staff without jeopardizing primary health care we deliver to our
    patients. The cuts in personnel have resulted in life altering
    consequences for our patients. For example, since we have had to
    eliminate the health educator's position, our patients can no longer
    receive intensive diabetes education after their doctor's visit. One of
    our patients recently diagnosed with the disease was prescribed oral
    medication and dietary changes. One day she was rushed to the emergency
    room with extremely elevated blood sugar level. She was admitted to the
    hospital to bring down her blood sugar level, was placed on insulin,
    and received 2 hours of instruction from a diabetic nurse as a hospital
    inpatient. Had our health center been able to retain our health
    educator and continue to provide intensive diabetes education, this
    patient would have received necessary education when she was first
    diagnosed, and possibly the trauma and expense of a hospitalization
    could have been avoided.
        Without an increase in grant funding, PHS will not be able to
    generate the revenue needed to continue providing our full scope of
    services beyond next year.
        The problems PHS is facing are echoed nationwide. There are 981
    community, migrant, homeless and public housing centers and FQHC look-
    alikes serving over 2,500 communities across America. Together, these
    health centers care for over 10 million children and adults in every
    state, Commonwealth and Territories, and the District of Columbia.
    Health centers are local non-profit, community-owned health care
    programs serving low-income and medically underserved urban and rural
    communities with few or no resources. Health centers are governed by
    volunteer members of the community who have an interest and take
    responsibility to ensure that responsive and affordable health care is
    provided to all who need it. Patients are charged on a sliding fee
    scale to ensure that income or lack of insurance is not a barrier to
    care. Federal grants subsidize the cost of care provided to the
    uninsured and the cost of enabling services (such as translation and
    outreach) not covered by Medicare, Medicaid, or private insurance--
    services which make the care provided by health centers cost-effective
    and responsive.
        Health centers are staffed with interdisciplinary teams of more
    than 6,000 physicians (98 percent of whom are board certified), as well
    as nurses, dentists, other health professionals and community
    residents. Health centers offer a wide range of primary and preventive
    medical and dental care, including: diagnostic laboratory and
    radiologic services, pharmaceutical services, immunizations, well-child
    examinations, preventive dental care, family planning, and prenatal and
    postpartum care. Health centers also provide health education,
    community outreach, transportation, and support programs (including
    literacy and other education programs) in collaboration with other
    organizations and agencies like schools, Head Start programs, and
    homeless shelters.
        Without health centers, residents of inner-city and rural
    underserved areas would face great unmet health care needs. Health
    center patients include uninsured low-income persons, minorities, rural
    residents, high-risk pregnant women and children, migrant and seasonal
    farm workers, persons with AIDS, persons with drug and alcohol
    problems, homeless persons and families, the frail elderly and other
    high-risk groups. Health centers have special expertise in meeting the
    unique needs of these most vulnerable populations and are often the
    only source of non-hospital, community-based primary care for them.
        The following reflect the profiles of health center patients:
      --Health centers serve one of every six low income children (4.5
            million children).
      --In 1995, the 400,000 births to health center patients accounted for
            one of every 10 births (and one of every five low-income
            births) in the United States.
      --One in every 10 uninsured persons in the United States uses health
            centers.
      --Health centers are the family doctor for one in 10 rural Americans.
      --One of every eight low income Americans uses health centers.
      --Almost 7 million minority persons are health center patients.
      --Health centers are the provider of choice for one of every 10
            people covered by Medicaid.
      --Health centers care for one of every four homeless persons.
        There are over 42 million uninsured Americans who suffer financial,
    geographic or cultural barriers to health care. This number of
    uninsured Americans is growing rapidly, at a rate of 100,000 per month.
    Studies have shown that this number could reach 50 million or more over
    the next five years. Nearly three-fifths of the uninsured are members
    of low-income working families who cannot afford to buy health
    insurance, and must rely on the safety net for health care primarily
    health centers or costly emergency rooms.
        Many studies have concluded that health centers, in the process of
    providing primary care to medically uninsured and underserved
    communities, achieve real and significant cost savings. Through fewer
    hospital admissions and less frequent use of costly emergency care for
    routine services, health centers save the American health care system
    almost $12 billion annually.
        Few government programs have made as significant a contribution to
    low-income families as cost-effectively, or in high quality a manner as
    health centers. For example:
      --Health centers create jobs and provide an economic base: Health
            centers employ more than 50,000 persons, many of whom are
            community residents. They also help to retain other local
            businesses and stabilize neighborhoods by bringing in other
            forms of community or economic development. Health centers
            generate over $14 billion in annual economic activity in many
            of America's most economically depressed urban and rural
            communities.
      --Health centers make a difference in the health of people: Studies
            of health centers credit them for a 40 percent reduction in
            infant mortality, improved immunization and prenatal care
            rates, and increased use of preventive health services among
            their patients.
      --Health centers triple the value of investment: Every $100 million
            invested in health centers brings an additional $200 million in
            other resources into communities, and helps 1 million people
            (including 350,000 uninsured persons) get the care they need.
        Despite achieving remarkable progress in responding to the rapidly
    changing health care environment, health centers increasingly are
    feeling the strains brought on by the continuing erosion of private
    insurance coverage, stagnant or shrinking public subsidies, and the
    pressures of a restructured marketplace now driven by competitive
    forces. Over the past three years, centers have added more than one
    million new uninsured patients to their rolls. This growth in new
    uninsured health center patients is widespread and underscores the
    declining ability of providers in all communities to continue to serve
    the uninsured. This situation is certain to worsen causing more
    uninsured and low-income people to seek care at health centers.
        In addition, the changes in the Medicaid program have reduced the
    amounts available to health centers. Health centers lost almost 400,000
    Medicaid patients last year, principally because of State Medicaid
    managed care efforts. The most perplexing part of this is the fact that
    much of the loss is due to state auto-enrollment (or default
    assignment) procedures, in which health center patients who failed to
    choose a managed care plan were involuntarily assigned to plans that
    did not include their center in their provider network. At least 650
    patients were lost at my Philadelphia centers alone. Also, with the
    increased enrollment of Medicaid patients in managed care, health
    centers around the country are receiving decreased reimbursement for
    serving Medicaid patients. And, beginning in fiscal year 2000, the
    Balanced Budget Act will phase out and eliminate cost-based
    reimbursement for Medicaid patients. Even though health centers are re-
    engineering their service delivery systems to become more efficient, we
    are caught in a tightening vise of reduced levels of reimbursement and
    increased numbers of uninsured. Health centers will again have to use
    grant dollars to subsidize the care of Medicaid patients.
        During testimony to the House Appropriations Subcommittee on Labor,
    Health and Human Services and Education hearing the Health Resources
    and Services Administrator, Dr. Claude Earl Fox, stated that the
    problem requires immediate attention by the Congress in order to ensure
    the future viability of health centers. Dr. Fox stated that grant
    dollars need to be increased or Medicaid dollars going to health
    centers need to be increased to address the situation. He also stated
    that in his professional judgment, health centers need a $200 million
    increase in fiscal year 1999 to maintain operations and meet the
    growing demands for services. In addition, Dr. Marilyn Gaston, Director
    of the Bureau of Primary Care, stated that five percent of health
    centers are bankrupt and between five and 10 percent more will be soon
    as a result of the financial squeeze affecting health centers.
        The National Association of Community Health Centers believes
    additional federal investment is needed to ensure the availability of
    primary and preventive health care in medically underserved
    communities, and priority should be given to strengthening and
    preserving the existing health center infrastructure. Health centers
    have been faced with the challenge of caring for an ever- increasing
    number of people seeking care in an era of stable or declining
    resources and shortages of primary care health professionals. As the
    number of uninsured persons increases, there must be a system in place
    that will provide essential health care services, especially for the
    most vulnerable, underserved people in our communities and in our
    nation. The health center system is already in place; it is cost-
    effective, efficient, accountable, and it works. We urge you to
    maintain and build on it.
        As you consider the fiscal year 1999 appropriations, we request
    that you consider for the Consolidated Health Center Program (i.e.,
    community, migrant, homeless and public housing): $926 million.
        Mr. Chairman, we know that you and members of the Subcommittee have
    a very difficult task ahead of you this year because of the strict
    limits on available funds. We have labeled our recommended funding
    levels as an investment in a proven system of care to foster wellness
    and prevention. If funded adequately, the continued presence of health
    centers and the availability of basic health services will contribute
    to a healthier, more productive America.
        Health centers were founded with a vision of community and consumer
    empowerment, and their experience over that past 30 years provides an
    object lesson on how consumer involvement can succeed where other
    models fail. Invest in health centers, build upon what has worked, look
    at the long history and success of the program and continue to invest
    in programs that mobilize communities to solve problems at the local
    level.
        Once again, Mr. Chairman and Members of the Subcommittee, I thank
    you for the opportunity to present you with my testimony.
                                     ______

     Prepared Statement of Dr. Rodney Mead, Professor of Zoology, Director
                    of NIH IDeA Program, University of Idaho
        Mr. Chairman and members of the Subcommittee, thank you for the
    opportunity to submit this testimony regarding the National Institutes
    of Health's Institutional Development Award (IDeA) program on behalf of
    the Coalition of EPSCoR States.\1\ I am Rodney Mead, and I am Professor
    of Zoology and Director of the NIH IDeA Program at the University of
    Idaho.
    ---------------------------------------------------------------------------
        \1\ Alabama, Arkansas, Idaho, Kansas, Kentucky, Louisiana, Maine,
    Mississippi, Montana, Nebraska, Nevada, North Dakota, Oklahoma, Puerto
    Rico, South Carolina, South Dakota, Vermont, West Virginia, and
    Wyoming.
    ---------------------------------------------------------------------------
        Let me begin by expressing my thanks to Senator Larry Craig for his
    strong support of the IDeA program. IDeA works to improve Idaho's
    biomedical research capability, and we are deeply grateful for Senator
    Craig's efforts to ensure that the NIH has a truly effective IDeA
    program for the benefit of Idaho and of our nation.
        The 1993 NIH Revitalization Act (Public Law 103-43) authorized the
    NIH to establish a program to broaden the geographic distribution of
    health research funding. The IDeA program is similar to the
    Experimental Program to Stimulate Competitive Research (EPSCoR), a
    program established by the National Science Foundation to improve our
    nation's science and technology capability.
        The IDeA program funds merit-based, peer reviewed research and
    works to enhance the competitiveness of research institutions located
    in states with historically low aggregate success rates for grant
    applications to the NIH. For fiscal year 1998, the NIH has identified
    the following states as eligible for IDeA funding: Alaska, Arkansas,
    Delaware, Hawaii, Idaho, Kansas, Kentucky, Louisiana, Maine,
    Mississippi, Montana, Nebraska, Nevada, New Hampshire, New Mexico,
    North Dakota, Oklahoma, Rhode Island, South Dakota, South Carolina,
    Vermont, West Virginia Wyoming and the Commonwealth of Puerto Rico.
        The fiscal year 1999 budget request for IDeA is $5.2 million. The
    Coalition of EPSCoR States respectfully requests that the Subcommittee
    appropriate $15 million for IDeA in fiscal year 1999.
        Let me begin by telling you how IDeA is improving Idaho's
    biomedical research capability. Idaho has received two IDeA awards
    totaling $500,000, all of which has been matched dollar for dollar by
    the state of Idaho. The federal funding has been equally divided
    between the University of Idaho (UI) and Idaho State University (ISU),
    and has been used to upgrade the biomedical research infrastructure at
    both institutions.
        Funds from the first award were used by both universities to
    create, equip and staff core molecular biology research laboratories.
    These core laboratories are designed to provide technical support,
    training and access to multi-user equipment that was not previously
    available. These services are made available to all biomedical
    researchers on both campuses. At UI, the core molecular biology
    laboratory is staffed by a full time Ph.D., whose position is now
    permanently funded by state funds.
        The second award has been used to purchase a state-of-the-art
    equipment for three core laboratories (molecular biology laboratory,
    confocal microscope laboratory, and the experimental laboratory animal
    facility). The phosphoimaging/gel documentation instrument purchased
    last year has received extensive utilization by biomedical researchers
    from five different departments on the University of Idaho campus. In
    addition, the first of several sets of specialized caging systems,
    which permit the housing of rodents in a germ-free environment were
    purchased. This year we are purchasing a sophisticated UV microscope
    for the confocal microscope laboratory that will greatly expand the
    capabilities of several of our biomedical researchers. The instruments
    in this core research laboratory are extensively used by members of the
    WAMI medical faculty. For example, Dr. Michael Laskowski makes
    extensive use of the confocal microscope in his studies of the growth
    and regeneration of mammalian nerves.
        These core research facilities are currently being used by
    biomedical researchers in the Departments of Biological Sciences,
    Animal Science, Food Science and Toxicology, Microbiology, Molecular
    Biology and Biochemistry, and by the Washington, Alaska, Montana, Idaho
    (WAMI) medical faculty at the University of Idaho. The core molecular
    biology laboratory at ISU is principally being used by biomedical
    researchers in the Department of Biological Sciences and the College of
    Pharmacy.
        The creation and enhancement of these research facilities have led
    to at least six important results. They have:
      --(1) provided access and training in the proper use of very
            expensive multi-user equipment that was not previously
            available. Use of this equipment has significantly reduced the
            amount of time required to acquire, analyze, graphically
            display data, and obtain publication quality images. This
            equipment has both enhanced the quality of the data that were
            are able to obtain and has increased the productivity of
            Idaho's biomedical researchers. This has increased the
            productivity of Idaho's biomedical research community,
            including Dr. Holly Wichman, who has made extensive use of the
            imaging system to acquire rapidly preliminary data that she
            included in an NIH research grant application regarding the
            evolution of viruses. This grant has just been funded by the
            NIH;
      --(2) expanded the research capabilities of faculty and students by
            providing training in new and rapidly changing molecular
            biology technologies used in biomedical research. This has
            allowed faculty, students, and post-doctoral trainees to
            undertake research projects that were previously impossible due
            to inexperience with the new techniques required to investigate
            complex biomedical problems;
      --(3) reduced the time required to establish these new techniques in
            investigators' laboratories and provided unlimited access to
            methodological trouble-shooting expertise that was formerly not
            available without impinging upon other researchers' time and
            good will;
      --(4) enhanced the chances of Idaho's biomedical researchers of
            obtaining NIH research grants by providing them with increased
            technical capabilities and the opportunity to demonstrate their
            ability to use these new techniques by collecting preliminary
            data which are so vital in convincing grant reviewers that they
            have the facilities, technical expertise and actual ability to
            do what is proposed. For example, I obtained preliminary data
            which ultimately convinced an NIH panel to approve funding of a
            grant to investigate factors necessary for promoting changes in
            the uterine environment that may be essential for successful
            implantation of mammalian embryos;
      --(5) enhanced the ability of UI and ISU faculty to provide state of
            the art training to future biomedical researchers. Several of
            our graduate students have obtained training and used equipment
            in the molecular biology laboratory to conduct and complete
            their thesis research. Results of these studies have been
            presented at recent national scientific meetings and
            manuscripts have been or are being prepared for submission for
            publication in leading scientific journals. Specific examples
            include:
        --Ms. Carrie Bickle has completed a study regarding changes in the
                length of the ends of chromosomes (telomeres) during aging
                in mice;
        --Mr. Doug Hirzel completed a study of changes in uterine
                concentrations of leukemia inhibitory factor during the
                peri implantation period of pregnancy; and
        --Mr. Todd Garwood has reported on the isolation and changes of DNA
                binding proteins.
      --(6) resulted in Idaho universities being better able to compete for
            the brightest young biomedical researchers. For example, UI has
            hired a faculty member (Dr. Debora Stenkamp) who studies the
            developmental and molecular biology of color vision. Access to
            equipment and technical help was an important factor in her
            decision to accept this position at UI. Dr. Stenkamp was just
            awarded her first NIH research grant.
        These accomplishments indicate that the intent of Congress and the
    goals of the IDeA program are being met, and that Idaho's biomedical
    researchers are becoming better equipped and better able to compete for
    research funding. The capability of Idaho's universities to provide
    state of the art training to our country's biomedical researchers has
    been and is continuing to be enhanced by this effective program.
        In previous years the National Center for Research Resources
    (NCRR), which funds the IDeA program, issued program announcements
    soliciting applications from IDeA eligible states to provide support
    for research activities that stimulate improvement in the biomedical
    research capacities of the institutions. In response to Congressional
    language included in the fiscal year 1998 Appropriation Committees
    Reports, NCRR has modified IDeA. The program will now support: (1) high
    quality applications for Shared Instrumentation Grants, using
    meritorious requests that have already been submitted to the SIG
    program; and, (2) using the Shannon Awards as a model, NIH will fund
    investigator-initiated proposals from IDeA eligible states with scores
    that fall near but below the funding cut-off in the regular Institutes
    programs. For fiscal year 1998 funds, no specific solicitation to the
    IDeA eligible states will be issued for either of these awards.
        Congress appropriated $13.6 billion for the NIH in fiscal year
    1998; for the NCRR Congress appropriated over $453 million. The
    Coalition of EPSCoR States applauds the Congress for this commitment to
    biomedical research and encourages Congress to continue funding
    biomedical research at as high a level as possible. We also ask
    Congress, and especially this Subcommittee, to consider the importance
    of making sure all parts of the country are able to contribute to the
    important research mission of the NIH. We encourage the Subcommittee to
    provide $15 million for NIH IDeA in fiscal year 1999.
        I thank the subcommittee for the opportunity to submit this
    testimony.
                                     ______

    Prepared Statement of G. Brockwel Heylin, Director, Government Affairs,
                the American Association of Colleges of Nursing
        This statement presents the fiscal year 1999 appropriations
    recommendations of the American Association of Colleges of Nursing
    (AACN) for nursing research and education. AACN represents over 520
    baccalaureate and graduate nursing education programs in senior
    colleges and universities across the United States.
        AACN thanks the members of this subcommittee for the fiscal year
    1998 funding levels for the National Institute of Nursing Research
    (NINR) at NIH. AACN also is grateful for the subcommittee's commitment
    to the Nurse Education Act (NEA) (Public Health Service Act Title
    VIII), Scholarships for Disadvantaged Students (in PHSA Title VII), the
    Agency for Health Care Policy and Research (AHCPR) and others. These
    needed funds are being well spent to improve the public health.
        Overall Recommendations: For NINR, AACN recommends an increase of
    $63.5 million over fiscal year 1998 to $127 million. For AHCPR, AACN
    asks for an increase of 10 percent to $161.08 million. For fiscal year
    1999 for the NEA, AACN respectfully requests an increase of 8 percent
    over fiscal year 1998 to a level of $70.9 million. For SDS, we seek an
    increase also of 8 percent over the fiscal year 1998 level to $20.2
    million. AACN endorses the fiscal year 1999 overall NIH recommendation
    of the Ad Hoc Group for Medical Research Funding. AACN agrees with the
    recommendation of the Health Professions and Nursing Education
    Coalition for fiscal year 1999 of $306 million for PHSA Titles VII and
    VIII. AACN also advocates appropriate fiscal year 1999 funding levels
    for Higher Education Act programs that serve nursing students at the
    undergraduate and graduate levels, such as Pell Grants, Perkins Loans,
    Federal Work-Study, TRIO, and GAANN.
    National Institute of Nursing Research
        AACN urges the subcommittee to increase the fiscal year 1999
    funding for NINR to $127 million. This doubling of resources is
    essential for several reasons.
        One, NINR is ``fighting success'' in terms of its research and
    research training programs. The research being conducted and
    disseminated is extremely relevant and is making a difference to public
    health issues such as health promotion, caring for the increasing
    numbers of chronically ill individuals and their families, dealing with
    the acute care nature and high technology of our hospitals, and
    understanding how health care systems influence client/patient outcomes
    in terms of quality and cost. There is more and more demand for such
    research.
        Two, nursing science has advanced rapidly with numerous
    sophisticated clinical intervention studies underway, which are
    resource intensive and require years of study. Such intervention
    studies are at the heart of the science for nursing practice since we
    can understand best which interventions are most effective. These
    studies are quite expensive compared to laboratory research because of
    the involvement of human subjects and other factors.
        Three, the research training needs for nursing are quite high,
    unlike other biomedical sciences, according to the 1994 Institute of
    Medicine Biomedical Personnel Needs Report. A number of graduate
    programs are not fully staffed with doctorally prepared faculty. In
    addition, there is a graying of nurse researchers and a strong need to
    prepare and bring to maturity a sizable cadre of nurse scientists in
    the future.
        NINR has the smallest funding level of any NIH institute and all
    but one of NIH's 3 centers, despite the fact that nurses are the
    central human component in the delivery of care and management of
    health care for most patients in hospitals and communities. In fiscal
    year 1998, NINR received an increase of only 6.8 percent although the
    NIH at large was increased by 7.1 percent. NINR's funding base is less
    than one-third the level of the next higher funded NIH institute. A
    small percentage increase on such a low base equals a very small dollar
    increase for the science of nursing practice. Nursing is relevant to
    virtually every condition and disease within the health care delivery
    system.
    Nursing research makes a difference, as the following examples
            demonstrate
        Arthritis: About 11 percent of the U.S. Hispanic population suffers
    from arthritis. An NINR funded project at the Stanford Arthritis Center
    in California brings the benefit of previously English language only
    measurement scales to the Latino community. The project includes pain
    management and exercise for Spanish speakers through community
    outreach, classroom education, a manual, and audiovisual aids. The
    project concept is being expanded for use with Chinese patients.
        Early Hospital Discharge: Today's shorter hospital stays may save
    money but they mean that patients are sicker at discharge and need more
    support at home. NINR funded a project for comprehensive discharge
    planning and follow-up programs using visits and telephone contact by
    advanced practice nurses. The study improved patient outcomes and
    decreased the cost of care and the likelihood of readmissions.
    Originally developed with a focus on high-risk mothers and low birth
    weight infants, the model is being expanded to elderly patients with
    complex medical conditions and to prenatal care.
        Pain: The permutations and intensities of pain trouble patients and
    challenge caregivers. NINR funded research has discovered that, for
    women, a particular type of pain medication, kappa-opioids, more
    effectively reduce high levels of pain than morphine type drugs and
    with fewer negative side effects. The study also found that with the
    test drugs, pain relief lasted longer than with traditional
    medications. Now, the study seeks to ascertain dose response levels and
    whether hormones play a role in pain responses.
        Other Examples: NINR's research agenda focuses on helping patients
    deal with pain, maximizing the quality of life of people living with
    chronic conditions or the physical disabilities of stroke, avoiding low
    birth weight babies, and maternal and child health. Indeed
    interdisciplinary research partially funded by NINR increases the value
    of NIH research and is complementary to biomedical research. For
    instance, several Pennsylvania studies are studying critical illness in
    the elderly and elderly frail rural populations. A Texas grant seeks to
    reduce the number of teen pregnancies. University of Illinois-Chicago
    NINR project is examining ways to strengthen respiratory muscles in
    patients with chronic obstructive pulmonary disease. A University of
    Arkansas NINR grant has produced ways to improve knowledge on the
    ability of nursing home residents to achieve their activities of daily
    living thus reducing their need for assistance. A Florida Atlantic
    University project seeks to find ways to improve the quality of life
    and to reduce the care costs for Alzheimer's disease patients by using
    exercise and special monitoring. A Johns Hopkins University (MD) NINR
    project has investigated several interventions to reduce the risk of
    high blood pressure in young black men, a common concern in this
    population. A University of Mississippi Medical Center project funded
    by NINR is supporting an interdisciplinary research team to examine
    treatment of blood clots and tumors. NINR grants to schools in New York
    are examining childhood asthma and the side effects of chemotherapy.
    And a University of Wisconsin project is examining high risk pregnancy.
        The Core Centers program sponsored by NINR funds extramural
    research at several institutions to focus on major areas of
    professional nursing practice. They include symptom management
    (University of California San Francisco), care of the chronically ill
    (University of Pittsburgh [PA] and University of North Carolina, Chapel
    Hill), serious illness (University of Pennsylvania), gerontological
    nursing interventions (University of Iowa), and women's health
    (University of Washington). These Core Centers gather established
    investigators into an interdisciplinary team to benefit from the
    synergy of collaboration that will exceed what individually funded
    investigators might be expected to produce. The Core Centers were also
    designed to build and strengthen the research infrastructure of
    personnel and physical facilities and to promote outreach activities to
    disseminate findings and implications. While the Centers are relatively
    new, they have provided valuable knowledge on patient care issues.
    End-of-life care
        Recently, NINR was assigned to serve as the lead institute on
    research related to palliative care, involving complex care, pain
    management, and psychosocial issues for terminal patients and the
    families of critically ill patients. With a population that is aging
    dramatically, these are major areas of concern to the health care
    system. NINR's base of knowledge in pain management and palliative
    care, positions it well to handle this important responsibility. Last
    fall, NINR and other NIH entities convened an interdisciplinary and
    inter-intramural conference on Symptoms in Terminal Illness. It has
    joined with other NIH entities to stimulate research interest in the
    subject. Research is critical to addressing these issues; by providing
    NINR with the financial tools it needs they will be addressed.
        In fiscal year 1997, NINR awarded 64 competing and 95 non-competing
    (renewal) grants; in fiscal year 1998, NINR expects to award 50
    competing and 121 non-competing grants, reflecting the shift to longer
    term and continuing research awards typical of a mature institute
    supporting a cadre of mature and productive research. But NINR's
    success rate, 20 percent, that is the proportion of peer reviewed,
    approved awards that actually receive funding, is below the NIH
    average, 28 percent. One reason is that NINR funds proportionately more
    clinical research than most NIH institutes, and research that involves
    actual human subjects is more expensive. But this alone cannot explain
    NINR's lower success rate. The problem is primarily its small funding
    base.
        The contributions that NINR funded research are making are
    substantial, but they could be even greater with an adequate financial
    base. AACN requests the Subcommittee to boost NINR funding of NINR to
    $127 million. Such a figure is still far less than the fiscal year 1998
    figure of $200 million for the National Institute of Deafness and
    Communications Disorders which was established almost at the same point
    in time. (AACN is not criticizing the higher funding of other
    institutes; it offers this point only for comparison.) A greater
    funding base for NINR is critical to supporting a critical mass of
    researchers and research activity that is producing breakthroughs of
    major importance to society in patient care, outcomes and cost
    effectiveness appropriate to nursing, the largest health care
    profession. With past strong congressional support for women in
    science, this is an excellent opportunity to increase research relevant
    to the public health of women and all Americans. With over ten years at
    NIH, NINR has the administrative structure, strategic plan and
    experience to be able to wisely and efficiently administer more
    spending authority.
    Agency for Health Care Policy and Research
        AACN recommends a 10 percent increase over fiscal year 1998 for
    AHCPR to $161.08 million in fiscal year 1999. AHCPR's mission is
    critical to wise utilization of health care dollars because it seeks to
    discover and to publicize the most effective health care interventions.
    The Nurse Education Act
        The NEA is the key source of federal financial support for nursing
    education programs and nursing students. Nursing students educated with
    NEA support often become the nurse scientists that conduct research for
    NINR and other NIH entities. The NEA provided stipends in 1997 to
    almost 37 percent of 12,769 full-time graduate nursing students in 267
    grants totaling $15.6 million. For example, Professional Nurse
    Traineeships (Section 830), provided assistance for masters and
    doctoral students in Pennsylvania ($910,424), Wisconsin ($339,935),
    North Carolina ($370,773), Washington ($418,555), Mississippi
    ($180,226), Hawaii ($61,875), Iowa ($80,880) New Hampshire ($69,164),
    Texas ($917,281) and South Carolina ($185,465). The NEA funds programs
    to educate APNs and future nursing faculty (NEA Sections 821, 822 and
    831) and seeks to help disadvantaged students attain nursing education
    (Section 827). NEA funds supported about half of the doctorally
    prepared nursing faculty teaching today. Future nurse researchers often
    receive one or more types of NEA support as they increase their
    academic skills.
    Scholarships for disadvantaged students
        AACN recommends a funding level for fiscal year 1999 for SDS of
    $20.2 million, an 8 percent increase over fiscal year 1998. By statute,
    30 percent of SDS appropriations are reserved for nursing students.
    Schools with proportionately greater numbers of minority students are
    given additional funds. For fiscal year 1996 (most recent data), 4,101
    nursing students received about $5.6 million in SDS support, and 2,601
    or 63.4 percent were minorities. Federal funds can help to increase the
    diversity of the profession.
        (The NEA and SDS are the subject of reauthorization legislation
    moving through Congress [S. 1754, Frist/Kennedy]. This bill would
    increase program flexibility and provide one authorization figure for
    NEA programs, but would support continuation of present legislative
    foci as well.)
    National Health Service Corps
        AACN suggests a 5-percent increase over fiscal year 1998 for the
    National Health Service Corps Scholarship and Loan Repayment programs
    (PHSA Title III) to $82.074 million. This program seeks to attract
    health professionals to areas with shortages of such providers. Many of
    those areas are rural, and have difficulty attracting and retaining
    caregivers.
                                   conclusion
        In summary, AACN respectfully recommends the following
    appropriations for fiscal year 1999:
                                                                    Millions
    National Institute of Nursing Research............................  $127
    Nurse Education Act...............................................  70.9
    Scholarships for Disadvantaged Students...........................  20.2
    Agency for Health Care Policy and Research........................161.08
    National Health Service Corps Scholarship/Loan.................... 82.07
                                     ______

        Prepared Statement of Vicki Kalabokes, Chief Executive Officer,
                      National Alopecia Areata Foundation
        Chairman Specter and members of the Senate Subcommittee on
    Appropriations for the Departments of Labor, Health and Human Services,
    and Education, I am Vicki Kalabokes, chief executive officer of the
    National Alopecia Areata Foundation (NAAF).
        First, I would like to take this opportunity to thank you for your
    leadership and support. We are making progress because of the hard work
    of many researchers, the leadership of many professionals, and, most
    importantly, the vision of this committee and it's chair. Our work
    isn't finished, but we are making progress.
        The National Alopecia Areata Foundation (NAAF) is the largest
    organization in the nation dedicated to finding a cure for alopecia
    areata. It also provides support for those with alopecia through a
    publication program and support groups. The support groups provide
    information and direction to thousands of people with alopecia areata.
    As a support group leader I am sometimes the first person, outside of
    the medical community, that a person turns for help and information.
    Frequently people call who are scared, misinformed, and afraid. The
    support group provides a forum to reach out to others, problem-solve
    and grow.
        The National Alopecia Areata Foundation is also a member of, and
    currently the headquarters for, the Coalition of Patient Advocates for
    Skin Disease Research. The Coalition, which operates as a voluntary
    organization and as such receives no public or private money, provides
    an umbrella to over 21 ``lay'' skin groups. These groups represent
    millions of people who suffer from a wide range of skin diseases. We
    work together for two reasons. First, to provide information to others
    about why research is needed. And secondly, so that we may push for a
    wide-ranging research agenda. Many of us believe that diseases such as
    alopecia, lupus and others are the result of a malfunctioning immune
    system. When the key is found to one of our diseases then it is likely
    that many of the other diseases represented in the coalition will be
    cured. By working together we will make a difference. Alopecia areata
    is a disease that strikes over four million Americans. It is the loss
    of hair. For some it is a quarter size patch that can be easily
    covered, for others it is the loss of every hair follicle on their
    body. Young children get alopecia areata most often. It strikes members
    of all ethic groups. The loss of hair has several types of impacts.
    Hair provides significant protection for the body. The loss of
    eyelashes means that even the simple act of opening and closing ones
    eyes to keep the dust out is a difficult process.
        However, alopecia is not simply a physical problem, it has
    surprisingly serious psychological demands. For many people, when they
    first discover their hair falling out they are devastated. They think
    that they are the only ones in the world with the disease. Frequently
    when they go to their doctors they discover that even their physicians
    have little idea of what is happening, why it is happening, or even if
    others suffer from it. For some treatment options stop there, while for
    others they begin the long process of finding someone who knows
    something about the condition.
        Unfortunately in our society the lack of information is not the
    only problem. Frequently people with alopecia believe that they are
    vulnerable to the stares and grimaces of those around them. People have
    lost their jobs. A noted news anchor lost his on-air job because he was
    suddenly perceived as being unappealing. This lack of being appealing
    (either real or perceived) causes many people to lose confidence in
    themselves and they begin to withdraw from society.
        Recently, one parent called concerning her daughter who has
    alopecia areata and she was asking for help to stop the harassment that
    the daughter was experiencing at school. Another parent called who has
    alopecia areata and had just discovered that her daughter is developing
    it too. As this parent talked more about her child, she expressed the
    fears of many parents who have alopecia areata; they don't want their
    children to suffer from the turmoil and fears that they had to endure.
    Both parents wanted to know what they should or even could do.
        Fortunately, there are people who can help, and in many of our
    support groups people learn how they can help themselves both
    cosmetically and psychologically. They learn that they are not alone
    and that they can do something about their sense of vulnerability and
    isolation. But the real solution will be when we find a cure for
    alopecia areata.
        Over the past ten years the Foundation has raised and provided
    almost $1.5 million for research studies. Our privately funded research
    studies have been studying the genetic structure of hair, the function
    of the immune system, and supporting non-human research studies looking
    for the cause of alopecia. Several weeks ago the press hailed a major
    discovery of a ``hairless gene.'' This gene was discovered by one of
    our Foundation's funded researchers. We can do much more if we fund
    research programs with the National Institutes of Health.
        Part of our research program is to continue to work with the
    National Institute of Arthritis, Musculoskeletal and Skin Disorders to
    create a research agenda. In 1990 and in 1994 NIAMS and NAAF conducted
    two international research workshops on what is known about alopecia
    areata. One of the many results from this joint program was that NIAMS
    funded a significant study on the structure of the disease. Another
    result was the discovery of animals with alopecia--thus NAAF was able
    to support the first non-human host of the disease.
        On November 5, 1998, we will be holding the Third International
    Workshop on Alopecia Areata, with NIAMS. This workshop, as with the
    earlier meetings will bring researchers, clinicians, and patients
    together from around the world to study what progress has been made and
    how new studies should be structured. The convening authority of NIAMS
    is critical for this sharing of knowledge. However, its long-term value
    will be seen because of the unique relationship that has been developed
    with NIAMS and NAAF.
        Working together in this unique private-public partnership is a
    significant step towards finding a cure. We hope to continue this
    relationship with NIAMS providing limited funds for critical studies,
    while we continue to work to support the research effort as well. With
    this partnership we have been able to sharpen the research agenda so
    that we are looking at questions that are building on a wider and more
    informed base of knowledge.
        The National Alopecia Areata Foundation and the 20 other lay skin
    disease groups in the Coalition of Patient Advocates for Skin Disease
    Research ask that you continue to support NIAMS. We are asking for an
    increase of 15 percent. This increase would allow the Institute to
    increase its ability to fund more research projects and support more
    programs that will help the over 60 million people who are impacted by
    skin diseases. We also support the proposal of the Ad Hoc Group for
    Medical Research Funding, which calls for a 15-percent increase in
    funding for the NIH in fiscal year 1999 as a first step toward doubling
    the NIH budget over five years. We recognize that difficulty in
    achieving this goal under the current spending limits, and encourage
    the Congress to explore all possible options to identify the additional
    resources needed to support this increase.
        We also believe that work done in any of the disease areas
    represented by the Coalition of Patient Advocates for Skin Disease
    Research, will have a profound impact on the lives of over 60 million
    Americans who suffer from one or more than one of the diseases that
    NIAMS is charged with investigating. We also believe that when a cure
    is found for any of these diseases that there is a good chance that it
    will help in finding a cure for many of the other skin diseases.
        Again thank you for your vision and concern. Without your support
    this unique private/public partnership would only be a dream, with your
    help it will result in a cure.
        I look forward to answering your questions.
                                     ______

    Prepared Statement of Dr. Raymond E. Bye, Jr., Associate Vice President
                     for Research, Florida State University
        Mr. Chairman, thank you, and the Members of the Subcommittee, for
    this opportunity to submit testimony. I would like to take a moment to
    acquaint you with Florida State University. Located in the state
    capital of Tallahassee, we have been a university since 1947; prior to
    that, we had a long and proud history as a seminary, a college, and a
    women's college. While widely known for our athletics teams, we have a
    rapidly emerging reputation as one of the Nation's top public
    universities. Having been designated as a Carnegie Research I
    University several years ago, Florida State University currently
    exceeds $100 million per year in research expenditures. With no
    agricultural or medical school, few institutions can boast of that kind
    of success. We are strong in both the sciences and the arts. We have
    high quality students; we rank in the top 25 among U.S. colleges and
    universities in attracting National Merit Scholars. Our scientists and
    engineers do excellent research, and they work closely with industry to
    commercialize those results. Florida State ranks seventh this year
    among all U.S. universities in royalties collected from its patents and
    licenses. In short, Florida State University is an exciting and rapidly
    changing institution.
        Mr. Chairman, let me describe four projects that we are pursuing
    this year. The first is a collaborative project between FSU and UM
    dealing with risk assessment activities related to several health
    issues. Several proposals have been completed and are being sent to the
    Directors of the National Institutes on Health (NIH), National
    Institute for Drug Abuse (NIDA), and the National Institute of Child
    Health and Human Development (NICHHD). The proposal to NIH seeks
    funding to provide an overarching capability to respond to requests
    from several institutes in the overall risk assessment area. This would
    be consistent with report language included in the fiscal year 1998
    Committee reports. These funds will establish a joint FSU-UM Risk
    Assessment and Intervention Center that will provide invaluable data to
    a wide range of health and health-related federal agencies that deal
    with health and other human outcomes. An amount of $750,000 is being
    requested to establish such a Center. No new legislative language will
    be sought in fiscal year 1999. Based on pending proposals at NIH, the
    collaborators are requesting support at the $2 million level from the
    Department of Health and Human Services (HHS). State matching funds
    will be sought from the Florida legislature.
        Florida State University (FSU) and the University of Miami (UM) are
    also collaborating to establish a joint Program in Aging and Health
    Promotion dedicated to research on the issues of health and health care
    facing an aging population. Florida is the ideal state for such a
    project given the high proportion of people over 65 in the population
    and the presence of these two research universities with outstanding
    programs in this area. The resources include UM's School of Medicine
    and FSU's Pepper Institute on Aging and Public Policy as well as FSU's
    Center for Population Studies. The Center will become a focal point for
    national, state, and local research on such issues as Medicare's
    transition to managed care; the provision of long-term care for the
    frail elderly including models to integrate acute and long-term care;
    and the impact of immigration on the racial and ethnic structure of the
    older population of the future. Partners will include the Florida
    Department of Elder Affairs and other state agencies. Private
    foundation support is also being sought. The initial step in securing
    federal funding will be project funding for a research development
    proposal to the National Institute on Aging (NIA). We will be seeking
    approximately $1 million in fiscal year 1999 from NIA, and matching
    state funding will be sought.
        A third collaborative project between FSU and UM will look at the
    effectiveness of early childhood programs in preparing children for
    school. There are several major early childhood services: Head Start,
    Pre-K, childcare, and early intervention programs. Although these
    programs vary substantially in terms of staff, cost and quality, little
    is known of the differences in their effectiveness as school readiness
    programs. We propose to answer these questions by comparing the school
    readiness of children enrolled in early childhood programs
    characterized as effective based on the literature, with that of
    children enrolled in sub-optimal programs. This research will also help
    to determine whether inclusive programs, currently advocated for
    children with disabilities, are equally effective for children with all
    types of disabilities. We are seeking $2 million in fiscal year 1999
    from HHS for this project.
        Another project that we are seeking funding for in fiscal year 1999
    is for course materials for training purposes that could be based upon
    materials developed by the British Open University (BOU). Florida State
    University and the British Open University signed an agreement to
    jointly develop educational materials with FSU faculty playing key
    roles as mentors/teachers for the users of these materials at various
    training sites. New technologies will be employed in this effort, and
    innovative approaches in utilizing these technologies in classrooms and
    other training settings will be emphasized. We are working closely with
    the Leon County School District (FL) in creating a model program
    effort. Our consortia will be seeking funding from the Department of
    Education and its Technology Innovation Challenge Grants program. We
    anticipate a $1 million effort in fiscal year 1999 and $5 million over
    five years.
        Mr. Chairman, these activities discussed will make important
    contributions to solving some key problem and concerns we face today.
    Your subcommittee's support for research activities across your
    jurisdiction is greatly appreciated. Those investments are crucial one
    for our Nation's future. Thank you again for this opportunity to
    present these views for your consideration.
                                     ______

     Prepared Statement of Ritchie L. Geisel, President, Recording for the
                           Blind and Dyslexic [RFB&D]
        Mr. Chairman, Mr. Cochran, members of the subcommittee, I am
    Ritchie Geisel, President of Recording for the Blind and Dyslexic
    (RFB&D), whose headquarters are located in Princeton, New Jersey, with
    thirty-two recording studios throughout the United States. It is on
    behalf of RFB&D that I submit this statement in support of our request
    for continued federal support of our mission as the nation's primary
    producer of recorded textbooks for people of all ages who cannot use
    standard print because of a visual, perceptual or physical disability.
        First, I want to thank the members of the subcommittee for the
    continuous support that you have given RFB&D since our first federal
    assistance, which began in 1975. This support, plus the support we
    receive through private philanthropy, allowed us this year to circulate
    more than 245,000 textbooks, free of charge, to approximately 50,000
    borrowers. In 1990, the number of borrowers was less than half that
    number. Increased federal support has been key to our ability to reach
    an increasing number of students, including an increasing number of
    severely dyslexic students.
        Historically, RFB&D was founded in 1948 as a service for returning
    blind veterans of World War II, and has grown into a national, private,
    volunteer-based organization serving as the national education library
    for people who cannot read standard print because of a disability.
    Located in Princeton, New Jersey, its volunteer readers are spread
    throughout the United States, as are its library users.
        RFB&D distributes textbooks and other educational materials in
    accessible audio and digital sound and text formats. Our tape and
    digital library continues to grow with more than 75,000 titles and is
    constantly updated to meet the needs of our student and professional
    users. Our books are provided free of charge to students of all ages,
    after a small registration fee, with students permitted to borrow as
    many texts as required for their course of study.
        Our request to the subcommittee for fiscal year 1999, is for an
    appropriation of $6,500,000, an increase of $500,000 over the amount
    provided by the Congress last year. This federal subsidy, which is
    approximately 25 percent of our total budget, will be used for two
    significant initiatives:
      --1. Expanding the number of student borrowers through an aggressive
            outreach program: By the year 2000, only three years from now,
            the number of borrowers is expected to exceed 80,000 students
            dependent on us for their textbooks. Since these students are
            entitled by both the Americans with Disabilities Act (ADA) and
            the Individuals with Disabilities Education Act (IDEA) to
            appropriate educational materials, RFB&D believes that our
            federal appropriation represents an appropriate contribution
            towards this cost. Our highly trained readers are volunteers
            knowledgeable in the field in which they read; therefore, RFB&D
            is able to meet this need at a fraction of what it would cost
            government, whether local or federal, if it were required to
            produce these textbooks on their own.
      --2. Converting RFB&D's recording system from analog tape to digital
            format: RFB&D is well along in this 3-year project to convert
            its recording operations to the new digital technology. This
            change will have two principal advantages. First, it will allow
            visually impaired and dyslexic students to search and move
            around within a book in the same way that sighted students do.
            Second, it will permit books to be circulated on CD-ROM and
            electronically through the Internet. During 1998, RFB&D has
            further refined its core digital technology and begun the
            process of revamping its 32 recording studios located
            throughout the United States in order to begin recording
            digitally.
        Mr. Chairman, RFB&D and its student users are grateful for the
    support the committee has provided in the past, and are hopeful that
    you will be able to approve our request for $6,500,000 for fiscal year
    1999. This level of support will assist RFB&D as it continues our joint
    efforts to serve the educational needs of disabled students throughout
    the United States.

                                      RECORDING FOR THE BLIND AND DYSLEXIC (RFB&D)
                                   [Special education, technology, and media services]
    ----------------------------------------------------------------------------------------------------------------
                               Fiscal year                                 Base          Outreach          Total
    ----------------------------------------------------------------------------------------------------------------
    1998 appropriation..............................................      $6,000,000  ..............      $6,000,000
    1999 President..................................................       6,000,000  ..............       6,000,000
    1999 RFB&D request..............................................       6,000,000        $500,000       6,500,000
    ----------------------------------------------------------------------------------------------------------------

                                          RECORDING FOR THE BLIND AND DYSLEXIC
    ----------------------------------------------------------------------------------------------------------------
                                                                                                           2000
                                                           1990            1995            1998         (estimate)
    ----------------------------------------------------------------------------------------------------------------
    Students........................................          23,287          37,176          49,515          80,000
    Books loaned....................................         143,020         214,621         245,274         400,000
    ----------------------------------------------------------------------------------------------------------------

        Recording for the Blind and Dyslexic (RFB&D), located in Princeton,
    New Jersey, is the nation's primary producer of recorded textbooks for
    people of all ages who cannot use standard print because of a visual,
    perceptual or other physical disability. Books from its master tape
    library are loaned, free of charge, to users throughout the United
    States. RFB&D is supported principally through private, charitable
    giving and volunteer labor, but has received support from the
    Department of Education continuously since 1975. In 1998, 245,274 books
    are expected to be sent to 49,515 users, and RFB&D has recently
    committed to a doubling of the number of blind and dyslexic student
    borrowers by the year 2000. (See table above.)
        In fiscal year 1998, RFB&D received increased funding from Congress
    to support two significant initiatives: (1) substantial expansion in
    the number of student borrowers served by the organization, and (2)
    development and application of digital technology as a tool to improve
    the usefulness of its recorded books for students. Congress approved
    these increased resources as part of its continuing partnership with
    RFB&D, and both projects are proceeding on schedule. RFB&D is well
    along in its 3-year project to convert its recording operations from an
    analog tape system to new digital technology. This change will have two
    principal advantages. First, it will allow visually impaired students
    to search and move around within a book in the same way that sighted
    students do. Second, it will eventually permit books to be circulated
    on CD-ROM and electronically through the Internet. During 1998, RFB&D
    has further refined its core digital technology and begun the process
    of revamping its 32 recording studios located throughout the United
    States in order to begin recording digitally. The process of expanding
    the number of students receiving books is proceeding, and an additional
    6,225 borrowers have been added this past year. RFB&D believes this
    process can be further accelerated through an expanded outreach program
    which has already been implemented and will be expanded in fiscal year
    1999.
        The $500,000 increase requested for RFB&D for fiscal year 1999, is
    compatible with the long range financial plan developed at the
    Appropriations Committee's request and submitted to Congress on January
    31, 1997. The amount requested represents approximately one-fourth of
    the organization's operating budget with the remaining funds generated
    from private sources.
                                     ______

          Prepared Statement of the National Rural Health Association
        The National Rural Health Association (NRHA) thanks Chairman
    Specter and members of the Committee for the opportunity to submit for
    the record the association's fiscal year 1999 funding requests for
    programs important to our nation's rural health care delivery system.
    We believe we can offer you and your Committee a unique and insightful
    look at the health care needs of rural frontier America.
        The NRHA is a national nonprofit membership organization that
    provides leadership on rural health issues. The NRHA works to create a
    clear national understanding of rural health care, its needs and
    effective ways to meet them. Our mission is to improve the health of
    rural Americans and to provide leadership on rural health issues
    through advocacy, communications, education and research. As you are
    well aware, rural areas are unique. They differ from urban areas in
    their geography, population mix and density, economics, lifestyle,
    values and social organization. Rural people and communities require
    programs that respond to their unique characteristics and needs.
        The NRHA membership is a diverse collection of individuals and
    organizations, all of whom share the common bond of an interest in
    rural health. Individual members come from all disciplines and include
    administrators, physicians, nurses, dentists, non-physician providers,
    health planners, researchers, educators and policy-makers. Organization
    and supporting members include hospitals, community and migrant health
    centers, state health departments and university programs.
        The NRHA appreciates this opportunity to discuss several programs
    we feel are particularly crucial to the quality of rural health care
    services. However, attached is a more detailed letter containing all
    the NRHA's specific program funding level requests for fiscal year
    1999, which was sent to Chairman Arlen Specter and Ranking Member Tom
    Harkin on March 11, 1998.
        Before discussing specific programs, the NRHA wants to express its
    strong opposition to any special projects being funded in this year's
    appropriations bill from funds appropriated for the Rural Health
    Outreach, Network Development and Telemedicine Grant program and the
    Rural Health Research Grant program. While the projects that were
    earmarked in last year's bill were both innovative and important, the
    NRHA believes that any program increases should be made available in
    their entirety to the competitive grant process, which was the original
    intent of Congress.
        The National Health Service Corps (NHSC) is one of the NRHA's
    partners in several of our initiatives to recruit and retain more
    health care providers in underserved rural communities. The NHSC is
    long overdue for a funding increase after having received only level
    funding the last several fiscal cycles, and the NRHA urges the
    Committee to increase the Corp's funding to $155 million. This funding
    increase is desperately needed so the NHSC can expand its outreach
    efforts in educating rural communities regarding the options the Corps
    can provide and targeting a portion of the existing pool of health
    professionals toward service in underserved communities. In 1996, the
    NHSC placed 1,371 health care professional in rural areas of which 771
    were primary care physicians. However, there are still many communities
    that cannot provide essential health care services on their own. Since
    its inception 25 years ago, the NHSC has been an essential lifeline for
    providing health professional services to those communities most in
    need.
        For example, Dr. Ralph Taube began his practice with the Tigerton
    clinic in Tigerton, WI, in 1979. His NHSC obligation was completed in
    June 1982, but he remained in the community for another nine years. For
    twelve years he provided medical care to the community and was joined
    by another physician who still provides care in Tigerton. Without the
    initial support of the NHSC, the small clinic might not have been able
    to recruit for and stabilize the practice that provided much needed
    support for the people of this community.
        The Cornerstone Care facility in Greensboro, PA, has been able to
    expand their services to two other communities, Rogersville, PA, and
    Burgettstown, PA, because of the commitment of the current medical
    director Nathan Duer. Dr. Duer was an NHSC scholar who remained in the
    community after serving his four year commitment to the NHSC. His
    continual presence has allowed the practice to stabilize and build to
    what is now a three site network with both medical and dental services.
        In Onawa, IA the NHSC has placed two physicians, Dr. Gerald Stanley
    and Dr. Curtis Mock, who have been working together for almost ten
    years establishing a system of health care services for the community.
    Dr. Stanley and Dr. Mock are in the process of expanding their system
    of care to another satellite with the two physician assistants and
    physician placed in Onawa by the NHSC in recent years. This team of
    health care providers in Onawa is also active at the state level
    ensuring that access to quality health care in rural America continues
    to improve. Dr. Mock is on the State Board of Directors for Rural
    Health Clinics and Dr. Stanley is on the State Board of Directors of
    the Iowa Academy of Family Practice and has been recently nominated for
    the NHSC Physician of the Year Award.
        The Balanced Budget Act of 1997 (BBA) provides numerous
    opportunities to improve access to quality health care services to
    rural and frontier Americans. It is imperative, however, that Congress
    provide the financial resources necessary to ensure the full and proper
    implementation of these provisions. One such program, which the NRHA
    strongly supports, is the Medicare Rural Hospital Flexibility program.
    This program was created by the BBA to improve access to essential
    health care services through the establishment of Critical Access
    Hospitals (CAHs) and rural health networks. The program creates an
    important alternative to small rural hospitals that provides regulatory
    relief and more equitable financing options by assisting states in
    proactively respond to market changes, remove any restrictive standards
    and authorities, support network development and regional approaches to
    health care and support hospitals that want to respond to ongoing
    market reforms. The NRHA strongly urges the Committee to provide the
    $25 million annual appropriation authorized by the BBA. This money
    would provide states with the necessary resources to develop and
    implement a rural health plan, develop networks, designate CAHs and
    improve rural Emergency Medical Services.
        The NRHA requests that the Committee provide $50 million for the
    Rural Health Outreach, Network Development and Telemedicine Grant
    program. This program, which was reauthorized in 1996, provides
    important grant opportunities to rural communities. The Rural Outreach
    Grant program includes grants for developing formal, integrated
    networks of providers that may offer a range of primary care and acute
    care services. Network development grants are designed to develop
    organizational capacity in the rural health sector through formal
    collaborative partnerships involving shared resources and possible
    risk-sharing.
        One outreach grant in Lock Haven, Pennsylvania, provides health
    promotion classes and health screening programs throughout rural
    Clinton County. Health screening services, conducted in local fire
    halls include checking for hypertension, diabetes, elevated cholesterol
    levels, skin cancer and other conditions. Clients are referred to
    appropriate sources of care as needed. The grant also supports health
    education classes on such topics as diet, exercise, nutrition and
    diabetes control.
        Marshalltown, Iowa, which is providing medical and dental services
    to underserved children, youth and families through a school-based
    outreach program, is another innovative outreach grant project. Using a
    mobile medical clinic, services are rotated among four elementary
    schools. Hundreds of elementary school children have received primary
    medical care and dental services through this project. The grant has
    also established an emergency prescription drug reimbursement program
    for low income students and their families.
        Additionally, the program will continue to offer grants to rural
    communities working to provide health care services through new and
    innovative strategies including mobile primary care outreach programs
    for migrant and seasonal farmworkers and telemedicine. Since 1991,
    approximately 300 rural communities have benefited from innovations in
    health care service delivery from grants totaling $170 million. The
    program also currently funds 18 telehealth/telemedicine projects.
        The NRHA strongly recommends a $15 million appropriation for Rural
    Health Research, which provides funding for research programs, the
    Rural Information Center Health Service (RICHS), telemedicine grants
    and the National Advisory Committee on Rural Health. This grant program
    currently supports six Rural Health Research Centers that provide
    policy relevant research, including work on rural hospitals, health
    professionals, delivery of mental health services and functioning of
    managed care systems.
        RICHS began in 1990 as a joint project of the Office of Rural
    Health Policy, HHS, the National Agricultural Library and the
    Department of Agriculture. It serves as a national clearinghouse for
    those seeking information referrals about rural health issues and
    answers requests on specific rural health issues. The knowledge gained
    from all these important research efforts is an important contributor
    to the success of all the above mentioned programs in improving access
    to quality rural and frontier health care services.
        In many cases, the only health care entity providing primary and
    preventive health care services to a rural community is a community
    health center (CHC). Overall, CHCs provide services to eight million
    residents of underserved areas. About 60 percent of health centers and
    50 percent of the users are from rural areas. CHCs have been proven to
    significantly improve a community's health especially when it provides
    maternal and child health care services as well as child immunizations.
    The NRHA urges the Committee to provide $926 million for the
    Consolidated Health Centers program for fiscal year 1999 to continue
    improving the health status of our country's underserved populations.
        We also urge you to include specific language in your Committee's
    final report directing $5 million from the National Health Service
    Corp's allocation for State Offices of Rural Health. The State Offices
    of Rural Health coordinate statewide rural health activities, offer
    technical assistance to communities to develop health care programs and
    are also actively involved in efforts to recruit and retain health care
    providers in rural areas.
        The NRHA wishes to thank the Chairman and Members of the Committee
    again for the opportunity to submit for the record the NRHA's fiscal
    year 1999 funding requests. It is important that the work already done
    continue to be built upon to create a healthier life for rural and
    frontier Americans. However, due to the geographical, distance and
    financial restraints that many rural and frontier areas face, this
    progress depends upon the assistance of all levels of government. The
    NRHA stands ready to work with your Committee and the Congress to
    ensure access and quality of essential health care services continue to
    improve for our country's rural residents.
                                     ______

       Prepared Statement of Dr. William H. Mahood, President, Digestive
                           Disease National Coalition
        Mr. Chairman and members of the Subcommittee, thank you for the
    opportunity to submit written testimony regarding the federal
    government's support for digestive disease research and prevention
    programs at the National Institute of Diabetes and Digestive and Kidney
    Diseases (NIDDK) and the Centers for Disease Control and Prevention
    (CDC).
        I am Dr. William Mahood, a practicing gastroenterologist in
    Abington, PA and the president of the Digestive Disease National
    Coalition (DDNC). Founded in 1978, the DDNC is a voluntary organization
    comprised of 22 professional and patient organizations concerned with
    the many diseases of the digestive tract. The Coalition has as its goal
    a desire to improve the health of millions of Americans who suffer from
    both acute and chronic digestive disorders
        Mr. Chairman, the social and economic impact of digestive diseases
    is enormous. Digestive disorders afflict approximately 62 million
    Americans, resulting in 50 million visits to physicians, 10 million
    hospitalizations, 230 million days of restricted activity, and nearly
    200,000 deaths annually. The total cost associated with digestive
    diseases has been conservatively estimated at $56 billion a year.
        With these devastating numbers in mind, I would like to take this
    opportunity to thank you Mr. Chairman for your past support of the
    National Institutes of Health and the Centers for Disease Control and
    Prevention. Regarding the coming fiscal year, I would like to briefly
    discuss the following: (1) digestive disease research at NIDDK (2)
    colorectal cancer prevention activities at CDC, (3) viral hepatitis
    research and prevention, and (4) irritable bowel syndrome.
                      digestive disease research at niddk
        Millions of Americans suffering from digestive disorders are
    pinning their hopes for a better life--or even life itself--on medical
    advances made through research supported by the National Institute of
    Diabetes and Digestive and Kidney Diseases. Recent breakthroughs in our
    understanding of hemochromatosis, Crohn's disease, pancreatitis and
    other digestive abnormalities reinforce the need for continued support
    of NIDDK.
        For fiscal year 1999, the DDNC recommends that NIDDK receive a 15
    percent increase over last year. This percentage translates into $131
    million over fiscal year 1998 and would bring NIDDK's total
    appropriation to $1 billion. At this point Mr. Chairman, I would like
    to make clear that although the DDNC strongly supports the concept of
    doubling NIH's overall budget in the next five years, we do not believe
    that these increases should come at the expense of other important
    Public Health Service programs.
                          colorectal cancer prevention
        Turning from biomedical research at NIH to disease prevention and
    control at CDC, I would like to say a few words about CDC's newly
    established program promoting colorectal cancer screening.
        Colorectal cancer is the third most commonly diagnosed cancer for
    both men and women in the United States and the second leading cause of
    cancer- related deaths. Although colorectal cancer is almost entirely
    curable when detected early, recent studies have shown a tremendous
    need to (1) inform the public about the availability and advisability
    of screening and (2) educate health care providers with respect to
    colorectal cancer screening guidelines. The recently initiated National
    Colorectal Cancer Screening Awareness Program at the Centers for
    Disease Control and Prevention will address these needs by coordinating
    with national partners like the DDNC to develop an information program
    emphasizing the value of early detection. The digestive disease
    community hopes that this new program will do for colorectal cancer
    screening rates what CDC's Breast and Cervical Cancer Screening Program
    has done for mammography and Pap smear screening compliance.
        Mr. Chairman, as the DDNC representative to CDC's colorectal
    screening program, I have seen first hand the ambitious plan that CDC
    has to reduce the incidence of this devastating disease. As a result,
    the DDNC encourages the Subcommittee to provide CDC with $5 million (an
    increase of $2.5 million over fiscal year 1998) for this vital
    campaign.
                    viral hepatitis research and prevention
        Mr. Chairman, viral hepatitis is one of this country's most
    dangerous and prevalent infectious diseases. More than 5 million
    Americans are currently infected with chronic hepatitis B or hepatitis
    C. Overall 128,000 new cases are reported each year. Because chronic
    viral hepatitis can result in severe liver impairment, liver
    transplantation (at a cost of approximately $250,000 per patient) often
    becomes the only treatment option available for many individuals.
    Already, chronic hepatitis C accounts for nearly one third of all liver
    transplants being performed in the U.S. It is estimated that there are
    up to 10,000 deaths annually from hepatitis C and the CDC projects that
    this number may triple by the year 2010.
        The DDNC is pleased that NIDDK convened a Hepatitis C Consensus
    Development Conference last March. We believe that priority should be
    given to supporting the research recommendations developed by the
    consensus panel, particularly the development of vaccines for hepatitis
    C. Also, we urge making existing hepatitis B vaccines readily available
    to at-risk populations through an expansion of CDC's vaccination
    program.
                            irritable bowel syndrome
        Finally, Mr. Chairman, I would like to provide the Subcommittee
    with some information on one of the most common and perplexing
    digestive disorders, irritable bowel syndrome (IBS). IBS is a chronic
    complex of disorders that malign the digestive system affecting 10-15
    percent of the general population annually. These disorders strike
    people from all walks of life and result in a significant toll of human
    suffering and disability. Although IBS is one of the most common GI
    disorders people are often very isolated by their condition.
        In a recent U.S. Householder Survey of Functional Gastrointestinal
    Disorders, Prevalence, Sociodemography and Health Impact, irritable
    bowel syndrome accounted for 10 percent of the total gastrointestinal
    disorders population, 46 percent of which required the supervision of a
    gastroenterologist. This care alone results in millions of dollars in
    health care costs every year. In addition, individuals who suffer from
    IBS will miss 13.4 days of work annually as opposed to the 4.9 national
    average, further contributing to higher health care costs and loss of
    productivity. IBS alone has recently been called a multi-billion dollar
    problem by the gastrointestinal community. I would like to thank
    Senator Kohl for his past interest in this area and remind the
    Subcommittee that much more can be done and should be done through the
    NIDDK to address the needs of the millions of Americans suffering from
    IBS.
        Mr. Chairman, once again, thank you very much for the opportunity
    to present the views of the Digestive Disease National Coalition.
                                     ______

     Prepared Statement of the National Association of Addiction Treatment
                                   Providers
        The National Association of Addiction Treatment Providers, Inc. is
    very honored and proud to participate in this hearing on ``Addiction
    and Recovery''. For the past twenty years, NAATP has been the
    preeminent association representing the interests and concerns of
    private sector addiction treatment providers across this country. This
    organization represents some of the highest quality and most well
    recognized treatment programs, as evidenced by the attached Board of
    Directors list, throughout the United States.
        Perhaps no other subject generates as much discussion, debate,
    disagreement, hostility and confusion as does the topic of addiction.
    Hardly any citizen of this country would argue that addiction, in some
    form, has not touched their family or a family close to them. However,
    the responses to this primarily public health issue have been confusing
    and often misguided. Our public policy initiatives have oscillated
    between an attempt to ignore the disease to punishment for those with
    the disease of addiction. In our attempt to simplify a complex issue,
    we have often not taken the time to understand this disease for what it
    is a chronic re-occurring disease that does respond to treatment.
        The National Association of Addiction Treatment Providers
    recognizes that the current public debate on addictions has focused on
    a significant number of issues including, demand reduction, illegal vs.
    legal, criminal justice component, outcome expectations, health care
    off-set dollars, etc. Without diminishing the importance of these
    issues, NAATP wishes to comment on the treatment side of the equation.
    The National Association of Addiction Treatment Providers begins with
    the premise that Alcoholism and other Drug Dependencies is diagnosable,
    the disease responds to treatment and that through appropriate quality
    treatment and a life-long monitoring process, this disease like any
    other chronic disease can be managed. Therefore, recovery becomes
    possible!
        The one hundred and forty members of the National Association of
    Addiction Treatment Providers, Inc. believe that their contribution to
    the continued national debate on this issue will be best served with a
    focus on treatment. In this regard, NAATP is committed to helping to
    promote and provide the most current, accurate and reliable information
    possible on addiction treatment.
        NAATP believes that the single strongest deterrent to an informed
    discussion of this issue are the stigmas and myths associated with the
    diagnosis and treatment of alcoholism and other drug dependencies. The
    overt and covert discrimination is rampant! The National Association of
    Addiction Treatment Providers supports the passage of Federal
    Legislation that would eliminate discrimination that currently exists
    in private health insurance plans. The artificial establishment of
    lifetime dollar caps and yearly limited treatment episodes for
    addiction treatment which are not included or in place for other
    diseases is blatant discrimination. In 1997 Senator Paul Wellstone (S.
    1147) and Representative James Ramstad (H.R. 2409) introduced
    legislation that would end this discrimination. In a recent study
    completed by Milliman & Robertson Premium Estimates for Substance Abuse
    Parity Provision for Commercial health Insurance Products (September 2,
    1997) it was found that the cost for this ``act of justice'' would be
    0.5 percent or less than $1 per member per month. NAATP supports the
    rapid and complete passage of this legislation so as to take the first
    steps toward dealing with the stigma and discrimination that have
    plagued this disease.
        If we are indeed going to commit ourselves to providing treatment
    to those individuals and families whose lives have been ravaged by
    chemical dependency then we must take note of and address the following
    issues:
        Treatment efficacy.--The efficacy of treatment for alcohol and
    other drug problems is clearly established. Outcome studies for the
    treatment of addictions have clearly documented that treatment is
    effective and beneficial both to the individual, her or his family, and
    society. Recent studies have shown that addictions do conform to the
    common expectations of chronic illness and that addiction treatment has
    outcomes comparable to other chronic conditions. A key issue with
    chronic conditions is compliance with the prescribed treatment plan.
    The likelihood of requiring additional treatment within a 12-month
    period following initial treatment is generally higher for diabetes,
    hypertension and asthma than for alcoholism and other drug
    dependencies.
        Economics of treatment.--Accessibility to addictions treatment is a
    major issue. At present, demand for addiction treatment services is
    considerable. Current reimbursement for care both in public and private
    sector combined, are not sufficient to meet the demand for treatment
    appropriately. Hence, accessibility to treatment is often non-existent
    or truncated. It has been the experience of the National Association of
    Addiction Treatment Providers and its members (both former and present)
    that over the past ten years nearly 50 percent of the addiction
    treatment beds have disappeared. This reduction in beds has been
    directly related to the availability and accessibility of treatment
    funds to pay for such treatment. Therefore, due considerations must be
    given to ensure that appropriate fiscal resources necessary for
    addictions treatment are available.
        Accountability.--Accountability for treatment, i.e., who receives
    care, what kinds of resources they receive and sufficiency of
    treatment, are key issues. Managed care has changed the equation of the
    past in that treatment decisions are no longer the sole domain of
    health care providers. Therefore, standards to monitor the performance
    of managed care entities and meaningful oversight mechanisms are
    essential if accessibility is to be promoted and the positive cost-
    benefits of treatment are to be realized. Likewise, existing clinical
    and performance standards for treatment provides need to be promoted
    and monitored to ensure treatment efficacy.
        The National Association of Addiction Treatment Providers and its
    members will continue to forge new treatment methodologies, new
    treatment measures and new partnerships with other professionals to
    ensure that the addiction treatment delivered is of the highest
    possible quality and provides the best opportunity for life long
    recovery.
        Therefore, NAATP is committed to:
      --Actively working to reduce the stigma associated with the disease
            of Alcoholism and other Drug Dependencies;
      --Providing accurate information as to who the persons in treatment
            and needing treatment really are (replacing the myth with a
            person);
      --Seeking accessible and affordable treatment for all persons
            diagnosed with the disease of alcoholism and other drug
            dependencies;
      --Developing appropriate outcome measures so as to continue to
            demonstrate the value of addiction treatment; and
      --Building a national database on addiction treatment.
                                     ______

     Prepared Statement of the National Council on Rehabilitation Education
        The Rehabilitation Act of 1973, as amended in 1992, has significant
    implications for Title III, Section 302 (Training) and the resultant
    Title I and Title III appropriations for the period from fiscal year
    1992 through fiscal year 1997. In the 1992 Amendments, the following
    changes impact the nature, scope, breadth, and distribution of the
    Title III Training appropriations:
      --Section 21 focuses on the need for recruitment, development, and
            retention of underrepresented and unrepresented individuals and
            requires the set-aside of 1 percent to meet these needs;
      --Section 803 of Title VIII requires specialized training for
            distance education through telecommunications, Braille
            training, parent information and training, Impartial Hearing
            Officers training, and recruitment and retention of urban
            personnel;
      --Title I strengthens the requirements for a comprehensive system of
            personnel development, increasing congressional expectations on
            State agencies to upgrade the qualifications of personnel
            consistent with comparable State and professional standards
            (i.e., a graduate degree, licensure, or national
            certification);
      --The Amendments increased Section 130 programs for Native American
            reservations, services for independent living (Title VII-B),
            and the expansion and development of independent living centers
            (Title VII-C), resulting in the need for preparation of
            additional personnel entering the field of rehabilitation and
            requiring continuing education for currently employed
            personnel; and
      --The Amendments allocated a minimum of 15 percent of all Title III
            appropriations for State agency in-service training grants.
        In addition to these legally mandated training requirements,
    numerous studies were commissioned by the Rehabilitation Services
    Administration (RSA), the National Council on Disability, and the
    National Institute on Disability and Rehabilitation Research, and were
    completed by rehabilitation personnel and professional organizations
    over the past fifteen years (Pelavin, 1991; Menz, 1989; Roberts, 1984;
    and Crisler, 1991), which have substantiated the existing shortages for
    current rehabilitation personnel and the need for future rehabilitation
    personnel. A number of Institutes on Rehabilitation Issues (i.e., Human
    Resource Development, 1991; Serving the Underserved, 1992; and
    Counseling and Guidance, 1993) have substantiated the need for
    qualified personnel throughout the State-Federal system and in special
    areas of priority needs. These studies further supported the contention
    that many agencies are experiencing significant loss of personnel
    through retirement and turnover. In the late 1980's and 1990's, State
    agencies have lost much of their institutional memory and talent
    related to the full implementation of the Rehabilitation Act and its
    subsequent Amendments.
        These statutory requirements and personnel and research studies are
    further impacted by increases in SSI and SSDI recipients and the
    authorization and implementation of the Americans with Disabilities
    Act. The needs of persons with disabilities to obtain employment remain
    high (Harris, 1994). While legislation mandates increased employment
    opportunities for persons with disabilities and improved quality and
    productivity of rehabilitation services, there is a critical disparity
    between the current level of appropriated Title III funds and the level
    of funding necessary to prepare new professionals and provide
    continuing education for rehabilitation personnel to empower them to
    comply with these mandates.
        The legislative mandates, the demands for rehabilitation services
    by adult consumers with disabilities, and the need for new personnel to
    meet expansion of program directions, replace retirements, and meet the
    turnover needs of personnel have created a critical demand for the
    continuing education of existing personnel and the educational
    preparation of new personnel.
                  realities of the resources and rsa policies
        From fiscal year 1993 through 1998, the Federal appropriations for
    Title III was $39,629,000,000. This reflected level funding, while the
    Title I appropriations increased from $1,873,476,000 to $2,231,528,000,
    an increase of 19 percent. Coupled with the above demands, the rise in
    inflation, and the escalating costs of purchased educational services,
    the level funding for the past six fiscal years actually resulted in a
    significant reduction of resources and purchasing power.
        RSA policies and the Federal regulations changed during the fiscal
    years of 1993 to 1997. These changes involved an administrative policy
    for level funding for each year of a multi-year grant or cooperative
    agreement. In essence, for a 5-year grant or cooperative agreement,
    there are no cost- of-living increases. Many long-term training grants
    have been capped at a maximum of $100,000 per year, with a further
    mandate that at least 75 percent of all dollars must be directly
    related to student tuition and fees or stipend support. The latter
    requirement has been mandated by Department of Education regulations
    for 34 CFR 386.
        In the area of continuing education, the General Regional
    Rehabilitation Continuing Education Programs (General RRCEPs), which
    were first funded in 1974, have received level funding for the period
    from 1992 to 1997. The only increases have been task-specific addendums
    (i.e., diversity, employment, and streamlining) for a finite period. In
    the September 1997 Request for Proposal, the seven regional General
    RRCEPs which are competing for five-year funding are required to
    continue level funding for another five years. This category of
    training and the individual cooperative agreements will have received
    level funding for a ten-year period--with no reduction in outcomes and,
    in some cases, increased expectations.
        In 1995, RSA consolidated funds from a number of community
    rehabilitation long-term training grant categories and phased in
    Community Rehabilitation Program Regional Rehabilitation Continuing
    Education Programs (CRP-RRCEPs) over a three-year period (1995 through
    1997). The ceiling is $500,000 per year per each regional program for
    the five-year period of the cooperative agreement. There are no
    increases to compensate expanded training needs or inflation.
        Clearly, although the resources have remained constant in actual
    dollars, they have actually been reduced in purchasing power through
    erosion from inflation, cost-of-living increases, regulatory
    parameters, and expanded needs and expectations of consumers and
    rehabilitation service providers.
        While there are methods to increase efficiency, there are also the
    realities of actual cost demands. These demands include increases in
    tuition and fees, travel, and inflation. A program comparable to Title
    III, Training, within the U.S. Department of Education, the Office of
    Special Education and Rehabilitation Services, is the training
    authorized under the IDEA. Table 1 reflects the appropriated levels of
    Federal funding for training during a two-year period (FY 1995 and
    1996).

        TABLE 1--COMPARISON OF IDEA AND REHABILITATION ACT APPROPRIATIONS FOR FISCAL YEAR 1995-96 FOR STATE GRANTS AND TRAINING/PERSONNEL DEVELOPMENT \1\
    --------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               Title I State     Title III      Percent for   State grants--     Personnel      Percent for
                          Fiscal years                           VR funds         funding        training          IDEA         development      training
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    1995....................................................      $2,054.145         $39.629            1.93      $2,998.812        $114.254            3.67
    1996....................................................       2,118.834          39.629            1.83       3,000.000        113.50 4            3.64
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    \1\ Personnel development for IDEA includes personnel development, parent training, the clearinghouses, and the regional resource centers, which are
      categories within Title III of the Rehabilitation Act. All funds are reflected in millions of dollars.

        As reflected in Table 1, during the same two Federal fiscal year
    periods (1995 and 1996), the education and training appropriations
    within the IDEA received significantly higher funding levels. There is
    a substantial discrepancy between the two training programs in terms of
    actual dollars and the percent of appropriations for State grants. The
    support for personnel development, based on a percentage of the total
    allocation for direct services, is almost double for IDEA when compared
    to the State-Federal system of rehabilitation. In actual dollars the
    difference is in excess of $70 million.
          concerns for the future appropriations of title iii of the
                         rehabilitation act, as amended
        The quality of services available for consumers with disabilities
    will be severely diminished without a significant change in the
    philosophical, legal, and fiscal approaches to the comprehensive system
    of personnel development.
        Therefore, to establish the base for an effective system of
    personnel development that will enable quality employment outcomes for
    adults with disabilities, the following resolution is proposed:
        Whereas the Rehabilitation Services Administration training dollars
    have remained the same since fiscal year 1993, and
        Whereas there have been inflationary increases and increases in the
    number of individuals needing training and education, and
        Whereas the 1992 Amendments to the Rehabilitation Act and related
    regulations require master's degree-prepared rehabilitation counselors
    and other qualified rehabilitation personnel to deliver vocational
    rehabilitation services, and
        Whereas training dollars must be spread across an increasing number
    of disciplines, and
        Whereas many staff members who entered into employment in the late
    1960's and early 1970's are now aging out of the vocational
    rehabilitation system,
        Whereby be it recommended by the National Council on Rehabilitation
    Education that the Rehabilitation Services Administration seek an
    increase of the appropriations for fiscal year 1999 to $50 million.
    This figure is derived from the cost-of-living adjustments that were
    afforded to Title I of the Rehabilitation Act from 1993 through 1998
    (19 percent) and from parity with the IDEA personnel development
    authorization.
        There should be an explicit mandate that the focus of training
    efforts in Title III be linked to employment-related outcomes. The
    portion of Title VIII related to distance learning needs to be expanded
    to enable present and future rehabilitation personnel to remain current
    and technologically competent.
        In addition to the proposed increase in appropriations,
    modifications are needed in the regulations and administration of Title
    III by the RSA. These changes should include the expansion of the terms
    and conditions for the payback provisions for stipend support. The
    current provisions are placing undue burdens on the universities for
    reporting and recordkeeping, which often extend beyond grant periods.
    With the development of public-private partnerships, the move toward
    deregulation, and privatization of services, the current definitions
    for graduates are restrictive. Finally, the policy for level funding of
    multi-year projects should be refined and adjusted to meet the needs of
    the students and employed trainees, the sponsoring organizations, and
    the public program.
                                   summation
        The comprehensive system of personnel development is a positive
    mandate under the law and has far-reaching implications for
    organizations providing services through, and preparing personnel for,
    the public program of rehabilitation. However, without a proactive
    approach to appropriations that ensures that there will be sufficient
    funds for the future, the personnel development of new professionals
    and continuing education of current personnel will continue to fall
    critically short of the need. The legislative intent is clear--what
    remains in question is sufficient funding to meet the intent. Persons
    with disabilities deserve and should expect the highest quality
    services provided by competent, professional personnel.
                                     ______

       Prepared Statement of Dr. John F. Neylan, the American Society of
                          Transplant Physicians [ASTP]
            enhancing transplantation medicine in the united states
        Thank you for the opportunity to be here today and to present
    testimony on behalf of the American Society of Transplant Physicians
    (ASTP). I am John Neylan, President-Elect of the ASTP, and Director of
    Transplant Out-Patient Services at Emory University.
        The American Society of Transplant Physicians is composed of 1,100
    physicians, surgeons and scientists. The practices and careers of our
    members focus on the broad fields of transplantation medicine and
    immunobiology and span across many medical and surgical specialties.
    The ASTP represents the largest group of transplant professionals in
    the United States.
        We are pleased that the Institute of Medicine (IOM) has invited a
    cross section of professionals and other interested individuals from
    the transplant community. No single institution or organization can
    affect significant change alone. If we are to continue to advance the
    field, it will be accomplished only through a partnership among all
    interested parties. The progress achieved over the past ten years is
    clearly a result of this kind of collaborative effort. For example, the
    volunteer-run Organ Procurement and Transplant Network (OPTN)
    administered by the United Network for Organ Sharing (UNOS) has
    developed a sophisticated national system for organ sharing.
        The transplant community has persuaded the Congress to extend anti-
    rejection drug benefits for kidney transplant patients from 12 to 36
    months under the Medicare entitlement. There have also been steady
    improvements in clinical practice which have reduced transplantation
    morbidity and mortality. Surveys confirm that an overwhelming
    percentage of Americans are aware of and are in favor of the ``gift of
    life,'' though family refusal continues to be a significant impediment.
    Required request laws have been enacted in all 50 states. The organ
    procurement organizations (OPOs) have been responding to increased
    demands for efficiency and productivity and have consolidated from 120
    to 64. And finally, the funding for transplant-related biomedical
    research at the National Institutes of Health (NIH) has increased in
    the past decade.
        As we have heard this morning, enhancing transplantation requires a
    myriad of strategies including increasing organ donation, developing
    fair and equitable allocation principles, recognizing the concerns of
    special populations, building upon scientific and technical advances,
    and securing adequate access and funding for all patients in need of
    organ or tissue transplants. I would like to build upon this morning's
    discussion by presenting two very important and timely issues for your
    consideration. First I will discuss the ASTP's development of
    standardized listing criteria for determining when to list a patient on
    the national transplant waiting list. Second, I will provide a cursory
    review of the Society's assessment of the recommendations put forth by
    the original Task Force on Transplantation as a means in which to
    determine the public policy needs facing us today.
        Organ allocation, without a doubt, has engendered the most
    contentious public policy debate regarding transplantation in years.
    Throughout this debate, it has been observed that the variation in
    criteria physicians use to list a patient for transplant has
    contributed to the inconsistencies in waiting times among patients
    across the country. Furthermore, there is concern that, because of long
    waiting times in certain regions, there is a pressure on transplant
    programs to list patients early, before they actually require
    transplantation, a practice referred to as ``waiting list inflation.''
    While many other factors contribute to these regional differences
    including OPO productivity and the available supply of local donors,
    the increasing discrepancy between the short supply of donor organs and
    expanding list of patients in need has spurred a growing demand to
    ensure that the organ allocation system is efficient and equitable.
        In early 1997, the ASTP successfully joined transplant physicians,
    surgeons, government agency representatives, UNOS, patients, ethicists
    and managed care providers on the NIH campus for a series of organ-
    specific conferences. These conferences addressed the scientific basis
    supporting specific minimal listing criteria. Transplant programs were
    surveyed before each conference to identify areas of consensus and
    areas of controversy. The initial work in this area by UNOS provided
    the spring board from which the Society has subsequently developed
    recommendations for national, standardized criteria for placing
    patients on the organ-specific transplant waiting lists.
        Time does not permit me to review each of the listing criteria,
    however, a set of these has been made available in your handouts. A few
    key points are worth noting. It was agreed by the participants of the
    conferences that when a program places a patient on the waiting list,
    it should signify that the program would be prepared to transplant that
    patient immediately. Patients should not be placed on the waiting list
    only because it is perceived that he or she will likely need an organ
    transplant at some indeterminate point in the future. It was agreed
    that the minimal listing criteria should be simple, practical, based on
    existing published or, in some cases, unpublished clinical research,
    and have received broad agreement among the transplant community. The
    criteria should be readily verifiable and regularly reviewed to be
    modified where appropriate.
        Recently, a modified version of these recommendations was approved
    by the UNOS Board of Directors. These and other steps must be taken if
    we are to maintain the public's trust in the organ allocation system.
    This trust is absolutely essential if altruistic organ donation is to
    grow to the levels required to meet the needs of transplant recipients
    in the future. The consensus-building process used in the development
    of these listing criteria is an example of how the system can work. The
    ASTP encourages the IOM to carefully scrutinize the process for
    establishing public policy in organ allocation and other areas. We
    support an approach, where those actively involved in transplantation
    come together to review scientific evidence, reach a consensus, and
    make recommendations. As I mentioned in my introduction, the ASTP, in
    it's own efforts to forecast the future needs of transplantation,
    conducted an internal review of the Task Force on Transplantation's
    recommendations. As you are aware, the Task Force was created by
    statute with the passage of the National Organ Transplant Act in 1984.
    We believe the more than 70 recommendations put forth by the Task Force
    presents a national blueprint from which most public policy decisions
    have been made in the past decade. From a public policy perspective, we
    felt much could be learned from revisiting these recommendations to
    determine what has been accomplished, what remains a work in progress,
    and what has been left undone.
        The ASTP Public Policy Committee and the Board of Directors
    recently completed a position paper that created a ``scorecard'' that
    compared 1986 Task Force recommendations with the state-of-the-art
    today. Each of the recommendations was reviewed and scored according to
    present day results. Enclosed in your handouts, is a copy of the ASTP's
    White Paper on Transplantation which reviews our conclusions and
    describes areas of needed improvement. The White Paper addresses four
    specific areas: organ donation, organ allocation, access to
    transplantation and biomedical research. Our agenda is ambitious, but,
    we are confident that each and every recommendation is attainable. In
    the remaining time, I will outline a number of key points.
                                 organ donation
        The transplant community is acutely aware that nearly 10 patients
    die each day while waiting for an organ. Despite improvements in the
    organ retrieval system, allocation simply has not kept pace with
    demand. In 1990, there were 21,914 patients on the waiting list; today,
    there are over 51,000 patients on the waiting list representing an
    increase of 133 percent over six years. Tragically, the number of
    donors has increased by only 43 percent over the same period. The
    reasons for the lack of transplantable organs are numerous, but family
    refusal as I mentioned earlier is the leading cause for the loss of
    potential donors, averaging over 40 percent. Recently, the Institute of
    Medicine recommended that, ``Increasing the donation of kidneys receive
    the highest priority in the coming decades.''
        The ASTP urges federal and state governments, providers,
    professional organizations and patient communities to work together in
    translating the extremely high public awareness of the benefits of
    organ donation into a pro-active national effort to increase the actual
    practice of this altruistic act.
                                organ allocation
        Many of the Task Force organ sharing recommendations have been
    implemented through a single, national OPTN. UNOS continues to work
    towards a fair and equitable national allocation scheme, however, as we
    have noted, there are still unresolved questions and problems. The ASTP
    proposes:
      --The Scientific Registry should develop policies to make the system
            more user friendly concerning access to data and its use.
      --A mechanism is needed to minimize the persistent problem of organ
            discard rates. In 1995, 1,200 kidneys, 500 livers and 250
            hearts were procured and ultimately discarded.
      --The Task Force recommendation to regionalize histocompatibility
            typing should be implemented to reduce unnecessary and
            duplicative effort and expense.
      --The Congress needs to embrace the OPTN guidelines developed by UNOS
            and enact long overdue legislation to reauthorize the
            Transplant Act so that authority will finally be in place to
            appropriately administer the system of organ sharing.
                           access to transplantation
        The issues surrounding access to transplantation are complex and
    controversial. To build upon and enhance the existing system we
    propose:
      --Uniform medical listing criteria for each solid organ category
            (heart, liver, lung, pancreas and kidney) should be developed.
            Patients who meet the accepted criteria should be allowed
            access to transplantation, regardless of their ability to pay.
            As managed care grows, the ASTP sees a need for the federal
            government to assert its leadership to assure that each managed
            care plan provides equal access to transplantation.
      --The government should extend Medicare coverage and payment for
            anti-rejection drugs for the life of the graft.
      --With Medicaid reform, the federal government should assure that all
            states have uniform eligibility and coverage criteria for
            transplantation.
      --To ensure that patients make informed choices regarding
            transplantation, the HCFA and private insurance carriers should
            annually advise patients of their treatment options.
      --National education programs targeted to minorities should be
            developed to educate these under-served groups about the ``gift
            of life'' as well as the medical consequences of a transplant.
            It is imperative that there be a thoughtful review of previous
            minority education programs coupled with this effort.
      --There is disturbing evidence that transplant recipients experience
            employment discrimination. The Congress should schedule
            hearings to determine the extent of discrimination in
            employment, insurance coverage, etc. and move to amend the
            Society Security Act, the job training program, and the
            Vocational Rehabilitation Act to eliminate such discrimination
            and design programs to ensure appropriate access to employment
            medical benefits.
      --The special issues and specialized needs of children should be
            given a high priority. All funding sources, including Medicaid
            and Medicare, private insurance and HMOs must recognize the
            additional costs necessary for the appropriate provision of
            transplantation care to children, particularly infants and the
            very young.
                              biomedical research
        Research is central to all of the transplantation issues previously
    addressed. We submit that increased funding for transplantation
    research will lead to solutions that will save lives. Both the Task
    Force and an IOM report recommended that research receive high
    priority. While research initiatives since 1986 have made progress in
    all of the areas cited by the Task Force, the ASTP believes that we are
    now on the threshold of many important breakthroughs in the areas of
    rejection-immunosuppression, tolerance and xenografts.
        Next to issues related to the supply of organs for patients on the
    waiting lists, those of basic and clinical research are of the highest
    priority. Clinical and basic transplantation funding at the NIH must be
    increased. We propose that Congress, through the authorization and
    appropriations process, expand the general transplantation research
    authority of NIH. In particular, we recommend that Congress designate a
    number of high priority initiatives at the NIDDK, the NIAID and the
    NHLBI. We also recommend that the NIAID be designated as the lead
    coordinating institute for the NIH transplantation research effort in
    the next decade, The Decade of Transplantation.
        I have submitted a copy of the White Paper for this hearing's
    record. We plan to distribute this paper to members of the Congress,
    selected government agencies, and others in the transplant community.
    The ASTP invites the IOM and all other interested groups to comment and
    reflect on the recommendations presented in this white paper. We would
    welcome the opportunity to work with the Institute to publicly explore
    these issues further. I urge each of you to read the document. We
    believe it is a blueprint for The Decade of Transplantation.
        The ASTP is enthusiastic about the potential for a variety of
    important studies on organ transplantation in the United States today.
    We strongly endorse an IOM study that would evaluate the field,
    identify problems and trends and suggest solutions. It has been more
    than ten years since the Congressionally mandated (Public Law 98-507)
    Department of Health and Human Services report of the Task Force on
    Organ Donation issued its report and more than seven years since the
    landmark Institute of Medicine report, Kidney Failure and the Federal
    Government. There is much to do to ensure that every person on the
    waiting list has the opportunity to obtain the benefits of organ
    transplantation. We believe that we are at a crossroads, and that the
    time is right to unite our community to enhance transplantation as we
    approach the beginning of the new millennium. The ASTP stands ready to
    assist in every facet of the process.
        Thank you.
                                     ______

     Prepared Statement of Dr. David L. Heymann, World Health Organization
    the need for global surveillance and monitoring for infectious diseases
    The challenge
        Infectious diseases remain a global problem in the late twentieth
    century. Global surveillance is an urgent necessity to protect the
    health of people throughout the world. There is reason to believe that
    the emergence of previously unknown diseases and the re-emergence of
    old ones is increasing. One-third of the 52 million deaths in the world
    in 1995 were due to infectious diseases, and this ratio remained the
    same in 1996 and 1997. Infectious diseases spread when adequate
    financial and human resources are not devoted to infectious disease
    control and when microbes in animals find suitable conditions to jump
    the species barrier and infect humans. Factors responsible for the
    increase in infectious diseases include social changes such as mass
    population movements, rural-to-urban migrations and accelerated
    urbanization, population growth, rapid transport, global trade, new
    food technologies, and new life styles as well as environmental changes
    such as altered land use patterns and irrigation that increase the risk
    of human exposure to animal reservoirs and vector-borne infections. A
    new outbreak may first appear in a circumscribed area, but with
    expanding global travel and trade, the disease can span entire
    continents within days or weeks as influenza periodically demonstrates.
    The diseases that have crossed, or threaten to cross, international
    borders menace international public health security. Today these
    infectious disease outbreaks and epidemics are not only costly to the
    economies of the countries in which they occur, but are also a concern
    for all countries because no country is safe from infectious disease.
        For example, during 1997:
      --Major cholera epidemics spread throughout eastern Africa, affecting
            hundreds of thousands of people in more than ten countries over
            several months; trade sanctions were unnecessarily placed on
            fish exports from these countries resulting in severe economic
            impact on their fragile economies;
      --Yellow fever fatalities were reported in seven countries in Africa
            and South America;
      --Meningitis caused major epidemics in Africa, with over 70,000
            deaths reported in the 1996-1997 season;
      --More than 15,000 cases of typhoid fever with resistance to first
            line antibiotics occurred in Tadjikistan;
      --Epidemic typhus resurged in Burundi with over 30,000 cases and
            untold deaths;
      --An avian influenza virus emerged in humans in Hong Kong, killing
            six out of eighteen people, and was carefully monitored for its
            potential to be the next pandemic influenza threat;
      --Rift Valley Fever afflicted thousands of people, killing hundreds
            and many of their livestock in Kenya and Somalia;
      --The prevalence of hepatitis C continues to increase in countries
            where blood is not screened prior to use and where
            sterilization of medical equipment is faulty;
      --Lassa fever, with high mortality, re-emerged in Sierra Leone;
      --An outbreak of dengue fever occurred in Cuba for the first time
            since the 1981 epidemic;
      --The investigation of an unexpectedly large human monkeypox outbreak
            in Africa raised new issues about this important disease and
            the safety of smallpox vaccination in the era of AIDS;
      --The number of cases of new variant Creutzfeldt-Jakob Disease
            reached twenty-four in the United Kingdom and France combined
            with the continuing threat of bovine spongiform Encephalopathy
            (BSE or mad cow disease), and the United Kingdom's economic
            loss from BSE was estimated to have reached 5.7 billion U.S.
            dollars;
      --Eschericia coli 0157 continued to surface in industrialized
            countries including Japan and the United States;
        Vancomycin-resistant Staphylococcus aureus was identified in Japan
    for the first time, and later in the United States.
    The solution
        The concern of industrialized countries such as the United States,
    where prevention and control efforts have dramatically decreased
    infectious disease mortality, is international public health security:
    ensuring that infectious diseases which are occurring elsewhere do not
    spread internationally across their borders.
        The concern of developing countries is to detect and stop
    infectious diseases early, thus avoiding high mortality and negative
    impacts on tourism and trade. Yet, developing countries are constrained
    by the lack of appropriate technologies and the difficulty of financing
    the necessary interventions on a sustainable basis.
        The solution, which addresses the interests of both the
    industrialized and developing countries, is to combine their efforts to
    strengthen detection and control of infectious disease. The major
    requirements for the prevention and control of infectious diseases
    globally and nationally are:
      --1. Strong global and national epidemiological surveillance and
            public health laboratories to detect infectious diseases, to
            provide data for analyzing and prioritizing health services,
            and to monitor and evaluate the impact of control efforts plus
            global monitoring and alert systems to bring together
            laboratories and disease surveillance systems from all
            countries to share information internationally through
            electronic and printed media.
      --2. Sustainable and well-managed infectious disease control programs
            which effectively diagnose infectious diseases and administer
            vaccines, curative drugs, and other interventions where and
            when they are needed.
      --3. Continuing research and development of simple-to-use and robust
            vaccines, antimicrobial drugs, and laboratory tests for
            effective surveillance, prevention, and control of infectious
            diseases.
    WHO's global strategy and collaboration with CDC
        To combat the spread of infectious disease a global framework is
    needed to build up the necessary networks for surveillance and control
    of infectious diseases. The World Health Organization works to build
    such a global framework and effective networks through its Division of
    Emerging and other Communicable Disease Surveillance and Control (EMC).
        WHO has responded to the threats of infectious disease by
    developing a four-part strategy for international surveillance.
        First, WHO has instituted a global monitoring and alert system for
    communicable diseases that brings together laboratories and disease
    surveillance systems from all countries to share information
    internationally through electronic and printed media. Revision of the
    International Health Regulations (IHR) is underway and will be proposed
    for adoption by the World health Assembly in 1999. The new
    International Health Regulations will require Member States to report a
    spectrum of communicable disease syndromes of international public
    health importance in addition to the three specific diseases covered at
    present. These proposed new regulations are now being field-tested.
        Second, WHO rapidly and widely disseminates global information
    collected from national Ministries of Health, WHO Collaborating
    Centers, and governments via electronic means and the WHO World Wide
    Web site. EMC also has an electronic alert system designed to help
    facilitate expert verification of unconfirmed outbreak information on a
    confidential basis.
        Third, WHO helps in establishing national and regional preparedness
    for communicable disease prevention and control. EMC provides manuals,
    standards, and guidance to national centers. The weak link in current
    global monitoring capacity is the collection of clinical/
    epidemiological data. At present, few countries have an adequate
    national infectious disease monitoring system, and most are extremely
    weak. Some of the most important geographical regions in terms of
    disease emergence, are the weakest, and this situation needs to change.
        Finally, WHO encourages international preparedness for communicable
    disease prevention and control, which supports and augments national
    and regional preparedness while national systems improve their
    capabilities.
        The key to global surveillance and control of infectious diseases
    has been a collaborative effort between WHO and its partners, including
    national-level agencies like the Centers for Disease Control and
    Prevention (CDC), which play a critical role in continuing domestic
    surveillance and control which minimizes the risk of international
    transmission of infectious diseases.
        WHO's goal is to strengthen national preparedness in all countries,
    which will require a substantial long-term commitment of human and
    material resources by many partners to strengthen the infrastructure
    and processes for disease control and surveillance in poorer countries.
    WHO's role has been to reinforce global laboratory-based surveillance
    by providing training and support to existing WHO Collaborating Centers
    and laboratories. WHO gives seed funding for development and
    distribution of diagnostic reagents and designates new centers and
    laboratories to fill geographic gaps. CDC already provides valuable
    assistance in quality assurance to WHO supported laboratories
    monitoring bacterial, viral, parasitic and zoonotic diseases throughout
    the world. CDC also provides expert training in epidemiology and other
    areas of public health, working with WHO and other international
    partners.
        WHO has improved global epidemiological surveillance and
    facilitated rapid reporting of and response to infectious disease of
    international public health importance. Surveillance has specifically
    focused on developing a system to detect and investigate unusual
    infectious disease outbreaks, whether naturally occurring or
    intentionally caused. WHO has been working with the monitoring group of
    the Biological Weapons Convention (BWC) to make sure that all diseases
    of concern to BWC are included in these surveillance guidelines. WHO
    Member States and WHO's network of regional offices, country
    representatives, and technical partners such as CDC are now being
    linked electronically for verification and response. The response
    mechanism permits rapid and coordinated international investigation and
    containment of infectious disease outbreaks of international
    importance. WHO-coordinated international response broadens
    international cooperation so that no country is required to shoulder
    the entire burden of responding to an infectious disease outbreak of
    international importance. Without such a coordinated international
    response, many disease outbreaks could have resulted in extensive
    international spread.
        EMC is strengthening global surveillance through adding new
    collaborating partners to the network of WHO Collaborating Centers in
    infectious disease and/or the anti-microbial resistance (ARM)
    monitoring network. WHO is working to incorporate military laboratories
    which often have good capabilities even in poorer countries, together
    with WHO Collaborating Centers into the global monitoring system for
    diseases and antimicrobial resistance.
        Increased support to CDC for international collaboration with WHO
    would permit more rapid strengthening of surveillance and control
    capabilities worldwide, especially in poor countries. By permitting
    rapid detection and containment of infectious diseases when and
    wherever they occur, the risk of their entering the United States of
    America is minimized. Together, WHO and CDC will be working to advance
    all of the elements of current efforts to strengthen the global
    monitoring system to ensure international public health security.
                                     ______

    Prepared Statement David B. Moore, Coordinator, Health Professions and
                          Nursing Education Coalition
        The Health Professions and Nursing Education Coalition (HPNEC) is
    pleased to submit its recommendations for fiscal year 1999 funding for
    the health professions and nursing education programs authorized under
    Titles VII and VIII of the Public Health Service Act. HPNEC is an
    informal alliance of over 40 organizations comprising a variety of
    schools, programs, and individuals dedicated to educating professional
    health personnel. All members of HPNEC are united in our belief that
    these programs are essential to the development and training of health
    professionals and that these programs are critical to our nation's
    efforts to provide professional health services to underserved and
    minority communities.
        The members of HPNEC are encouraged by the Administration's
    recognition of the importance of these programs as reflected in the
    President's fiscal year 1999 budget. The budget illustrates the
    Administration's understanding that the federal government must take a
    leadership role in ensuring the supply, distribution, diversity, and
    quality of this nation's health care workforce. The Administration's
    budget proposal emphasizes the importance of having health care
    professionals in areas where they are most needed, and highlights
    strategies to achieve this goal: increasing the number of health
    providers from minority backgrounds; fostering community- based
    education; and enhancing service to underserved communities.
        HPNEC recommends that Titles VII and VIII receive an appropriation
    of $306 million for fiscal year 1999. This recommendation is a 5
    percent inflationary increase over the amount Congress appropriated for
    these programs in fiscal year 1998. This appropriation is necessary to
    maintain current efforts to address our nation's rapidly changing
    health care system.
        These programs are designed to meet the nation's needs for an
    expanded supply of primary health care providers and public health
    professionals. The original purpose of Titles VII and VIII were to
    train more health professionals in fields experiencing shortages,
    improving the geographic distribution of health professionals, and
    increasing access to health care in underserved areas. However, the
    need for these programs will become increasingly critical to ensure
    that the medical innovations and new technologies that will result from
    increased support for research will be properly applied to individuals
    in or most needy communities. With your support, these programs will
    continue to achieve these missions by providing support for the health
    professions in the form of loans, loan guarantees, scholarships to
    students, and grants and contracts to institutions. In this rapidly
    changing health care environment, it is crucial Title VII and Title
    VIII programs receive an appropriation of $306 million for fiscal year
    1999 in order to meet the mission set out in their original
    authorization.
        The following pages describe each of the health professions and
    nursing education programs authorized under Titles VII and VIII.
    Examples of the positive impact of these programs are provided in
    italics.
                                   title vii
    Title VII programs provide opportunities for health professions
            students to train and provide primary and preventive care to
            people of medically underserved communities
                 loans for disadvantaged students [section 721]
        Loans for Disadvantaged Students go to eligible health professions
    schools allowing them to provide loans to disadvantaged individuals.
    Schools receiving funds must carry out programs for recruiting and
    retaining students from disadvantaged backgrounds and recruiting
    minority faculty. The fiscal year 1997 appropriation was $6.717
    million; the fiscal year 1998 appropriation is $6.741 million. The
    Health Professions Student Loan Program has helped approximately 700
    students at Ohio State University over the past three years. These
    loans have kept students from having to borrow alternative loans or
    having to increase the use of unsubsidized loans to meet their Cost of
    Attendance. This has enabled students to not only reduce their debt,
    but have loans with better terms when repayment occurs. Rita Spring,
    Financial Aid Officer for the College of Veterinary Medicine, recently
    spoke with John Groah, a 1996 graduate from the College of Veterinary
    Medicine. He received not only Health Professions Student Loans, but
    Loans for Disadvantaged Students while at Ohio State. John was from
    McConnelsville, Ohio, a rural part of southern Ohio and considered part
    of the Appalachian Mountain region. John has returned home to
    McConnelsville and is engaged in a practice with one other
    Veterinarian. John feels that he would not have been able to graduate
    from Veterinary School without the help of these two programs. He is
    doing well and is contributing to his community.
     scholarships for students of exceptional financial need [section 736]
        Exceptional Financial Need (EFN) scholarships are awarded by
    allopathic medical, osteopathic medical, and dental schools to students
    who can demonstrate extreme financial hardship. Each scholarship
    consists of payments equivalent to the student's tuition and other
    educational expenses, such as books and laboratory fees. Students who
    accept EFN scholarships must agree to enter and complete a primary-care
    residency and serve in a primary-care career for five years after
    finishing the residency. The fiscal year 1997 appropriation of $11.33
    million resulted in nearly 650 scholarships for needy students; the
    fiscal year 1998 appropriation is $11.371 million.
        Dr. Gary Schluckebier, and Exceptional Financial Need Scholarship
    recipient, graduated from the Indiana University School of Dentistry in
    1995. Upon graduation Dr. Schluckebier served one year in an inner-city
    clinic in Chicago, Illinois providing oral health services to HIV/AIDS
    patients. Dr. Schluckebier now has a general dentistry practice in the
    small economically depressed town Michigan town of Niles. Scholarships
    for Disadvantaged Students [Section 737]
        While African Americans represent 12 percent of the population of
    the United States, only 2 to 3 percent of our nation's physicians,
    dentists, pharmacists, psychologists, and veterinarians are African
    American. Historical data documents that African Americans and other
    minority health care professionals are more likely to serve in
    underserved communities in primary-care settings. This program provides
    funds to health professions and nursing schools for scholarships for
    disadvantaged persons from all ethnic backgrounds to help defray the
    cost of education at the baccalaureate and graduate levels, thereby
    encouraging the recruitment and retention of these individuals. More
    than 4,980 health professions students received scholarships through
    the fiscal year 1997 appropriation of $18.676 million; the fiscal year
    1998 appropriation is $18.737 million--30 percent of this appropriation
    is reserved for nursing students.
              faculty loan repayment and fellowships [section 738]
        This program repays loans for and provides added training to
    minority individuals from disadvantaged backgrounds who serve on the
    faculty of health professions schools. The fiscal year 1997
    appropriation of $1.061 million benefited 23 faculty members; the
    fiscal year 1998 appropriation is $1.065 million
                      centers of excellence [section 739]
        Section 739 recognizes the need to increase the number of
    minorities in the health professions and to improve the health status
    of minorities. The Centers of Excellence program seeks to strengthen
    our national capacity to educate minority students by offering special
    support to institutions that train many of America's minority health
    professionals and serve as the primary source of health care to
    minority populations. Funding for Centers of Excellence supports
    programs to improve student recruitment, retention, training, and
    research at predominantly minority institutions. The education of
    nearly 3,520 students at 22 institutions was enhanced by the fiscal
    year 1997 appropriation of $24.718 million; the fiscal year 1998
    appropriation is $24.798 million.
        The Tuskegee University School of Veterinary Medicine has utilized
    Centers of Excellence funding to gradually increase faculty salaries to
    85 percent of the national average, making Tuskegee more competitive in
    recruiting faculty. Tuskegee has also increased its number of library
    personnel and updated its audiovisual tutorial holdings. Centers of
    Excellence funding has contributed to Tuskegee becoming a national
    leader in recruiting and training students specializing in the human
    health aspects of veterinary medicine. These specially trained
    veterinarians combat diseases such as E. coli that threaten public
    health.
                     disadvantaged assistance [section 740]
        Grants made to health professions schools under the Health Careers
    Opportunity Program (HCOP) are used to identify and recruit
    disadvantaged students, facilitate their entry into school, and help
    them complete their education successfully. HCOP funds are also used to
    provide any necessary preliminary education and to pay for scholarships
    (known as Financial Aid for Disadvantaged Health Professions Students
    scholarships) and stipends to defray the costs of attendance. HCOP
    grants supported by the fiscal year 1997 appropriation of $26.785
    million assisted 134 projects that served 6,122 students; the fiscal
    year 1998 appropriation is $26.779 million.
        Despite the fact that the provision of health care in this country
    is undergoing rapid changes, there has been insufficient funding of
    training programs for health care professionals, such as psychologists
    who are equipped to deal with behaviorally based social problems (e.g.,
    violence, teen pregnancy, and the spread of AIDS and other sexually
    transmitted infections). The Wright State University School of
    Professional Psychology's Minority Access to Professional Psychology
    (MAPP) is designed to assist individuals from cultural, racial, and
    other diverse and/or disadvantaged backgrounds to enter and graduate
    from doctoral training programs in psychology. The three program
    components are:
      --Preliminary education, which targets undergraduate minority and
            disadvantaged students (at the sophomore levels and above) from
            area universities and provides them with academic skill-
            building and enrichment experiences;
      --Facilitating entry, which is designed to reduce barriers to
            minority and disadvantaged students' applying and being
            accepted for clinical psychology graduate study; and RETENTION,
            which includes the provision of preventive and remedial
            academic skill development as well as nonacademic personal and
            professional development support.
                  area health education centers [section 746]
        Section 746 provides grants for the creation and operation of area
    health education centers (AHECs). The AHEC program provides clinical
    training opportunities to health professions and nursing students and
    residents in rural settings by extending the resources of academic
    health centers to communities in need of health care and education.
    Through this linkage, AHEC projects, which eventually become self- or
    state-supported, form networks of health-related institutions to
    provide educational services to students, faculty, and practitioners,
    and ultimately to improve health-care delivery. The fiscal year 1997
    appropriation of $28.490 million supported grants to 36 AHEC projects
    that train 21,075 students and residents across the country; the fiscal
    year 1998 appropriation is $28.587 million.
        The University of Florida College of Medicine through coordination
    with the University of Florida Health Science Center AHEC program has
    developed a mandatory three-week community primary care rotation for 85
    first-year medical students. The program has presence in all 37 north
    Florida counties in the North Florida AHEC cachment area. This program
    was made possible by the AHEC system and its federal funding. The
    program has been in place for 6 years and while it is too early to
    determine placements in these primarily underserved areas, several
    other outcomes have developed. The value and positive role these
    students have played in the various sites across North Florida have
    resulted in additional rotations for 3rd and 4th year students at the
    same sites. In addition, rotations for other health professions have
    developed in these areas. Also, along with the first-year student
    rotations, the AHEC program was central in establishing rotation sites
    for primary care residents and nurse practitioners. These latter
    trainees have added service capacity to the communities they train in
    since they are licensed practitioners. It is safe to say these programs
    would not have emerged as rapidly or as successfully without the AHEC
    component
             health education and training centers [section 746(f)]
        The Health Education and Training Center (HETC) program was created
    to improve the supply and distribution of health professionals along
    the border between the United States and Mexico, as well as in other
    underserved areas to population groups that have demonstrated serious
    unmet health care needs. HETC projects employ educational incentives to
    attract and retain health care personnel and incorporate a strong
    emphasis on wellness through public health education activities. Each
    project also supports at least one training and education program for
    physicians and one for nurses to provide a portion of the clinical
    training for students in the service area. The fiscal year 1997
    appropriation of $3.752 million assisted ten projects; the fiscal year
    1998 appropriation is $3.765 million.
        Nova Southeastern University College of Osteopathic Medicine (NSU-
    COM) serves as the lead institution of the Florida Border Health
    Education and Training Centers Program, a partnership of the four
    medical schools in Florida, which focuses on the State's diverse and
    complex immigrant, migrant, and minority patient populations. This
    program now provides a unique national model of collaboration between
    osteopathic, allopathic, private and public schools of medicine. Among
    the many special training initiatives have been a ``Culturally
    Competent Health Care'' Teleconference reaching nearly 600 participants
    in over 35 sites across Florida. These site encompass providers from
    health departments, community and migrant health centers, and hospitals
    in rural and remote communities where a large number of immigrants from
    Florida's multiethnic and multilingual cultures are served. Because of
    its success, this Teleconference also resulted in the production of a
    videotape which is now being used in follow-up workshops and seminars.
                     family medicine training [section 747]
        Section 747 family medicine training funds are used to help develop
    and maintain an infrastructure for the production of family physicians.
    Funding is used for the establishment of departments of family medicine
    within medical schools, the development of third-year clerkships in
    family medicine for medical students, the training of family practice
    residents, and development of teaching and education skills for family
    medicine faculty. The General Accounting Office and others have
    acknowledged the importance of this Title VII funding in the creation
    and maintenance of family medicine departments and divisions in medical
    schools.
        The fiscal year 1997 appropriation of $49.3 million funded 322
    projects, including grants to school to support predoctoral training;
    to hospitals to support graduate training for 950 students in family
    medicine; to various institutions engaged in facility development
    activities; and for the establishment and maintenance of family
    medicine departments. The fiscal year 1998 appropriation is $49.42
    million.
        Medical College of Georgia. A number of years ago the department
    was awarded an innovative residency curricula grant to develop academic
    community partnerships with a network of rural health clinics in a four
    county area--an area that was a Health Professional Shortage Area,
    unable to keep private physicians, and economically depressed. The
    success of that grant is in the development of self-sustaining rural
    health clinics as teaching sites with residents and students providing
    care under the auspices of a teaching physician. Physicians graduating
    from this program have subsequently been hired to direct these sites
    and have stayed for the long term providing continuity of care, and
    living in the communities that they serve.
    general internal medicine and general pediatrics training [section 748]
        General internists and pediatricians are two additional and
    important generalist specialties. Section 748 provides funds directly
    to general internal medicine and general pediatrics training programs,
    which together train the most medical students. In an effort to produce
    more generalists, these training programs expose students to generalist
    role models in community and ambulatory settings, where most
    generalists are likely to practice, and encourage general faculty
    development programs that produce future generalist teachers and role
    models.
        Pediatrics has historically been a generalist dominated field of
    medicine with over 70 percent of practicing pediatricians engaged in
    primary care practice. Faced with increases in the incidence of AIDS,
    substance abuse, adolescent pregnancy and other health concerns, future
    pediatricians will be expected to manage both acute and chronic health
    programs, care for children and adolescents with disabling conditions,
    and provide counseling for problems that are psychosocial or behavioral
    in nature. Section 748 grants in pediatrics have supported training in
    a variety of diverse ambulatory and community-based sites including
    nontraditional settings such as, juvenile detention centers, homeless
    shelters, child nutrition programs, child care centers and community
    health centers. The fiscal year 1997 appropriation of $17.68 million
    supported nearly 1506 residency positions in general internal medicine
    and general pediatrics and nearly 1,000 faculty positions in these two
    areas of medicine. The fiscal year 1998 appropriation is $17.678
    million.
        With Title VII funds, the Department of Pediatrics at Harbor/UCLA
    Medical Center (a county-funded institution serving mainly underserved
    indigent Hispanic patients) expanded services, developed new programs,
    and trained physicians who have remained general pediatricians in inner
    city underserved communities of California. Approximately 100 such
    pediatricians have been trained, and these generalists provide
    comprehensive and preventive care to a large number of vulnerable and
    economically disadvantaged children.
                  general dentistry residencies [section 749]
        General Dentistry Residency Training provides dentists with the
    skills and clinical experiences needed to deliver oral health care to
    the full community of patients. General Dentistry programs include off-
    site rotations in community-based settings such as community health
    centers, nursing homes, geriatric day care facilities, state
    institutions, and children's hospitals. Because the General Dentistry
    program emphasizes primary care, dentists are trained to deliver a
    broader range of services to their patients and as a result,
    consistently refer fewer patients to specialists. This is especially
    important to the underserved populations that often face financial and
    logistical barriers making specialized care unobtainable. Eighty-seven
    percent of the dentists that receive General Dentistry Training remain
    in primary care. Programs have consistently met the statutory
    preference of demonstrating that graduates establish their permanent
    practice or spend a significant portion of time working in underserved
    communities. However, there are not enough of these residency slots for
    dental school graduates seeking this training. The General Dentistry
    Residency Training program does not increase the supply of dentists,
    but provides enhanced training for primary care dentists. The need to
    increase these training opportunities was supported by the 1995
    Institute of Medicine Report on Dental Education. The fiscal year 1997
    appropriation of $3.785 million supported 41 General Dentistry
    Residency Training programs.
        The fiscal year 1998 appropriation level is $3.798 million.
        The General Dentistry Residency program at Meharry Medical College
    School of Dentistry in Nashville, Tennessee, is currently in the second
    year of a three-year federal General Dentistry Residency grant. A
    significant feature of the Meharry program is the involvement of the
    General Dentistry residents as a part of an interdisciplinary health
    care team delivering medical and dental care to rural populations in
    west Tennessee. Over 40 percent of the General Dentistry program
    graduates continue to practice in medically underserved communities
    throughout Tennessee and the United States.
                       physician assistants [section 750]
        Section 750 authorizes grants for schools of medicine and
    osteopathic medicine, as well as colleges and universities, to meet the
    costs of projects to develop and operate or maintain accredited
    programs for the training of physician assistants and faculty. Programs
    under this section are oriented toward primary care and stress
    educational experiences in both rural and urban areas that are
    medically underserved or facing shortages of qualified health
    professionals. The fiscal year 1997 appropriation of $6.376 million
    provided 38 awards for the training of 3,250 physician assistants
    nationwide; the fiscal year 1998 appropriation is $6.398 million.
        The establishment of the Physician Assistant Program has enabled
    Western University to develop and implement a 20-week cross-cultural
    medicine curriculum designed to provide physician assistant students
    with the skills needed to practice in culturally diverse communities.
    In addition, the program has been designed to provide clinical
    practicum in primary care and increase the clinical rotation time in
    primary care from 12 to 16 weeks. As a result of Title VII funds,
    Western University PA students consistently score the highest on State
    Board exams.
                podiatric primary care residencies [section 751]
        Grants are awarded under Section 751 for assistance with the costs
    of training podiatric physicians to provide primary health care
    services. Funds awarded through this section help podiatric residency
    training programs implement new primary-care projects and provide
    financial assistance to residency trainees enrolled in these programs.
    Thirty-nine podiatric physicians in five projects were supported by the
    fiscal year 1997 appropriation of $677,000; the fiscal year 1998
    appropriation is $679,000.
     public health traineeships, special projects, and preventive medicine
                                [sections 761-3]
        Public health professionals will play a unique role in the evolving
    managed care environment, and health agencies and organizations at
    national, state, and local levels will rely even more heavily on
    University graduate schools of public health and other public health
    and preventive medicine projects to provide leadership in the form of
    comprehensively trained public health professionals.
        Section 761 provides Traineeships for individuals pursuing courses
    of study in fields experiencing severe shortages of public health
    professionals, such as dental public health, epidemiology,
    environmental health, biostatistics, managed-care administration, and
    risk analysis. Section 762 authorizes the extension of grants to
    schools of public health for projects in the areas of preventive
    medicine, health promotion and disease prevention, and improving access
    to and quality of health services in medically underserved communities.
    Section 763 provides funds to schools of medicine, osteopathic
    medicine, public health, and dentistry for the development and
    maintenance of preventive medicine and dental public health programs,
    and extends financial assistance to residents enrolled in such
    programs.
        Preventive medicine physicians and dentists are uniquely trained in
    both clinical medicine or dentistry and public health, and seek to find
    the most cost-effective ways to reduce the risk of diseases,
    disabilities, and death in individuals and population groups. Support
    through Title VII is necessary to alleviate the serious shortage of
    public health professionals such as dental public health specialists;
    in 1994, for example, there were only 116 such board-certified
    specialists and only 12 graduates from the 19 accredited programs.
        The fiscal year 1997 appropriation of $7.998 million supported 69
    projects and awards, approximately 123 preventive medicine and dental
    residents, and more than 987 public health trainees. The fiscal year
    1998 appropriation is $8.025 million.
        Section 762 (Special projects) funded a project with the Tulane
    University School of Public Health and Tropical Medicine to develop a
    community health strategic plan. A task force of more than 60 members
    of the university, community, non-profits and public agencies came
    together to create a community health strategic plan to establish
    partnerships which truly address community needs. Outcomes of this
    program include the establishment of a school-based adolescent mental
    health clinic, expansion of primary care facilities to low- income
    neighborhoods, school health clinics to promote healthy lifestyles for
    children, and a five-year study in 24 elementary schools to assess
    school-based interventions in promoting healthful behaviors. As an
    outgrowth of this program, the school formed a faculty advisory
    committee, and began an academic program in community health. The
    School of Public Health has also instituted a program in social
    mobilization to teach community leaders how to empower their
    communities for action.
       allied health professions advanced training and special projects
                                [section 766-7]
        Section 766 authorizes the awarding of grants to schools,
    universities, and other educational entities for establishing and
    expanding post baccalaureate programs for the advanced training of
    allied health professionals, as well as for providing traineeships and
    fellowships for students who agree to teach in an allied health
    profession. Section 767 provides funding for developing or expanding
    programs that will increase the number of individuals trained in allied
    health professions. The fiscal year 1997 appropriation of $3.832
    million supported 34 special projects in allied health; the fiscal year
    1998 appropriation is $3.845 million.
        Several grant recipients have developed model programs to identify
    and recruit non- traditional students, including minorities and recent
    college graduates in science, into allied health professions. The
    University of Maryland School of Medicine developed a national model to
    assist in recruiting and retaining minority and disadvantaged students.
    The retention rate of individuals participating in the program is 92
    percent to 100 percent.
     health administration traineeships and special projects [section 771]
        Health administration training programs exist in a wide variety of
    settings, including medical schools, schools of allied health, schools
    of public health, and even in schools of business. They play an
    integral role in training the present and future management of our
    evolving health care system.
        Section 771 authorizes a program of traineeships, as well as
    special projects in which grant applications are peer-reviewed. Special
    emphasis is placed on programs that focus more heavily on underserved
    communities. Preference is given to students who are committed to
    careers in underserved areas with public or nonprofit private entities
    requiring the specific training provided in health administration
    programs. The fiscal year 1997 appropriation of $1.095 million
    supported 38 awards and 365 health administration trainees. The fiscal
    year 1998 appropriation is $1.099 million.
      geriatric education centers and fellowships and geriatric optometry
                     training [sections 777 (a, b, and (c)]
        Funding for geriatric training has not kept pace with the rising
    demand for specialized services necessary for a rapidly aging
    population. Evaluations of the adequacy and availability of health-
    care personnel to meet the needs of elderly Americans through the year
    2020 have revealed a shortage of adequately-trained faculty to educate
    future health-care providers in geriatrics. Specifically, increased
    funding is needed to support multi-disciplinary geriatric education
    centers (GECs) and geriatric training programs (GTPs). Both types of
    programs are effective in providing opportunities for health-care
    personnel to develop skills for providing better, more cost-effective
    health care for older Americans.
        GECs include short-term faculty training, curriculum and other
    educational resource development, and technical assistance and
    outreach, and are affiliated with educational institutions, hospitals,
    nursing homes, community-based centers for the aged, and veterans'
    hospitals. GTPs provide fellowships for medical and dental faculty and
    provide for curriculum development, the hiring of faculty and the first
    three months of fellowship training.
        Section 777(c), Geriatric Optometry Training, authorizes grants to
    schools and colleges of optometry to support projects in postgraduate
    geriatric care training for optometrists who will teach geriatric
    optometry; to provide residencies, traineeships, and fellowships to
    participants; and to establish new affiliations with nursing homes,
    ambulatory-care and senior centers, and other public or nonprofit
    private entities.
        The fiscal year 1997 appropriation of $8.88 million supported 31
    GECs and 8 Faculty Fellowship Programs; the fiscal year 1998
    appropriation is $8.911 million.
        University of North Texas Health Science Center Texas College of
    Osteopathic Medicine (UNTHSC) has a two year faculty training program
    in medicine and dentistry that includes research, administration,
    clinical, and teaching experiences in aging. By July, 1997, the program
    will have graduated three dentists and 1 physician. The program
    requirements include providing services through community-based
    programs to minority elderly and indigent elderly populations. Over the
    past three years, a dentist, nurse manager, Director of nursing,
    physician, and administrative coordinator have enjoyed the benefits of
    a educational experience in geriatrics education. There are needs for
    continued support of GEC's to increase interdisciplinary training in
    Geriatrics to meet future population demands.
             rural health interdisciplinary training [section 778]
        Rural health interdisciplinary training projects are designed to
    assist individuals in academic institutions in establishing long-term
    collaborative relationships with health care facilities and providers
    in rural areas. Projects funded under this authority use new and
    innovative methods to train practitioners to provide services in rural
    areas, demonstrate models and methods designed to provide access to
    cost-effective comprehensive health care, and enhance the amount of
    relevant research conducted concerning health care issues in rural
    areas. Twenty grants and contracts were made with the fiscal year 1997
    appropriation of $4.153 million.; the fiscal year 1998 appropriation is
    $4.167 million.
                   health professions research [section 781]
        Section 781 provides funding to public and nonprofit private
    educational entities for conducting research on various health
    professions issues. The issues on which research has been authorized
    include the extent to which educational indebtedness influences the
    specialty choice of medical students; the effects of federally-funded
    educational programs for minority and disadvantaged individuals; the
    effectiveness of state licensing authorities in protecting the public
    health through investigations and disciplinary actions; and the extent
    and impact of federal policies and medical school curricula on the
    percentage of physicians and other health professionals graduating from
    health professions schools and selecting a primary care career. The
    fiscal year 1995 appropriation of $600,000 supported 11 contracts and
    awards; there was no appropriation for fiscal year 1996. The fiscal
    year 1997 appropriation was $450,000; the fiscal year 1998
    appropriation is $452,000.
               chiropractic demonstration projects [section 782]
        Section 782 provides funding to chiropractic schools for carrying
    out demonstration projects in which chiropractors and physicians
    collaborate to identify and provide effective treatment for spinal and
    lower-back conditions. Funding may only be extended to a project in
    which a school of medicine or osteopathic medicine will participate
    jointly. The fiscal year 1997 appropriation was $1.025 million, which
    provided for three awards; the fiscal year 1998 appropriation is $1.029
    million.
                 health professions data analysis [section 792]
        Section 792 authorizes the Secretary of Health and Human Services
    to establish a program to collect, compile, and analyze data on health
    professions personnel. The program includes a uniform health
    professions data reporting system. The Secretary also has the authority
    to conduct or enter into contracts with states and not-for-profit
    entities for the conduct of analytic and descriptive studies of the
    health professions, including evaluations and projects of the supply of
    and need for health professionals by specialty and geographic location.
    The fiscal year 1997 appropriation was $236,000, which supported 12
    contracts and awards; the fiscal year 1998 appropriation is $237,000.
                      title viii (the nurse education act)
        The Nurse Education Act helps schools of nursing and nursing
    students at all levels prepare a workforce for a changing health care
    delivery system. The NEA encourages moving the educational level of the
    professional nurse to the baccalaureate level (60 percent of RNs have
    less than a BSN today) due to the complexities of caring for sicker,
    often older, and chronically ill patients. The NEA is a major thrust
    toward educating more advanced practice nurses such as nurse
    practitioners (NPs), certified nurse midwives (CNMs), clinical nurse
    specialists (CNSs) and Certified Registered Nurse Anesthetists (CRNAs).
    The NEA also funds studies on workforce needs to help plan for the
    future.
        There is a preference in most Nurse Education Act programs for
    institutions that have been particularly effective in placing graduates
    in practice in medically underserved communities, such as rural areas
    and inner cities. The NEA appropriation for fiscal year 1998 was $65.6
    million
                         special projects [section 820]
        Section 820 provides funds to: increase nursing enrollments;
    initiate nurse managed centers to deliver primary care to medically
    underserved populations as part of a clinical training experience;
    support continuing education for nurses practicing in medically
    underserved communities; and to help paraprofessionals acquire
    professional nursing education. The fiscal year 1997 appropriation of
    $10.381 million funded 61 special projects; the fiscal year 1998
    appropriation is $10.600 million and should fund about the same number.
        An estimated 50 percent of the currently operating nurse managed
    centers were developed or expanded under this section. These clinics
    deliver essential primary health care services to a diverse population
    in elementary schools, senior citizens centers, housing complexes,
    homeless shelters and via mobile units such as the University of
    Maryland School of Nursing's Wellmobile. Section 820 also supports
    projects to increase the use of technology in nursing practice.
                     advanced nurse education [section 821]
        Section 821 represents program support for schools offering
    master's and doctoral programs for graduate students on track to become
    clinical nurse specialists, public health nurses, nursing school
    faculty, and acute care nurse practitioners (education for primary care
    nurse practitioners in supported by Section 822). Nearly 1,300 graduate
    students benefited from 60 grants totaling $12.249 million in fiscal
    year 1997; the fiscal year 1998 appropriation is $12.410 million and
    will fund about the same number of awards.
        A University of Pittsburgh School of Nursing project funded through
    this section combines education regarding the acute care skills of a
    clinical nurse specialist and primary care skills of an NP and recruits
    applicants from rural and underserved areas (26 out of 88 enrolled are
    from such places). This section supports 10 programs in psychiatric-
    mental health nursing. The section supports 70 percent of doctoral
    programs preparing nursing faculty. (Funding for doctoral programs is
    limited to 10 percent of appropriations for this section.)
            nurse practitioner/certified nurse-midwife [section 822]
        Section 822 supports grants to schools for starting, maintaining,
    or expanding advanced practice programs educating primary care nurse
    practitioners and certified nurse-midwives. The section gives special
    consideration to programs that train NPs and CNMs for practice in
    Health Professional Shortage Areas. The fiscal year 1997 appropriation
    of $17.278 million supported 69 awards benefiting 1540 NPs and CNMs;
    the fiscal year 1998 appropriation of $17.64 million will result in
    about the same number of awards.
        This section funded 60 percent of nurse practitioner programs
    preparing for practice in primary care. Medicaid patients represent a
    quarter of the patient population for forty four percent of certified
    nurse practitioners. A majority of nurse-midwives have been educated in
    programs supported by this section, and 89 percent of nurse-midwives
    serve low-income women.
       opportunities for nursing students from disadvantaged backgrounds
                                 [section 827]
        Section 827 funds nursing school activities to recruit, counsel,
    remediate, and assist faculty in helping, disadvantaged students in
    completing nursing education programs. A small stipend is part of 50
    percent of awards. The fiscal year 1997 appropriation of $3.799 million
    aided 1,000 nursing students in 22 programs; the fiscal year 1998
    appropriation of $3.878 million will fund about the same.
        Schools receiving support from this section average 35 percent
    minority students, compared to schools not in the program at 19
    percent. Over the past 5 years, this section has helped increase
    overall minority nursing student enrollments by 25 percent. One program
    in rural North Carolina is part of an academic pipeline to facilitate
    disadvantaged students in attaining a BSN degree. Two Texas programs
    helped increase the clinical competence of disadvantaged students and
    boost their graduation rates. The NEA has supported 3 minority
    congresses to consider ways to increase the minority presence in
    nursing practice and teaching.
    traineeships for the advanced education of professional nurses [section
                                      830]
        Section 830 funds individual stipends for master's and doctoral
    students (funding for doctoral limited to 10 percent of total
    appropriations for the section) such as nurse practitioners, certified
    nurse midwives, nurse educators, public health nurses or in clinical
    nursing specialties, with a preference for those who are residents of
    Health Professional Shortage Areas. The graduate education of more than
    5,580 nurses at 267 schools was supported by the fiscal year 1997
    appropriation of $15.662 million; the fiscal year 1998 appropriation of
    $15.985 million will be distributed to students by 278 schools.
        This section provided stipends to about 37 percent of full time
    graduate nursing students, including 20 percent of funded nurse
    practitioner programs and 42 percent of nurse- midwifery programs. In
    some cases, these stipends make it possible for a student to attend
    school full time, producing these much sought after professionals more
    quickly. (Over half of master's in nursing students are part
    time.)(Funding for doctoral students is limited to 10 percent of the
    appropriations for this section.)
                        nurse anesthetists [section 831]
        Section 831 assists programs that teach registered nurses to become
    Certified Registered Nurse Anesthetists (CRNAs), with a concentration
    on meeting the needs of rural areas by requiring clinical experience
    there and by preferring residents of Health Professional Shortage
    Areas. The section provides grants for institutions to develop and
    operate programs, to improve faculty, and to offer traineeships to
    students. A fiscal year 1997 appropriation of $2.678 million benefited
    1,107 nurse anesthesia students (over 75 percent of total students) and
    66 programs; the fiscal year 1998 appropriation of $2.774 million will
    have about the same impact.
        CRNAs administer 65 percent of anesthetics administered each year
    and are sole providers in 70 percent of rural hospitals. This section
    also helped programs obtain training sites for students who are
    required to have a minimum of 800 hours of clinical training.
            loan repayment for service shortage areas [section 846]
        Section 846 repays up to 85 percent of nursing student loans in
    return for at least 2 years of practice in an area of nursing shortage,
    such as Indian health, public hospital, migrant, rural or community
    health center, or other public facility that has a critical shortage of
    nurses. In fiscal year 1997, 213 awards were made from an appropriation
    of $2.157 million. In fiscal year 1998, appropriations of $2.183
    million will produce about 200 new awards.
        Ninety percent of loan repayment participants are in pubic
    hospitals providing inpatient care. The three states with the highest
    number of loan repayment nurses are Louisiana, (74), Mississippi (18)
    and North Dakota (12). Other states with substantial numbers of nurses
    in loan repayment are Hawaii (7), Georgia (8), Alabama (6), Nebraska
    (12), South Carolina (8), and Texas (7).
        In closing, Titles VII and VIII of the Public Health Service Act
    help the nation meet the need for an expanded supply of primary health
    care providers and public health professionals. For both institutions
    and students, the educational process is a carefully planned and
    carried out undertaking that depends upon stability of financial
    support. Federal funds are a vital part of this effort because they
    focus on innovative approaches to changes in the health care delivery
    system and help to prepare those who deliver basic care to underserved
    people. The solution is to fund Titles VII and VIII in accordance with
    the need. In this rapidly changing health care environment, it is
    crucial Title VII and Title VIII programs receive an appropriation of
    at least $306 million for fiscal year 1998 to meet their missions.
        The members of HPNEC appreciate the opportunity to comment on these
    vital programs and look forward to working with the Subcommittee in
    support of them.
                                     ______

         Prepared Statement of Nancy Munro, RN, MN, CCRN, the American
                   Association of Critical Care Nurses [AACN]
        Thank you Chairman Specter and Members of the Subcommittee for the
    opportunity to present written testimony. I am Nancy Munro, Clinical
    Nurse Specialist at Georgetown University Hospital. I am pleased to
    present testimony on behalf of the American Association of Critical
    Care Nurses (AACN) in support of funding for the National Institute of
    Nursing Research, the Agency for Health Care Policy and Research, and
    the Title VIII Health Professions Programs.
        AACN is a not-for-profit service association dedicated to the
    welfare of people experiencing critical illness or injury. AACN was
    founded in 1969 and has grown to become the world's largest specialty
    nursing organization with nearly 73,000 members representing the United
    States and 35 countries. AACN has 270 chapters, located in every state
    and overseas.
        Our goal should be to translate the promise of scientific discovery
    into an improved quality of life for all Americans. To accomplish this,
    we must continue to invest in medical research and the NIH. Towards
    this end, I encourage the Subcommittee to support the recommendation of
    the Ad Hoc Group for Medical Research Funding which calls for a 15
    percent increase in the NIH budget for fiscal year 1999. This
    represents the first step towards doubling the NIH budget over the next
    five years. And within this increased appropriation, AACN will work to
    ensure that NINR receives its fair share of the increase.
        AACN strongly supports NINR's goals of health care effectiveness,
    cost effectiveness, and assuring that the scientific agenda has a human
    aspect and translates research findings into applications that improve
    the nation's health.
        As nurses who provide care to the critically ill, one of the most
    important things we can do for our patients is provide relief from
    their pain and suffering. Nursing affords a unique vantage point from
    which to examine the way pain affects patients and their caregivers.
    Pain is also a costly health problem, prompting nearly 40 million
    visits to health care providers each year and costing our nation over
    $100 billion annually in lost productivity and health care expenses.
        Over the past year, NINR has reported two groundbreaking advances
    in pain research--one showing gender differences in response to
    analgesics and a second indicating that sedatives given before surgery
    can actually block the action of medication given to relieve pain after
    surgery.
        AACN currently sponsors Thunder Project II, a large-sample, multi-
    site research project in partnership with seven other nursing
    organizations. The purpose of the research is to examine pain
    perceptions and responses of acutely or critically ill pediatric and
    adult patients to selected producers. Data collection is underway, and
    it is anticipated that it will be completed by early 1999. To date,
    over 200 sites are enrolled in the U.S., Canada, Australia, and the
    U.K.
        AACN also supports NINR's leadership in improving end-of-life-care.
    NINR recently held a state-of-the-science conference on ``Symptoms in
    Terminal Illness'' to address end-of-life issues in four areas--pain,
    dyspnea, cognitive disturbances, and cachexia.
        AACN firmly believes that research is needed to develop a
    scientific basis for critical care nursing practice and to achieve a
    broad understanding of the role and impact of critical care nurses on
    patient outcomes. Many research projects funded by AHCPR are gradually
    helping our communities refocus healthcare so that it is truly driven
    by the needs of patients and their families. AACN is pleased that the
    President's budget includes $171 million for AHCPR, a $25 million
    increase over fiscal year 1998.
        As you know, in 1990, Congress passed the Patient Self
    Determination Act which AACN believes has made significant progress in
    educating Americans about their right to make their own health care
    choices. This is of particular interest to AACN in light of the Robert
    Wood Johnson study that followed 9,000 critically ill patients and
    found discrepancies between patient's end-of-life care directions and
    their actual treatment.
        AACN is currently working to educate consumers about the Patient
    Self Determination Act and its importance. The Committee's support for
    AHCPR has provided AACN with the resources to design a community
    outreach program to improve completion rates for advanced directives.
    AACN's program, in conjunction with UCSF, Research on Advance Care
    Planning Including Advanced Directives, has a specific emphasis on an
    education program stressing definition and documentation of care
    preferences so that in the event of catastrophic illness or injury,
    individual care preferences can be honored.
        Additional funds have been received to complete the project as a
    result of AHCPR funding in fiscal year 1998.
        AACN believes that education is fundamental to professional growth
    and to excellence in clinical practice and optimal patient outcomes.
    Practitioners must commit to life-long learning to assure they remain
    competent in fulfilling their obligations to the patients and families
    they serve.
        According to the Bureau of Labor Statistics, the demand for health
    professionals is expected to grow by 47 percent by the year 2005, with
    the need for advanced practice registered nurses among the greatest. In
    addition, an Institute of Medicine study on the role of nursing staff
    in hospitals found that a more advanced, or more broadly trained
    registered nurse (RN) workforce would be needed in the future. Such
    training is currently provided under the programs funded under Title
    VIII of the Public Health Service.
        AACN is pleased that Congress provided an increase for Health
    Professions training overall in fiscal year 1998, and encourages
    Congress to once again demonstrate its support for these important
    programs in fiscal year 1999.
        In closing, Mr. Chairman and members of the Subcommittee, I would
    like to thank you again for your support for nursing research and the
    NIH.
                                     ______

       Prepared Statement of Ellen Glesby Cohen, President and Founder,
                    Lymphoma Research Foundation of America
        Thank you Chairman Specter and esteemed members of the Subcommittee
    for the opportunity to present written testimony before the
    Subcommittee. My name is Ellen Glesby Cohen. Even in my wildest dreams,
    I never thought that I would be in this honored position of testifying
    before Congress on matters of life and death. That was before my own
    health turned into a matter of life and death and made me realize how
    many millions of Americans will be helped or even healed by the
    decisions you have the power to make.
        I am here today as the Founder and President of the Lymphoma
    Research Foundation of America, the nation's largest lymphoma
    organization dedicated to providing comprehensive information and
    support to lymphoma patients, their family and friends. The Lymphoma
    Research Foundation of America also finances research into better and
    safer treatments for the third most rapidly-rising cancer in America. I
    would like to share with you the story of my own battle with Lymphoma
    as a way of illustrating for you just how crucial your work is.
    Although this disease claims the lives of more victims every day and
    understanding lymphoma could shed light on many other diseases, funding
    for lymphoma research amounts to just 2 percent of the National Cancer
    Institutes' budget.
        I am going to speak from my heart today so that you know how much
    we are looking to this Subcommittee for the hope and strength we need
    to persevere in our battle against this killer called lymphoma.
        In 1987, my dear husband, Mitch, and I were the proud parents of an
    18-month-old daughter and we were waiting for our son to be born. We
    were also building an addition to our home. My husband's internal
    medicine practice was growing and I was a busy TV commercial producer.
        Life was good except for the nagging tiredness I was constantly
    feeling. It also seemed that I got the flu or a cold every time I
    turned around. The lymph nodes in my neck kept swelling up and my feet
    were so swollen that I had to buy new shoes. I went to the doctor, but
    blood tests didn't reveal anything suspicious.
        My son, Joshua, was born in October of 1988. When I didn't bounce
    back from the birth, and lumps kept growing on my neck, my husband sent
    me to an oncologist. She took one look at me and sent me straight to
    the hospital for a biopsy. A week later, we had an answer, but it
    wasn't the answer we wanted to hear.
        I had Lymphoma. Cancer of the lymph system. And it isn't curable.
    At the time, I wasn't even 40 years old.
        My doctors told me to go on with my life. Sure, I was sick, they
    said, but not sick enough to receive aggressive treatment at the time.
    But how do you act like nothing is happening to your family when cancer
    is lurking in your body?
        Somehow, we made it through a year and a half. Eventually, I
    developed a 99-percent obstruction in my nasal pharynx and I could
    hardly breathe. I also had a large mass in my abdomen. It came time for
    me to experience chemotherapy and within days of that first treatment,
    I was back in the hospital with a collapsed immune system. I had just
    five white blood cells left in my body. I didn't even have the strength
    to hug my children. Eventually, the therapy did its job. But it wasn't
    medicine that gave me the will to fight. It was the statistics behind
    this devastating illness.
        Lymphoid malignancies strike upwards of 85,000 Americans each year
    and there is a 50-percent mortality rate. It is one of the most rapidly
    rising cancers in our country today yet it seemed that no one knew much
    about it. Even the scientific community was not sure what caused it and
    there was no national organization funding research, educating the
    public or supporting patients.
        I had to do something. So I picked up the telephone and began
    calling everyone I could think of. Each phone call led me to someone
    else--another doctor, another lymphoma patient. Those conversations
    convinced me that I could start a nonprofit organization that could
    make a difference, not just for myself but for the health of all
    Americans.
        You see, this disease knows no boundaries. Anyone can get it. A
    former First Lady. A former senator. A professional hockey player. Two
    of my neighbors. Even voters who cast their ballots for the esteemed
    members of this subcommittee. You should be aware that many of the
    states you represent have some of the highest rates of lymphoma in the
    country. Approximately 600,000 Americans today are living lymphoid
    malignancies. Some days, it feels like I hear from all of them. I have
    to fight back the tears when I hear from a 23-year-old graduate student
    in Illinois who tells me she is relapsing after only a year of
    remission and she's running out of effective and safe treatment
    options.
        I started the Lymphoma Research Foundation of America to raise
    money, but what's priceless is the hope we have raised. We started the
    first Lymphoma-specific support groups, Internet site, patient helpline
    and quarterly newsletter. To date, the Lymphoma Research Foundation of
    America has funded 43 Lymphoma research projects totaling more than
    $1.25 million at top cancer centers and universities across the
    country.
        Lymphoma is a growing, serious public health problem for all
    Americans. Recent research shows that there are links between
    understanding the causes of lymphoma and understanding the causes of
    many other cancers, including leukemia, lung, colon, breast and
    prostate cancer. We are finding that there are several crucial
    scientific issues that require immediate attention, such as the link
    between viruses and bacteria with lymphoma, and the role of
    environmental toxins in triggering lymphomas.
        The Lymphoma Research Foundation of America has achieved a lot, but
    this disease is a formidable opponent and strikes in the very prime of
    our lives. Of all cancers, lymphoma is the fourth-largest killer of men
    ages 25 to 60 and the fifth-largest killer of women in that same age
    group. Sixty percent of all childhood malignancies are lymphoma or
    related diseases.
        Those statistics grow deadlier every day. I, myself, am now facing
    the grim prospect of another round of chemotherapy and I wonder how
    much more my body can endure. I keep reminding myself--and every
    Foundation member I speak with--that some of the new treatments that
    have come out of our research programs are promising. But it's so hard
    to keep hope alive without increased government support.
        The good news is that scientists believe that lymphoma research
    will unlock the secrets to many other cancers. That is why, for Fiscal
    1999, Mr. Chairman, we seek this Subcommittee's continued support in
    funding the research essential to finding a treatment and cure for
    lymphoma. In furtherance of this goal, we request that Congress:
    Increase Appropriations for the National Institutes of Health.
        Lymphoma Research Foundation of America endorses the call of the Ad
    Hoc Group for Medical Research Funding for a doubling of the budget of
    the National Institutes of Health within the next five years.
        However, we realize the difficulty--if not impossibility--of
    achieving this goal entirely with the current spending caps for
    discretionary spending. Accordingly, we believe that the Administration
    and Congress should identify additional resources to reach these goals,
    such as adjustments to spending caps, increasing tobacco revenues, and
    investing part of the potential budget surplus.
        As a first step the Lymphoma Research Foundation of America joins
    the Ad Hoc Group, along with other research organizations, in
    supporting a 15 percent increase for the NIH in Fiscal 1999.
        For the National Cancer Institute, which funds the bulk of lymphoma
    research at the NIH, Lymphoma Research Foundation of America supports
    the Institute's Fiscal 1999 Bypass Budget Request of $3.191 billion,
    which represents a $644 million increase over the Fiscal 1998
    appropriated level. The 1999 Bypass Budget will enable the National
    Cancer Institute to sustain its current research investment, identify
    and invest in new research opportunities, and invest now in future
    research opportunities.
        For all the reasons mentioned above, its link with other cancers,
    the potential role of environmental factors, and the alarming rise in
    its incidence, the Lymphoma Research Foundation of America requests
    that the Subcommittee include in its Fiscal 1999 Committee Report
    language calling for:
      --Increased appropriations for lymphoma research.
      --Use of all available mechanisms for expanding the scope of lymphoma
            research, including convening a scientific workshop to examine
            the current state of research on lymphoma and exploring
            opportunities for additional study, use of program
            announcements and Requests for Applications on lymphoma-
            specific research topics.
      --Research into potential environmental and other factors responsible
            for lymphoma.
        Thank you for the opportunity to tell you my story. Thank you for
    your hard work and for your consideration. And thank you for the hope
    that you have given me and to all lymphoma patients and their families.
                                     ______

    Prepared Statement of Michael Q. Ford, Executive Director, the National
                         Nutritional Foods Association
        Mr. Chairman and members of the subcommittee: My name is Michael
    Ford. I am Executive Director of the National Nutritional Foods
    Association (NNFA), a trade association representing some 2,500 health
    food stores and some 800 manufacturers, distributors and suppliers of
    natural health products, including organic and natural foods, natural
    ingredient cosmetics and dietary supplements.
    Congressional mandate mirrors citizen demand
        National interest in access to and reliable information on safe,
    effective vitamins, minerals, herbs, amino acids and other dietary
    supplements has grown steadily since the Dietary Supplement Health and
    Education Act (DSHEA) unanimously passed the House and Senate to become
    the law of the land in 1994.
        Approximately 100,000,000 Americans are taking dietary supplements,
    spending, by some estimates, as much as $11.5 billion a year in health
    food stores alone. Americans are looking to safe, natural alternatives
    to prescription drugs to treat and prevent disease, and to maintain
    good health by supplementing inadequate diets with vitamins and
    minerals.
    Nutrients can prevent chronic disease
        We are entering a new era of recognition of the value of natural
    pathways to good health. For example, the Food and Nutrition Board of
    the National Academy of Sciences, which devises Recommended Daily
    Allowances for nutrients for the Food and Drug Administration, has
    issued the first of a series of reports presenting revised nutrient
    intake guidelines. Originally introduced in 1941, RDAs were intended to
    prevent classical nutrient deficiency diseases nearly extinct in the
    U.S. today, such as scurvy, beriberi and rickets. Now, these reports
    are revising and expanding RDAs to reflect compelling evidence which
    supports the use of nutrients to help prevent chronic disease, such as
    osteoporosis. We agree with the Chairman of the Food and Nutrition
    Board, who characterized this approach as ``a major leap forward in
    nutrition science.''
        Similarly, the recent report of the President's Commission on
    Dietary Supplement Labels endorses continued research on the benefits
    of dietary supplements in health promotion and disease prevention. The
    Commission hails the increasing research-based documentation of the
    benefits of dietary supplements in maintaining health and preventing
    chronic disease and other health-related conditions, and calls for
    continuation of this welcome trend. NNFA entirely supports the
    Commission's recommendation that, ``the public interest would be served
    by more research that assesses the relationships between dietary
    supplements and maintenance of health and/or prevention of disease.''
    Herbs and botanicals are beneficial, cost-effective
        In addition to support for these kinds of exciting new findings on
    the health benefits of nutrients, NNFA urges the Committee to support
    research on medicinal herbs and botanicals, also classified as dietary
    supplements under the DSHEA. The results of a study on ginkgo biloba,
    published recently in the October 22, 1997, ``Journal of the American
    Medical Association,'' indicates that administration of this herbal
    extract, recognized for centuries in Chinese medicine for its ability
    to stimulate and improve blood circulation in the brain, could delay
    the onset of Alzheimer's Disease for up to 6 months. This could
    represent tremendous savings of lives and dollars from a disease which
    costs society $90 billion a year. Other studies show saw palmetto more
    effective than prescription medicine at reducing benign prostate
    enlargement, with far less expense and no reportable side effects.
        Millions of Americans are turning daily to herbal remedies and
    seeking primary health care from the alternative, holistic providers
    who prescribe them. There is an urgent need for a dramatic increase in
    support for research on herbs and botanicals, justified by consumer
    demand and the Congressional intent expressed in DSHEA. The Dietary
    Supplement Commission report recommends that, ``Federal agencies
    continue to support research on the health benefits and safety of
    dietary supplements. Research should be expanded beyond the
    traditionally supported areas associated with vitamin and mineral
    supplements and include research on some of the more promising
    botanical products used as dietary supplements.'' NNFA whole-heartedly
    agrees.
        Ours is one of the few cultures in the world for whom the
    prevention and treatment of disease with non-prescription herbal
    medicines is the exception rather than the rule. This is largely due to
    the fact that foreign research oftentimes is deemed unacceptable by the
    Food and Drug Administration for use in justifying health claims for
    herbs and botanicals. We urge the Committee to provide the adequate
    funding for research on the safety and benefits of medicinal herbs.
    Full funding for the NIH Office of Dietary Supplements
        The Office of Dietary Supplements (ODS) was established at the
    National Institutes of Health by DSHEA, to stimulate, coordinate and
    disseminate the results of research on the benefits and safety of
    dietary supplements in the treatment and prevention of chronic disease.
    Though authorized at $5 million per year by DSHEA to carry out its
    lofty mission, ODS has been woefully underfunded at less than $1
    million per year and fewer than 2 full-time employees (FTEs). Despite
    these severe financial constraints, ODS has done an admirable job in
    attempting to meet its mandate. While this is commendable, the
    Congressional mandate for ODS is yet unmet. NNFA agrees with the
    President's Commission on Dietary Supplement Labels that the ODS must
    be fully-funded. Says the Commission report, if fully-funded, ``ODS
    could play a valuable role in providing consumers with information
    about dietary supplements including [the] promotion of scientific
    studies on potential roles of dietary supplements in health promotion
    and disease prevention. Appropriations as authorized by DSHEA are
    essential if ODS is to meet [the] mandates of the Act.'' ODS deserves
    this Committee's support and that of the NIH itself.
    Office of Complimentary and Alternative Medicine
        In 1992, Congress directed the National Institutes of Health to
    establish the Office of Alternative Medicine with the expressed task of
    assuring objective, rigorous review of alternative therapies to provide
    consumers reliable information. While funding for the Office has grown
    since its creation, the fiscal year 1998 funding of $20 million
    provided for this office, now known as the Office of Complimentary and
    Alternative Medicine (OCAM), is an infinitesimal percentage of the
    overall NIH budget. Furthermore, the OCAM budget is insignificant in
    comparison to the dramatic growth of the American public's interest in
    and use of alternative therapies.
        Indeed, findings from the ``National Survey of Alternative Medicine
    Use,'' published in the January, 1993 New England Journal of Medicine,
    reveal that Americans made an estimated 425 million visits to
    alternative medical therapy providers in 1990, exceeding the 338
    million visits made to all US primary care providers that year. The
    survey also showed that out-of-pocket expenditures associated with
    alternative therapies totaled $10.3 billion in 1990, approaching the
    $12.8 billion in out-of-pocket expenses incurred for all U.S.
    hospitalizations during the same period.
        NNFA not only supports increased funding for OCAM, but feels it is
    critical that this office also be granted increased authority to
    initiate research projects and develop its own peer review panels. To
    this end, the NNFA strongly supports legislation to elevate the Office
    of Complimentary and Alternative Medicine to a Center at the National
    Institutes of Health, as proposed by Congressman Peter DeFazio's H.R.
    1055, the National Center for Integral Medicine Establishment Act.
    Demonstration projects at AHCPR and HFCA
        The Agency for Health Care Policy and Research (AHCPR) is often
    directed by the Committee to pursue projects designed to research the
    cost-effectiveness attendant to novel approaches to the treatment and/
    or prevention of illness. The time is right for investigation of the
    worthiness of certain dietary supplements, based on well-designed,
    cost-effectiveness research.
        Every year, treatment of chronic conditions and illnesses--from
    flus and colds to hypertension to dementia and Alzheimer's disease--
    generates enormous publicly and privately funded health care
    expenditures. There exists an opportunity to trim such burgeoning costs
    through prevention and/or treatment of these chronic ailments--or delay
    of their onset--with safe, effective, low cost dietary supplements.
    NNFA is confident that basic research at NIH can lead to appropriately
    structured, cost/outcome research at AHCPR which would demonstrate the
    value of dietary supplements in comparison to contemporary medical
    intervention. This evidence can, in turn, lead to HCFA projects to
    determine if a policy of reimbursement could be established.
        Despite the growing popularity and demand for herbs and nutritional
    supplements, and their widespread use for prevention and intervention
    of chronic illness, precious few large-scale outcome studies on
    American populations are available to give health professionals the
    information they need to make decisions on alternatives to contemporary
    medical approaches. Echinacea and golden seal have been shown to be
    effective in preventing and treating colds and flus; ginkgo has been
    show to forestall dementia and the onset of Alzheimer's disease;
    herbal/nutritional combinations have been shown to provide control for
    hypertension without the side effects which cause many patients to stop
    using their prescription medicine; similarly, saw palmetto effectively
    shrinks benign prostate enlargement without side effects affecting
    normal body function.
        NNFA believes that a sufficient body of botanical and nutrient
    research may exist in certain instances, to whet AHCPR's appetite and
    to warrant Congressional consideration of cost-effectiveness studies in
    this area.
        NNFA urges the Committee to consider directing AHCPR to work with
    the Office of Dietary Supplements and the Office of Complimentary and
    Alternative Medicine to review the existing outcome research on dietary
    supplements. The AHCPR could then investigate the feasibility, under
    appropriate protocols, of developing cost-effectiveness projects
    designed to compare the value of herbs and other dietary supplements in
    the treatment and prevention of chronic illness to typical medical
    approaches. The areas I have mentioned are but a few of the many
    possibilities which urgently present themselves for research and
    evaluation. Once the necessary biomedical and cost-effectiveness
    research have been completed, NNFA urges the Committee to direct HCFA
    to investigate the potential reimbursement for promising alternative
    therapies and treatments involving nutritional supplements and herbs.
    A sound investment in the health and well-being of all Americans
        Science and experience ably demonstrate a wealth of benefits
    attendant to the regular use of vitamins, minerals, amino acids,
    enzymes, herbs and botanicals--all classified by DSHEA as dietary
    supplements. Dietary supplements are allowing millions of American
    consumers to take charge of their own good health by safely and
    effectively preventing and treating a host of illnesses and conditions.
    The body of research supporting use of these products is impressive,
    but sorely requires immediate and dramatic expansion. NNFA urges the
    Committee to undergird the Congressional mandate expressed in DSHEA by
    investing in the scientific research which holds the key to our
    knowledge of the remarkable importance and value of dietary
    supplements.
        Thank you.
                                     ______

                   Prepared Statement of Rotary International
        Chairman Specter, members of the subcommittee: Rotary International
    appreciates this opportunity to submit written testimony in support of
    the polio eradication activities of the U.S. Centers for Disease
    Control and Prevention. Rotary International is a global association of
    nearly 29,000 Rotary clubs, with a membership of over 1.2 million
    business and professional leaders in 158 countries. In the United
    States today there are some 7,500 Rotary clubs with over 400,000
    members. All of our clubs work to promote humanitarian service, high
    ethical standards in all vocations, and international understanding.
        Rotary is submitting this testimony on behalf of a broad coalition
    of child health advocates, including the March of Dimes Birth Defects
    Foundation, the American Academy of Pediatrics, the Task Force for
    Child Survival and Development, and the U.S. Committee for UNICEF, to
    seek your continued support for the global program to eradicate polio.
    First, Rotary International and our coalition would like to express our
    sincere gratitude. For 1997, you recommended that $47.2 million be
    allocated for the polio eradication activities of the Centers for
    Disease Control, and for fiscal year 1998 you again recommended this
    same amount, and the full Congress ratified your recommendations in
    both years.
        This investment makes the United States the leader among donor
    nations in the drive to eradicate this crippling disease. The target
    year is 2000. Fewer than 1,000 days remain to defeat this disease in
    the 60 nations where the polio virus still causes death and disability.
    The eradication of polio, achieved through your leadership, will not
    only save lives, but will also save our financial resources.
    Eradicating polio will save the United States at least $230 million
            annually
        Although polio-free since 1979, the United States currently spends
    at least $230 million annually to protect its newborns against the
    threat of importation of the polio virus. Globally, over 1.5 billion
    U.S. dollars are spent annually to immunize children against polio.
    This figure does not even include the cost of treatment and
    rehabilitation of polio victims, nor the immeasurable toll in human
    suffering which polio exacts from its victims and their families. Once
    polio is eradicated, tremendous resources will be unfettered to focus
    on other health priorities.
    Progress in the global program to eradicate polio
        Thanks to your appropriations, the international effort to
    eradicate polio has made tremendous progress during the past two years.
      --Preliminary estimates are that reported polio cases for 1997 will
            be approximately 3,600, one-half the number of cases reported
            only 2 years ago. This dramatic decline is due to the
            tremendous success of National Immunization Days (NIDs) in
            South Asia and Africa. Worldwide, reported cases have decreased
            from over 38,000 cases in 1985, when Rotary began its PolioPlus
            Program--a decline of over ninety percent! Acute Flaccid
            Paralysis (AFP) surveillance, which is critical to the process
            of certification of a polio-free world, is improving, and
            health authorities in polio-endemic countries are now better
            able to assess the challenges remaining to eradication.
      --In 1996, 154 countries reported no polio. That number is expected
            to rise in 1997. About 60 countries, however, remain polio-
            endemic.
      --The global eradication strategy is working. Seventy-five countries
            conducted NIDs in 1997, protecting 450 million children against
            polio--more than one-half of the world's children under the age
            of 5.
      --During its third year of NIDs, India was able to immunize 130
            million children on December 7, 1997, and again on January 18,
            1998--the largest public health events in history. Pakistan,
            Bangladesh, and six other countries coordinated their NIDs with
            India's to achieve the maximum effect over the entire region.
      --Despite economic difficulties, more than 40 African countries
            conducted National or Sub-National Immunization Days during
            1996-97, as part of the continent-wide ``Kick Polio Out of
            Africa'' campaign championed by South African President Nelson
            Mandela, reaching nearly 70 million children. Forty-nine
            African countries are undertaking NIDs in 1997-98. Polio-free
            zones are emerging in both Northern and Southern Africa.
      --The three-year ``Operation MECACAR'' (Middle East, Caucasus,
            Central Asian Republics) immunization campaign has been deemed
            a success, virtually eliminating polio from 19 contiguous
            countries stretching from the Middle East to Russia. For 1997,
            polio cases reported from WHO's European region have been
            confined to Tadjikistan and Turkey.
      --As a result of 3 years of successful NIDs, China reported no
            laboratory-confirmed indigenous polio cases in 1996 or 1997. In
            1997, reported polio cases in the Western Pacific were confined
            to the Mekong Delta of Cambodia and Viet Nam, with no cases
            reported for more than a year. We are optimistic that we have
            seen the last case of polio in the Western Pacific, but
            continued vigilance is necessary to confirm this. The entire
            region has started on the process of certifying polio
            eradication.
    The role of the U.S. Centers for Disease Control and Prevention
        In this Subcommittee's fiscal year 1998 report, you commended the
    CDC for its active leadership in the global polio eradication effort,
    and recognized the real prospect of eradicating polio by the year 2000.
    As a result of the $47.2 million Congressional appropriation, in 1998
    the CDC is:
      --Supporting the international assignment of nearly 50 long-term
            epidemiologists, virologists, and technical officers to assist
            the World Health Organization and polio-endemic countries to
            implement polio eradication strategies.
      --Providing $30 million to UNICEF for polio vaccine and operational
            costs for NIDs in more than 50 countries in Asia, Eastern
            Europe, the Middle East and Africa. Many of these NIDs would
            not take place without the assurance of CDC's support.
      --Providing over $7 million to WHO for surveillance and NIDs'
            operational costs, primarily in Africa. As successful NIDs take
            place, surveillance is emerging as a critical need, to
            determine where polio cases are continuing to occur. Good
            surveillance can save resources by eliminating the need for
            extensive immunization campaigns if it is determined that polio
            circulation is limited to a specific locale.
      --Training virologists from all over the world in advanced poliovirus
            research. The CDC's Atlanta laboratories serve as an
            international reference center and training facility.
      --Helping to persuade countries such as Afghanistan, Somalia and
            Sudan to plan and conduct NIDs despite ongoing civil conflict.
            Warring factions have agreed to ``days of tranquillity'' in
            order to allow immunization campaigns to occur.
    The benefits of polio eradication
        Increased political and financial support for childhood
    immunization has many documented long-term benefits. Polio eradication
    is helping countries to develop public health and disease surveillance
    systems useful in the control of other vaccine-preventable infectious
    diseases. Already, much of Latin America is free of measles, due in
    part to improvements in the public health infrastructure implemented
    during the war on polio. As a result of this success, measles has been
    targeted for eradication in the Americas by the year 2000. The disease
    surveillance system--the network of laboratories, computers and trained
    personnel built up during the Polio Eradication Initiative--is now
    being used to track measles, Chagas, neonatal tetanus, and other deadly
    infectious diseases. The campaign to eliminate polio from communities
    has led to increased public awareness of the benefits of immunization,
    creating a ``culture of immunization'' and resulting in increased usage
    of primary health care and higher immunization rates for other
    vaccines. It has improved public health communications and taught
    nations important lessons about vaccine storage and distribution, and
    the logistics of organizing nation-wide health programs. Lastly, the
    unprecedented cooperation between the public and private sectors serves
    as a model for other public health initiatives.
    Resources needed to finish the job of polio eradication
        The World Health Organization now estimates that in 1998
    approximately $220 million in external funds is needed to help polio-
    endemic countries carry out the polio eradication strategy. For 1999,
    an estimated $248 will be needed. To date, however, only $160 million
    has been committed by external donors for 1998, leaving an estimated
    shortfall of $60 million. In the Americas, some 80 percent of the cost
    of polio eradication efforts were borne by the national governments
    themselves. In Africa, many nations can contribute only a small
    percentage of the needed funds, meaning that foreign donors must meet
    up to 100 percent of the polio eradication costs. We are asking that
    the United States continue to take the leadership role in meeting this
    shortfall.
        The United States' commitment to polio eradication has stimulated
    other countries to increase their support. Belgium, Canada, Finland,
    France, Italy, Korea, Norway, Sweden and Switzerland are among those
    countries which have followed America's lead and have recently
    announced special grants for the global Polio Eradication Initiative.
    Japan and Australia are major donors in Asia and the Western Pacific,
    and Japan has recently expanded its support to polio eradication
    efforts in Africa. And both Denmark and the United Kingdom have made
    major grants that will help ensure that India is able to vanquish polio
    by the target year 2000.
        By the time polio is certified as eradicated, hopefully no later
    than 2005, Rotary International will have expended well over $400
    million on the effort--the largest private contribution to a public
    health initiative ever. Of this, $304 million has already been
    allocated for polio vaccine, operational costs, laboratory
    surveillance, cold chain, training and social mobilization in 119
    countries. In 1997, realizing the increased role which external donors
    need to play in order to ensure that polio eradication is not
    jeopardized due to lack of resources, The Rotary Foundation committed
    an additional $34 million to its PolioPlus fund. More importantly, we
    have mobilized tens of thousands of Rotarians to work together with
    their national ministries of health, UNICEF and WHO, and with health
    providers at the grassroots level in thousands of communities.
    Fiscal year 1999 budget request
        For fiscal year 1999, we respectfully request that you provide
    $67.2 million for the targeted polio eradication efforts of the Centers
    for Disease Control and Prevention. This is an increase of $20 million
    over the fiscal year 1998 level of $47.2 million, and $20 million more
    than the President's fiscal year 1999 budget request, which was
    submitted before WHO released the latest estimates of unmet polio
    eradication needs. The additional $20 million is needed to meet the
    enormous costs of eradicating polio in its final stronghold--sub-
    Saharan Africa. Of this amount, $6 million would be used to purchase
    and deliver more oral polio vaccine for NIDs, while $5 million would be
    used for technical and operational support of NIDs in difficult
    countries such as Liberia, Somalia, and the Democratic Republic of the
    Congo. A further $9 million would go to develop an Africa-wide polio
    surveillance system, and strengthen and expand the existing network of
    regional and national laboratories. Without this additional
    appropriation, we may not be able to eradicate polio in Africa by the
    target date.
        Humankind is on the threshold of victory against polio, and we must
    not miss this window of opportunity. Poliomyelitis will be the second
    major disease in history to be eradicated. The world celebrated the
    eradication of smallpox in 1979, and no child anywhere in the world
    will ever suffer from smallpox again. The annual global savings of
    nearly $1 billion per year in smallpox immunization and control costs
    far exceed the approximately $300 million that was spent over ten years
    to eradicate the disease. The United States was a major force behind
    the successful eradication of the smallpox virus, and has recouped its
    entire investment in smallpox eradication every 2\1/2\ months since
    1971. Even greater benefits will result from the eradication of polio.
        Polio eradication is an investment, but few investments are as
    risk-free or can guarantee such an immense return. The world will begin
    to ``break even'' on its investment in polio eradication only 2 years
    after the virus has been vanquished. The financial and humanitarian
    benefits of polio eradication will accrue forever. This will be our
    gift to the children of the 21st century.
        Thank you for this opportunity to testify.
                                     ______

         Prepared Statement of Robert Wilson, the Wilson Foundation on
                               Neurofibromatosis
        Thank you, Chairman Specter and members of the Subcommittee for the
    opportunity to submit testimony on the need for a continued Federal
    commitment to research for Neurofibromatosis (NF), a terrible genetic
    disorder closely linked to cancer, brain tumors and learning
    disabilities affecting over 100 million Americans.
        I am Robert Wilson, President of the Wilson Foundation, a private
    charitable foundation. My 11 year old son, Michael, suffers from a
    severe case of Neurofibromatosis. I have been working for many years
    with NF groups from around the country, the growing NF scientific
    community, members of Congress, and the National Institutes of Health.
    I appear before you today on behalf of Michael and the 100,000 other
    Americans who suffer from NF, as well as the tens of millions who
    suffer from NF's related diseases.
        As a result of your support for biomedical research, each year that
    I appear before your Subcommittee I bring exciting news of a
    breakthrough in NF research that moves us closer to a treatment and
    cure for this terrible disease. Once again, I am able to report to you
    a major breakthrough since last year which holds promise not only for
    the individuals suffering from NF, but also for the 100 million
    Americans who suffer from cancer, brain tumors, and learning
    disabilities with which NF is closely connected.
        Last Spring, researchers at Cold Spring Harbor Laboratory and
    Massachusetts General Hospital in Boston have determined for the first
    time that the NF-1 gene in fruit flies is linked to learning and
    memory. The studies showed that the protein made by the NF-1 gene is
    part of the c-AMP pathway, the pathway which is known to control
    learning and memory, while at the same time still being implicated with
    NF's cancer fighting tumor suppressor functions. This major
    breakthrough leads to new opportunities for drug and genetic therapies
    for NF patients, experiments for which have already begun on the fruit
    fly. Cold Spring Harbor Laboratory stated in its Spring/Summer 1997
    newsletter that such research stands to benefit ``a vast segment of the
    human population, including those afflicted with learning disabilities,
    Alzheimer's disease, and other dementias''.
        NF, incorrectly but commonly known as elephant man disease,
    involves the uncontrolled growth of tumors along the nervous system
    which can result in terrible disfigurement, deformity, deafness,
    blindness, brain tumors, cancer, and death. It is the most common
    neurological disorder caused by a single gene. While not all NF
    patients suffer from the most severe symptoms, all live their lives
    with the uncertainty of knowing whether they too will be severely
    affected because NF is a highly variable and progressive disorder.
        Dr. Samuel Broder, former Director of the National Cancer
    Institute, stated that NF was at the ``cutting edge'' of cancer
    research. This cancer connection was at the heart of two major
    conferences on NF held in October 1995 and July 1997 at Cold Spring
    Harbor Laboratory in New York, one of the world's leading cancer and
    neuroscience research laboratories headed by Dr. James Watson, the co-
    discoverer of DNA. These Conferences brought together basic
    researchers, clinicians, biotech and pharmaceutical companies from
    around the world to find a treatment and a cure for NF. These
    conferences have been hailed throughout the research community as a
    turning point for NF. After the first conference, more than 20 leading
    NF researchers worked for over one year preparing a detailed blueprint
    for finding a treatment for NF. This document has been well received at
    NIH and many researchers are calling for this document to be used as a
    model for how NIH should fund research.
        The future promise of NF research is based upon past successes. Let
    me highlight the enormous advances in NF research that have occurred
    since 1990:
      --The discovery of the NF1 and NF2 genes and gene products;
      --Determining that NF is closely linked to many of the most common
            forms of human cancer, brain tumors, and learning disabilities
            which affect over 100 million Americans;
      --Determining the function of the NF genes and gene products,
            including their tumor suppressor, memory, and learning
            disability functions;
      --Developing animal models for NF1 and NF2;
      --Developing a diagnostic blood test and pre-natal testing for NF;
      --Commencing a national trial drug treatment program for NF patients
            which can serve as the infrastructure for future clinical
            trials;
      --Determining the connection between the phenotype /genotype in NF;
            Substantially increasing the number of NF researchers;
      --Commencement of drug and genetic treatment experimentation on fruit
            flies with defective NF genes
        The enormous promise of NF research--and its potential to benefit
    millions of Americans in this generation alone--has gained increased
    recognition from Congress and the National Institutes of Health. For
    fiscal year 1999, this Subcommittee's continued support will be
    critical to expanding on the basic and clinical research described
    above which is essential to finding a treatment and cure for NF.
    Specifically, this can be accomplished through a four-part NF research
    agenda:
        Increase appropriations for NIH. Our goal should be to translate
    the promise of scientific discovery into an improved quality of life
    for all Americans. To accomplish this ambitious goal, we must continue
    to invest in medical research and the NIH. Sustained growth for the NIH
    is necessary to seize the tremendous opportunities brought about by
    previous research successes, build upon past scientific achievements,
    address present medical needs, and anticipate future health challenges.
    Towards this end, I encourage the Subcommittee to support the
    recommendation of the Ad Hoc Group for Medical Research Funding, a
    coalition of nearly 200 patient and voluntary health groups, medical
    and scientific societies, academic and research organizations, and
    industry, which calls for a 15 percent increase in the NIH budget for
    fiscal year 1999. This represents the first step towards doubling the
    NIH budget over the next five years. I urge members of this
    Subcommittee to join with their colleagues who have introduced
    legislative vehicles for achieving this ambitious but critical goal.
        Increase appropriations for NF research. In addition to holding the
    promise of improving the lives of the thousands of individuals who
    suffer from NF, recent research has demonstrated that NF research
    stands to benefit the 100 million Americans who suffer from cancer,
    brain tumors, and learning disabilities. Therefore, I urge members of
    this Subcommittee to increase funding for NF research at NIH.
        Continue cooperation and coordination between NCI and NINDS through
    targeted NF research programs. In your fiscal year 1998 Report, this
    Subcommittee encouraged NCI and NINDS to coordinate efforts and to
    pursue an aggressive program in basic and clinical research on NF. I
    applaud NCI and NINDS for the coordination that has occurred to date,
    and encourage the Committee to continue to urge continued expansion and
    coordination for NF research through the use of: Requests for
    Applications, as appropriate; Program Announcements; the National
    Cooperative Drug Discovery Group Program; and Small Business Innovation
    Research Grants.
        Target funding for the implementation of the clinical research
    initiatives generated at the Cold Spring Harbor Conferences. As
    developed by Cold Spring Harbor Laboratory at its NF Conference in
    October 1995, NF should become the model for scientist-initiated
    proposals to fund clinical treatment research for specific diseases
    which offer the potential for significant advances in broader areas,
    such as tumor suppressor genes. The Committee should encourage NIH to
    explore this new and exciting avenue in promoting dramatic advances in
    select research areas.
        In closing, Mr. Chairman, with only a small investment, dramatic
    advances in NF research have been made with far reaching implications
    for many other diseases. Many of the worlds leading NF researchers,
    such as Dr. Frances Collins, Director of the National Human Genome
    Project; Dr. Bruce Korf of Harvard Medical School; Dr. Vincent Ricardi
    of the NF Institute in Los Angeles; Dr. David Guttman of Washington
    University School of Medicine; and Dr. Michael Wigler of Cold Spring
    Harbor Laboratory, among others, now believe that with an increased
    investment and a research agenda focused on all aspects of the NF
    research portfolio, from basic research in the labs to drug development
    and genetic therapy, a treatment and cure for NF can be found in the
    next few years.
        I would like to end with a statement that appeared in a recent
    edition of Cold Spring Harbor Laboratory's newsletter which focused on
    major breakthroughs in NF research: ``the hope is that the day may come
    when doctors can flip critical switches to repair the broken circuits
    in each of these disorders and diseases. Such life-changing therapies
    will be the reward for years of enthusiastic basic research.'' I
    believe, Mr. Chairman and members of the Subcommittee, that with your
    continued support, that day will soon be here.
                                     ______

     Prepared Statement of Kathye Gorosh, Project Director, the Core Center
        Committee on Appropriations Submitted to the Subcommittee on Labor,
    Health and Human Services and Education U.S. Senate Washington, DC
        Mr. Chairman, thank you for the opportunity to present this
    testimony for the record on behalf of the ``Enhanced Provider and
    Patient Education Initiative'' proposed at the CORE Center in Chicago,
    Illinois. To address the national need for a model of ``real time''
    education and training for HIV care providers at all levels and for
    patients, the CORE Center is proposing the establishment of the
    ``Enhanced Provider and Patient Education Initiative.''
        This initiative will create a model technology-based system for the
    education of specialty and community-based providers and the education
    and treatment of patients. It will address an existing national need
    for the effective integration of educational programs to enhance
    provider performance and, importantly, to incorporate patients into the
    decision making process. It will create a system of education and care
    which takes advantage of the new scientific landscape and is centered
    around an information system. It will demonstrate the ability of
    computerized networks, with real time performance feedback, to improve
    the quality of and access to care, to increase compliance and to
    control cost.
        As you know, the development of new and more effective drugs has
    allowed people to remain healthier longer and to delay the progression
    from HIV to AIDS. Nevertheless, it remains critical that we stop the
    spread of HIV as well as provide early and comprehensive care to those
    already infected. Effective education and compliance management
    programs are the only way to prevent the behaviors that lead to the
    spread of resistant strains of HIV. As a result, quality care will be
    provided in a cost-effective manner providing thousands of HIV infected
    individuals with an improved quality of life and enabling them to
    remain productive members of society.
        While there have been dramatic new developments in HIV care due to
    new and more powerful medications, including a 13 percent decrease in
    the death rate from AIDS reported by the Centers for Disease Control
    and Prevention (CDC), these therapies have not been as effective in the
    indigent inner-city urban population. For example, according to the
    Department of Medicine at Long Island Jewish Medical Center in New Hyde
    Park, New York, in 1996 increased cases of AIDS related opportunistic
    illnesses were reported for heterosexual African American and Hispanic
    men and women. This disparity in opportunistic infection trends between
    population groups most likely reflects differences in access to the
    full range of new therapies now available and a lack of targeted
    outreach, education and compliance enforcement efforts aimed at high
    risk populations and at those lifestyles which contribute significantly
    to the transmission of HIV.
        In contrast to the general decline in the number of AIDS related
    illnesses and deaths, the CDC has reported a continuing increase in new
    cases of HIV/AIDS among people of color.
        In November 1997, medical experts at the United Nations reported
    that new infections are occurring worldwide twice as fast as just one
    year ago at 16,000 per day, up from 8,200 per day, with 30.6 million
    living with HIV throughout the world. For children under age 15, the UN
    estimates that 1,600 children are infected each day, up from last
    year's estimate of 1,000 per day. In addition, it is estimated that
    1,200 children die of AIDS each year, up from the prior estimate of
    1,000.
        In the United States, the numbers are equally as chilling. Research
    is showing that the epidemic continues to shift to people of color,
    women and children. Since 1993, there has been a 3 percent increase
    annually in the national prevalence of AIDS. Recent data have shown
    that:
      --One in 250 people in the United States is infected with HIV;
      --One in four of all new HIV infections in the U.S. are estimated to
            occur in young people between the ages of 13 and 20;
      --Every hour 2 to 4 Americans under the age of 20 become infected
            with HIV;
      --27 to 54 adolescents are infected with HIV every day;
      --2,354 adolescents ages 13--19 have been diagnosed with AIDS as of
            December 1995;
      --Among adolescent women with AIDS, 80 percent are African American
            or Hispanic; and,
      --AIDS is the leading cause of death of people between the ages of 25
            and 44 in African Americans and Hispanics.
        In addition to the growing numbers of individuals being infected
    with HIV, continuing trends show that the rate of increase is greatest
    among injection drug users and through heterosexual transmission.
        Recent research has shown that the disproportionate incidence of
    HIV/AIDS among inner-city, minority populations is due in large part to
    low rates of compliance and lack of effective community-based,
    comprehensive, health education systems and programs for providers and
    patients.
        Low rates of compliance can most often be attributed to the
    following:
    Cost
        The costs for HAART therapy is enormous, as much as $10,000--
    $15,000 per patient per year. This figure does not include other costs
    for care or daily medications. There is great concern among people
    living with AIDS that access to care for all people be assured.
        Although the federal program, AIDS Drug Assistance Program (ADAP),
    is designed to provide financial assistance for uninsured or
    underinsured HIV/AIDS patients in purchasing required medications, it
    has been unable to keep up with the increasing demands;
    Testing
        Many individuals are hesitant to be tested for HIV and go
    undetected. As a result, patients go without care until the symptoms
    become evident and they are in need of immediate services;
    Compliance
        Many HIV infected patients are unwilling or unable to get timely
    clinical care or to adhere to complex and difficult drug regimens.
    Often patients have little or no understanding of newer therapies and
    their potential benefit, resulting in low levels of compliance.
        While many piecemeal health education systems for HIV/AIDS exist
    throughout the United States, there are none that are taking full
    advantage of today's cutting-edge scientific landscape. It is well
    known that the adoption of computerized clinical information systems in
    health care lags behind the use of computers in most other sectors of
    the economy. There is no HIV educational system that provides care,
    clinical assistance and interactive education, while integrating the
    patients and community-based providers into the care giving and
    decision-making process. Especially given today's technological
    advances, this is a striking deficiency in health education systems for
    HIV/AIDS.
        At this critical time in the evolution of the long-term treatment
    of HIV/AIDS, it is important that we focus on the creation and
    implementation of comprehensive educational systems of care for
    individuals affected by HIV/AIDS. This focus will improve treatment and
    prevention efforts, increase the rate of the early detection of HIV,
    increase the rate of treatment compliance and ultimately decrease the
    spread of HIV. It is critical that the federal government focuses its
    resources on creating comprehensive HIV education systems that fully
    integrate specialists, community-based providers and patients and
    evaluate the outcomes of those systems.
        The CORE Center believes that the most effective educational system
    is one which uses today's state-of-the-art technology and creates
    interactive systems of education that provide real-time feedback and
    enables providers to optimize care for HIV/AIDS patients. That is why
    the Center is proposing to establish the ``Enhanced Provider and
    Patient Education Initiative'' a model technology-based system for the
    education of specialty and community-based providers and the education
    and treatment of patients.
        We are at a critical point in the care of patients with HIV/AIDS.
    We have achieved major goals in our basic science understanding of the
    course of HIV disease and have applied this understanding to the care
    of patients
        Successes in the treatment and care of HIV/AIDS have led to
    increased numbers of AIDS patients surviving longer and once again
    becoming productive members of society. Hospital admissions for AIDS
    care are down, and clinics are experiencing dramatic increases in the
    demand for out-patient services. Although science has taken big steps
    toward making AIDS a long-term manageable disease, by no means do we
    have a cure for the largest public health crisis of the century.
        Additionally, given the frequently changing scientific landscape
    and related improvements to available therapies and care protocols, it
    is difficult for specialty-care providers, and more so for community-
    based care providers, to keep abreast of the most recent advances in
    care and medication usage. Lack of access to up-to-date information
    also hinders compliance of patients in their therapy and clinic
    schedules.
        There is no successful system in place that provides caregivers and
    patients the education and scientific tools needed to ensure that they
    make the most of the advances in care.
        Patients need to be educated regarding their drug therapies and
    other care options available to them. Because many inner-city patients
    are unable or unwilling to routinely access the local primary health
    care system, this education and compliance is very difficult.
        Moreover, the treatment of patients with HIV/AIDS in Chicago and
    other urban areas is made more difficult by the large number of
    patients receiving care and the large number of potential patients
    whose infections have not been recognized who will ultimately need
    care.
        Compliance for patients in lower socioeconomic populations has been
    more difficult to achieve. Unfortunately, incomplete compliance with
    medication regimens greatly increases the risk of the emergence of
    strains that are resistant to the newest therapies thus increasing the
    likelihood of the spread of HIV/AIDS.
        Specialists alone are not able to provide primary care for all
    affected patients, especially those in underserved communities. This
    means that other providers need to be trained in the complicated care
    of patients with HIV/AIDS to insure that the new HIV medications are
    used appropriately and to the greatest benefit for all patients.
        To be effective, these community providers must have current
    medical data and protocols at their fingertips. They must be able to
    access immediate expertise to ensure the most accurate interventions
    and care for patients. Today, due to weaknesses in the HIV/AIDS care
    infrastructure, they are often unable to access this type of critical
    information or feedback in a timely and effective fashion.
        The Enhanced Provider and Patient Education Initiative will focus
    primarily on methods of optimizing the delivery of care through the
    real time education of specialists, nurse practitioners, physician's
    assistants, and community-based providers caring for people with HIV/
    AIDS. The secondary goal is to screen patients with other sexually
    transmitted diseases for infection with HIV and to initiate therapy at
    an early stage of HIV disease.
        The CORE Center's proposed initiative will be composed of four
    elements:
                                  i. education
        There is growing evidence that use of practice guidelines and
    disease management systems can help direct and improve care given to
    patients. In the complicated arena of HIV care, where multiple
    antiretroviral regimens are available and where interactions with other
    medications are common, the use of such protocols is particularly
    important.
        The CORE Center's Enhanced Provider and Patient Education
    Initiative will disseminate expert consensus-derived protocols for the
    care of patients in the CORE Center and in the community. It will use a
    comprehensive technology-based education system to implement a program
    for health care providers, including specialists, generalists, nurse
    practitioners, and physicians assistants, to optimize care of HIV/AIDS.
    This system will provide education services both in the CORE Center and
    to the community clinics associated with the Cook County Bureau of
    Health Services.
        Through the use of current state-of-the-art, interactive computer
    technology, this initiative will allow providers to order medications
    and laboratory tests through an interactive computer system which will
    direct therapy by computerized educational screens that appear
    sequentially during the ordering process. These educational screens
    will assist providers in prescribing the most effective, economical and
    comfortable therapies for patients
        Computer facilitated review of patient care will be performed daily
    by using computer flagging systems to ensure that care conforms to
    guidelines and by expert review of computerized records that will be
    transmitted to the CORE Center from affiliated clinics on a daily
    basis.
        Feedback will be provided for caregivers based on the reviews
    described above. This will create a continuous improvement loop.
    Guidelines and additional education efforts will be redesigned on a
    continual basis using the results of computer facilitated reviews of
    patient care. The process will be used for educating patients at each
    visit, teaching patients about HIV disease and related issues and
    integrating patients into the decision making process. It will improve
    compliance with the use of social service interventions for the CORE
    Center's indigent population.
        Computer kiosks stationed throughout the CORE Center will allow
    patients to review information on AIDS treatment, to formulate
    questions, and to interact with other patients.
                             ii. early intervention
        The CORE Center will evaluate early intervention programs in terms
    of their effectiveness and successful coordination with the full
    continuum of care. This program element will target HIV screening of
    inner-city populations with sexually transmitted diseases so that
    advances in HIV care can be made available as early as possible in the
    course of HIV infection and help to stop the increase in the numbers of
    HIV cases reported daily.
        The CORE Center will include a screening clinic for patients with
    sexually transmitted diseases. Currently, only 10 percent of the more
    than 10,000 patients seen yearly at Cook County Hospital with STDs
    undergo screening for HIV infection. The CORE Center will provide HIV
    testing and counseling of all patients who are seen for treatment of
    STDs.
        The CORE Center will assess the impact of early intervention
    programs on the stage of illness at which patients enter into care in
    the CORE Center. Specifically, patients will be seen earlier in the
    course of HIV infection which will improve their chance of responding
    to therapy. In addition, the CORE Center will provide HIV testing and
    counseling for all patients who are seen for treatment of STDs.
                                iii. compliance
        The Center will implement an aggressive compliance program to
    insure application of sound treatment principles and protocols,
    medication compliance and clinical follow-up.
        Provider compliance with treatment guidelines will be measured,
    corrected, and reinforced through innovative use of provider order
    entry systems, as noted above in the education program. Patient
    compliance will be reinforced through participation in the development
    of treatment plans, through clinical pharmacy teaching sessions, and
    through the use of medication reminder devices. The CORE Center is
    currently developing a variety of compliance programs and believes that
    patient will be an important source of patient empowerment and ``buy-
    in'' to care.
                            iv. outcomes measurement
        The Center will implement an aggressive and comprehensive outcomes
    measurement program that will measure patient outcomes and cost of care
    by different community provider groups in the CORE Center and the
    community. This HIV/AIDS cost and outcomes data, which does not
    currently exist for any AIDS treatment program, will be extremely
    useful. Importantly, this initiative will also measure improvement
    rates in provider compliance with recommended guidelines and measure
    the cost for achieving improved compliance with treatment protocols.
        In closing, Mr. Chairman, the CORE Center believes that this
    technology-based education initiative is a prototype for national
    efforts to meet the educational challenges presented by infectious
    diseases, especially, HIV/AIDS. As such, the CORE Center is seeking
    $6.9 million over five years for the establishment of the Enhanced
    Provider and Patient Education Initiative.
        Again, I appreciate the opportunity to submit testimony for the
    record and to share with you and the other members of the subcommittee
    the details of this unique initiative. We look forward to continuing to
    work with you and your subcommittee as well as the Administration in
    support of this initiative.
                                     ______

               Prepared Statement of the Tri-Council for Nursing
        This statement presents the fiscal year 1999 appropriations
    recommendations for nursing education and research of the Tri-Council
    for Nursing. The Tri-Council is composed of four major national nursing
    organizations:
      --The American Association of Colleges of Nursing representing over
            520 baccalaureate and graduate nursing education programs in
            senior colleges and universities;
      --The American Nurses Association with 178,000 registered nurse
            members in 53 constituent state and territorial associations;
      --The American Organization of Nurse Executives representing 5,000
            nurses in executive practice; and
      --The National League for Nursing on behalf of 1,674 education agency
            members representing all levels of nursing education, 42
            constituent state leagues representing 40 states, 104 health
            care institutions, 67 academic nursing centers and non-academic
            agencies, and 6, 842 individual members, including consumers,
            nursing school faculty, and nurse practitioners in community
            nursing centers.
        The Tri-Council thanks the members of this subcommittee for the
    fiscal year 1998 funding levels for the programs critical to nursing
    education and research: the Nurse Education Act (NEA) (Public Health
    Service Act Title VIII), Scholarships for Disadvantaged Students (in
    PHSA Title VII), the National Institute of Nursing Research (NINR) at
    NIH, the Agency for Health Care Policy and Research (AHCPR) and others.
    We can assure you that these needed funds will be well spent to improve
    the public health.
        For fiscal year 1999 for the NEA, the Tri-Council respectfully
    requests an increase of 8 percent over fiscal year 1998 to a level of
    $70.92 million. For SDS, we seek an increase also of 8 percent over
    fiscal year 1998 to $20.235 million. For NINR, we recommend a 15
    percent increase over fiscal year 1998 to $73.136 million. For AHCPR,
    we ask for an increase of 6 percent over fiscal year 1998 to $155.221
    million. For the National Health Service Corps Scholarship and Loan
    Repayment programs we seek an increase over fiscal year 1998 of 5
    percent to $82.074 million.
    The Nurse Education Act
        The NEA is the key source of federal financial support for nursing
    education programs and nursing students. Although it has a student loan
    program open to undergraduates, the NEA primarily seeks to encourage
    preparation of advanced practice nurses (APNs) for underserved
    populations. APNs include nurse practitioners, certified nurse
    midwives, clinical nurse specialists and certified registered nurse
    anesthetists. These well-trained professionals are highly sought after
    by hospitals, community based health care centers and other providers.
    The NEA funds programs to educate APNs and future nursing faculty (NEA
    Sections 821, 822 and 831), offers modest stipends to master's and
    doctoral students (Section 830), and seeks to help disadvantaged
    students attain nursing education (Section 827). NEA Section 820,
    Special Projects, encourages linking training to the delivery of
    primary care for underserved people, assists continuing education in
    rural areas, and encourages schools to increase enrollments. NEA
    Section 846 offers repayment of academic loans for nurses that agree to
    practice in areas of nurse shortage such as public hospitals, community
    health centers, American Indian facilities, and public health services.
    (The NEA reauthorization underway in the form of S. 1754 may streamline
    the law and expand its focus, but existing functions will likely
    continue.) NEA funds serve as federal leverage to reward schools and
    students for meeting workforce needs of our rapidly evolving health
    care system. NEA programs have incentives for schools to train for work
    with underserved populations. Whatever that system ultimately becomes,
    nursing professionals will provide needed healthcare services.
                           accomplishments of the nea
    NEA funds
      --Assisted the development and expansion of 60 percent of current
            educational programs readying nurse practitioners for primary
            care. 95 percent of NP graduates work in primary care and 44
            percent of NPs had at least 25 percent Medicaid patients;
      --Supported the development of APN education for specialty HIV/AIDs
            tracks;
      --Supported about half of the doctorally prepared nursing faculty
            teaching today;
      --Helped schools to address current and developing care issues such
            as HIV/AIDS, elderly, school health, high risk perinatal care,
            rural health, and home health;
      --Fostered programs to prepare nurses to meet the healthcare system's
            need for nursing professionals to address sicker patients in
            tertiary care sites, people living longer with chronic
            conditions, and the often complex health care needs of an
            increasingly elderly population;
      --Expanded the scope of nursing's use of technology for telehealth,
            distance learning and information collection and analysis;
      --Provided stipends in 1997 to almost 37 percent of 12,769 full-time
            graduate nursing students in 267 grants totaling $15.6 million
            (for example, $910,424 went to 20 Pennsylvania programs);
      --Significantly increased the number and retention of minority
            nursing students and faculty, boosting the number of minority
            nursing graduates by 25 percent over the past 5 years;
      --Helped train Certified Registered Nurse Anesthetists (who are sole
            providers of anesthesia services in 70 percent of rural
            hospitals) and contributed to the upgrading of the anesthetist
            faculty and to graduate degrees to meet the strong demand for
            these professionals;
      --Facilitated development and/or operation of 50 percent of currently
            operating nurse managed health care centers that serve diverse
            populations of minorities, elderly, schools, housing complexes
            and homeless people;
      --Supported 80 percent of certified nurse midwifery (CNM) programs,
            and 89 percent of CNMs serve low-income women;
      --Provided funds for 10 graduate programs in psychiatric-mental
            health nursing; and
        Sponsored and collaborated on research on nursing workforce to help
    maintain a relevant educational focus and preparation level.
                         some examples of nea projects
        A Pennsylvania Acute Care Nurse Practitioner program combines
    primary health care skills with acute care clinical skills and is
    designed to attract students from medically underserved areas. An NEA
    project at the Marquette University College of Nursing in Milwaukee,
    Wisconsin developed a Pediatric Nurse Practitioner/Clinical Nurse
    Specialist programs to address the preventive and primary health care
    needs of children living in poverty in a medically underserved area.
    Another NEA grant at the University of Arkansas College of Nursing
    supports a Family Nurse Practitioner program that focuses training on
    underserved rural populations and has placed over half of its graduates
    there. Another NEA grant seeks to increase the numbers of disadvantaged
    and minority nursing graduates at Prairie View A&M University in Texas.
    NEA funds support a nursing center in Kansas City Missouri managed by
    The Research College of Nursing that delivers primary health care
    services 6 days a week to the 520 children and their families at
    Blemheim Elementary School. The NEA facilitates a pioneering program at
    Howard University (Washington, DC) to teach homeless people to become
    successful nursing professionals. Several NEA programs use special
    mentoring and academic assistance to help nursing students complete
    their courses of study and then return to underserved areas to practice
    nursing. The University of Maryland School of Nursing operates 7 school
    based health centers in metropolitan Baltimore with NEA funds as well
    as 2 Wellmobiles on Maryland's rural Eastern Shore.
        The scope and breadth of NEA projects is impressive. Continued
    funding ensures that these good works will be maintained and possibly
    expanded. The need for BSN graduates is expected to increase;
    meanwhile, APNs are in great demand everywhere. The fact is that the
    NEA is the sole source of federal support for APN education.
                    scholarships for disadvantaged students
        The Tri-Council recommends a funding level for fiscal year 1999 for
    SDS of $20.235 million, an 8 percent increase over fiscal year 1998. By
    statute, 30 percent of SDS appropriations are reserved for nursing
    students. Most of the nursing SDS money, about $5.6 million in fiscal
    year 1998, goes to baccalaureate students. Schools with proportionately
    greater numbers of minority students are given additional funds. For
    fiscal year 1996 (most recent data), 4,101 nursing students received
    SDS support, and 2,601 or 63.4 percent were minorities. While
    baccalaureate nursing programs have done reasonably well in attracting
    minority students (19.5 percent of baccalaureate enrollments in 1997,
    according to AACN's most recent data), the SDS funds do make a
    difference for the students. Nursing needs federal help to increase the
    diversity of the profession.
                     national institute of nursing research
        NINR is one of the smallest NIH entities, despite the fact that for
    many patients in or out of hospitals, nurses are the major factor in
    their care and management of health care. The Tri-Council strongly
    urges the subcommittee to increase funding for NINR by at least 15
    percent over fiscal year 1998 to $73.136 million. This level will
    enable nursing science to begin to conduct the scope of research
    essential to achieving breakthroughs in patient care, outcomes and cost
    effectiveness appropriate to nursing, the largest health care
    profession. NINR's research agenda concentrates on helping patients
    deal with pain, maximizing the quality of life of people living with
    chronic conditions or the after effects of stroke, avoiding low birth
    weight babies, maternal and child health and other conditions. Indeed,
    interdisciplinary research funded by NINR increases the value of NIH
    research.
        Recently, NINR was assigned to be the NIH lead institute on ``End-
    of-Life Care,'' involving complex care, pain management, mental issues
    for terminal patients and emotional issues for critically ill patients'
    families. Not only is this an issue we all must someday face, but also
    with a population that is proportionately getting older, it will be of
    major concern to many more people in the years to come. The way to
    address this issue is to research it; the way to research it is to
    provide NINR with the financial tools it needs to handle this task. For
    this reason, the Tri-Council urges the subcommittee to ensure that
    funding for NINR meets the percentage of increase that NIH receives. In
    fiscal year 1998, NINR was given only 6.4 percent, while NIH got 7.1
    percent. This puts a small institute like NINR at a disadvantage
    because the need for nursing science is huge. The Tri-Council
    recommends at least a 15 percent increase over fiscal year 1998 for
    NINR in fiscal year 1999.
                   agency for health care policy and research
        The Tri-Council recommends a 6 percent increase over fiscal year
    1998 for AHCPR to $155.221 million in fiscal year 1999. AHCPR's mission
    is critical to wise utilization of health care dollars because it seeks
    to discover and to publicize which procedures and practices work and
    which don't. Among other things, AHCPR is developing a new Web based
    clearinghouse for clinical practice guidelines and funds a group of
    Evidence Based Practice Centers to examine specific medical and health
    concerns in detail. To spend health care dollars wisely, America needs
    a strong AHPCR.
                         national health service corps
        The Tri-Council suggests a 5 percent increase over fiscal year 1998
    for the National Health Service Corps Scholarship and Loan Repayment
    programs (PHSA Title III) to $82.074 million. This program seeks to
    attract health professionals to Health Professional Shortage Areas.
    Many of those areas are rural, and have difficulty attracting and
    retaining caregivers.
                                   conclusion
        In summary, the Tri-Council for Nursing respectfully recommends the
    following appropriations for fiscal year 1999:

    Tri-Council for Nursing recommended appropriations for fiscal year 1999

                                                                    Millions
    Nurse Education Act...........................................   $70.920
    Scholarships for disadvantaged students.......................    20.235
    National Institute of Nursing Research........................    73.136
    Agency for Health Care Policy and Research....................   155.221
    National Health Service Corps scholarship/loan................    82.074

    Prepared Statement of Tom LaPahe, Council Delegate, Pinon Health Center
                    Project, Pinon, Navajo Nation (Arizona)
        In the early 1980's, the Pinon and Whippoorwill Chapters and the
    surrounding communities initiated plans to design and construct the
    Pinon Health Facility to be located in Pinon, Navajo Nation (Arizona).
    The purpose of establishing a health center in Pinon is to provide
    community members direct and immediate access to adequate health and
    emergency care services to save lives. Although the development of the
    Pinon Health Center Project (Project) has been progressing for quite
    some time, the Project continues to experience funding shortfalls.
        Pinon is geographically located in the middle of the Navajo
    Nation--a considerable distance from major growth areas such as Chinle,
    Window Rock, and Tuba City. The nearest health facility that provides
    general health care, inpatient accommodations, and emergency services
    is the Chinle Comprehensive Health Care Facility, approximately 50
    miles from Pinon. The Pinon community has grown considerably in the
    past ten years. Construction of new school facilities, construction of
    a dormitory housing 600 students and additional housing development has
    contributed to community expansion. There are over 1,500 students in
    the elementary and high school. Pinon, as a result of this expansion,
    has become one of the primary communities where a considerable number
    of Navajo families have relocated from the Hopi Partitioned Lands
    tripling the population.
        Due to increasing population, the community is planning future
    infrastructure development to accommodate needs. Upgrading health care
    service delivery is a necessary and critical part of this development.
    The current Pinon Health Clinic will need to be expanded to meet the
    increasing demand for a comprehensive health facility that will equal
    the medical services provided by the hospital in Chinle. Currently, the
    Pinon Health Clinic is open from 8 a.m. to 4 p.m., three days of the
    week. This requires those seeking emergency medical treatment to travel
    to Chinle to seek needed medical attention when it is not available at
    the Pinon Clinic. During normal weather conditions, persons will travel
    45 minutes, or 50 miles, from Pinon to Chinle to seek medical
    assistance. During inclement weather, persons residing on the far west
    end of the Pinon community have to travel additional miles on
    impassable roads to get into Pinon, then drive to the Chinle hospital.
    This situation extends travel time up to one and a half-hours and in
    severe emergency situations, critical life saving time is lost. Once
    the project is completed, people of Pinon and the surrounding
    communities will no longer have to risk their lives to receive minor
    and major health care at the current clinic.
        An estimated $34.2 million is required for construction of the
    health facility and is considered the fourth priority of the National
    Indian Health Services Construction Priority list for outpatient
    facilities. In addition, approximately $1.04 million is needed to
    complete the design phase that was funded in fiscal year 1990. In
    fiscal year 1989, $50,000 was appropriated by the US Congress for the
    initial stage of the Project's design and $84,000 was appropriated
    again in fiscal year 1990, however, additional monies are needed in
    fiscal year 1999. The Navajo Nation Council's Health and Social
    Services Committee has endorsed the aforementioned dollar amounts as
    outlined in Resolution HSSCF-24-98.
        If moneys are not secured to complete the design phase and budgeted
    to begin construction of the health facility, overall cost will
    escalate and the project will be further delayed. I strongly believe
    the health, welfare, safety and accessibility to quality health care
    are at stake and may be jeopardized.
        The Pinon community greatly needs this project to move forward--
    tragic loss of life has already been experienced due to the lack of
    emergency facilities and the distance form Pinon to Chinle. Without the
    Pinon Health Care Facility, families will continue to confront loss of
    life due to lack of a nearby health facility. To immediately reduce
    tragic losses and contain the escalating costs, Congress must
    appropriate funds in fiscal year 1999 to complete the design phase and
    the Clinton Administration must budget for the construction of the
    Pinon Health Facility at Pinon, Navajo Nation (Arizona) next fiscal
    year.
                                     ______

    Prepared Statement Michael E. DeBakey, M.D. and the Hon. Paul G. Rogers
       on Behalf of the Friends of the National Library of Medicine (NLM)
        On behalf of the Friends of the NLM, it is our pleasure to submit a
    statement for the record on the need to double funding for the National
    Institutes of Health over the next five years, and particularly to
    double support for the National Library of Medicine (NLM), the world's
    largest and most prestigious medical and scientific library located at
    the NIH.
        We are Michael DeBakey, Chancellor Emeritus and Professor of
    Surgery at Baylor College of Medicine in Houston, Texas, and Paul G.
    Rogers, Chairman of the Friends of the NLM. The Friends of the NLM is a
    national nonprofit organization whose mission is to increase awareness
    and use of this preeminent national treasure, the NLM. Our membership
    includes medical societies and associations, health sciences schools,
    medical librarians, health professionals and companies that share our
    vision. The motto of the Friends is The More You Know, The Better You
    Heal, and that is perhaps an apt point on which to begin.
        We appreciate this opportunity to offer our perspective on the
    current state of the nation's medical research and, in particular, on
    the spectacular emergence of information technology as a new essential
    component of the whole biomedical research enterprise.
                 unlocking the mysteries of disease and health
        As America approaches the turn of a new century, we are poised on
    the brink of a revolutionary new era in medical knowledge. Mysteries
    about the nature of the human body and its disorders that have baffled
    medical scientists for centuries are beginning to be revealed. Major
    new breakthroughs in genetics, molecular biology, human biochemistry,
    and many related fields, are converging to unlock our understanding of
    and treatments for cancers, diabetes, Alzheimer's, AIDS, and many other
    diseases. This knowledge explosion in medicine has only just begun. As
    we approach the millennium, these advances hold the promise of
    dramatically increasing our ability to improve the quality of human
    life.
        Many of these exciting breakthroughs are inextricably tied to the
    emergence of new information technologies. Researchers around the world
    now have instantaneous access to the latest biomedical knowledge thanks
    to MEDLINE and other online databases of the National Library of
    Medicine. Medical and scientific research now and in the future begins
    at the computer screen, enabling our research dollars to go further and
    avoid wasteful duplication of effort.
        While we are submitting this statement specifically to address the
    vital programs of the National Library of Medicine, we strongly support
    the efforts to double funding for all of the National Institutes of
    Health over the coming five years. We simply can think of no better
    investment of public resources.
        Thanks to America's wise investment in a broad array of biomedical
    investigation, the NIH has become the world's preeminent medical
    research institution, the engine of cutting-edge investigation of human
    afflictions and the repository of vast stores of scientific information
    available to researchers and laypersons around the globe.
        the nlm: linchpin between communication technologies and health
        As ardent champions of the importance of making available
    scientific information to the public as well as to medical
    practitioners and researchers, we would like to draw your attention to
    the ways in which digital technology is enhancing the value of public
    investment in the NIH.
        The National Library of Medicine, located in Bethesda and a part of
    the NIH, has been a leader in developing and applying the latest in
    communications technologies to improve health. From the birth of the
    computerized MEDLARS system in the 1960s, to the introduction of the
    online database, MEDLINE, in the 1970s, to today's DNA databases and
    World Wide Web based services, the Library has played an increasingly
    central role in the life of American medicine.
        Last year marked a stunning milestone for the NLM in this regard.
    In June, 1997, beginning with a packed Capitol Hill press conference
    led by Vice President Al Gore and Senators Arlen Specter and Tom
    Harkin, the Library launched free, public use of MEDLINE via the World
    Wide Web [WWW]. As you may know, prior to that time the database--which
    is the world's largest medical database--was open only to registered
    users who paid a search fee.
        We are delighted but not surprised to report to you that MEDLINE
    use has risen tenfold since that time, to more than 300,000 searches a
    day. Researchers, medical practitioners, and students are rightly
    thrilled with MEDLINE's easy-to-use, free search capabilities. What is
    particularly extraordinary, is that almost one-third of those who are
    accessing the service are simply citizens seeking health-related
    information. With this in mind it is noteworthy that NLM is enriching
    MEDLINE with carefully selected consumer health newsletters published
    by medical schools and government agencies.
        We are particularly proud of the outreach efforts the NLM has taken
    to educate the public about the potential of online medical knowledge
    to save lives. For example, both ER and Chicago Hope television shows
    have recently used story lines that involve MEDLINE searches. The
    stories have been based on actual true stories where vital, life-saving
    information was found because a simple literature search was undertaken
    by the doctor. You may have seen the ER episode where a boy arrives in
    the emergency room and has a ``numb chin''. This baffling symptom is
    diagnosed as lymphoma when nurse Hathaway performs a MEDLINE search.
    The real situation happened in an Atlanta community health clinic.
        We agree with The Speaker of the House, Newt Gingrich, who wrote in
    Roll Call column a few weeks ago that ``the development of a universal
    system of knowledge accessible to both professionals and patients'' is,
    in conjunction with increased funding for medical research, the
    linchpin of ``a dramatically healthier and financially smarter'' health
    care system for the 21st century.
        The new free MEDLINE demonstrates the validity of the Speaker's
    vision for the future: A consumer-oriented system in which individuals
    take greater responsibility for maintaining their health begins with
    access to current credible information about diseases and disease
    prevention.
        MEDLINE is the hub of the emerging health information system. Since
    making MEDLINE free via the Web last summer, more than 100 medical
    journals now have direct links to the existing database enabling
    searchers to access full text of the article. And, that effort will
    only increase in the future, making MEDLINE an increasingly valuable
    and vital source of comprehensive biomedical information.
        Clearly the NLM will need significantly more resources to reach out
    to both health care professionals and the public about free MEDLINE.
                      nlm's role in improving health care
        We have highlighted the role of MEDLINE in expanding the return on
    the public's investment in medical research. But we certainly believe
    that health care practitioners themselves are primary beneficiaries of
    the new information technologies. It was not too long ago that research
    findings took years to wend their way into clinical practice. Today
    computer-literate members of the medical community around the globe can
    access state-of-the-art research information almost as soon as it is
    published.
        It is impossible to overstate the significance of the change such
    access represents over the traditional system in which doctors practice
    the medicine they learned in medical school. Even at the current rate
    of new developments, practitioners' knowledge becomes outdated in less
    than a few years. And, the pace of advances is only going to increase
    in the years ahead.
        To quote Speaker Gingrich again: ``Thirty years from now, we will
    have somewhere between 10 and 1,000 times the amount of information we
    have today on the human body. Therefore, another goal [of medical-
    research funding] should be the transmission of knowledge to the
    practitioner within no more than 12 to 18 months of discovery.''
        We concur in this vision for rapid information flow between
    research and practice, and believe MEDLINE is the wellspring.
                digital imaging and the next generation internet
        In its Visible Human Project, the NLM has developed another
    breathtaking application of information technologies: a digital
    ``library'' of CAT, MRI, and cryosection images, at one millimeter
    intervals, of the male and the female body. Begun in the last decade,
    this project is producing CD-ROMs and related materials for teaching
    and research that are now being used throughout the world. We are
    particularly proud that more than 1,000 commercial and nonprofit
    licenses have been issued by the NLM to use this free public database
    of images.
        In addition, we are proud of the NLM's leadership in the federal
    government's Next Generation Internet Project, and overall efforts to
    use advanced telecommunications to improve health. This initiative,
    which involves a number of federal agencies and academic institutions,
    will experiment collaboratively with telecommunications technologies to
    increase the speed of data transmission by up to 100 times current
    levels while ensuring data integrity, security, and reliability.
    Success in this venture promises to propel the advance of telemedicine
    and telehealth, with its need for absolute reliability and data-heavy
    image transfers, into a new level of usefulness as a tool in medical
    practice.
        Already NLM has invested significantly in telemedicine projects
    that are beginning to bear fruit. Just a few weeks ago a Boston
    newspaper ran a feature about how an NLM-sponsored telemedicine project
    in that city was helping new mothers care for infants whose precarious
    health requires special attention.
        The Next Generation Internet also will allow NLM's National Center
    for Biotechnology Information to create high-speed, reliable
    connections between the Center and contributing genome sequencing
    centers and the worldwide participants in the National Cancer
    Institute's Cancer Genome Anatomy Project. A new database containing
    the entire genome of the malaria-causing mosquito would also be
    created. High-speed connectivity is necessary if we are to process the
    avalanche of data coming out of the mapping centers, develop new
    computational analysis software, and provide effective access to
    scientists around the world. Most importantly, the ``next generation''
    NLM will be able to make accessible images and other complex data as
    well as text materials to online researchers.
                                    summary
        We hope this brief account suggests our reasons for agreeing with
    leading members of Congress that it is indeed appropriate and essential
    to double federal funding of the National Institutes of Health and the
    National Library of Medicine over the next five years.
        This is a moment of unparalleled possibility in the history of
    medical science, and we believe there is no better way to improve the
    lives of all Americans than to increase investment in the work of
    preventing and treating disease.
        We believe the investment in NIH, and particularly for the National
    Library of Medicine, will result in the best health care and quality of
    life. Thank you.
                                     ______

     Prepared Statement of Vicki Kalabokes, Co-chair Coalition of Patient
                 Advocates for Skin Disease Research [CPA-SDR]
        Mr. Chairman and members of the subcommittee, my name is Vicki
    Kalabokes. I am the co-chair of the Coalition of Patient Advocates for
    Skin Disease Research [CPA-SDR]. The Coalition wishes to express its
    sincere thanks to you, Mr. Specter, and to members of the Subcommittee
    for your unwavering support of the NIH and biomedical research. The
    Coalition also thanks you for providing us with the opportunity to
    submit written testimony.
        The Coalition of Patient Advocates for Skin Disease Research joins
    with our colleagues in the Ad Hoc Group for Medical Research Funding
    and the NIAMS Coalition to request an increase of 15 percent for the
    National Institutes of Health (NIH) in fiscal year 1999. This increase
    would provide the first year installment towards an effort to double
    the budget of the NIH over the next five years.
        Although research into the basic mechanisms of skin disease is
    supported throughout the NIH, it is the mission of the National
    Institute of Arthritis, Musculoskeletal and Skin Diseases (NIAMS) to
    address the causes, treatment and prevention of diseases of the skin.
    An increase of 15 percent would provide the NIAMS with a budget of $316
    million in fiscal year 1999.
        The Coalition is comprised of over 20 national lay skin disease
    organizations. The member organizations of the CPA-SDR are supported by
    patients and their families, Americans who live with skin disease
    daily. For the majority of patients served by our member organizations,
    treatment options continue to remain limited or, in some cases,
    nonexistent. The skin diseases represented by the CPA-SDR are chronic,
    costly, disfiguring, and sometimes fatal.
        It is estimated that over 60 million Americans are treated each
    year for skin disease; skin disorders are among the ten most frequent
    reasons for physician visits annually. Skin disease is the most common
    cause of chronic illness in the United States and its economic cost is
    staggering--over $7 billion every year.
        Funding for biomedical research at the NIAMS has significantly
    advanced our understanding of the skin, its important role in our
    immune system, and the structure and function of connective tissue.
    While much progress has been made, much more must be understood if we
    are to take the breakthroughs from the lab to the bedside.
        Let me now discuss with you recent important breakthroughs in skin
    disease:
      --The basic molecular mechanisms for two very serious, blistering
            skin diseases, epidermolysis bullosa (EB) and pemphigus, has
            been uncovered. In addition, scientists have also elucidated
            the molecular mechanism in a variant of EB that is associated
            with muscular dystrophy. This discovery provides scientists
            with a new understanding of muscle physiology in relation to
            muscle wasting disorders.
      --The efforts of this Subcommittee has provided for many
            breakthroughs in the treatment of lupus. Now special prevention
            and education programs are in place to screen young minority
            women most at risk for this terrible disease. It is hoped that
            the screening process will allow physicians to diagnose this
            disease in its earliest stages, drastically reducing costs and
            improving outcomes.
      --Tissue banks have been established for several skin diseases,
            including psoriasis, EB and ichthyosis. These pioneering
            efforts will lead to advances in therapies and ultimately cures
            for these diseases.
      --Researchers now know that port wine stains form during the first 2-
            8 weeks of gestation. Additional research is needed to
            elucidate the role of angiogenesis in these stains.
      --Researchers at the NIAMS and the National Cancer Institute have
            significantly advanced our understanding of skin cancer, the
            most common form of cancer in the United States. We now know
            that a gene is responsible for a rate inherited disorder, basal
            nevus syndrome and acquired basal cell carcinoma.
      --Ichthyosis is a family of rare diseases in which there is abnormal
            development of the outermost layers of the skin. Researchers
            have made an important discovery--the genes for many of the
            molecules involved with the structure of our skin are clustered
            on chromosome 1. This area of chromosome 1 is called the
            epidermal differentiation complex.
      --During the past year, the locus for pseudoxanthoma elasticum (PXE)
            was isolated. A recent international meeting on PXE was
            sponsored by the NIAMS and helped to define the next steps
            toward treating this disease. This may be a small step in
            understanding the complexities of PXE, but it provides the
            first glimmer of hope that a cure can be found.
        Despite our progress, many extraordinary grants remain unfunded.
    Historically, the NIAMS has been below the NIH average with regard to
    success rate. This means that the NIAMS has funded fewer meritorious
    grants than many other institutes. Increased funding for the NIAMS will
    allow the institute to support more research grants in key areas of
    opportunity.
        The Skin Diseases Research Core Centers are another important part
    of the NIAMS effort to unlock the many remaining mysteries of skin
    disease research. The CPA-SDR thanks the members of this Subcommittee
    for your support of these centers. In addition to the core centers,
    NIAMS has also announced that research initiatives in scleroderma would
    be eligible for funding under the SCORs program.
        A skin disease research center grant provides funds for
    integrating, coordinating, and fostering interdisciplinary cooperation
    of a group of established investigators conducting research programs of
    high quality that relate to a common theme in skin disease. These
    centers bring together related facilities within six large, prestigious
    medical universities to pursue interdisciplinary research on skin
    diseases. By providing more accessible resources, these special grants
    ensure greater productivity at a given grantee institution. Indeed, a
    recent review of the centers programs supported by the NIAMS points to
    the skin disease core centers as a model for future efforts.
        In addition to basic research funding, the members of the CPA-SDR
    are very concerned about support for clinical, patient-oriented
    research and for research training funds. We were pleased to learn of
    the high priority that Dr. Stephen Katz, the NIAMS Director, has placed
    on these areas. Translating the great discoveries of the bench to the
    bedside is critical, if we hope to improve the quality of life for skin
    disease patients. Furthermore, we must do everything that we can to
    encourage brilliant minds to consider a career in skin disease
    research. Funding for the NIH must include funding for increases in
    training stipends and encourage more experienced scientists to mentor
    new investigators.
        We, the Coalition of Patient Advocates for Skin Disease Research,
    thank you again for your support and ask for your continued support in
    fiscal year 1999. Your commitment has meant so much to the many
    families that cope with chronic skin disease each and every day.
                                   disclosure
        The Coalition of Patient Advocates for Skin Disease Research
    receives no federal funding. The National Alopecia Areata Foundation,
    for which Ms. Kalabokes serves as executive director, received less
    than $5,000 from the Combined Federal Campaign.
                                     ______

             Prepared Statement of the American Medical Association
          medicare resource-based practice expense--medicare user fees
        The American Medical Association (AMA) would like to submit the
    following statement for the record regarding the implementation of
    resource-based practice expense relative values, and the
    Administration's proposal to implement user fees in the Medicare
    program.
    Medicare resource-based practice expense
        The Balanced Budget Act of 1997 (BBA) included important provisions
    regarding the Health Care Financing Administration's (HCFA) development
    of resource-based practice expense values. Due to major problems with
    HCFA's initial proposal for resource-based practice expense values, the
    AMA strongly supported the BBA provisions extending the implementation
    date for the new payments and requiring that HCFA revise its proposal
    to incorporate accurate cost data. We were also pleased that Congress
    directed the General Accounting Office (GAO) to evaluate HCFA's methods
    and data and the potential impact of the payment changes on beneficiary
    access. The AMA continues to support the change to resource-based
    values, so long as they reflect the actual costs of clinical practice.
        Since enactment of the BBA, we have been impressed with the
    dedication of both GAO and HCFA staff to meeting the Act's
    requirements. Project teams from both agencies have consulted
    frequently with AMA staff, particularly with regard to potential use of
    data from the AMA's annual survey of physicians in the new values. We
    believe that the GAO has developed an excellent report, and its
    recommendations are consistent with AMA policy.
        The AMA is encouraged that HCFA's recent Report to Congress, also
    required by the BBA, suggests that HCFA is likely to adopt many of the
    modifications recommended by the GAO. Many of the GAO recommendations
    encourage HCFA to conduct sensitivity analyses and explore alternative
    options. The GAO does not recommend that HCFA use one specific
    alternative for the new values; however, and HCFA's report suggests
    that HCFA also is weighing multiple options. The AMA believes that HCFA
    should publish several different methodological options in its May 1998
    proposed rule. The options could vary in the degree to which the
    practice expense values are based on the expert panel data or on data
    from the AMA's Socioeconomic Monitoring System (SMS).
        Although the SMS was not designed to support the development of
    relative values and the sample sizes for some specialties are not large
    enough to produce statistically valid responses, it has become clear
    that no other valid and reliable cost data are currently available.
    With a response rate greater than 60 percent, the SMS is of high
    quality and is the only existing practice expense database derived from
    a randomly selected national sample. The SMS core survey has been
    conducted since 1982 by respected survey research firms and its
    validity is well-recognized. Therefore, the AMA, the GAO, and a number
    of medical specialties now agree that HCFA should make use of
    specialty-specific data from the SMS.
        This use of specialty-specific data would be a marked departure
    from HCFA's June proposal, which used the SMS data only to establish
    the total proportion of direct and indirect practice costs. The SMS
    reveals significant practice cost differences among specialties,
    however, including wide variations in the total dollars expended on
    practice resources per hour worked, as well as on individual cost
    components, such as medical equipment, staff labor, and materials and
    supplies.
        The AMA also agrees with the GAO that use of expert panels is an
    appropriate way to gather information about procedure-specific, or
    direct practice costs. However, the way that HCFA used the panel data
    in its June proposal indicated that even the agency itself had little
    confidence in the results. A variety of methods were utilized,
    including a statistical approach called ``cross-specialty linking'' and
    a series of across-the-board data ``edits'' that substantially reduced
    the cost estimates provided by the expert panels. HCFA did not describe
    the criteria that it used to judge the relative accuracy of the panel
    estimates. Nor did it explain its apparent conclusion that only one of
    the panels produced accurate results. Moreover, in contrast to the
    process used to construct the physician work values, the cross-
    specialty linking process for practice expense relied exclusively on
    statistical methods, with no opportunity for clinical judgment.
        Despite our criticism of the way HCFA altered the direct cost data
    in its June proposal, however, the AMA believes that, if the expert
    panel data are to be a significant component of the new values, they
    require some adjustment and should not be used ``as is.'' AMA observers
    attended all of the expert panel meetings and concluded that the panel
    estimates of billing costs, and possibly other administrative costs,
    were of questionable validity. Over the last six months, HCFA has made
    several well-intentioned but unproductive efforts to evaluate and
    correct these data. In our estimation, it is now time to move on and
    try other approaches to obtain accurate billing and administrative cost
    estimates.
        We support the GAO recommendation, therefore, that HCFA either
    modify its linking approach significantly or eliminate the need for
    linking by making targeted adjustments to improve the expert panel
    data's consistency. We also agree with the GAO that the agency should
    explore the option of including billing and other administrative costs
    in indirect costs, such as office rent and other overhead costs. This
    approach would eliminate the need to rely on panel estimates to measure
    billing and administrative costs for each procedure, thereby also
    eliminating the need to adjust or link the panel estimates for these
    resource costs.
        With the expert panel and SMS data, we believe HCFA could develop
    reasonably accurate values. HCFA's Report to Congress and recent
    testimony suggests three major options for the revised proposal:
      --Use the adjusted expert panel data for direct costs and SMS data on
            specialty costs per hour worked for indirect costs.
      --Use the SMS data on total specialty costs per hour worked as the
            basis for the new values and use the expert panel data to
            allocate costs and assign relative values to specific codes
            within a specialty.
      --Use the linked expert panel data for direct costs and use the SMS
            data to calculate specialty-specific ratios of direct to
            indirect costs in determining indirect relative values.
        If possible, the AMA would like to see all three of these options
    published in the new proposed rule. Since all three options rely on
    existing data, the AMA agrees with the GAO that starting data
    collection over again would needlessly increase costs and delay
    implementation. While we are eager to see a detailed new proposal
    explaining how HCFA plans to use the various extant databases, we think
    it is highly likely that these data will prove sufficient for initial
    implementation of the new values to proceed as scheduled in January
    1999.
        Nonetheless, we also appreciate the GAO's recognition of the need
    for HCFA to engage in some limited additional data collection to
    validate the expert panel data and expand the information available
    from the SMS. These supplemental data collection efforts should be
    initiated before a final rule is issued, continue during the transition
    period, and be used to refine the initial values. As a first step, we
    believe HCFA could collect data on administrative and equipment costs
    from a representative sample of medical practices, firms that provide
    billing, coding, transcription, and equipment procurement services to
    practices, and industry groups such as the Medical Group Management
    Association and the Health Industry Manufacturers Association.
        One of the most serious flaws in HCFA's June 1997 proposal was the
    application of a ``behavioral offset'' that would have removed more
    than $1 billion from Medicare's budget for physician services. HCFA
    actuaries' assumption that physicians would manipulate patient demand
    to recoup 50 percent of any payment reductions in their services led to
    a proposed 2.4 percent payment cut for all services. An earlier
    analysis by Physician Payment Review Commission (PPRC) staff suggested
    that the actuaries' assumption was incorrect.
        Both the Medicare Payment Advisory Commission (MedPAC) and HCFA's
    Practicing Physicians Advisory Council have now recommended that no
    behavioral offset be applied when the new practice expense values are
    implemented. The AMA wholeheartedly endorses these recommendations.
    There is no reason to expect that physicians will manipulate
    utilization in response to payment changes. If for any reason
    utilization experience differs from projections, however, the
    expenditure target, or Sustainable Growth Rate established under the
    BBA, will adjust future payment updates to recoup any spending over the
    target. There is thus absolutely no reason to apply any behavioral
    offset.
        Finally, we think it is important to note that controversy over the
    development of new practice expense values stems partly from the
    requirement that total practice costs under the new system cannot
    exceed practice costs under the old system. The problem with that
    requirement is that it ignores any increases in practice expenses that
    may have occurred since the original system was developed. We believe
    that physician costs have increased, however, in part because hospital
    restructuring and changing practice patterns have shifted care from the
    inpatient to the outpatient setting.
        For example, a number of cardiovascular services now are frequently
    provided in the office rather than the hospital. Patients with complex
    illnesses that once would have required hospitalization are being
    treated in physicians' offices. Shorter lengths of stay for many
    surgical procedures have increased the number of post-surgical services
    and supplies provided in physicians' offices. In addition, it is
    possible that the volume of physician services may rise as more and
    more care is provided outside the hospital. Physicians then could
    exceed the expenditure targets established through Medicare'
    Sustainable Growth Rate formula, thereby triggering reductions in their
    future payment levels.
        To fairly reimburse physicians for the increased overhead they
    incur from these changes in the current Medicare environment raises
    some difficult questions, however. Since virtually all payment changes
    today are required to be budget neutral, any efforts to compensate
    physicians for new costs they have assumed must be offset with payment
    cuts elsewhere in the Medicare program. Inpatient hospital services and
    physicians are paid out of two separate pools of money, however, so
    unless Congress directs otherwise, the offsetting pay cuts can only be
    applied to other physician services.
        Since physicians are already subject to tighter constraints than
    other Medicare providers, many could be forced to respond to these
    additional pressures in ways that could erode the quality of care
    Medicare beneficiaries now receive. The AMA therefore suggests that
    Congress direct HCFA or MedPAC to consider whether some redistribution
    of funds between Parts A and B is needed to accommodate recent changes
    in the medical delivery system. We urge the Appropriations Committee to
    call for and appropriate funds for such a study.
    Medicare user fees
        The AMA is adamantly opposed to a series of so-called ``user fees''
    included in the President's latest budget plan. Let us be clear: these
    proposals are not really ``user fees''. Instead, they represent a
    significant new tax on physicians and other health care providers and
    are completely at odds with Congressional leaders' goal of reducing or
    holding the line on taxes.
        If enacted, these proposals could reduce Medicare's status with
    physicians to the same low levels as Medicaid's. Surveys by the
    Physician Payment Review Commission suggest that Medicare's physician
    payment rates are nearly a third lower than most private plans' rates.
    That gap is likely to widen under the terms of last year's Balanced
    Budget Act (BBA) since the Congressional Budget Office anticipates that
    over the next five years, Medicare's physician payment rates will fall
    by 11 percent across-the-board or 19 percent after adjustment for
    inflation.
        Even as their payments have eroded, physicians have been hit year
    after year with burdensome new administrative duties that increase
    their overhead and detract from their time with patients. In their
    effort to root out fraud in federal health programs, government
    officials have contrived ever more elaborate paperwork requirements
    that frequently seem to assume that all doctors and hospitals are
    guilty of fraudulent behavior. At the same time, funds for informing
    doctors about new rules have shriveled, leaving them vulnerable to
    potential fraud charges should they misinterpret any of Medicare's
    45,000 pages of complex rules and regulations.
        To add insult to injury, the President now is asking physicians and
    other providers to pay for the privilege of dealing with Medicare's
    extensive paperwork and low payments. Alarmingly, his budget seeks more
    than $850 million in total and $660 million in new ``user fees'' or
    taxes. Between 13 percent to 15 percent of program administration costs
    would be financed out of the pockets of physicians and other providers.
    Government expenditures for running Medicare would drop to a paltry 1
    percent of benefits or less than 10 percent of what even the most
    efficient private plans spend.
        None of the new taxes or ``user fees'' would go into education or
    provider relations and many of the proposals would exacerbate Medicare
    costs and hassle. For example, under one proposal, doctors would be
    charged $1 for every duplicate or unprocessible claim. Physicians then
    would be penalized for resubmitting claims even when payment was
    seriously overdue or when the contractor had rejected the claim for
    trivial reasons. Should the Iowa doctor whose claims were denied
    because the contractor disapproved of his signature really have to pay
    for the right to go through the hassle of resubmitting all claims?
        In another plan, rejected by Congress in the past, the President
    also wants to charge $1 to process any claim submitted on paper rather
    than electronically. Budget documents refer to a possible waiver for
    rural physicians but it is our understanding that the waiver would be
    so narrowly drawn that few physicians would qualify. Is it fair or wise
    to ask physicians anticipating retirement in a few years to invest in
    new computer equipment or leave Medicare? Other than raising money, is
    there any real purpose to another administration proposal to force
    physicians to enroll ($100) and re-enroll ($25 every five years) in
    Medicare?
        To make matters worse, the same budget that asks physicians to help
    finance Medicare's operation also proposes to double prepayment claims
    reviews. Physicians certainly do not condone fraud and the AMA supports
    appropriately-designed prepayment reviews. However, past experience
    suggests that prepayment review sometimes results in automatic and
    unjustified claims denials. Physicians then will experience yet another
    increase in the costs of treating Medicare patients as they are forced
    to appeal all these automatic denials in order to receive the payments
    that are due them.
        The timing for the President's onerous new tax proposal could not
    be worse. As the government prepares to launch the BBA's Medicare
    reforms, elderly and disabled patients are likely to look to their
    physicians for information on the wide array of new choices and
    benefits available to them. But physicians coping with lower payments,
    increased paperwork, and new taxes may be forced to see more patients
    every day to cover their overhead. Many may find that they do not have
    time to stop and talk to patients about their new Medicare choices.
        If the reforms Congress enacted in the BBA are to fulfill their
    promise, Medicare needs to spend more money, not less, on program
    administration. We therefore concur with the Administration that
    additional resources are needed and we urge lawmakers to move quickly
    before more key senior Medicare officials leave the program to work in
    private industry. The true users of Medicare are its 37 million
    beneficiaries, however, and we submit that the cost of running the
    program should therefore be shared by all Americans.
        To pretend that the program can be adequately and equitably
    financed through a rash of new taxes on physicians and other providers
    is an elaborate and dangerous ruse that abdicates this nation's
    responsibility to its most venerable and vulnerable citizens. Like the
    Congressionally-created Practicing Physicians Advisory Council, we are
    unalterably opposed to this outrageous proposal and urge Congress to
    reject it swiftly and soundly.
        The AMA appreciates this opportunity to submit our views for the
    record. We would be happy to respond to any questions the Committee
    might have on these important issues.
                                     ______

      Prepared Statement of the Association of Maternal and Child Health
                                    Programs
        Thank you for the opportunity to provide testimony to the Senate
    Labor Health and Human Services Appropriations Subcommittee. We, at the
    Association of Maternal and Child Health Programs, appreciate the
    Subcommittee's support of the Maternal and Child Health Services Block
    Grant.
        For over 60 years, programs authorized within Title V of the Social
    Security Act, the Maternal and Child Health Services Block Grant, have
    helped fulfill our nation's strong commitment to improve the health of
    all mothers and children. State Maternal and Child Health (MCH)
    programs, supported by the federal Maternal and Child Health Services
    Block Grant, have demonstrated their ability to adapt through decades
    of change by responding to the emergence of new diseases, discovery of
    new vaccines, and evolving health financing and delivery systems while
    still fulfilling their core mission of improving the health of all
    mothers and children. Congress has remained committed to this public
    health program because it provides proven, preventive health care with
    demonstrated results. These results include reducing maternal and
    infant mortality, improving the health of newborns, immunizing and
    screening children to prevent life-threatening diseases, and helping
    children with disabilities function to their full potential.
        The Maternal and Child Health Services Block Grant is the basic
    framework upon which states have built and maintained their systems of
    care for women and children. This framework assures access to quality
    maternal and child health services, including care for children with
    special health care needs. State MCH programs carry out core public
    health prevention activities, as well as provide or finance direct
    services for women and children who lack access to necessary care.
                            public health prevention
        Investment in public health enables Americans to live longer
    healthier lives by preventing premature death and disability. In order
    to meet the challenges ahead, Congress must continue to invest in a
    continuum of public health activity that not only includes biomedical
    and behavioral research, but also includes investment in targeted
    health care services, disease prevention, and other cost-effective
    strategies such as those aimed at improving the health of women and
    children. As a proportion of overall health expenditures, federal
    public health activities account for approximately $25 billion of the
    estimated $1 trillion, roughly 3 percent, spent on health care in the
    United States.
        Investment in public health, including maternal and child health,
    is cost-effective, preventive in nature, and results in improved health
    outcomes for mothers and children. For every dollar invested in
    prenatal care, three dollars are saved in subsequent health costs for
    the care of a low birth weight baby. MCH programs also assist in the
    delivery of immunizations to children. Immunizations are widely known
    to be cost-effective, and for every dollar spent on measles, mumps, and
    rubella vaccine $21 is saved.
        Another important MCH program, newborn screening, prevents chronic
    diseases and disability through early detection, diagnosis and
    treatment. Currently, nearly all 4 million newborns receive screening
    in order to avert tragic health consequences from genetic, metabolic,
    hearing and other disorders. In Illinois, 99 percent of its 190,000
    newborns are screened for at least 6 disorders including sickle cell
    anemia. In Hawaii, the expansion of newborn hearing screening has
    enabled the average age of hearing loss identification to drop from 4
    years of age in 1987 to 1 month in 1995. In addition to newborn
    screening, MCH programs provide early intervention and coordination of
    care for children with chronic diseases and disabilities. Through these
    efforts, children are able to function more independently and avoid
    institutionalization. Florida estimates saving $21,000 per disabled
    child over a 20 year period because of such early intervention efforts.
        Finally, another important public health threat that is receiving
    increased attention this year is tobacco. Tobacco use and exposure to
    environmental tobacco smoke pose exceptional and immediate risks to
    pregnant women, infants, children, and youth. The serious health risks
    include low birth weight which is the strongest determinant for infant
    mortality and is associated with a wide range of problems. These health
    problems include cerebral palsy, epilepsy, respiratory illnesses, and
    learning disabilities. In 1995, the estimated costs of birth
    complications attributed to smoking were conservatively estimated at $1
    billion. Given the enormous impact of tobacco on maternal and child
    health populations, state MCH programs have long supported tobacco
    control policy. They have worked in partnership with community-based
    groups, other public agencies, and the private sector to prevent and
    end nicotine addiction. The Association of Maternal and Child Health
    Programs (AMCHP) supports public health prevention strategies aimed at
    preventing tobacco use among our nation's pregnant women and youth.
        With demonstrated, preventive programs such as prenatal care,
    immunizations, newborn screening, smoking cessation, and care for
    children with disabilities, the Maternal and Child Health Services
    Block Grant is a sound investment in the health of children and
    pregnant women.
                               populations served
        The Maternal and Child Health Services Block Grant directly serves
    over 17 million women and children. Through grants, contracts, or
    reimbursements to private and public sector providers, state MCH
    programs support the availability and accessibility of community health
    and family support services, especially for the uninsured and
    underinsured families. These services range from doctors' visits for
    newborns to specialized treatment for children with special health care
    needs. Most recent data indicate that MCH programs supported
    preventive, primary, and speciality services for:
      --Approximately 4.8 million women;
      --Almost 11.3 million infants, children and adolescents; and
      --Approximately 900,000 children with special health care needs.
        Beyond direct services, the program reaches a much wider population
    of women and children through population-based services. These services
    include sudden infant death syndrome (SIDS) education, injury
    prevention, lead poisoning prevention, outreach activities, and public
    education to encourage healthy behaviors. Many parents are familiar
    with the ``Back to Sleep Campaign'' aimed at preventing SIDS deaths
    that was developed in collaboration with the Maternal and Child Health
    Bureau, the National Institute of Child Health and Development, and the
    American Academy of Pediatrics. Using the message from this campaign,
    state MCH programs have conducted public education activities to
    educate parents about putting their babies to sleep on their backs.
    SIDS deaths have dropped substantially for the population as a whole,
    but more research needs to be done to determine why rates have not
    fallen as much for minority populations.
                                   unmet need
    Health status indicators
        The health of our Nation's pregnant women and children has improved
    dramatically over the last 50 years. Advancements in medical technology
    and improved access to care, have seen reduced in many adverse health
    outcomes including maternal and infant mortality rates; however, our
    nation still falls short of its goals, especially for underserved and
    minority populations. Since 1980, our infant mortality has dropped for
    both blacks and whites, but there is still a substantial gap between
    the two.
      --In 1980, the infant mortality rate for blacks was two times higher
            than the white rate. Fifteen years later, this gap has widened.
            In 1995, the black infant mortality rate was 2.4 times higher
            than the white infant mortality rate.
        Another important indicator in child health is the number of babies
    born who are low birth weight. Low birth weight infants are at higher
    risk of death, long-term illness and disability than are babies of
    normal weight.
      --The percentage of low-birth weight infants in the United States
            increased from 6.8 percent in 1980 to 7.3 percent in 1995.
        Clearly, the increase in low birth weight babies is going in the
    wrong direction. Although important health problems have been
    alleviated, many still threaten the health of women and children.
    Smoking rates for adolescents are going up; injuries remain the leading
    cause of death for children; and women and children are at increased
    risk for HIV/AIDs.
    Children's health insurance implementation and remaining needs
        Last year, Congress took significant steps to address some of these
    health problems through passage of the State Children's Health
    Insurance Program. This health coverage expansion presents states with
    tremendous opportunities. During the current implementation stage, most
    state MCH programs have been working together with Medicaid agencies to
    figure out what is the best approach to serve the needs of uninsured
    children.
        The Congressional Budget Office estimated that the new law would
    cover 3.4 million uninsured children when it's fully implemented. Even
    if every one of these 3.4 million children is enrolled in public
    insurance programs, and even if the 3 million uninsured children who
    are eligible for Medicaid sign up for that program, there will remain
    millions of youngsters--3.6 million to be precise--with no health
    coverage whatsoever. These 3.6 million young children and adolescents
    will need the health services that MCH programs and other public health
    programs provide or they will have no professional health care at all.
        Although the State Children's Health Insurance Program fills a
    tremendous gap in coverage for many children, it does not cover all
    necessary services, or as I just mentioned, all populations. The new
    insurance initiative does not provide access to care, by which I mean
    transportation to clinics, and other services that bridge the gap
    between ``eligibility'' and actual service delivery. It does not
    provide services for uninsured pregnant women or for children with
    substandard insurance coverage. It does not cover comprehensive
    services for children with special health care needs.
        As a result, a significant number of pregnant women will still need
    prenatal care and related health services. Without adequate access to
    these services, pregnant women will be at risk of having babies that
    are low birth weight or have other serious and potentially long-term
    health problems. Underinsured children--including those with only
    catastrophic health coverage through a parent's policy--will still
    require access to well-baby and well-child check-ups and other
    preventive services provided by state MCH programs. Finally, the
    complex medical conditions of children with special health care needs
    will require additional care by pediatric specialists, and care
    coordination not likely to be covered by the new children's health
    initiative. It is estimated that 13.4 percent of low-income, insured
    families with disabled children had unmet health care needs in 1994.
    This figure is not likely to change with the expansion of the new
    health insurance program. Clearly, the needs of pregnant women and
    children, the underinsured, and children with disabilities must still
    be addressed by the MCH programs with or without health insurance
    expansion.
        Even as more children gain insurance coverage, MCH programs will
    continue to:
      --Ensure the availability of public and private providers in
            underserved areas;
      --Support and coordinate services for children who have complex
            medical conditions or disabilities;
      --Provide ``enabling services'' such as home visiting to detect any
            health problems early on, and to teach parents how to prevent
            childhood injuries; and
      --Get pregnant women and children into care through media campaigns,
            toll-free hotlines and outreach workers that link them with
            Medicaid, other insurance sources, and directly with providers.
                           funding formula/set-asides
        The MCH Block Grant is a permanently authorized discretionary
    federal grant program. Its current authorization level is $705 million;
    in fiscal year 1998, $683,000 million was appropriated for the program.
    Of this $683,000 million, $3 million was earmarked for the traumatic
    brain injury demonstration project and other initiatives. The
    Association of Maternal and Child Health Programs recommends that new
    initiatives such as the traumatic brain injury demonstration project,
    be funded separately in fiscal year 1999. For appropriations up to $600
    million, 85 percent of the appropriation is allocated to the states,
    and 15 percent is set-aside at the federal level for demonstration,
    research and training, and service projects. For appropriations
    exceeding $600 million, 1989 amendments created a second set-aside of
    12.75 percent to fund six types of demonstration projects: home
    visiting; provider participation; integrated service delivery; non-
    profit hospital MCH centers; rural programs; and community projects for
    children with special health care needs. States match $3 for every $4
    Federal; many States provide additional funds. States must limit
    administrative costs to 10 percent; maintain state MCH funding levels
    at 1989 levels; and spend 30 percent of funds on preventive and primary
    care for children and adolescents, and 30 percent on services for
    children with special health care needs.
        The MCH Block Grant's two Ufederal discretionary programs or set-
    asides: are the Special Projects of Regional and National Significance
    (SPRANS) program and the Community Integrated Service System (CISS)
    program. SPRANS grants are authorized as special projects that must
    respond to national needs and priorities, have regional or national
    significance, and demonstrate some way to improve State systems of care
    for mothers and children. SPRANS funds are reserved at the federal
    level for the purpose of supporting projects in five areas of research,
    training, hemophilia, genetic diseases, and maternal and child health
    improvement projects. SPRANS grants support technical assistance
    training and research policy development centers that work to build
    States' maternal and child health infrastructure and develop tools and
    information to help States improve the health status of pregnant women
    and children. While SPRANS grants focus on regional and national
    priorities, the CISS program targets communities through increasing the
    capacity for service delivery at the local level and fostering
    formation of comprehensive, integrated, community-level service systems
    for mothers and children.
        One example of the good use of Federal grants is child care. With
    three of every children under age 6 in some form of child care setting,
    it is vitally important that these settings be safe and healthy. To
    this end, the Maternal and Child Health Bureau awarded nearly all
    states a grant of $50,000 each as seed money to promote health and
    safety in child care settings. In North Carolina, the state has used
    this grant as part of a larger initiative, Smart Start, which is a
    public--private partnership involving businesses such as Glaxo--
    Wellcome. The program promotes healthy child care by actually expanding
    access to health screenings and nutrition services onsite at child care
    settings, and educating child care workers about proper health and
    safety. If additional resources were available, states could make
    further improvements in the training of child care providers in the
    area of health and safety.
                             funding recommendation
        To maintain cost-effective, preventive public health services
    protecting all our nation's mothers and children, the Association of
    Maternal and Child Health Programs recommends an appropriation of $705
    million for the Maternal and Child Health Services Block Grant for
    fiscal year 1999. This modest request is approximately a 3-percent
    increase over fiscal year 1998. While AMCHP recognizes that there are
    limited federal resources, it should be noted that if the block grant's
    appropriation were to have kept pace with constant 1980 dollars, its
    funding level would now be approximately $730 million. With sufficient
    funding, this program can continue to play a vital role in improving
    the health status of all children and pregnant women.
                                     ______

      Prepared Statement of Patricia Franklin, MSN, RN, CPNP, President,
      National Association of Pediatric Nurse Associates and Practitioners
        On behalf of the more than 5,500 members of the National
    Association of Pediatric Nurse Associates and Practitioners (NAPNAP), I
    appreciate the opportunity to provide the members of the subcommittee
    the views of the association and request that our statement be included
    in the record.
        Founded in 1973, NAPNAP is the largest nursing organization
    dedicated solely to improving the quality of health care of children
    from birth to the age of 21. Pediatric nurse practitioners (PNPs), are
    registered nurses with advanced education and training who provide
    health care services and have prescriptive authority in 49 states. The
    PNP has completed a program of nurse practitioner (NP) preparation
    usually offered in schools of nursing as part of the Masters in Nursing
    Degree Program.
        NP's were recognized in the Balanced Budget Act as a primary care
    providers and are now able to receive direct reimbursement from the
    Medicare program in all settings. Now more than ever, advanced practice
    nurses like PNPs are front line, point of contact providers of primary
    care services to an increasing number of Americans.
        PNP's deliver a broad range of health care services to children
    from birth to age 21--performing physical examinations, treating common
    childhood illnesses, coordinating care of chronic illnesses in
    children, and helping families meet other important health care needs.
    To support the increasing contributions PNPs make to the health care
    system, particularly in rural and medically underserved areas, NAPNAP
    requests your favorable consideration of spending levels for the
    following programs:
      --Nurse Education Act: $70.92 million;
      --National Institute of Nursing Research (NINR): $73.136 million; and
      --National Health Services Corps (NHSC): request that the committee
            provide the appropriations necessary to assist the NHSC in
            developing a site assessment tool to evaluate the workforce
            needs of medically underserved areas and provide funding for
            necessary health care providers.
                              nurse education act
        The Nurse Education Act (NEA) is the sole source of federal support
    for advanced practice nursing education. Advanced practice nurses
    (APNs) include nurse practitioners, certified nurse midwives, clinical
    nurse specialists, and certified registered nurse anesthetists. NAPNAP
    respectfully requests an 8 percent increase over fiscal year 1998 to a
    level of $70.92 million with proportionate increases appropriated to
    Sections 821 and 822, Advanced Nurse Education and Nurse Practitioner/
    Nurse Midwives, respectively.
        APN's are in increasing demand in the health care market, and
    traditionally have filled the void of primary care physicians in rural
    and medically underserved areas. Increasing support for a diverse group
    of advanced practice nurses prepared as primary care providers will
    further the ability of the government and the profession to meet the
    health care needs of all Americans.
                    national institute for nursing research
        The National Institute for Nursing Research (NINR) is one of the
    smallest NIH entities despite the growing responsibility of nurses,
    especially advanced practice nurses, for the primary care and case
    management of patients in all settings. In fiscal year 1998, NINR
    received a budget increase of 6.4 percent over fiscal year 1997, less
    than the 7.1 percent budget increase for the overall National
    Institutes for Health. To compensate for the disproportionate increase
    last year and in line with anticipated fiscal year 1999 NIH spending,
    we respectfully request that the subcommittee endorse a 15 percent
    increase in the NINR budget, commensurate with NIH funding levels.
        This increase would provide funding sufficient to empower NINR
    researchers to explore the vast complexities of ``end-of-life'' care; a
    research area for which NINR was identified as the lead institute. End-
    of-life care involves the synthesis of complex care, pain management,
    and mental health services for patients and their families.
    Furthermore, NINR represents the largest health care profession--
    nursing--whose research agenda encompasses breakthrough developments in
    patient care, outcomes, and cost effectiveness; avoiding low birth
    weight babies; and maximizing the quality of life of people living with
    chronic conditions, a population which will grow as the baby boom
    generation ages.
                         national health services corps
        The National Health Services Corps (NHSC) has traditionally
    provided the funding necessary to bring vital health care to rural and
    medically underserved areas. At present, there are 146 counties without
    a physician, more than 50 percent of which are being served by a NP or
    a physician assistant (PA). NHSC funding makes this possible; however
    there are still approximately seventy counties not served by either a
    physician, NP, or PA.
        Furthermore, NAPNAP has grave concerns regarding a shift in the
    National Health Service Corps policy on the placement of NPs in
    underserved areas. Traditionally, the program has paid for both family
    nurse practitioners and pediatric nurse practitioners; however in 1997,
    NHSC moved to eliminate PNPs from consideration for NHSC scholarships
    without any assessment mechanism as to whether this best meets the
    needs of the communities. We strongly urge the committee to direct the
    NHSC to develop a site assessment tool which assesses the resident
    characteristics of a community and then provide the appropriate health
    professional to meet those needs. Without this, the NHSC is left making
    arbitrary determinations about the providers placed in underserved
    areas--a disservice to all involved.
        On behalf of NAPNAP, I thank the committee for this opportunity to
    present our views on the vital funding of nursing programs. We look
    forward to working with you through the appropriations process and
    welcome any questions, comments, or concerns you might have. Please do
    not hesitate to call me should you desire additional information or
    have further questions.
                                     ______

       Prepared Statement of the American College of Emergency Physicians
        The American College of Emergency Physicians (ACEP) wishes to thank
    the Labor, Health and Human Services, and Education Subcommittee of the
    Senate Appropriations Committee for the opportunity to present its
    views concerning implementation of a resource-based practice expense
    payment system.
        ACEP is a medical specialty society representing over 19,600
    emergency physicians. Emergency medicine is practiced as patient-
    demanded, broadly available, and continuously accessible care by
    physicians educated to engage in the recognition, stabilization,
    evaluation, treatment, and disposition of patients in response to
    unexpected illness and injury. The patient population is unrestricted
    and presents with a full spectrum of episodic undifferentiated physical
    and behavioral conditions.
        ACEP supported the provisions enacted as part of the ``Balanced
    Budget Act of 1997'' (BBA) to delay the implementation of the new
    practice expense system and redirect the Health Care Financing
    Administration's (HCFA) efforts in devising the new system. ACEP also
    appreciates the oversight that the Subcommittee is providing on this
    issue in the hearing on March 10, 1998.
        As the Subcommittee is well aware, due to concerns that HCFA's June
    1997 proposed rule was based upon a flawed methodology, the BBA
    required HCFA to restudy the issue, taking into account ``generally
    accepted cost accounting principles which (i) recognize all staff,
    equipment, supplies, and expenses, not just those that can be tied to
    specific procedures, and (ii) use actual data on equipment utilization
    and other key assumptions.''
        However, ACEP is concerned that despite this new Congressional
    directive, HCFA continues to depend upon a methodology and data that
    pre-date the enactment of the BBA and which are not based upon
    generally accepted cost accounting principles and do not utilize actual
    data. It is difficult for the College to understand how continuing on
    this path will comply with the requirements of the BBA.
        The way is which HCFA calculates and allocates indirect practice
    expense is an especially important issue for emergency medicine
    because, as a hospital-based specialty, a substantial proportion of the
    specialty's practice costs are indirect in nature. However, after
    reviewing the June 1997 proposed rule and based upon HCFA's subsequent
    actions, the College believes that the way in which HCFA has chosen to
    measure and allocate indirect practice costs is seriously flawed.
        For the practice of emergency medicine, this raises significant
    concerns with respect to two categories of expense. These are
    uncompensated care costs and readiness costs.
    Uncompensated care
        To accurately and fairly determine the level of practice expense
    for emergency physicians, it is essential that any new rule recognize
    certain aspects of emergency medicine, such as the cost of
    uncompensated care.
        For the practice of emergency physicians, uncompensated care is a
    significant portion of indirect practice costs. This cost becomes even
    more significant in light of the fact that, in 1986, Congress passed
    the ``Emergency Medical Treatment and Labor Act'' (EMTALA), often
    referred to as the Federal ``antidumping'' law (section 1867 of the
    Social Security Act). Under EMTALA, emergency physicians are required
    to provide services to all persons who seek care in the emergency
    department, regardless of their insurance status or ability to pay.
        As a direct result of this federal mandate, a substantial portion
    of the services provided by emergency physicians are never reimbursed.
    This federal mandate applies only to the practice of emergency medicine
    and is vigorously enforced through HCFA and the Medicare law. Violation
    of EMTALA can result in $50,000 fines for the physician and expulsion
    from the Medicare and Medicaid programs. As such, emergency physicians
    practice under a Federal requirement to provide significant amounts of
    uncompensated care to patients and face stiff penalties if they fail to
    do so.
        The irony is that while HCFA oversees enforcement of EMTALA,
    resulting in high levels of uncompensated care for emergency
    physicians, HCFA has historically refused to consider this cost as a
    legitimate practice expense that Medicare should reimburse. Although
    ACEP supports the tenets of EMTALA and has always been dedicated to
    providing access to care for all those who seek it, HCFA should
    recognize that there is a financial consequence to sustaining this
    level of care.
        All available evidence suggests that uncompensated care in the
    emergency department is large and growing. The 1996 National Hospital
    Ambulatory Medical Care Survey, conducted by the National Center for
    Health Statistics (NCHS), estimates that 16.8 percent of all visits to
    the emergency department are ``self-pay'', a term that reflects the
    uninsured population and usually results in no payment. In the same
    study, the NCHS estimates that Medicaid patients make up about 22
    percent of the emergency department case mix. As any emergency
    physician will tell you, State Medicaid payment rates are, for the most
    part, unreasonably low, and often do not even cover the cost of
    providing care to Medicaid recipients.
        Anecdotal reports from emergency physicians indicate that
    uncompensated care may account for between 20 and 50 percent of the
    physician workload, depending on where the physicians practice.
    Furthermore, the growth of managed care, both in public programs, such
    as Medicaid, and in the private sector, has led to increased levels of
    uncompensated care and under-compensated care, with virtually no means
    by which to shift the costs of such care to other payers.
        As HCFA considers a new proposed rule to implement the resource-
    based practice expense system, ACEP strongly urges the agency and
    Congress to take into account the costs of uncompensated care.
    Readiness costs
        Emergency physicians are required to be available on a 24-hour a
    day, 7 days a week basis. Patients with a variety of injuries and
    illnesses arrive in the hospital emergency departments at any time of
    day or night. There is a value to the community and the nation in
    maintaining these readiness capabilities. As a result of the
    unscheduled nature of emergency medicine, emergency physicians may
    spend a portion of their time in an ``availability'' or ``readiness''
    status awaiting the arrival of patients.
        There is substantial economic costs involved in maintaining
    emergency physician resources on a 24-hour a day basis. Any practice
    expense approach that pays on an average per-case basis and fails to
    recognize this unscheduled demand for services is problematic for the
    practice of emergency medicine, particularly in low volume emergency
    departments, such as rural areas. The College is increasingly concerned
    that HCFA does not currently recognize these costs in calculating
    Medicare work values or practice expense values.
        As with the costs of uncompensated care, ACEP urges HCFA and
    Congress to recognize ``readiness'' costs in determining the new
    practice expense payment system.
    Conclusion
        Emergency physicians are dedicated to providing access to emergency
    services for all populations, regardless of culture, background,
    economic status, or ability to pay. However, by mandating through
    EMTALA that emergency physicians and hospitals provide emergency care
    24 hours a day, 7 days a week, Congress also determined that such
    access should be the law of the land. As a result, both uncompensated
    care and ``readiness'' costs are legitimate components of emergency
    physician practice expense and should be incorporated into HCFA's
    practice expense methodology. These costs help ensure that high quality
    emergency medical services are available whenever the need arises.
        In sum, ACEP appreciates the opportunity to present our views on
    this important issue. The College would be pleased to work with the
    Subcommittee and HCFA to ensure that the new proposed rule accurately
    and fully recognizes the costs associated with the practice of
    emergency medicine.
                                     ______

      Prepared Statement of Ronny B. Lancaster, M.B.A., J.D., President,
               Association of Minority Health Professions Schools
        Mr. Chairman, thank you very much for the opportunity to present
    the views of the Association of Minority Health Professions Schools
    (AMHPS) regarding fiscal year 1999 appropriations for the Departments
    of Labor, Health and Human Services, Education and Related Agencies. I
    am Ronny Lancaster, Senior Vice President for Management and Policy at
    Morehouse School of Medicine, and President of AMHPS.
        I would like to begin my statement by thanking this subcommittee
    for its past support of programs which assist AMHPS institutions. In
    particular, we very much appreciate the leadership of Chairman Specter.
        AMHPS is an organization which represents 12 historically black
    health professions schools in the country. Combined, our institutions
    have graduated 60 percent of all the nation's African-American
    pharmacists, 50 percent of African-American physicians and dentists,
    and 75 percent of the African-American veterinarians. Our 12 schools
    are becoming even more ethnically and culturally diverse in terms of
    Hispanic students and Native American students, and most of these
    students and graduates matriculate from and are working in the nation's
    underserved rural and inner-city communities.
        While African-Americans represent approximately 12 percent of the
    U.S. population, only 2-3 percent of the nation's health professions
    workforce is African-American. Studies have demonstrated that when
    African-Americans and other minorities are trained in these
    institutions, they are much more likely to serve in medically
    underserved areas, more likely to take care of other minorities and
    more likely to accept patients who are Medicaid recipients or otherwise
    poor. For this reason, it is imperative that the federal commitment to
    training African-Americans and other minorities in the health
    professions remain strong. Clearly, institutions which train
    disproportionately high numbers of minorities address an important
    national need.
        In spite of our proven success in training minority health
    professionals, our institutions endure a financial struggle that is
    inherent in our missions to train disadvantaged individuals to serve in
    underserved areas. The financial plight of the majority of our students
    has affected our schools in numerous ways, such that we are not able to
    depend on tuition as a means by which to respond to the discontinuation
    of funding or other forms of federal support for health professionals
    education. Additionally, due to the fact that the patient populations
    served by the AMHPS institutions have historically been poor, our
    institutions have not earned money from the process of patient care at
    the time when the average medical school gets 40 to 60 percent of its
    operating revenue from patient care.
                    specific key programs supported by amhps
    Health professions/disadvantaged minority training
        The health professions programs supported by this subcommittee are
    the only Federal initiatives that are designed to deal with
    acknowledged health personnel shortages among diverse populations and
    in geographic areas.
        The Minority Centers of Excellence Initiative, the Health Career
    Opportunity Program, Scholarships for Disadvantaged Students, and other
    health professions programs recognize and support the institutions that
    have a mission, commitment and record to addressing those shortages.
    The support provided for the Centers of Excellence program, represents,
    very frankly, the difference between keeping the doors open or closed
    at several historically minority health professions schools.
        Our schools and students appreciate the support of this
    subcommittee in restoring funding for health professions programs in
    last year's bill. It is our hope that the President's budget proposal
    for fiscal year 1999 is more favorable than it was last year. Health
    professions organizations, including AMHPS, are recommending $306
    million for fiscal year 1999 for health professions training.
        Our association is also encouraging members of this subcommittee to
    review and co-sponsor H.R. 1895, the Disadvantaged Minority Health
    Improvement Amendments introduced by Congressman Stokes. H.R. 1895
    would reauthorize many of the important health professions training
    programs, and its passage this year is critical.
    National Institutes of Health
        The historically minority institutions which I represent today are
    committed to narrowing the health status gap among minorities when
    compared to the general population. Our institutions can achieve this
    national goal by improving our research capabilities through continued
    development of our research labs, faculty improvement, and other
    learning resources. Three programs specifically address developing the
    research infrastructure at our institutions:
        The Research Centers at Minority Institutions program at the
    National Center for Research Resources (NCRR) is helping us develop the
    research capability to solve health problems disproportionately
    impacting minorities. Funding for this program should grow at the same
    rate as NIH overall.
        Second, the Extramural Facility Construction program at NCRR can
    help our schools catch up to our non-minority counterpart institutions
    by providing us the resources to build adequate research facilities.
    The subcommittee is urged to provide $30 million for fiscal year 1999
    for this program.
        Third, the Minority Health Initiative and the Office of Research on
    Minority Health at NIH each support critical specific disease related
    research initiatives through the various NIH institutes. We recommend a
    combined funding level of $80 million for these programs in fiscal year
    1999.
        Almost every health professions training and research institution
    in this country was built and developed with a significant contribution
    from federal sources. At this stage in our development, minority
    institutions are prepared to accept and hereby request this same kind
    of support.
        Mr. Chairman, as this subcommittee contemplates a significant
    increase in the budget for the National Institutes of Health, we
    believe that an unprecedented opportunity exists to provide the
    research and infrastructure building support that is necessary to allow
    our historically minority institutions to conduct research on equal
    footing with our sister majority institutions. We are recommending the
    establishment of a $1 billion research endowment initiative at NIH,
    focused on those individuals and institutions which have a historic
    commitment to studying and improving minority health status. The
    purpose of this initiative is to establish research endowments in
    minority institutions to ensure excellence and continuity in our
    research efforts.
    Centers for Disease Control and Prevention
        Minority populations of all ethnic backgrounds are at significantly
    increased risk of infectious disease, low birth weight, Hepatitis B.
    sexually transmitted diseases, tuberculosis, and other chronic
    disorders.
        The Centers for Disease Control has taken a leadership role in
    combating these problems by supporting initiatives to control
    infectious and chronic diseases among disadvantaged minority
    populations through CDC's plan, ``Addressing Emerging Infectious
    Disease Threats: A Preventative Strategy for the United States''. With
    additional resources, CDC could begin to support community-based
    infectious disease prevention programs in each State.
        Because of the proximity of minority health professions
    institutions to disadvantaged, medically underserved communities, CDC
    can and does play a leadership role in supporting disease prevention
    and public health education activities in partnerships with our
    institutions.
        Our overall funding recommendation for CDC for fiscal year 1999 is
    $2.8 billion.
    HHS Office of Minority Health
        The HHS Office of Minority Health (OMH) has the critical role of
    trying to ensure that all Public Health Service agencies are focusing
    appropriate resources on improving minority health status in this
    nation. Although their task is daunting, progress has been made as a
    result of OMH leadership.
        The OMH is assisting our institutional adjustment to the managed
    care environment by supporting a comprehensive study entitled Securing
    the Future of Minority Health
        Professions Schools. The study is analyzing the challenges and
    capabilities of each of our institutions, and offering recommendations
    to our schools to better compete as patient care entities and as
    academic health centers.
        To continue this study in fiscal year 1999, we are recommending
    additional funding of $1.5 million for the HHS Office of Minority
    Health.
    Strengthening historically black graduate institutions/higher education
        The Strengthening Historically Black Graduate Institutions, Title
    III, Part B. Section 326 is a program of extreme importance to AMHPS
    schools. This program allows historically black graduate institutions,
    including those represented by AMHPS to participate in the Part B
    programs for strengthening our schools. The funding from this program
    is utilized by our institutions to establish and strengthen development
    offices, to begin endowment development campaigns (a definite need of
    all HBCU's), and to enhance our educational capabilities on the
    graduate level.
        The Higher Education Act Reauthorization added 11 Historically
    Black Graduate and Professional Schools to Section 326 of Title III,
    making 16 schools eligible for this funding. In order to accommodate
    the growth at these new schools and continue the progress being made at
    existing schools, increased funding is a necessity in the fiscal year
    1999 appropriation for this program. A funding level of $30 million is
    necessary to accommodate the growth of the grant level at each of the
    Section 326 schools.
    Closing
        Mr. Chairman, please allow me to offer our sincere appreciation to
    you and the members of this subcommittee for the support you have
    provided for our institutions and our students. With congressionally
    funded programs for minority health and health professions education,
    we can overcome the disparity in health care in this country. We must
    be careful not to eliminate, paralyze or strangle the programs that
    have proven to work. There are success stories, but not enough of them.
    The lack of participation by minorities in medicine and the sciences is
    characteristic of a long-term, complex, multi-faceted set of variables
    which will require a sustained, vigorous, and visionary commitment from
    our high schools, colleges, medical schools, and support
    organizations--and from this subcommittee and the entire Congress.
        Once again, thank you for allowing our association the opportunity
    to present our views.
                                     ______

    Prepared Statement of Jannine D. Cody, Ph.D., President, the Chromosome
                        18 Registry and Research Society
        Thank you for allowing me this opportunity to share some of our
    concerns with you.
        My name is Jannine Cody. I am the founder and President of the
    Chromosome 18 Registry and Research Society, a support group for
    families affected by chromosome 18 abnormalities. I live in San
    Antonio, Texas. I am accompanied by members of our Board of Directors
    from Chicago and Detroit as well as some of our families who live in
    the DC area.
        We are asking you to reevaluate the NIH funding priorities.
    Nationally, in our fervor to alleviate suffering and to insure a long
    and healthy life, we have ignored our most needy and vulnerable
    citizens. We have focused our medical research efforts on prolonging
    the end of life without equal commitment to giving people with mental
    retardation and developmental disabilities a complete life. A life of
    dreams and promise. A life of independence instead of dependence.
        Thirteen years ago, my daughter Elizabeth was born with a severe
    cleft palate and cleft lip and foot abnormalities. A blood test
    revealed that these problems were caused by a chromosome abnormality
    called 18q-. This is a mental retardation syndrome caused by a missing
    portion from the long arm of chromosome 18.
        The pediatrician gave us a photocopy from a medical textbook which
    made the following observation about kids with 18q-. ``They are
    probably the most severely afflicted among carriers of chromosomal
    abnormalities. They maintain the froglike position observed in infants
    and are reduced to an entirely vegetative, bedridden life.''
        As you can imagine this was devastating news. Especially since she
    seemed so bright and alert. This information was accompanied by a long
    list of other possible congenital deformities associated with the
    syndrome. There was VERY LITTLE information about functional
    development such as growth, motor skills and hearing. There was NO
    information about increased risk for later onset conditions.
        For us, our most immediate concern was repair of her cleft lip and
    palate. To date, she has had 12 surgeries and is about at the half-way
    point in the repair process. However, her first 4 surgeries, all before
    age 3, were all complicated by her failure to heal properly. We now
    know that her healing problems were caused by growth hormone deficiency
    which also causes short stature.. The 8 surgeries she has had since
    being on growth hormone replacement therapy have healed perfectly. She
    has had to face numerous surgeries to repair the complications
    resulting from her early failed surgeries because no one ever asked the
    simple question, ``Why are kids with 18q- short?''.
        Because of Elizabeth, growth hormone deficiency is now known to be
    a common feature of the 18q- syndrome. And hopefully no future child
    will have to endure the pain and trauma of unnecessary surgery and
    abnormal scarring.
        It was this finding in my daughter that spurred me to find other
    parents and to see that research is done to determine the nature of our
    children's problems. I started The Chromosome 18 Registry & Research
    Society in an effort to bring families together who are affected by
    chromosome 18 abnormalities. In order to insure that the research done
    on these syndromes is clinically relevant and is translated into
    patient useful information, I earned a Ph.D., in human genetics working
    on the 18q- syndrome. Our goal is to find treatments and not just
    supportive care for our children.
        Today, my husband and I are trying to understand why two bone
    grafts to create a continuous gum line have failed. Why the bones in
    her feet are grown together. What can we do about her dyslexia? In
    spite of these many obstacles, Elizabeth is now in a hearing impaired
    7th grade and her teacher says she is a whiz at history and science.
    Not exactly the vegetable that was predicted.
        This might be my personal story, but the stories of any of our over
    700 families are as equally compelling and frustrating.
        18q- is only one of many types of chromosome abnormalities. These
    abnormalities are a leading cause of birth defects because chromosomes
    play a central role in controlling the cells that make up our body.
    Chromosomes are the packages of hereditary material that are in every
    cell of the body and are passed from one generation to the next.
    Individuals with Down syndrome have three instead of two copies of
    chromosome 21. There are many other chromosome abnormalities which can
    involve all or only a part of any of the 23 pairs of chromosomes.
    Almost anything you could do to a picture of chromosomes with scissors
    and glue could really happen, but few are compatible with life.
        The majority of people with chromosome 18 abnormalities have one of
    5 different syndromes. A missing piece from the long arm of the
    chromosome is called 18q-, which my daughter Elizabeth has. A missing
    piece from the short arm is called 18p-. The chromosome can form a ring
    causing the loss of chromosomal material form both ends of the
    chromosome and is called Ring 18. Individuals can have an extra copy of
    chromosome 18 which is called Trisomy 18. An even more unusual
    rearrangement can result in an extra chromosome 18 which is composed of
    2 short arms, giving the individual a total of 4 copies of the short
    arm. This is called Tetrasomy 18p.
        These abnormalities can happen to anyone. There is no known ethnic
    bias. There are no know causes such as exposure to radiation or
    chemicals, before or during pregnancy. There is no way to protect your
    family. It could happen to anyone and it often does. Fifty percent of
    conceptions are thought to have chromosome abnormalities. However, 90
    percent of those with abnormalities do not even implant in the uterus
    and become a recognized pregnancy. Of those embryos that are viable
    through early pregnancy the vast majority are miscarried. The
    abnormalities of chromosome 18 are probably some of the most common
    because they are more compatible with life. Babies conceived with a
    chromosome 18 abnormality are more likely to survive long enough to be
    born.
        Many other parent support groups have information about the growth
    and development of their children. They have growth charts so that
    parents can see how their child is growing in comparison with other
    children with that same syndrome. Here is the growth chart for kids
    with chromosome 18 abnormalities. It is a normal growth chart. We will
    not settle for less than average, less than normal. If our kids are
    failing to grow normally, we intend to find out why and to fix it.
    Palliative and supportive therapy is not enough. We are determined to
    understand our kids problems and then to solve them, not to merely
    ameliorate them.
        We have been extremely fortunate to have found a group of
    researchers who have had the vision to see that these are
    scientifically interesting syndromes. These syndromes are medically
    uncharted territory. These are syndromes that the age of molecular
    biology can make understandable. This is a opportunity to make a
    dramatic difference in the lives of many families.
        One of our main organizational goals is to establish a Chromosome
    18 Clinical Research Center. We thought that if we could provide money
    to gather preliminary data on the study of each of the syndromes, then
    these projects could move on to be Federally funded. We would just have
    to get the ball rolling. Our families have invested more than $700,000
    to generate preliminary results and this has still not been enough. It
    has not been enough because the pot of NIH money available to study
    these syndromes in the mental retardation branch of the NICHD is
    disproportionately small. It is disproportionately small compared to
    the number of people affected by mental retardation and
    disproportionately small compared to the proportion of mental
    retardation caused by chromosome abnormalities.
        As a nation, we have focused so intensively on adult onset
    conditions that we have not given adequate attention to those who have
    not been given the chance to grow into productive adults, to make adult
    choices and have adult dreams and aspirations. In 1996, 32 percent of
    the population was children and adolescents, yet only 14 percent of
    direct NIH funding was for pediatric research (1). Children's medical
    research needs have been unmet.
        Compounded by that problem, seven and a half million Americans have
    mental retardation (2) representing 3 percent of the population (3).
    For fiscal year 1996, 3 percent of the NIH budget was 357 million , yet
    in that year only 86.3 million dollars were spent on mental retardation
    research by NICHD. One quarter of what should be spent based on
    population numbers alone.
        However, population numbers alone should not determine the
    budgetary level of importance. The burden to society must be considered
    as well as scientific opportunity.
        Individuals with development disability and mental retardation
    create an indisputable burden to society, not just in terms of health
    care but in special educational needs and in lifelong dependency. Money
    spent to cure these problems would be an investment in the future and
    potential of these individuals, and their caregivers, as well as an
    investment in the future of the nation as a whole.
        Chromosome abnormalities represent a significant clinical and
    social burden. The very nature of chromosome abnormalities means that
    multiple body systems are affected. Individuals with chromosome
    abnormalities usually require many medical interventions, not to
    mention many supportive therapies such as physical, occupational and
    speech therapy. This places a burden on families that is often
    overwhelming. One parent may have to give up a job in order to meet the
    appointments of all the different medical specialists and therapists.
    The other parent is often locked into the same job for fear of losing
    health insurance. This is a recipe for stress, and 22,000 families join
    these ranks each and every year.
        Scientific opportunity does not magically appear, it is bought. The
    Human Genome Project has bought us the advances necessary to begin to
    understand and to ultimately treat many human disease including mental
    retardation. Yet there is proportionately little clinical research on
    mental retardation or chromosome abnormalities.
        Since 50 percent of mental retardation is caused by chromosome
    abnormalities and chromosome abnormalities have a defined genetic
    etiology they are the logical starting place for unraveling the
    mysteries of learning differences and mental retardation. The study of
    chromosome abnormalities could open many new vistas in cognitive
    neuroscience.
        What we need is for you to realize that by studying chromosome
    abnormalities you would not just be helping our families, but you would
    be opening the door to understanding mental retardation and
    developmental disabilities. Chromosome abnormalities can serve as the
    key to understanding mental retardation and fulfilling the promise of
    the Human Genome Project which has provided us with the scientific
    opportunity.
        You would be giving people back not just the end of their life but
    an entire life. A productive life. A life of independence instead of
    dependence. We have declared war on cancer so that adults might live a
    little longer. Now lets declare war on mental retardation so that
    children might have a full life.
        With the promise of increased NIH funding in the air, please
    consider directing those funding increases in ways which will equalize
    research for the currently under-served populations such as those with
    mental retardation and chromosome abnormalities. These are areas of
    research which have great scientific promise, in a field in which there
    is currently little expenditure. These syndromes carry a significant
    social burden with life-long health-care and entitlement costs.
        References:
        1. A May 7, 1996 letter to Representative John Porter from
    Representative James Moran.
        2. President's Committee on Mental Retardation, Fact sheet
        3. Introduction to Mental Retardation, The ARC, September 1993.
                                     ______

     Prepared Statement of Wadi N. Suki, M.D., President, American Society
                                 of Nephrology
                                  introduction
        Mr. Chairman and distinguished Members of the Subcommittee, my name
    is Wadi N. Suki, M.D., and I am the President of the American Society
    of Nephrology (ASN), the national organization representing 6,500
    physicians and researchers who are committed to finding cures for
    kidney disease. On behalf of the ASN, I would like to thank you for
    this opportunity to testify before you in support of the National
    Institutes of Health (NIH) and specifically the National Institute of
    Diabetes, Digestive, and Kidney Diseases (NIDDK), which provides
    funding for most of the kidney disease research in the United States.
                   esrd patient population continues to grow
        Although recent data suggests that the United States is possibly
    seeing some reduction in the growth of new end stage renal disease
    (ESRD) patients, the number of individuals being treated for ESRD grew
    steadily between 1986 and 1993. Since 1993, the rate of increase is
    down to 7 percent from the 9-10 percent levels that were experienced
    for most of the pre-1993 era.
        Between 1986 and 1995, the number of patients in this country with
    ESRD, that is total kidney failure, has more than doubled from 114,188
    to 257,266. During 1995 alone, a total of 68,870 patients were reported
    as being newly treated for ESRD in the United States. Chairman Porter,
    in your state of Illinois, the number of people undergoing therapy for
    ESRD has doubled over ten years from 5,813 in 1986 to 12,285 patients
    in 1995. In Mr. Obey's state of Wisconsin, the number of patients
    undergoing treatment for ESRD increased from 1,939 to 4,649 over that
    same period. In Mr. Istook's state of Oklahoma, the patient population
    receiving therapy for ESRD grew from 1,100 in 1986 to 2,865 in 1995.
    For your review, I have attached a table to my statement that outlines
    the dramatic rate of increase of people receiving therapy for end stage
    renal disease in each state.
        In terms of survival, the expected remaining years of life or life
    expectancies for U.S. ESRD patient groups is on average one-half to
    one-sixth of the normal life expectancy. In lay persons terms, if you
    are diagnosed with ESRD, you will die sooner.
    What causes ESRD
        The causes of ESRD are diabetes, hypertension, glomerulonephritis,
    and polycystic kidney disease. Hypertension and diabetes affect
    minorities disproportionately, thus accounting for the higher incidence
    of ESRD in the minority population. Diabetes is the most common cause
    of kidney failure in Native Americans, and it leads to kidney failure
    more often in women than in men. ESRD continues to be a disease that
    affects African Americans and Native Americans at a rate 3 to 5 times
    the rate of White Americans. ESRD remains very expensive to treat both
    on a per patient basis and a program basis. The medical, social, and
    financial implications of this disease continue to make ESRD a major
    public health and public policy problem for our country.
    Direct cost of ESRD to the Nation
        In 1995, the total spending for ESRD treatment in the United States
    was an estimated $13.1 billion. This includes Medicare payments of $9.7
    billion, $2.2 billion for Medicare patients' obligations, and an
    additional 0.98 billion for non-Medicare patients. In 1995, the average
    Medicare spending per patient/per year at risk was $40,000 for ESRD.
        Current data shows that the growth in the number of ESRD patients
    remains the primary driver of increased total spending. Between 1991
    and 1995, the rate of increase in spending per patient year was only
    1.1 percent. Depending on which Consumer Price Index (CPI) is used, the
    rate of increase in real spending per patient year was either or minus
    2 percent. As a result, spending per patient year has either remained
    constant or has decreased in recent years.
        Although the cost to the Federal Government per ESRD patient has
    remained relatively neutral, the number of patients requiring treatment
    for ESRD continues to grow. In recent years, the total funding at NIH
    for kidney disease research has been a little more than two percent of
    this country's direct cost to treat ESRD. Most of this funding went to
    the National Institute of Diabetes, Digestive, and Kidney Diseases
    (NIDDK). This is a very small percentage, yet it is my view and the
    view of the members of the American Society of Nephrology that an
    investment in research is the only real opportunity we have to reduce
    the enormous Medicare costs and human suffering imposed by ESRD.
    Advances in research
        Nephrology research is currently addressing many issues that affect
    patients with kidney disease. We are defining the best dialysis
    regimens in patients with ESRD. In experimental animals, we are
    exploring treatments to prevent or shorten the course of acute renal
    failure. We have also cloned the gene responsible for polycystic kidney
    disease and are now studying the protein to determine how it causes
    this disease. Genetic defects in other familial diseases have also been
    identified. Hopefully, these discoveries will lead to new treatments
    and preventions.
        Research is also addressing the mechanisms by which
    glomerulonephritis is induced, with the hope that this will lead to
    strategies for prevention. Antibodies against certain inflammatory
    proteins can arrest experimental focuses of glomerulonephritis. Soon
    this strategy will have to be tested in man.
        Medical research, made possible largely through Congressional
    support, has given the men, women, and children who suffer from chronic
    renal failure hope. Thirty-five years ago, ESRD patients died. Dialysis
    technology was in its infancy, available only for patients with acute
    reversible rather than total permanent renal failure. Kidney
    transplants were only a dream.
        Since then, millions of Americans have benefited from dialysis or
    kidney transplants. However, while treatment often prolongs life, ESRD
    remains a serious medical condition. There is a misconception that the
    dialysis patient is able to live a full, active life. Sadly, that is
    not the case.
        Dialysis does not simply mean being hooked up to a machine 4 hours
    a day, three times a week. Dialysis patients commonly suffer bouts of
    anemia, nausea, fatigue, low blood pressure, chills, and itching (due
    to impurities in the blood). The body has difficulty adjusting to the
    frequent changes in toxicity levels, as toxins are removed and then
    build back up prior to the next dialysis. Many patients suffer
    depression, due to feelings of vulnerability and illness.
        Children with chronic renal diseases present medical challenges not
    usually seen in adults. Children undergo continued somatic, mental and
    psychological maturation even in the face of ESRD. Therefore, an
    understanding of how these issues of normal development interact with
    chronic renal disease in the production of abnormal growth and
    development is the highest priority.
        Basic animal research led to clinical studies that have now
    established that the progression of chronic renal disease can be
    substantially slowed by: (1) treatment of blood pressure to normal
    levels; (2) use of specific types of anti-hypertensive drugs, that have
    kidney-protecting effects in addition to their action to lower blood
    pressure; and (3) dietary protein restriction. These approaches may
    well be responsible for the recently noted slowing in the rate of
    growth of ESRD in the U.S.
        Fifteen years of NIH-supported research established the role of
    increased blood pressure in the kidney itself as an important cause of
    the loss of kidney function. These findings stimulated a clinical trial
    that demonstrated that captopril, a drug that lowers blood pressure in
    the kidney, could also reduce the progression of diabetic kidney
    disease by about 50 percent, a finding that will save the Medicare
    program an estimated $2.6 billion over the next 10 years. More clinical
    trials of this nature are needed.
        Additionally, decreasing the anemia that accompanies chronic renal
    failure by the use of erythropoietin has been shown to reduce the
    incidence of heart failure in dialysis patients; increase the patient's
    sense of well being and exercise tolerance, as well as, improve their
    overall quality of life. Heart disease is the main cause of death in
    such patients.
        Despite the progress we have made and the possibilities on the
    horizon, the mortality rate for ESRD patients is still very high.
    Approximately 50 percent of dialysis patients die within a few years
    after they begin treatment. The life expectancy of a 49-year-old ESRD
    patient is less than seven years, compared to 30 years for a healthy
    49-year-old American.
    From bench to bedside
        Although solid basic research in the field of Nephrology has led to
    new discoveries in the prevention, diagnosis and treatment of kidney
    disease, more needs to be done in the area of clinical trials, studies
    and translational research (e.g., epidemiology, long-term longitudinal
    studies). Advances in understanding the mechanism of kidney disease and
    the discoveries of ways of arresting or modifying experimental kidney
    diseases will by necessity lead to the need to examine these strategies
    in patients with clinical kidney disease. This will create a need for
    professionals trained in the proper conduct, design, and analysis of
    data for clinical trials. There is also a need for properly trained
    officials to conduct longitudinal observation studies to better
    understand the natural history of kidney diseases. Funds will be
    necessary for training these individuals and for their research
    following the completion of training. In order to truly understand,
    diagnose, treat and hopefully cure kidney disease, it is imperative
    that we make a training investment in bio-staticians, clinical experts,
    and epidemiologists.
        At present, there is only a modest level of clinical trials and
    trained investigators working to translate new discoveries and
    information into cures for kidney disease. As with other disease
    institutes, a cadre of clinical investigators need to be funded and
    properly trained on how to conduct clinical trials and translational
    research to take basic discoveries to the next level in finding a cure
    for kidney disease.
        Although some funding does exist to train clinical investigators in
    the field of Nephrology research, additional resources are imperative
    if we are to be serious in combating this devastating disease. Without
    such an effort, kidney disease will continue to ravage this country.
    ASN request for fiscal year 1999
        The ASN is hopeful that a doubling of the NIH budget over the next
    5 years, as called for in several pieces of legislation currently
    pending before Congress, can be achieved, and the ASN looks forward to
    working with each member of this Subcommittee and its Senate
    counterpart to accomplish this goal. For 1999, ASN feels strongly that
    this Subcommittee should approve a 15-percent increase above the 1998
    level the NIH, as recommended by the Ad-hoc Coalition for Biomedical
    Research.
        More specifically, for NIDDK and kidney research, ASN feels
    strongly that a 15-percent increase over the 1998 level is also
    appropriate if we are to be serious and move forward in eradicating
    kidney disease. Given the cost to human life and to the Federal
    Government caused by ESRD specifically, and of all the diseases for
    which research dollars are provided by the NIDDK, we urge this
    Subcommittee to provide a 15-percent increase.
        Mr. Chairman, members of the Subcommittee, as President of ASN and
    as a representative to the Council of American Kidney Societies, I
    thank you for this opportunity and for your consideration of our
    request. That concludes my statement and I am prepared to answer any
    questions that you or other members of the Subcommittee may have.
                                     ______

      Prepared Statement of Dr. John F. Neylan, President-Elect, American
                        Society of Transplant Physicians
        Mr. Chairman and Members of the Subcommittee, thank you for the
    opportunity to present testimony on behalf of the American Society of
    Transplant Physicians (ASTP).
        I am John F. Neylan, M.D., Associate Professor of Medicine and
    Medical Director of the Renal Transplantation Program, at Emory
    University Hospital and I am President-Elect of the American Society of
    Transplant Physicians (ASTP). The ASTP, which has no governmental
    support, was established in 1982. Our membership, now over 1,000
    members strong, is comprised of physicians and scientists actively
    engaged in the research and practice of transplantation medicine and
    immunobiology. Given that our membership spans the disciplines of
    cardiology, hepatology, nephrology, pulmonology, infectious disease,
    and histocompatability, and that 25 percent of our members are surgeons
    with an expertise in related surgical specialties of solid organ
    transplantation, the ASTP represents the largest and broadest number of
    professionals in the field of transplantation in the United States.
        A principle goal of the ASTP is to serve as a forum for the
    exchange of scientific information related to transplantation and
    immunology and to promote and encourage research. One of the strategies
    for obtaining this goal is our annual scientific meeting. At the 1997
    ASTP Annual Meeting in Chicago last May, we had over 1,000 abstracts
    submitted highlighting cutting edge science in transplantation medicine
    and immunobiology.
        Today, my testimony will focus on fiscal year 1999 appropriations
    for the National Institutes of Health (NIH), particularly the National
    Institute for Allergy and Infectious Diseases (NIAID), National
    Institute for Diabetes, Digestive, and Kidney Diseases (NIDDK),
    National Heart, Lung, and Blood Institute (NHLBI). I will highlight
    those areas of research that need to receive additional emphasis and
    funding in fiscal year 1999.
        During the next hour, four new names will join those 56,793
    individuals in this country waiting for a solid organ transplant. And
    by the time I get home to Atlanta this evening, 10 individuals will
    have died because the wait for a transplant was just too long.
        But, Mr. Chairman with increased funding for research there is
    hope.
        Over the last 20 years, transplantation of solid organs has moved
    from experimental to accepted therapy, with nearly ------ performed in
    1997 alone. The success of this procedure has improved greatly over the
    last few years with almost all solid organ recipients enjoying an 83 to
    97 percent survival rate at one year. Much of this success can be
    attributed to research in immunosuppression that has been funded by
    previous NIH appropriations. However, this success has brought with it
    new challenges.
        More and more individuals are agreeing to be placed on waiting
    lists for an organ transplant. As I mentioned before, 56,793
    individuals are currently waiting for transplants, an increase of 255
    percent in the last ten years. It is unfortunate and absolutely
    unnecessary for those in need of a transplant to go without the ``Gift
    of Life.'' This happens because the supply of available donors is far
    less than the demand. Each year, the ASTP identifies the shortage of
    available donors as the number one problem in the field of
    transplantation.
        In December 1997 the Administration launched a national organ and
    tissue donation initiative to encourage more families to discuss and
    understand there loved ones' wishes in regard to donation. This may
    help in reducing family refusal, which is the number one cause of loss
    of potential donors today. Therefore, the ASTP urges this Subcommittee
    to provide the Department of Transplantation located in the Health
    Resources and Services Administration with additional funds for fiscal
    year 1999. This funding will help to insure the success of the
    Administration's initiative and any other programs conduct by the
    Department of Transplantation that enhance donor awareness and improve
    the public trust in the process.
        Research is central to all that occurs in the transplantation
    process. The ASTP believes that we are on the threshold of many
    important scientific breakthroughs in areas of transplantation
    research, such as rejection immunosuppression tolerance and xenografts.
    Because of this, the ASTP strongly urges this Subcommittee to continue
    its leadership in the area of biomedical research and provide a 15
    percent increase in funding for the NIH for fiscal year 1999. The ASTP
    supports this level of increase for the NIAID, the NIDDK, and the
    NHLBI, as well. By providing this increased level of funding, this
    Subcommittee will achieve the ultimate goal of doubling the NIH budget
    in 5 years. A concept supported by the ASTP and many of those societies
    who are members of the Ad hoc Coalition for Biomedical Research. With
    this level of increase, this Subcommittee and the Congress, as a whole,
    will have the personal satisfaction of knowing that they were
    responsible for expanding the general transplantation research
    authority at the NIH, as a whole.
        With this expanded authority, clinical and basic transplantation
    funding at the NIH must be increased. In particular, we recommend that
    Congress and the NIH designate the following as high priority
    initiatives at the NIAID, the NIDDK, and the NHLBI.
    The National Institute for Allergy and Infectious Diseases (NIAID)
        (1) Basic and clinical immunology, stressing an understanding of
    immunologic mechanisms of tolerance and autoimmunity, evaluation of
    chronic transplant rejection, and immunosuppression in transplant
    patients.
        (2) Basic immunology stressing the response to xenotransplants and
    methods to overcome the response.
        (3) Further structures on identification and treatment of
    infectious disease risks associated with xenotransplantation.
    The National Institute for Diabetes, Digestive, and Kidney Disease
            (NIDDK)
        (1) Continuation of the liver transplant database.
        (2) Studies to improve the survival of renal transplants, including
    improved mechanisms of donor and recipient matching.
        (3) Clinical trials to compare the outcome of combined kidney-
    pancreas transplant to kidney alone for diabetic patients. Prioritize
    increased funding for pancreatic islet cell transplantation.
        Great progress has been made in the field of pancreas
    transplantation and now simultaneous kidney/pancreas transplant offers
    greater survival at five years than kidney alone, and the majority of
    patients no longer need insulin. However, most insurance companies do
    not cover this combined transplant because definitive prospective
    studies have not been conducted. The NIDDK needs to sponsor a trial to
    document the superior benefit of combined kidney/pancreas transplant to
    convince third party payers and Medicare to cover this procedure, and
    further fund research to assess the comparative benefit of whole organ
    (pancreas) versus islet cell transplantation.
    National Heart, Lung, and Blood Institute (NHLBI)
        (1) Clinical trials in immunosuppression in heart transplantation.
        (2) Research on chronic rejection, applying promising new
    technology such as intravascular ultrasound.
        One new clinical advance is the development of an intravascular
    ultrasound imaging technique that allows measurement and detection of
    thickening of the vessel wall of the transplanted organ and follows
    these changes over time. This is currently being performed in heart
    transplant recipients, but the test is not reimbursed. This is the
    perfect opportunity to have NHLBI partner with industry to conduct a
    trial of new therapies to retard or prevent the development of this
    disease.
        (3) Establish the creation of databases for each stage heart
    disease to understand the disease and plan future needs.
        Heart failure is the number one admitting volume diagnosis in the
    Medicare system, the longest DRG, and it has the highest readmission
    rate. There are an estimated one million people with this diagnosis
    which has as much or more of an impact on the health care budget as any
    other disease. In addition, the increasing average age of the U.S.
    population indicates that this disease will only increase.
        We talk quite a bit in the transplantation community about how
    receiving a transplant can be the ``Gift of Life.'' You can't put a
    price tag in human terms of such a gift. Yes, a transplant procedure
    and follow-up care is expensive. But, relative to the lost
    productivity, the impact on quality of life, and the cost of living
    with end stage heart or renal disease, transplantation is cost
    effective. Also, it may be the only hope not just for improved
    survival, but for a full and healthy life for many individuals and
    their families. So, I end my remarks here today, by repeating ASTP's
    request that this Subcommittee and the Congress approve a 15 percent
    increase for the NIH for fiscal year 1999. Thus allowing the high
    priorities initiatives outlined above to be funded and commence.
                                     ______

     Prepared Statement of Peter E. Schwartz, M.D., President, Society of
                            Gynecologic Oncologists
        Chairman Specter, Senator Harkin, and Members of the Subcommittee,
    I am Peter E. Schwartz, M.D. I am here today in my capacity as the
    President of the Society of Gynecologic Oncologists (SGO). The SGO is
    the only national medical specialty society devoted to the study and
    treatment of cancers of the female reproductive tract. These
    malignancies include cancers of the cervix, endometrium or uterus, and
    ovary. The SGO has more than 750 members who specialize in providing
    comprehensive care for women with gynecologic cancers, including
    prevention, diagnosis, surgery, and all subsequent therapy.
        I am extremely grateful for the opportunity to provide public
    witness testimony on behalf of the SGO in support of increased funding
    for the National Institutes of Health, and particularly the National
    Cancer Institute.
        My remarks today will focus on the three major types of gynecologic
    cancers, detailing their incidence and providing some examples of how
    additional research dollars are critically needed to improve
    prevention, diagnosis, treatment, and survival for the estimated 82,000
    women who were diagnosed with a gynecologic cancer in 1997.
                  the three major types of gynecologic cancers
        The three most common types of gynecologic cancers are cervical,
    endometrial or uterine, and ovarian cancer.
    Cervical cancer
        (1) Cervical cancer accounts for 6 percent of all cancers in women.
    In 1997, an estimated 14,500 women were diagnosed with invasive
    cervical cancer and an estimated 4,800 of those women died from
    cervical cancer. An estimated 65,000 women were diagnosed with pre-
    invasive cervical cancer.
        Early detection greatly improves the chances of successful
    treatment. In fact, cancer of the cervix can be a preventable disease
    if women are regularly screened using the Pap test.
        While the vast majority of cervical cancers can be prevented, there
    are usually no signs or symptoms associated with cervical pre-cancers
    and early cancer. The symptoms develop after the cancer has become
    invasive.
        Survival rates of invasive cervical cancer patients are relatively
    high at eighty-seven percent one year after diagnosis and sixty-nine
    percent five years after diagnosis. However, we can and must do better.
        Currently, there is some very exciting research being conducted to
    prevent and treat invasive cervical cancer. Some of the promising new
    developments include research in the following: (1) How certain genes
    called oncogenes and tumor suppressor genes control cell growth and how
    changes in these genes cause normal cervical cells to become cancerous;
    (2) New laboratory tests to detect the types of human papilloma viruses
    or HPV that appear to cause cervical cancer; and (3) Improvements in
    the Pap test. The most exciting research in this area is the work going
    on at the National Cancer Institute (NCI) in the area of vaccines for
    preventing and treating cervical cancer.
        Increased funding for this research can speed new techniques for
    detection and treatment of cervical cancer to physicians and their
    patients.
    Endometrial or uterine cancer
        (2) Cancer of the endometrium is the most common cancer of the
    female reproductive organs. In 1997, an estimated 34,900 women were
    diagnosed with endometrial cancer and 6,000 of those women died from
    endometrial cancer.
        While early detection improves the chances that endometrial cancer
    can be treated successfully, at this time, there are no recommended
    screening tests or examinations that can reliably detect most
    endometrial cancers in asymptomatic women.
        In some cases, women experience symptoms of endometrial cancer,
    permitting diagnosis at an early stage. Unfortunately, endometrial
    cancers may reach an advanced stage before recognizable signs and
    symptoms are present.
        The 1-year relative survival rate for endometrial cancer is 93
    percent and the 5-year relative survival rate is 95 percent, if
    endometrial cancer is found at an early stage. The relative survival
    rate falls to 66 percent if the cancer is diagnosed at a regional
    stage.
        To improve prevention, diagnosis, treatment, and survival of
    endometrial cancer patients, more research dollars are needed for
    projects such as the following: (1) determining the molecular pathology
    of endometrial cancer; (2) laparoscopic lymph node sampling; (3)
    research regarding tumor markers; and (4) development of new
    chemotherapy drugs as well as angiogenesis inhibitors.
    Ovarian cancer
        (3) Ovarian cancer accounts for 4 percent of all cancers among
    women. Ovarian cancer ranks fifth as a cause of cancer deaths among
    women, and causes more deaths than any other cancer of the female
    reproductive system. In 1997, an estimated 26,800 new cases of ovarian
    cancer were diagnosed and an estimated 14,200 women died from ovarian
    cancer.
        While early detection improves the chances that ovarian cancer can
    be treated successfully, early cancers of the ovaries rarely cause
    symptoms that women would notice, or the symptoms are mistaken for
    menopausal ailments or intestinal illnesses.
        Early detection is complicated by the fact that the ovaries are
    deep inside the pelvis and cannot be seen directly without surgery.
    Small ovarian tumors are difficult for even the most skilled examiner
    to feel. In fact, there are no screening tests now available which are
    accurate enough to use in finding ovarian cancer early among women who
    have no symptoms.
        Unfortunately, almost 70 percent of women with ovarian cancer are
    not diagnosed until the disease is advanced in stage. The 5-year
    survival rate for these women is only fifteen to twenty percent. More
    than ever, there is a need for a greater awareness and understanding of
    ovarian cancer. Educational efforts must be increased to ensure that
    women and their primary care physicians and gynecologists recognize the
    symptoms and understand the risk factors for ovarian cancer.
        Additionally, now is the time to establish an agenda for more
    research into the areas of basic and translational research, genetic
    susceptibility and prevention, diagnostic imaging, screening and
    diagnosis, and therapy that could hold the most promise for future
    discoveries that will lead to improved prevention, detection, and
    treatment of ovarian cancer.
        The PHS Office on Women's Health (OWH), the Society of Gynecologic
    Oncologists (SGO), and the National Cancer Institute (NCI), in an
    effort to put ovarian cancer at the forefront of our nation's cancer
    research agenda, sponsored a Strategic Planning Conference on New
    Directions in Ovarian Cancer Research on December 8-9, 1997, in
    Washington, D.C. The purpose of the Conference was to outline the
    priorities for ovarian cancer research over the next five years.
        The Conference brought together a group of experts in gynecologic
    oncology, general oncology, diagnostic imaging, molecular
    endocrinology, and genetics, already armed with the knowledge of
    current procedures and techniques, in order to develop a strategic plan
    for ovarian cancer research.
        The Conference participants identified the following eight critical
    components as the priorities for the strategy for attaining a greater
    understanding of the disease, and for which a commitment to increased
    funding and investment in biomedical research should be pursued:
                              educational efforts
        The first critical component is to support greater educational
    efforts for both the physician and patient communities. Due to the fact
    that early detection of ovarian cancer is so difficult, and warning
    signs are often confused with symptoms of other types of abdominal
    ailments, it is essential that primary care physicians and
    gynecologists, as well as their patients, become aware of the potential
    early warning signs, the risk factors involved, and the importance of a
    complete medical history of both the patient and her family to assist
    in determining possible genetic risks.
                 infrastructure for the study of ovarian cancer
        The second critical component is support for the development of a
    solid infrastructure for the study of ovarian cancer. Increased funding
    for ovarian cancer research is essential not only for Requests for
    Application (RFAs) and the creation of a Specialized Program of
    Research Excellence, otherwise known as a SPORE, but also for the
    recruitment and retention of young investigators as well as trained
    investigators from other fields. Innovative mechanisms to protect time
    for clinician scientists to conduct research are crucial, especially in
    the managed care environment that medical professionals now must
    practice in.
                         tissue procurement and banking
        The third critical component is support for tissue procurement and
    banking. Tissue procurement and banking is an intrinsic part of
    clinical trials. By standardizing tissue collection and storage, we can
    then gather epidemiological and follow-up data on ovarian cancer and
    correlate this data with molecular biological studies on the banked
    tissues.
      identification of genetic changes related to all stages of ovarian
                                     cancer
        The fourth critical component is support for identification of all
    genes expressed in ovarian cancer tumors at all stages of the disease.
    This will facilitate the identification of molecular prognostic
    indicators, the identification of tools for early diagnosis, and the
    elucidation of the etiology of ovarian cancer.
                 tumor makers and diagnostic imaging modalities
        The fifth critical component is support for the collection of data
    to evaluate the utility of current tumor makers such as CA125 and
    current diagnostic imaging modalities on mortality of ovarian cancer in
    a multinational randomized controlled trial. Such collection will also
    allow for the evaluation of additional markers to aid in detection of
    ovarian cancer.
     cohort study of patients at a genetically high risk for ovarian cancer
        The sixth critical component is support for the development of a
    cohort study of patients at a genetically high risk for ovarian cancer.
    Such a study would provide a base for an assessment of ovarian cancer
    risk in relation to specific mutations, an evaluation of the benefits
    and risks of chemopreventive interventions, and an infrastructure for
    gathering tissue from prophylactic surgery in a uniform way for use in
    molecular studies.
        evaluation of conventional therapy approaches to ovarian cancer
        The seventh critical component is support for an ongoing,
    multinational evaluation of conventional therapy approaches to ovarian
    cancer. This would provide for an assessment of the role of cytotoxic
    chemotherapy and the role of surgical debulking, as well as an
    evaluation of the optimal time for surgical intervention.
       development and evaluation of novel investigational approaches to
                                 ovarian cancer
        And finally, the eighth critical component is support for the
    development and evaluation of novel investigational approaches to
    ovarian cancer. This includes research into anti-angiogenic agents,
    apoptosis targets, novel molecular targets, and gene therapy.
        Chairman Specter, Senator Harkin, and Members of the Subcommittee,
    I greatly appreciate your time and attention to the need for additional
    resources for research being conducted for improved prevention,
    diagnosis, and treatment for gynecologic cancers. The SGO and I look
    forward to working with you in the years ahead on behalf of women and
    their reproductive health. I would be happy to answer your questions at
    this time.
                                     ______

       Prepared Statement of Rosalie Lewis, President, Dystonia Medical
                              Research Foundation
        I am Rosalie Lewis, President of the Dystonia Medical Research
    Foundation. It is my pleasure to have the opportunity to submit
    testimony to the Subcommittee on behalf of the Foundation.
        First and foremost I would like to thank this subcommittee for its
    generous funding of the National Institutes of Health in its fiscal
    year 1998 appropriations bill. The Foundation is aware of the
    tremendous fiscal constraints under which you were working and we are
    extremely appreciative of your continued commitment and support of
    biomedical research.
        I have been formally involved with the Foundation since 1989, but
    on a more personal level I have been dealing with dystonia since 1985
    when the first of the three of our four children with dystonia was
    diagnosed. Dystonia has not only robbed my 20-year-old son Benjamin of
    the ability to walk unaided, or to use his hands for any fine motor
    coordination like writing, but now has made speaking most difficult.
    Like Benjy, my son Dan--now 17--also first exhibited symptoms of this
    disorder at age 7 and like Ben, dystonia has now made walking
    independently a challenge for Dan. The progression of early onset
    dystonia is relentless and uncontrollable. That is why, on behalf of
    the 300,000 other children and adults, I am asking for your help.
        Dystonia is a neurological disorder characterized by severe
    involuntary muscle contractions and sustained postures. There are
    several different types of dystonia, such as: generalized dystonia
    which afflicts many parts of the body and usually begins in childhood
    (my sons Benjamin and Daniel have generalized dystonia); focal
    dystonias affecting one specific part of the body such as the eyelids,
    vocal cords, neck, arms, hands or feet (my son Aaron has a focal
    dystonia of the hand); and secondary dystonia which is secondary to
    injury or other brain illness.
        There is no definitive test for dystonia (only now, with the
    identification of the genes responsible for childhood-onset and dopa-
    responsible dystonia is there a definite test for these two genetic
    forms). Many primary care doctors have never seen a case of dystonia.
    This fact coupled with its varied presentations make it difficult to
    correctly diagnose. It is estimated that 85 percent of those suffering
    from dystonia are not diagnosed or have been misdiagnosed.
        In primary, uncomplicated dystonia, there is no alteration of
    consciousness, sensation, or intellectual function. Treatment for
    dystonia has met with limited and variable success with drug therapy,
    botulinum toxin injections, and several types of surgery. My children
    with generalized dystonia take huge doses of drugs which makes
    cognition difficult. But with a choice between walking and not walking,
    one may choose to tolerate drug side effects. Ben receives injections
    of botulinum toxin (botox) into the abductor muscles of his vocal
    cords, and he is experiencing moderate improvement.
        I am proud to be involved with the Dystonia Medical Research
    Foundation, founded just 22 years ago and since 1993 a membership-
    driven organization.
        The goals of the Foundation have remained the same: to advance
    research into the causes of and treatments for dystonia; to build
    awareness of dystonia in the medical and the lay communities; and to
    sponsor patient and family support groups and programs.
    To advance research
        Since 1977 the Foundation has awarded over 285 medical research
    grants totaling close to $15 million dollars. Among the more
    significant results of this research are the discovery this past year
    of the DYT1 gene, the gene for early-onset dystonia and in 1995 the
    identification of the gene for dopa-responsive dystonia. In addition,
    several drug therapies have been developed including the use of
    Botulinum Toxin, Baclofen, and Artane.
        The discovery of the DYT1 gene for early-onset dystonia was made by
    Dr. Xandra O. Breakefield, geneticist at the Neuroscience Center of
    Massachusetts General Hospital in Boston, and her additional
    collaborators after two decades worth of research and over $1 million
    in contributions by the Foundation. With the discovery of the DYT1 gene
    came the identification of torsin A, the protein for which the DYT1
    gene codes and which plays a crucial role in the chemistry of dystonia.
        On November 13, 1997, Dr. Xandra O. Breakefield spoke at the
    National Institute of Neurological Disorders and Stroke on the
    hypotheses from her research, the significance of these discoveries and
    directions for future research. The following were presented based on
    Dr. Breakefield's research:
      --It has been hypothesized that dystonia is caused by an imbalance in
            dopamine transmission to the basal ganglia, from the supporting
            data that: (a) drugs that block D2 receptors can cause dystonia
            symptoms; (b) dopa-responsive dystonia is due to a block in
            dopamine synthesis and treatable with dopa; and (c) dystonia
            symptoms occur in early-onset Parkinson disease and with low
            doses of dopa in Parkinson patients.
      --It has been hypothesized the GAG deletion in torsin A disrupts (or
            decreases) the release of dopamine from the nerve terminal in a
            dominant-negative manner. Possible actions of this protein are
            as: (a) a heat-shock protein which protects dopa-minergic
            neurons from stress--such as high body temperature or overuse;
            (b) a component needed for vesicular release of dopamine at
            nerve terminals; and (c) a chaperone protein need for
            mitochondria integrity.
      --Future research is necessary to determine the normal function of
            the torsin A protein through cellular localization, expression
            of the protein in the brain, animal models, interaction
            proteins, and functional assays in culture. Other members of
            the newly discovered torsin family of human proteins need to be
            mapped for and tested for involvement in other forms of
            dystonia; these proteins may be involved in other forms of
            dystonia or another neurological and psychiatric diseases, as
            our present knowledge of torsin A and childhood-onset dystonia
            suggests a new kind of pathogenic mechanism associated with a
            particular window of time of susceptibility combined with some
            kind of environmental or endogenous stress.
    To build awareness
        It is the goal of the Foundation to educate the lay and medical
    audiences about dystonia so that people afflicted with the confusing
    symptoms need not go undiagnosed or misdiagnosed as is so common.
        The Foundation conducts medical workshops and regional symposiums
    during which comprehensive medical and research data on dystonia is
    presented, discussed, and then disseminated. In October 1996 the
    National Institutes of Health (NIH) was one of our co-sponsors for an
    international medical symposium with 60 papers on dystonia and 125
    representatives from 24 countries.
        Over 3,000 medical videos have been distributed since 1995 to
    hospitals and medical and nursing schools and at medical conventions.
    In addition, media awareness is conducted throughout the year but most
    especially during Dystonia Awareness Week, to be observed nationwide in
    1998 from October 11th through the 18th.
    To sponsor patient and family support groups
        The Foundation has more than 200 chapters, support groups and area
    contacts across the United States and Canada. We have 15 international
    chairpersons representing awareness, children's advocacy, development,
    extension, the Internet, leadership, medical education, the on-line
    news group, and symposiums.
        Patient symposiums are held regionally in order to provide the
    latest information to dystonia patients or others who are interested in
    the disease. Since 1995 we have held fifteen regional symposiums to
    attract, educate, and inform more people about dystonia. In 1998 we
    will have five more symposiums. Our most recent international patient
    symposium was held on May 24-26, 1996 in New York City, and was a
    tremendous success with 350 in attendance.
    The National Institutes of Health and Dystonia
        As mentioned, in October of 1996 we conducted a major medical
    symposium with support of the National Institute on Neurological
    Disorders and Stroke (NINDS). In February 1993 the Dystonia Foundation
    co-sponsored with the National Institute on Neurological Disorders and
    Stroke an international workshop to bring together basic and clinical
    investigators. We continue to need ``a greater interaction among
    researchers from different scientific disciplines [and] carefully
    collected epidemiological information on the dystonia subtypes * * *.
    NINDS encourages these ongoing research efforts towards the
    elucidation, treatment and eventual prevention of the various subtypes
    within the clinical spectrum of dystonia.''
        As you probably are aware, it can be extremely difficult for young
    scientists to break into the NIH grant system. The Dystonia Medical
    Research Foundation recommends that the National Institutes of Health,
    the National Institute on Neurological Disorders and Stroke, and the
    National Institute on Deafness and other Communication Disorders be
    funded for fiscal year 1999 at a 15-percent increase over fiscal year
    1998. This increase would be part of an overall request to double
    funding for the National Institutes of Health by fiscal year 2003. We
    would request that this increase does not come from funding sources
    which will require budgetary cuts in other public health service
    organizations. Because dystonia is the third most common movement
    disorder after Parkinsons and tremor and affects Americans six times
    more than most better known disorders such as Huntington's, Muscular
    Dystrophy, and ALS, we ask that NINDS fund dystonia-specific extramural
    research at the same level it supports research in those other
    neurological diseases.
        With the proper dedication of resources, we believe that more
    treatments and a cure can be developed that will help my three boys--
    Aaron, Benjamin, and Daniel, and thousands of others.
        Thank you for the opportunity to submit testimony to the
    Subcommittee on behalf of the Dystonia Medical Research Foundation.
                                     ______

       Prepared Statement of Allison Rumery-Rhodes, Sudden Infant Death
                               Syndrome Alliance
        Mr. Chairman and members of the Subcommittee, thank you for the
    opportunity to submit testimony to you regarding the federal
    government's response to and funding of Sudden Infant Death Syndrome
    (SIDS).
        As the parent of a child who died from SIDS, I would like to remind
    you that SIDS is a frightening disease that knows no geographic,
    economic or cultural boundaries. It can strike any infant, even if the
    parents do everything ``right.'' In the typical, but always tragic SIDS
    case, an apparently healthy child is put to bed without any indication
    that something is wrong. Sometime later, the infant is found dead. The
    infant's prior medical history, a complete postmortem examination, and
    a thorough investigation of the death scene provide no explanation for
    the cause of death.
        Although cases of the syndrome have been noted since biblical
    times, organized scientific research into the cause of SIDS is recent,
    dating to the mid-1970's. After decades of scientific study, we are
    just beginning to make real progress in reducing the number of babies
    dying of SIDS and are starting to unravel the mystery. The U.S. ``Back
    to Sleep'' campaign has heightened awareness about SIDS and offered
    parents an opportunity to reduce their infant's risk for SIDS. Initial
    results from this campaign indicate that SIDS rates have been reduced
    by 38 percent, the highest reduction in infant mortality rates in 20
    years! We have also learned that some infants who die of SIDS have an
    abnormality in a region of the brain thought to play a role in heart
    and lung control. This defect may hamper normal respiratory activity,
    and though not the sole cause of SIDS, it may contribute to a larger
    respiratory impairment leading to the baby's death. Whereas healthy
    babies' nervous systems detect breathing difficulties and arouse them,
    it is believed that SIDS babies may not be able to detect reduced
    levels of oxygen or elevated levels of carbon dioxide. Therefore they
    do not respond by gasping for breath, crying, or turning their heads
    like a non-impaired infant, leaving them more vulnerable to SIDS.
        These are important breakthroughs, expanding our understanding
    about SIDS and offering renewed hope that with further research we will
    be able to identify babies that are most vulnerable and ultimately
    prevent all SIDS deaths. However, our work is far from over. In this
    country more than 3,000 infants die each year as a result of SIDS. SIDS
    is the number one cause of death for infants one month to one year of
    age. It is a major component of the high rate of infant mortality in
    the United States, yet we still do not know what causes SIDS nor how to
    prevent it from claiming so many young lives.
        The primary federal agency responsible for conducting research into
    SIDS is the National Institute of Child Health and Human Development
    (NICHD) at the National Institutes of Health (NIH). In addition to
    federal funding of SIDS research, there are other agencies involved in
    SIDS efforts. Since 1975, the Maternal and Child Health Bureau (MCHB)
    of the Health Resources and Services Administration (HRSA) has
    supported specific programs for SIDS family counseling and for public
    and professional education about SIDS. Currently, MCHB is implementing
    SIDS initiatives recommended by the federally funded ``Nationwide
    Survey of Sudden Infant Death Syndrome Service,'' including a grant
    which was issued for a new SIDS Services Center in 1997. The Centers
    for Disease Control and Prevention (CDC) has established a standardized
    death scene investigation protocol for SIDS incidents. An Interagency
    Panel on SIDS, which includes the NIH, HRSA, CDC, Indian Health
    Services, Food and Drug Administration, Substance Abuse and Mental
    Health Service Administration, US Consumer Product Safety Commission,
    Department of Defense, Administration for Children and Families, and
    the Department of Justice help coordinate SIDS activities between
    government agencies.
        National Institute of Child Health and Human Development.--Mr.
    Chairman, thanks to the funding which has been provided by this
    Subcommittee, researchers supported by the NICHD SIDS Program have been
    making real progress in the fight against SIDS. In 1988, at the request
    of Congress, the NICHD assembled a group of scientists to examine the
    current state of knowledge about SIDS and articulate future SIDS
    research needs. The result of this effort was the SIDS Five Year
    Research Plan. The Five Year Plan was so successful and productive that
    a second SIDS Five Year Plan was initiated in fiscal year 1995. Through
    research projects sponsored by NICHD, scientists have expanded our base
    knowledge of SIDS and our understanding of the causes and underlying
    mechanisms of the syndrome. Research objectives have focused on:
    identifying infants at risk for becoming victims of SIDS including
    developing markers to detect which babies are most vulnerable;
    clarifying the relationship between high-risk pregnancy, high-risk
    infancy, and SIDS; investigating factors which place babies at higher
    risk and stresses that may trigger a SIDS occurrence; and exploring
    mechanisms and interventions that may prevent SIDS deaths.
        Provided below are a few examples of new or expanded initiatives
    that could be implemented with a funding level of $17,355,000 in fiscal
    year 1999 for the SIDS Five Year Research Plan.
      --Establishment of a community child health research network in
            communities with substantial under-represented minority
            populations to develop and implement common biomedical research
            protocols targeted at reducing morbidity and sudden death in
            infancy and early childhood, and to train minority researchers.
      --A study to validate potential predictive biologic tests for SIDS
            risk, such as computer analysis of heart rate variability and
            cry characteristics, in the general population.
      --Issue a request for applications on the biology of arousal to
            inform the research community of NICHD's interest in grant
            proposals covering molecular, cellular, organ system and
            behavioral aspects of arousal in developing organisms.
      --Extension of the prospective ``Infant Care Practices Study'' which
            is evaluating care-taking practices from birth through one year
            of age in two geographic areas. This project provides
            information to improve the efficacy of the ``Back to Sleep''
            campaign.
      --Expansion of the ``Back to Sleep'' campaign to improve the efficacy
            of the public health education effort. Additional resources are
            needed for the development and distribution of culturally
            relevant materials for minority groups, outreach to minority
            groups and day care centers, education of fathers and
            grandparents, exhibits and speaking engagements, and for
            evaluating the delivery of the strategies used to change the
            behavior of care givers.
        The SIDS Alliance is grateful to the Subcommittee's past support.
    We urge you again to provide the additional funding necessary for the
    fifth year of the second Five Year SIDS Research Plan so that NICHD can
    complete critical initiatives. Further research is essential to find
    the reasons for, and means of preventing the tragedy of Sudden Infant
    Death Syndrome.
        Centers for Disease Control.--Due to inconsistencies from state to
    state at the scene of an unexplained infant death, in 1993 Congress
    recommended that a standard death scene protocol be established. The
    hope was that the death scene protocol would be adopted by states to
    assist in developing a better statistical grasp on SIDS cases, and
    would help to avoid awkward and sometimes emotionally charged
    misunderstandings at the scene. In July 1993, the Centers for Disease
    Control and Prevention and the National Institute of Child Health and
    Human Development held a workshop on ``Guidelines for Scene
    Investigation of Sudden Unexplained Infant Deaths''. The proceedings of
    the workshop were published in the American Journal of Forensic
    Sciences in 1995. The actual protocol was published in the Mortality
    Morbidity Weekly Report in the summer of 1996. Since then it has also
    been republished by the Journal of SIDS Infant Mortality. 5,000 copies
    of the ``Guidelines for Scene Investigation of Sudden Unexplained
    Infant Deaths'' have been printed, and approximately 4,000 copies have
    been distributed to date. The long term goal of the SIDS Alliance is to
    work with and encourage each state's adoption of the guidelines. To
    help to realize this goal the SIDS Alliance would like to request that
    the CDC create a demonstration project to test the implementation of
    these guidelines in several communities nationwide.
        Maternal and Child Health Bureau.--The MCHB supports a number of
    SIDS related services and issues, including the National SIDS Resource
    Center, a major source of current information about SIDS. The Center
    maintains a national database of approximately 5,000 books, reports,
    and articles on SIDS and bereavement, and publishes information for
    national distribution. The National SIDS Resource Center has played a
    significant role in the ``Back to Sleep'' campaign, staffing the 800
    hotline number and processing the more than 4 million pieces of
    campaign materials.
        MCH Service Block Grant funds are used by MCH State Directors,
    either alone or in combination with non-federal funds, to provide a
    range of services to SIDS families in each state. Block grant funds
    support activities such as contact with families immediately after
    death; discussion of the autopsy results with the family; and family
    support through the first year of bereavement. Unfortunately, in many
    jurisdictions across the country, funds for these services have
    decreased or even been eliminated because of budgetary difficulties.
        At the direction of Congress, MCHB funded the ``Nationwide Survey
    of Sudden Infant Death Syndrome Services'' in 1992. In response to
    needs identified through the Survey, MCHB contracted the development
    and field testing of a curriculum to train health care providers in the
    case management of families who have experienced an infant death, as
    recommended by the Survey. To date, 100 health professionals have
    participated in the training program. MCHB is also supporting the
    development of model programs to meet the needs of families--
    particularly the under served and minorities--who experience an infant
    death, as recommended by the Survey. Four demonstration grants in
    California, Massachusetts, Missouri and New York have been initiated to
    target services for specific populations.
        Recently, the MCHB established a national SIDS program support
    center to address SIDS service issues at the federal level on an
    ongoing basis. The SIDS Alliance has been chosen to run this center,
    which opened this year. The center was another recommendation of the
    SIDS Survey.
        Fourth SIDS International Conference.--The SIDS Alliance, in
    conjunction with SIDS International and in cooperation with NICHD, MCHB
    and CDC hosted the Fourth SIDS International Conference on June 23-26,
    1996 in Bethesda, Maryland. Over 700 registrants and 300 guests
    participated in this unique event. The partnership of countries
    provided by the International Conference has resulted in a heightened
    awareness of SIDS throughout the world, as well as a vital link
    allowing the rapid exchange of high quality international research,
    prevention, and service data. The global focus of efforts facilitates
    scientific breakthroughs and enables the development of innovative
    public health strategies to combat SIDS and assist families.
    Collaborative efforts such as the Fourth SIDS International Conference
    are crucial in moving forward with all aspects of activities relating
    to SIDS including research, death scene protocol and local SIDS
    services.
        We are all too painfully aware, Sudden Infant Death Syndrome has
    historically been a mystery, leaving in its wake devastated families
    and bewildered physicians. In the past there have been no answers to
    why a baby dies of SIDS. For new and expectant parents there have been
    no answers on how to prevent SIDS from claiming their child. But today,
    we are beginning to find some of the answers such as factors that
    increase the risk for SIDS and actions parents can take to reduce the
    risks. Recent research has provided us with an unprecedented
    opportunity to decrease the number of SIDS deaths by alerting new
    parents about a few simple steps that they can take. It is important to
    realize however, that while following the recommendations presented may
    help to prevent some SIDS deaths, it will not save all babies; we still
    do not know what causes SIDS nor do we know how to predict which babies
    are vulnerable.
        There is still a great deal more that needs to be done in the fight
    against SIDS. It would truly be a tragedy if research efforts were
    halted or delayed at the point when so much progress is being made.
    Research capability and technology are available to conduct additional
    studies that will advance our abilities to eliminate SIDS. Now is the
    time for us to do something about SIDS and prevent babies from dying of
    SIDS in the future.
        As a SIDS parent, I am active in private organizations such as the
    SIDS Alliance that provide support to newly bereaved families, educate
    the public about SIDS and reducing the risks for SIDS, and fund SIDS
    research; but these organizations cannot do it alone. We need your
    help, your commitment, and your support. Moving towards the 21st
    Century, the political and fiscal realities of the world require that
    the public and private sectors work together to solve societal
    problems.
        I urge the subcommittee to support SIDS research and education by
    funding the NICHD at a level of $775,980,900. This is an increase of
    $10,121,490 or 15 percent over the fiscal year 1998 budget. This
    increase would be part of an overall request for doubling funding for
    the National Institute of Health by fiscal year 2003. We would request
    that this increase does not come from funding sources which will
    require cuts in other public health service agencies. As this
    subcommittee works toward doubling funding for the National Institutes
    of Health, we believe that it is reasonable to anticipate a doubling of
    the funding commitment to SIDS research through NICHD. We also request
    that Congress continue to encourage MCHB and CDC to move forward with
    their initiatives to help SIDS families by expanding the availability
    of services and promoting standardized, thorough and compassionate
    death scene investigations.
        On behalf of the thousands of families who have been devastated by
    the loss of a baby to SIDS, and the millions of concerned and
    frightened new parents each year, we thank you for your past leadership
    and support, and for enabling the Sudden Infant Death Syndrome Alliance
    to provide this testimony. If you have any questions, please do not
    hesitate to contact us.
                                     ______

       Prepared Statement of Susan Scrimshaw, Ph.D., Dean, University of
       Illinois School of Public Health, on Behalf of the Association of
                            Schools of Public Health
        Mr. Chairman, I am Susan Scrimshaw, dean of the School of Public
    Health at the University of Illinois at Chicago and a chair of the
    legislative committee of the Association of Schools of Public Health.
        I would like to thank you, Mr. Chairman and members of the
    subcommittee, for the opportunity to present our statement on the ASPH
    fiscal year 1999 appropriations requests for PHS programs of primary
    concern to the academic public health community. You will find a chart
    at the end of my statement that outlines these recommendations. For
    now, I would like to highlight some of them.
    Health professions education
        Although we are pleased that the Administration recommended level
    funding for HRSA's health professions education and training programs
    (much better than last year's proposal to cut them), we strongly
    recommend that Congress tackle a problem that has been left to fester
    for over a decade: the lack of adequately trained public health
    professionals to run this country's public health system. In 1988, the
    Institute of Medicine (IOM) found that the U.S. public health
    infrastructure was in a state of disarray and identified serious
    shortages of public health professionals. According to HHS, the U.S.
    public health system is still disorganized and experiencing shortfalls
    in the number of comprehensively-trained epidemiologists,
    biostatisticians, maternal and child health and environmental health
    specialists, public heath nurses, dentists and physicians, among
    others.
        According to experts in the Public Health Service, less than
    100,000 of the estimated 500,000 in the public health workforce have
    graduate education in the public health sciences. It is estimated that
    at least 40,000 environmental public health specialists require further
    training and education in order to function effectively on the job. Yet
    there is still a need for 120,000 more to staff unfilled vacancies.
        There is a need for more public health physicians, dentists, and
    nurses. For example, there are only about 4,300 certified preventive
    medicine physicians in the U.S., yet the estimated need hovers around
    10,000. Much the same can be said about dentists (there are 128
    certified public health dentists as compared to the 5,000 that are
    required today) and public health nurses. Furthermore, federal, state
    and local public health officials report problems in recruiting
    epidemiologists, biostatisticians, maternal and child health,
    occupational health professionals, and public health nutritionists.
        We are concerned that the large majority of practicing public
    health professionals currently lack the skills, knowledge and
    competencies to do their important jobs effectively. My school
    conducted a study recently and found that only about 25 percent of
    local public health departments have the staff to adequately address
    the three core areas of public health: assessment, policy development
    and assurance. Mr. Chairman, we need your help in seeking solutions to
    these inadequacies. We spend over $6 billion a year to ensure that
    physicians are well trained in the medical sciences to treat and cure
    diseases; yet we spend mere pittances to train professionals to prevent
    those diseases, promote health and diminish disability among U.S.
    citizens.
        The rush toward controlling medical care costs has created the
    managed care movement. This development has increased the need for
    public health professionals, persons with the skills, knowledge,
    competencies and values to address the characteristics and challenges
    of this emerging health care system. According to the Pew Charitable
    Trusts, these are: greater orientation towards health; prevention of
    disease and disability; focus on the health status of populations/
    communities; expectations of accountability and cost control; knowledge
    of treatment outcomes; reconsideration of human values. Yet
    professionals with knowledge and skills to address them are in short
    supply.
        To begin addressing these needs, Mr. Chairman, we respectfully
    request that Congress appropriate at least $50 million to support
    HRSA's public health training programs, including training of
    preventive medicine physicians, nurses and dentists, environmental
    health and maternal and child health specialists.
        In addition, ASPH joins the more than 40 national organizational
    members of the Health Professions and Nursing Education Coalition
    (HPNEC) in recommending an fiscal year 1999 appropriation of at least
    $306 million for Titles VII and VIII of the Public Health Service Act.
    Along with these organizations I wish to thank the subcommittee members
    for supporting these important programs that are designed to meet the
    nation's need for primary care providers and public health
    professionals in short supply.
    Prevention research
        Congress authorized CDC to establish a national network of
    university-based centers to undertake research and demonstration
    projects in health promotion and disease prevention. Currently, 14
    prevention research centers (PRCs), located mostly in schools of public
    health, form partnerships with state and local health agencies and
    community-based organizations to put into place innovative programs
    that prevent disease and promote health. PRCs serve to bridge the gap
    between public health science, research in academia and public health
    practice in communities.
        In 1995, CDC asked the IOM to review the PRC program and determine
    the extent to which it was meeting its congressionally mandated goals:
    to provide a sound scientific basis for health promotion and disease
    prevention policies and practices; and to translate research findings
    into community-based interventions.
        In short, CDC wanted the IOM to determine if the PRCs were:
    ``applying research findings and making them work at the local level.''
    Late in 1996, the IOM released its report on the CDC PRC program:
    Overall, the committee finds that the PRC has made substantial progress
    and is to be commended for its accomplishments on advancing the
    scientific infrastructure in support of disease prevention and health
    promotion policy programs and practices.
        In light of the IOM review, we respectfully request that you
    support an fiscal year 1999 appropriation of $24 million for the CDC
    prevention research centers program. The program was authorized in 1986
    to provide $1 million per center; this goal has never been reached. An
    increase in fiscal year 1999, albeit minor in comparison to NIH
    appropriations for centers with similar missions, would contribute
    greatly to this nation's attempts to change behaviors that put
    Americans at risk for chronic health conditions; they claim a
    disproportionate number of lives, especially those Americans in
    vulnerable populations (the elderly, the underserved, the
    underrepresented), plus add fuel to the nation's excessive health care
    costs.
        Mr. Chairman, we also go on record in support of the
    Administration's fiscal year 1999 request to fund CDC's extramural
    research program but at $100 million instead of $25 million. To
    effectively integrate health promotion and disease prevention
    strategies into our national health care system, promising
    interventions applicable at the community level need to be developed
    and evaluated. Prevention research enhances the nation's public health
    agenda by providing a scientific context for health promotion and
    disease prevention.
        Speaking of prevention research at CDC, we respectfully recommend
    that the NIH be urged to focus more attention on population-based
    research strategies targeted at precluding the development of disease,
    or postponing its symptomatic onset, through changes in personal habits
    and factors in the social and physical environment. It is anticipated
    that greater resources across the NIH institutes would be put into
    extramural prevention research which includes the following types of
    activities: investigations into the epidemiology of disease including
    identification of social and behavioral determinants of illness;
    studies of means to ameliorate personal, social and environmental
    factors contributing to disease onset or exacerbation; studies on
    immunization strategies and of methods for and the cost-effectiveness
    of population screening programs; studies on immunization strategies
    and or methods for and the cost-effectiveness of population screening
    programs; and studies into the means by which further decline in
    physical or social functioning can be prevented in people already ill.
    In general, the focus would be upon research that employs retrospective
    and longitudinally prospective populations groups, such as high risk
    groups or communities.
        In short, Mr. Chairman, we urge your subcommittee to support
    initiatives at NIH and CDC that adopt population-based approaches to
    the health status and needs of the American public: initiatives that
    work towards a better balance between caring for the sick and disabled
    and keeping people healthy. We should promote public health policies
    and programs that promote the postponement of morbidity opposed to the
    current practice of postponement of mortality (wellness instead of
    sickness).
        There is another federal prevention initiative that, in our
    opinion, deserves the committee's support, Mr. Chairman: CDC's injury
    prevention and control program. Entitled ``Safe America,'' this program
    is designed to ensure that Americans are safe in their homes, schools,
    while traveling and at work and play. This will be accomplished through
    a strong research program that provides the foundation for the delivery
    of effective intervention in states and communities, along with a
    national campaign and information system to inform Americans of what
    prevention measures work and how to access prevention resources.
        Currently, the extramural research program at the National Center
    for Injury Prevention and Control consist of 10 injury control research
    centers located in major universities across the country and an
    investigator initiated research project grant program. Mr. Chairman, we
    request that you support a $40 million increase in the fiscal year 1999
    appropriations for CDC's Safe America program. Of this $40 million , we
    are requesting that $20 million be directed to extramural research to
    expand the injury control research centers, increase the number of
    individual investigator awards and initiate a training grant program to
    attract new investigators to the field of injury control.
        By the way, Mr. Chairman, ASPH strongly applauds your efforts to
    double the NIH budget and commends your vision and leadership in this
    quest. We support the Ad Hoc Group for Medical Research Funding and its
    recommendation of a 15 percent increase for NIH in fiscal year 1999. We
    see this as a ``first step'' in achieving your goal by 2003. We also
    urge that equal commitment be given to NIH partners in its mission to
    improve the nation's health: HRSA, CDC, AHCPR and OPHS.
        As we prepare to celebrate the 200th anniversary of our nation's
    Public Health Service this July, we urge you and members of the
    subcommittee to renew the long-standing commitment and support of this
    stellar American institution by increasing funding for agencies that
    have contributed to making the U.S. health system the best in the
    world. These public health partners, along with state and local public
    health agencies and community-based organizations, and this nation's 28
    accredited schools of public health, have nurtured and harvested
    federal investments in improving the health status of the American
    public. As such, we support the fiscal year 1999 appropriations
    requests of the following coalitions that have or will testify before
    your subcommittee:
        Ad Hoc Group for Medical Research Funding; CDC Coalition; Coalition
    for Health Funding; Friends of AHCPR; Friends of NIOSH; Friends of
    Title V (MCH block grant); and Health Professions and Nursing Education
    Coalition.
        Mr. Chairman, the requests outlined by these coalitions represent
    the needs assessment that were derived from the views and expert
    opinions of this country's most respected administrators, scholars,
    scientists and leaders in the volunteer sector. I know you and the
    subcommittee members will take them into serious consideration when
    marking-up the fiscal year 1999 appropriations bill.
        Mr. Chairman, I would like to end my testimony by once again
    commending you and the members of the subcommittee for supporting PHS
    programs, in general and academic public health programs, in
    particular. The latter contribute to our efforts to educate and train
    public health professionals in the population-based approaches to the
    prevention and control of disease and promotion of health among
    individuals and communities. These are:
      --Assessment of the health status of communities to identify the most
            pressing health problems of each community, thus enabling
            effective and efficient deployment of health resources;
      --Outreach, screening and personal health services to reduce the toll
            from vaccine-preventable diseases, tuberculosis, sexually
            transmitted diseases, AIDS, lead poisoning, infant mortality,
            violence and other preventable public health problems
      --Community monitoring and health protection actions to assure clean
            air, safe water and nutritious, safe food supplies; and
      --Education in health promotion and disease prevention by health care
            providers and public health professionals
        Outlined below are the ASPH fiscal year 1999 funding
    recommendations for programs of primary concern to the academic public
    health community:

    Centers for Disease Control and Prevention

    Prevention centers......................................     $24,000,000
    Prevention research.....................................     100,000,000
    NIOSH training..........................................      20,000,000
    Injury control research.................................      20,000,000
                        --------------------------------------------------------
                        ____________________________________________________
          Total CDC.........................................   2,800,000,000
                        ========================================================
                        ____________________________________________________

    Health Resources and Services Administration

    Public Health, Preventive Medicine and Dental Public
        Health..............................................      50,000,000
    MCH training............................................      20,000,000
    Health professions......................................     306,000,000
    MCH block grant.........................................     705,000,000
    Family planning.........................................     218,400,000
                        --------------------------------------------------------
                        ____________________________________________________
          Total HRSA........................................   4,200,000,000
                        ========================================================
                        ____________________________________________________

    National Institutes of Health

    NIH.....................................................      15,600,000

    Agency for Health Care Policy and Research

    AHCPR...................................................     175,000,000

        The Association of Schools of Public Health (ASPH) is the
    only national organization representing the deans, faculty, and
    students of this nation's 28 accredited schools of public
    health in the United States and Puerto Rico. These schools have
    a combined faculty of over 2,500 and educate more than 15,000
    students annually from every state in the U.S. and most
    countries throughout the world. The schools graduate
    approximately 5,000 professionals each year. The 28 schools of
    public health constitute a primary source of comprehensively
    trained public health professionals and specialists in short
    supply to serve the federal government, the 50 states and
    private sector. According to the Pew health professions
    commission, managed care will increase the need for public
    health professionals.
                                    ------

        Prepared Statement of Dr. J. Alfred Rider, President, Board of
                 Trustees, Children's Brain Diseases Foundation
        I am Doctor J. Alfred Rider, President of the Board of Trustees of
    the Children's Brain Diseases Foundation. It is a pleasure to submit
    testimony on behalf of the Foundation for inclusion in the Senate
    Appropriations Committee, Labor-HHS Education Subcommittee hearing
    record for fiscal year 1998-99. I am submitting my testimony on behalf
    of the children's Brain Diseases Foundation and the thousands of
    children and their families who are affected with Batten disease.
        Specifically, I would like to address the need for continued
    funding at the previous 1994 level plus an increase amounting to
    approximately an average yearly addition of 4.1 percent since then for
    Batten disease research or a total of $3,470,000. Batten disease is a
    neurological disorder affecting the brains of infants, children and
    young adults. It occurs once in every 12,500 births. There are
    approximately 440,000 carriers of this disorder in the United States.
    It is the most common neuro-genetic storage disease in children. There
    are four major types of Batten disease-the infantile, late infantile
    and juvenile in children and Kuf's disease in young adults. Motor and
    intellectual deterioration, visual loss, behavioral changes, and the
    onset of progressively severe seizures and termination in death in a
    vegetative state characterize the usual case. This irreversible severe
    illness constitutes an enormous nursing and financial burden to
    families with afflicted children. Patients may live in a deteriorating
    state from 10 to 43 years. The changes that occur in the brain in these
    children are quite similar to many changes that occur in the aging
    person. Thus, effective treatment for Batten disease may also allow us
    to alter the aging process and age associated senility in our senior
    citizens.
        The Children's Brain Diseases Foundation, begun in 1968, has had a
    direct role in stimulating interest in Batten disease worldwide by
    granting money to various investigators. The Foundation has sponsored
    six worldwide symposiums; the most recent in Helsinki, Finland, June
    1996. The next international symposium will be held in Dallas, Texas in
    June of this year. There are now over 100 investigators worldwide.
    Their work must continue to be encouraged and supported. Batten disease
    is now recognized worldwide.
        A major impetus to these advances occurred as a direct result of
    your committee's perseverance and interest which began to achieve
    fruition in 1991 when for the first time, the committee recognized that
    not enough attention was being spent on Batten disease, and they
    directed the National Institute of Neurological Disease and Stroke
    (NINDS) to expand its research in this direction.
        I am happy to say that the NINDS heeded your requests and
    suggestions and actively solicited research grants for Batten disease
    by sending out an official Request for Applications (RFA). A special
    committee was established to review Batten disease grants since it was
    felt that the usual committees did not have sufficient expertise to
    make proper evaluations. Numerous applications were received and a
    significant increase in money was spent on Batten disease research. In
    1994, $3,272,699 was spent. As a direct result of this, monumental
    events have occurred.
        In 1995, a group in Finland, in collaboration with the University
    of Texas, isolated the gene defect; mutations in the palmitoyl protein
    thioesterase gene localized on chromosome 1 p32, causing the infantile
    form of Batten disease. Also in 1995, the International Batten Disease
    Consortium isolated the genetic defect in the juvenile form of Batten
    disease and found it to be on chromosome 16 p12.1.
        In 1996, a group in England, headed by Doctor Mark Gardiner,
    identified the region that contains the gene for the classical late
    infantile form of Batten disease. It lies on chromosome 11p15 and the
    gene for a variant form of the late infantile, which lies on chromosome
    15q21-23. In 1997, a group led by Doctor Peter Lobel at the Center for
    Advanced Biotechnology and Medicine in new Jersey using a much faster
    novel approach of looking at lysosomal enzymes instead of concentrating
    on which of the 100,000 genes are defective, discovered the molecular
    basis for the late infantile form of Batten disease by identifying the
    single protein that is absent in late infantile Batten disease which
    sequence comparisons suggest is a pepstatin-insensitive lysosomal
    peptidase.
        It is now possible to make an absolute definitive diagnosis and
    determine carriers in all three childhood forms by a simple blood test,
    and to prevent the disease by genetic counseling, including in vitro
    fertilization.
        In spite of these unprecedented major significant breakthroughs,
    the NINDS in fiscal year 1997 has only spent $2,838,806 on research
    grants. This is 13 percent less than in 1994. We are at a loss to
    understand this and are afraid that this trend may cast a damper on the
    whole research processes. Our scientists are there. They are like
    expensive finely tuned complicated scientific machines and like all
    machines, they need fuel. Instead of traditional fuels, these
    individuals need American dollars in sufficient amounts so that they
    may pay for their expensive new scientific equipment as well as being
    able to hire the technical help necessary to expedite the research.
        Much needs to be done. The enzyme defects resulting from gene
    abnormalities in three of the four types must be determined. This
    should then lead to definitive therapy by gene replacement and/or
    specific enzyme therapy.
        We are cognizant of the difficulty in getting funds for research.
    However, the amount requested is a small price to pay to solve a
    disease which wrecks havoc on the victims and families and is draining
    our national resources by approximately 712 million dollars per year
    based on approximately 300 children born with Batten disease each year
    and others living with this disease at an average treatment and
    maintenance cost of over $150,000 per year for each year of life. This
    lifetime, in a vegetative state, can last 10 to 43 years.
    Specific recommendations
        Although there have been four significant breakthroughs with regard
    to gene localization in Batten disease and the identification of the
    single protein that is absent in late infantile Batten disease, we were
    disappointed that the funding for fiscal year 1997 was approximately 13
    percent less than in fiscal year 1994. Consequently, we would like to
    suggest that the following wording similar to that which we recommended
    last year, be used in this year's appropriation bill:
        ``The Committee continues to be concerned with the pace of research
    in Batten disease. The Committee believes that the Institute should
    actively solicit and encourage quality grant applications for Batten
    disease and that it continue to take the steps necessary to assure that
    a vigorous research program is sustained and expanded. The Committee
    has requested that $3,470,000 within the funds available to the NINDS
    be spent on Batten disease research. This represents an average yearly
    increase of 4.1 percent since 1994. This will allow for $2,838,806 for
    continuation and renewal grants and $631,194 for new grants.''
                                     ______

        Prepared Statement of the American Academy of Family Physicians
        The 85,000 member American Academy of Family Physicians would like
    to submit this statement for the record on three issues of critical
    importance to our organization: appropriations for Section 747 of the
    Public Health Service Act for family practice training; appropriations
    for the Center for Primary Care Research at the Agency for Health Care
    Policy and Research (AHCPR); and funding for rural health programs.
                            family practice training
        The American Academy of Family Physicians strongly supports
    increased funding for Section 747 of the Public Health Service Act.
    Section 747 is the only federal program that provides targeted funding
    through grants for family practice residency training and funding for
    establishing and maintaining medical school departments of family
    medicine, predoctoral programs and faculty development. While Section
    747 must be reauthorized this year, it is currently authorized at $54
    million and received an appropriation of $49.4 million in fiscal year
    1998.
        The President's budget request is reported to contain level funding
    for Title VII (which includes Section 747) this year. Since this would
    be the first time in recent years that any President has begun the next
    year's budget discussion with a recommendation as high as level
    funding, we believe that value of this program is becoming more widely
    known and appreciated. While the Academy recommends a higher level, we
    are pleased with the Administration's request, as a starting point for
    our discussion.
    Recommendation
        Based on a review of future needs of the country for a more
    appropriate number of family physicians, the Academy supports a fiscal
    year 1999 funding level of $87 million for Section 747. This
    recommendation would provide funds for 20 new and developing residency
    training programs, 12 new and developing departments, 24 medical school
    clerkships, 700 new faculty and a number of innovative demonstration
    projects. The recommendation is the result of a strategic plan
    developed by the Academic Family Medicine Organizations, which includes
    all five family medicine organizations.
    Background
        Any attempts to control costs and maintain quality in the American
    health care system will be frustrated by a structural problem in our
    country: the shortage of generalist physicians. While in most countries
    at least 50 percent of physicians are generalists (family physicians,
    general internists and general pediatricians), the US physician
    workforce is made up of more than 70 percent subspecialists and only 30
    percent generalists. Family physicians make up only 13 percent of the
    total.
        Most experts believe that a physician workforce of at least 50
    percent generalists and 50 percent subspecialists would best meet
    America's health care needs. The Physician Payment Review Commission,
    Council on Graduate Medical Education, The PEW Commission, Institute of
    Medicine, American Medical Association and Association of American
    Medical Colleges all advocate increasing the supply of generalist
    physicians. A March, 1996, study by the Institute of Medicine
    encourages support for training of a primary care workforce.
        At one time, the physician workforce in the US was comprised of 50
    percent generalists, but after World War II, the nation's primary care
    workforce declined from a majority of the workforce to approximately
    one-third today. Public health service grants for medical education
    were a response to that decline, and the infrastructure they have
    helped establish is beginning to reverse the downward trend in primary
    care. During the 1990's, the number of medical students electing
    primary care residencies, and participating in family practice
    residencies, is increasing, however, the percentage is still only about
    one-third of graduating medical students. Much more progress is needed
    to begin to affect the national shortage. Section 747 support needs to
    be enhanced to provide a modest incentive for training more of the
    physicians America needs most.
        Medicare payment policies have contributed significantly to the
    overspecialization of physicians. These policies have promoted training
    in the expensive inpatient specialties that involve numerous procedures
    rather than in family practice and other generalist specialties. NIH
    funding also contributes to the overspecialization of physicians. NIH
    grants, amounting to billions of dollars, go primarily to the
    subspecialist projects in the nation's medical education complexes,
    providing powerful incentives to promote subspecialization to develop
    the capacity to secure grants.
        Moreover, a study conducted by KPMG Peat Marwick in September,
    1995, indicated that Medicare spending could be reduced by at least
    $48.9 billion and as much as $271.5 billion over the next six years if
    primary care physicians were 50 percent of the total physician
    workforce. The analysis revealed a direct correlation between the
    availability of primary care physicians and the reduction of health
    care costs. The Role of Primary Care Physicians in Controlling Health
    Care Costs: Evidence and Effects is a comprehensive review of existing
    studies on the role of primary care physicians in controlling health
    care costs.
        Section 747 is essential to provide at least a small incentive to
    offset the financial disadvantages that family medicine residencies and
    departments face. Until Medicare GME preferentially supports primary
    care training, and until primary care medical research is funded at
    more than a tiny fraction of subspecialist research, family practice
    residency programs and medical school departments will remain highly
    dependent on grants from Title VII.
        Finally, let me emphasize that Title VII funding is still
    important, regardless of changes made to graduate medical education.
    Specifically, Title VII dollars go to medical schools and universities
    to develop a primary care infrastructure, while GME funds go primarily
    to hospitals to support residency training. Further, the cutbacks in
    indirect medical education may adversely affect graduate training of
    primary care physicians.
    Family Practice Training Programs are Important to Meet the Nation's
            Health Care Needs
      --Family physicians are distributed in urban and rural areas in the
            same proportion as the US population as a whole--unlike any
            other physician specialty. Even so, 149 counties representing
            550,000 individuals have no physician at all. In addition,
            family practice residency training programs that receive
            Section 747 funding place greater numbers of graduates who
            locate in rural and underserved areas than programs that do not
            receive that funding.
      --In community health centers, which rely heavily on primary care
            physicians, 52 percent report difficulty recruiting primary
            care physicians.
      --The U.S. population 65 years of age and older will rise about 2
            percent per year between now and the year 2020. Older people
            will require a wide range of health care services, including
            preventive, primary, long-term, rehabilitative and hospice
            care--services that will require a substantial increase in the
            number of family physicians.
                 data and outcomes that prove section 747 works
    Family practice residency programs
        Over 90 percent of physicians who complete family practice
    residency programs work in direct primary patient care and are able to
    handle 85-90 percent of their patient's problems. (By contrast, over
    half of internal medicine residents subspecialize along with one-third
    of pediatric residents.) Section 747 grants to family practice
    residency programs have helped increase the number of training programs
    from 175 to 388 between 1975 and 1998. However, the nation needs 20-30
    new programs and significant expansion of many existing programs to
    achieve a balanced workforce.
        In contrast to other specialties, 80 percent of family practice
    residencies are located in community settings rather than in major
    tertiary care teaching hospitals. These residencies provide more
    ambulatory training than any other residencies. As a result, family
    practice programs do not have access to the considerable resources that
    flow to teaching hospitals. Further, 25 percent of family practice
    residencies are located in public hospitals. These hospitals receive
    low reimbursement for patient care services, and treat fewer Medicare
    patients. As a result, they do not receive substantial Medicare
    graduate medical education dollars. Section 747 is vital to the
    survival and expansion of these critical residency programs.
    Family medicine departments in medical schools
        Section 747 grants for establishing departments of family medicine
    have resulted in ten new departments in the past eight years. However,
    twelve of the nation's 124 medical schools still do not have
    departments of family medicine. An October, 1994 GAO report indicated
    that ``students who attended schools with family practice departments
    were 57 percent more likely to pursue primary care.'' The same report
    indicated that ``students attending medical schools with more highly
    funded family practice departments were 18 percent more likely to
    pursue primary care.'' Section 747 dollars are crucial to establishing
    these family practice departments and to graduating students into
    primary care careers, as well as to keep these important departments
    financially solvent.
    Predoctoral programs
        Section 747 funding for predoctoral under encourages medical
    schools to create required third-year clerkships in family medicine.
    However, 24 of the nation's 124 medical schools still do not have
    required third-year clerkships in family medicine. Requiring a third-
    year clerkship of more than four weeks duration results in 15.6 percent
    of a school's graduates choosing careers in family medicine, compared
    to 6.9 percent of the graduates of schools without required third-year
    clerkships. Moreover, the October, 1994 GAO report indicated that
    ``students who attended schools requiring a third-year family practice
    clerkship were 18 percent more likely to pursue primary care.'' Section
    747 funding has increased the number of medical schools with clerkships
    to 100, but continued funding is necessary to maintain and increase
    that number to all schools.
    Faculty development
        There is an acute shortage of faculty for family practice residency
    programs and family medicine departments as the discipline has been
    successful at placing its graduates in practice settings serving
    communities of need rather than in full-time faculty positions. Without
    adequate funding, there is a risk that even the progress that has been
    made so far will be compromised for lack of faculty.
                   agency for health care policy and research
        While American medicine is praised worldwide for its excellence in
    biomedical research, it has often failed to translate these
    breakthroughs to practical treatment that will apply to the population
    at large. It is imperative that US research facilities complement their
    superb understanding of high-tech research with a similar dedication
    both to applying state of the art medicine to primary care settings and
    research to improve the delivery of primary care and preventive
    medicine so that there is less of a need for high-tech subspecialty
    care.
    Recommendation
        The Academy requests that additional appropriations be provided to
    the Agency for Health Care Policy and Research (AHCPR), and that
    dollars be targeted specifically to the Center for Primary Care
    Research. We believe that supplementary funding, coupled with direction
    from Congress, will permit AHCPR to address primary care issues. We
    recommend $50 million for this effort. In view of Administration
    recommendations for substantially increased funding for the National
    Institutes of Health, we ask that you consider additional dollars for
    the Agency for Health Care Policy and Research as a part of this
    initiative. It is equally important that we find ways to extend state
    of the art medicine to primary care physicians as it is to develop the
    state of the art of medicine further.
    Background
        The Academy strongly supports the Center for Primary Care Research
    within AHCPR. The Academy supported AHCPR's establishment and, in
    particular, the agency's statutory authority to support clinical
    practice research to include primary care and practice-oriented
    research. In fact, the 1992 Senate Report 102-426 accompanying Public
    Law 102-410, which reauthorized AHCPR most recently, states that the
    Agency should strengthen its commitment to family practice and primary
    care research. The report asserts that: ``The committee believes that
    inadequate attention has been given to conditions that affect the(se)
    vast majority of Americans--that is, the undifferentiated problems
    individuals present to their generalist physicians. A focus on family
    practice/primary care research is essential if we are to redirect the
    US health care system that is currently skewed toward high technology
    medicine for catastrophic diseases.''
        Although over 95 percent of all medical conditions have been
    evaluated and treated outside of hospitals over the last 30 years,
    physicians are educated and trained using a knowledge base derived from
    hospitalized patients, or patients with complex conditions who were
    referred to specialists. This base of knowledge has frequently little
    relevance to the basic, entry-level concerns that affect most people.
    As a result, American health care is tilted toward institutions and
    systems that employ highly technological methods to treat catastrophic
    and end-stage disease. The consequences of this situation are serious;
    the US health care system has inadequate emphasis on cost-saving
    preventive care, scarce medical resources are delivered inefficiently,
    and costs continue to spiral upward.
    Primary care research
        As a result, a primary care research agenda is crucial. This agenda
    should be designed to provide new tools to family physicians and other
    generalist physicians as they serve the millions of patients they see
    each year. Such an agenda would include research to improve diagnostic
    accuracy because most people go to doctors with cluster of ill-defined
    symptoms. The job of the generalist physician is to make sense out of
    these symptoms; determining whether or not they constitute a short-term
    problem or one requiring ongoing or intensive treatment, and then
    initiating effective therapy. Primary care research would assist
    physicians in streamlining the diagnostic process and increasing
    accuracy while at the same time reducing their use of expensive,
    unnecessary or potentially dangerous medical tests.
        Finally, generalists and subspecialists must learn to work together
    to provide a continuum of appropriate medical care. Familiar symptoms
    such as chest pain, headache, fatigue and insomnia bring millions of
    Americans to their physicians each year, symptoms that may or may not
    represent serious conditions. It is imperative that generalists and
    subspecialists work together to discern the causes, evolution and
    management of human suffering.
                             rural health programs
        Finally, the Academy supports continued funding for several rural
    health programs. In particular, we support the State Offices of Rural
    Health, the Federal Office of Rural Health, Area Health Education
    Centers and the National Health Services Corps (NHSC). We are pleased
    that the President's budget is reported to protect most of these
    important programs, including the NHSC and the Rural Community and
    Migrant Health Centers. In addition, adequate funding for the State
    Offices of Rural Health is necessary to permit states to implement the
    provisions of the Balanced Budget Act of 1997 expanding children's
    health insurance and to ensure that they are of the same value to rural
    residents as they are to urban dwellers. Continued funding for these
    rural programs is vital if we wish to provide adequate health care
    services to America's rural citizens.
    Conclusion
        Several key federal health programs focus on meeting the needs of
    the American people. At a time when policymakers are critically
    reviewing government programs for their cost-effectiveness and overall
    value, Section 747 is a program that scores high on both fronts; it
    works. On behalf of the American Academy of Family Physicians, we ask
    you to appropriate funding for Section 747 of $87 million. In addition,
    scant research is available on basic patient care. The American Academy
    of Family Physicians recommends $50 million for the Center for Primary
    Care Research at the Agency for Health Care Policy and Research.
    Finally, we ask for continued funding for the rural health programs
    that help provide health care to rural Americans.
        Thank you for your attention to these important requests.
                                     ______

             Prepared Statement of the American Nurses Association
        The American Nurses Association (ANA) appreciates this opportunity
    to comment on fiscal year 1999 appropriations for nursing education,
    nursing research, and workforce programs.
        ANA is the only full-service professional organization representing
    the Nation's 2.5 million registered nurses, including staff nurses,
    nurse practitioners, clinical nurse specialists, certified nurse
    midwives and certified registered nurse anesthetists through its 53
    State and territorial nurses association.
        We gratefully acknowledge this Subcommittee's support for nursing
    education and research. You have continued to recognize the importance
    of nurses in health care delivery and have funded programs for nursing
    education and innovative practice models. We believe that our shared
    goal of ensuring the nation of an adequate supply of well-educated
    nurses, to meet the increasing demands of our rapidly changing health
    care system, will reaffirm the need for continued funding of these
    programs. Today, we offer our professional recommendations for Federal
    funding of nursing education, nursing research and workforce programs.
      department of health and human services programs nurse education act
        More than 100,000 advanced practice nurses--registered nurses with
    education and clinical experience generally at a master's degree
    level--are providing primary care in the place of physicians or are
    providing an expanded type of primary care, either as nurse
    practitioners, certified nurse midwives or clinical nurse specialists.
    Due to unprecedented changes in our health care delivery system and the
    changing demographics and complexity of care, nurse practitioners will
    be in increasing demand and the nurse education system will be
    stretched to provide first-quality training for them. These changes
    call for the fullest utilization possible of the multi-disciplinary
    providers who care for patients and families in an ever-increasing
    array of settings: hospitals, subacute care facilities, rehabilitation
    facilities, long term care facilities, schools and universities,
    workplaces and communities.
        Federal support for nursing education in Title VIII of the Public
    Health Service Act (PHSA) is unduplicated and essential to achieve
    future goals for the public's health. Under current law, specific
    authorizations are made for nurse practitioners/nurse midwives;
    professional nurse traineeships; nursing special projects; advanced
    nurse education; nurse anesthetists; and disadvantaged assistance.
    Although the Nurse Education Act was not reauthorized during the 104th
    Congress, a proposal will soon be introduced that would give the
    Secretary of Health and Human Services broad discretion to determine
    which projects to fund, with priority given to projects which would
    substantially benefit rural or underserved populations, including
    public health departments. In this proposal, the Division of Nursing
    would have the needed flexibility to focus on curriculum development
    and other programs to help change the focus of nurse education from
    acute care settings to the preparation of more nurses who are able to
    function where there is a greater demand. It would also better address
    the need for increasing the numbers of minority nurses available to
    provide culturally competent, linguistically appropriate health care
    services to underserved communities. These nurses would be better
    prepared to assist these populations in changing the way they access
    our health care system, and in helping these patients understand the
    advantages of developing relationships with primary providers. By
    itself, the behavior change from accessing health care services through
    emergency departments to one in which the consumer routinely seeks care
    through a primary provider decreases health care costs exponentially.
        As work on a reauthorization proposal progresses, it is crucial
    that the Division of Nursing be able to continue the administration of
    nursing education programs until the new programs can be implemented.
    For fiscal year 1998, the Nurse Education Act was funded at $65.6
    million. For fiscal year 1999, we are requesting an increase in funding
    of 8 percent over fiscal year 1998 funding to fund the Nurse Education
    Act programs at $70.8 million. The following provides a brief
    description of these programs, along with the fiscal year 1999
    individual funding recommendations.
    Nursing special projects (section 820)
        Title VIII of the PHSA is the only specific source of funds for
    innovation in nursing practice. Examples of innovation include nurse
    managed clinics, fifty percent of which have been developed or expanded
    with Title VIII support. The dramatic shift in health care delivery
    systems from inpatient to outpatient settings further emphasizes the
    need for workforce retraining and the development of new programs to
    address this educational need. We recommend funding at $11.4 million.
    Nurse Practitioner and Certified Nurse-Midwife Program grants (section
            822)
        Advanced practice continues to hold the nation's greatest promise
    of providing primary care access in rural, inner-city and underserved
    areas of the country. Title VIII of the PHSA has provided support to
    more than 80 percent of the nurse midwifery programs in the U.S. and 60
    percent of the nurse practitioner programs in the country. We recommend
    funding at $19 million.
    Nursing education opportunities for individuals from disadvantaged
            backgrounds (section 827)
        Over-utilization of costly emergency care, decreased access to
    primary care providers and a general lack of trust in the health care
    system has frequently been attributed to the lack of representation of
    minorities among health care providers. Funds from Title VIII of the
    PHSA have increased the number of minority nurses available to provide
    culturally competent, linguistically appropriate health care services
    to underserved communities. Evaluative studies have determined that
    this program has been the driving force behind many of the efforts
    nationwide to increase diversity in the nursing profession. We
    recommend funding at $4.1 million.
    Traineeships for advanced education of professional nurses (section
            830)
    Nurse anesthetists (section 831)
    Advanced Nurse Education Program (section 821)
        Nursing education at the graduate (master's and doctoral) level
    provides the skilled clinicians for promoting excellence in practice
    and the faculty needed to maintain the nursing education pipeline.
    Professional nurse traineeships under Title VIII of the PHSA support
    over 93 percent of all full-time graduate students in nursing.
    Preference is given for traineeship programs which provide significant
    learning experiences at rural health facilities and those where
    students come from health professional shortage areas. We recommend
    funding for Professional Nurse Traineeships at $17.2 million, Nurse
    Anesthetists program at $2.9 million and Advanced Nurse Education
    Programs at $13.5 million.
    Nurse loan repayment (section 836)
        This program provides for up to 85 percent repayment of student
    loans for nurses who agree to a service payback in nursing shortage
    areas. We recommend funding at $2.3 million.
    National Institute of Nursing Research (NINR)
        The second funding priority for nursing is funding for the NINR, on
    the campus of the National Institutes of Health (NIH). We applaud this
    Subcommittee's commitment to advancing behavioral science research.
    Nursing research is an integral part of the effectiveness of nursing
    care. The NINR provides the knowledge base for practice of 2.5 million
    registered nurses. Advances in nursing care arising from nursing and
    other biomedical research improves the quality of patient care and has
    shown excellent progress in reducing health care costs and health care
    demands. The trend for earlier discharge from the hospital can
    potentially reduce hospital charges, but patients may and frequently
    require rehospitalization, increased acute care visits, and home care
    that families may be unable to provide. Research funded by NINR has
    shown that a model consisting of a carefully planned hospital early
    discharge program with follow-up care in the home by nurse specialists
    can result in improved recovery of patients at substantially reduced
    health care costs. The model was tested on three groups of women.
    Hospital costs were reduced by an average of 38 percent for diabetic
    mothers and their babies; 29 percent for mothers with cesarean births
    and their babies; and 6 percent for women undergoing hysterectomies.
    Moreover, the women had fewer rehospitalizations and expressed greater
    satisfaction with their care. This model needs further testing in
    different patient populations. However, if its initial promise holds
    true for other groups of hospital patients, then earlier discharge with
    qualified home follow-up care can improve recovery and save
    increasingly scarce health care dollars. While we support the
    Administration's proposed 8.4 percent increase above fiscal year 1998
    funding of $63.5 million for this program, we recommend a 15 percent
    increase to fund NINR at $73 million.
    Substance Abuse and Mental Health Services Administration (SAMHSA)
            Clinical Training Program
        The SAMHSA Clinical Training Program has been a major source of the
    nation's mental health clinical training funds, and is a source of
    funding for ANA's Minority Fellowship Project (MFP). Since fiscal year
    1994 the program had been funded at $2.5 million. The funding is
    allocated through SAMHSA to the minority mental health training
    programs in Nursing, Psychology, Social Work and Psychiatry. The MFP
    graduates have an outstanding record of public service to minority and
    indigent communities.
        MFP graduates receive doctoral degrees and work as teachers in
    schools of nursing that serve minority students. They serve as role
    models and provide leadership to future nurses. As clinicians,
    graduates work in high risk urban and rural areas providing care to
    children and families who are victims of violence, HIV/AIDS, and
    substance abuse as well as the mentally ill. Nurses work in community
    based clinics and outreach programs and often are the primary care
    providers for indigent clients who might otherwise go without needed
    mental health services. In addition, these nurses generate research on
    minority mental health services, treatments and client outcomes.
    Culturally appropriate research helps us to identify ways to provide
    services faster and to more people, ultimately improving health care
    outcomes and reducing health care costs. This works to change the poor
    health outcomes and high risk health status that continues to plague
    minority communities. Unfortunately, last year this program was only
    funded at slightly above $1 million. We believe this program is a good
    investment in reducing mental health care costs and recommend funding
    of $1.5 million for fiscal year 1999 for the SAMHSA Clinical Training
    program.
    AIDS Education and Training Centers (AETC)
        The AETC program in the Bureau of Health Professions at the Health
    Resources and Services Administration provides specialized training for
    health care personnel who care for patients with AIDS. Emerging and
    evolving scientific information with profound impact on individual and
    public health requires a ready network for information dissemination
    and technology transfer. AETC's reduce care costs, promote private
    sector voluntarism and ease the suffering of families and communities.
    It is for this reason that we recommend a funding level of $25 million
    for fiscal year 1999 for the AETC's.
    The National Institutes for Occupational Safety and Health (NIOSH)
        NIOSH is the only federal agency with the mission to conduct
    research and develop practical solutions to prevent work injury and
    illness. NIOSH played a key scientific role in the development of the
    bloodborne pathogens standard. This standard provides significant
    protection to front-line health care providers from possible exposure
    to bloodborne pathogens, such as HIV, Hepatitis-B and Hepatitis-C. In
    addition, NIOSH funds Educational Resource Centers. These multi-
    disciplinary, university based occupational health and safety training
    and research centers as the primary vehicle for the development and
    training of a corps of trained occupational health nurses and other
    safety professionals. We recommend fiscal year 1999 funding of $153
    million for NIOSH.
                    other workforce funding recommendations
        As an advocate for the economic and general welfare of registered
    nurses, the American Nurses Association also recommends appropriate
    funding for the Department of Labor and related agencies that serve to
    ensure a safe and fair workplace. ANA believes the work done by the
    Bureau of Labor Statistics, with respect to the ongoing collection and
    analysis of employment and economic data, is necessary for tracking
    changing economic conditions and essential to making workforce
    projections. We urge your support of the Bureau.
    National Labor Relations Board (NLRB)
        ANA is concerned about the ability of the NLRB to meet its
    statutory responsibility of enforcing and interpreting the National
    Labor Relations Act (NLRA). Current cutbacks have created delays in
    processing of complaints and holding representation elections thus
    jeopardizing the progress in employee and employer relations. ANA
    considers this a core independent agency function that must be
    preserved. We recommend fiscal year 1999 funding of $184 million for
    the NLRB.
    Occupational Safety and Health Administration (OSHA)
        The rapid restructuring of the health industry has increased and in
    some cases exacerbated the risk of exposure to illness and injury for
    nurses and other health care workers. Hospitals and HMOs are downsizing
    both to cut costs and be competitive in the health care marketplace.
    These economic pressures have led to a reduction in the number of
    registered nurses providing care at the bedside. The remaining nurses
    in these acute care settings have to work harder and take care of more
    and sicker patients than ever before. The nurses themselves are
    sustaining more frequent incidences of injury and illness. According to
    the Bureau of Labor Statistics, in 1993, back and shoulder injuries
    accounted for 50 percent of the 31,422 injuries and illnesses that kept
    registered nurses away from work. Overall, lifting was specified as the
    cause of 26 percent of all registered nurse injuries. ANA is concerned
    about these increased incidences and adamantly opposes any proposal
    which would prevent OSHA from developing an ergonomic regulation.
        Overall, there are an estimated 50,000 deaths per year that result
    from illnesses caused by workplace chemical exposures and 6 million
    nonfatal workplace injuries that occur annually. Budgetary reductions
    place OSHA at risk in meeting its statutory responsibility of
    establishing and enforcing national health and safety standards. ANA
    continues to be concerned about the strength of the Office of
    Occupational Health Nursing and its parity with similar offices.
    Occupational health nurses are the largest group of health care
    providers at the Nation's worksites. As such, they are uniquely
    qualified to assess the practical realities of work sites and related
    regulatory activities. This office must be fully staffed in order to
    accomplish its critical task of linking the ongoing work of
    occupational safety and health nurses to OSHA. We support the
    Administration's recommendation for fiscal year 1999 funding of $355
    million for OSHA.
                                   conclusion
        We appreciate the opportunity to comment on funding for nursing
    education, research and workforce programs. We thank you for your
    continued support and look forward to working with you as you proceed
    through the appropriations process.
                                     ______

    Prepared Statement of Karen Murray, Member, National Marfan Foundation,
    on Behalf of the Coalition for Heritable Disorders of Connective Tissue
        Mr. Specter and members of the subcommittee, the members of the
    Coalition for Heritable Disorders of Connective Tissue (CHDCT) thank
    you for the opportunity to provide testimony regarding the budget of
    the National Institutes of Health.
        I am Karen Murray, Member of the National Marfan Foundation which
    is a charter member organization of the Coalition for Heritable
    Disorders of Connective Tissue (CHDCT). The Coalition is an umbrella
    group, founded in 1988, which represents more than one half million
    Americans affected by heritable disorders of connective tissue. There
    are more than 200 such disorders which include names most of us have
    never heard of unless or until a family member is diagnosed with one--
    names such as Ectodermal Dysplasias, Ehlers-Danlos Syndrome,
    Epidermolysis Bullosa, Osteogenesis Imperfecta, Pseudoxanthoma
    Elasticum, the Chondrodystrophies, and Marfan Syndrome, to name some of
    the more common ones. They are genetic disorders that have existed for
    centuries, yet most people do not know their names; although many
    people will recognize the name of the sheep Dolly, cloned last year.
        My son, Michael, was born August 13, 1991, 6 years ago, in one of
    the top hospitals in New York City. He was born with a dislocated hip,
    long fingers bent backward at the knuckle, and an indented chest. I
    overheard the physicians discussing among themselves, but not directly
    with me, the possibility of ``Marfan syndrome.'' They sent Michael and
    me for echocardiograms, pronounced us fine, and released us from the
    hospital. The same doctors followed Michael for the next five years,
    during which time, Michael grew faster, longer, taller and more
    awkwardly than his peers and his indented chest became more severe. I
    went to all kinds of specialists: pediatrician, orthopedic surgeon,
    neurologist, occupation/physical therapist, pulmonist, all but
    cardiologist. I would constantly describe Michael's symptoms: ``Why is
    my son so tall, thin, Awkward, loose-ligamented, indented chest, long
    fingers, arms, legs, narrow hands?'' I was told to let it go, he's
    beautiful, he's fine.
        I knew there was something wrong.
        For Michael's 5th birthday, I bought him a computer which came with
    a free CD ROM called ``The Family Doctor.'' Late one night, I clicked
    into it and recognized the words ``Marfan syndrome'' under the subject
    heading, ``Rare Disorders.'' The first paragraph read ``Children with
    Marfan syndrome grow taller than their peers, they have indented or
    protruding chest bones, fingers are disproportionately long, excessive
    joint mobility, muscle weakness * * *'' and so on. The next morning, I
    brought him back to the same prominent New York City hospital where he
    was born and five hours later, after an echocardiogram, the diagnosis
    of Marfan syndrome was confirmed.
        Marfan syndrome is a genetic disorder that affects the connective
    tissue throughout the body--in almost all cases, it affects the heart
    and aorta. Approximately 200,000 Americans are affected by Marfan
    syndrome and related connective tissue disorders, but diagnosis
    requires an assessment of the three primary body systems: orthopdeic,
    ophthalmological and cardiovascular. Early diagnosis and careful daily
    management of someone with the Marfan syndrome is critical. At the time
    of Michael's diagnosis, his aorta was already very dilated. Severe
    dilation can lead to dissection which is what we know as an aneurysm.
    If medical personnel can't recognize the signs, the outcome is usually
    fatal.
        My point is this: Doctors at the best hospital in New York City,
    extremely aware of Marfan syndrome--and whom suspected Marfan syndrome
    at Michael's birth--were not able to make the diagnosis. My son,
    Michael, in the hands of the best medical personnel in NYC, slipped
    away. Had I not heart the word ``Marfan'' or bought a computer, Michael
    could have been another statistic in his teens. But it doesn't have to
    be that way. Although Marfan syndrome is incurable, and a progressive
    disorder, it is diagnosable and treatable. Doctors and emergency room
    personnel need to be better educated in the recognition and treatment
    of Marfan syndrome. I am sure that if the best hospital in New York
    City didn't catch it, there are few other hospitals that will without
    considerable efforts to educate and increase awareness. As a parent of
    a Marfan child who is six years old--I'm nervous but optimistic Michael
    will be OK. I was lucky. I had the money to buy a computer and the
    persistence to keep looking because I always knew something wasn't
    quite right. I now know to have his heart monitored every three months.
    I'm having his orthopedic issues dealt with now. I have him on
    medication in the hope that his aorta will be less stressed. But there
    is still so much I don't know and I am told, ``Sorry--we haven't
    research that yet--especially for children.'' As was almost the case
    with Michael, those children who go undiagnosed and untreated will, in
    most cases, die at a young age. Today, tens of thousands of people are
    undiagnosed. As a parent, I have questions that keep me awake at night.
    I wish I had enough money to fund research programs to answer some of
    my questions.
        For example: I'm giving Michael calcium channel blockers daily--his
    aorta hasn't grown but what side effects will there be after years of
    calcium channel blockers?
        Can and should Michael exercise? Take gym class?
      --What's more effective--surgery or a brace to treat Marfan scoliosis
            in children?
      --Do children with Marfan syndrome have weak tissue in their
            respiratory system and is that why Michael has asthma?
      --Are spontaneous mutations more severely affected than those who
            have inherited Marfan?
      --Since Michael has so many orthopedic issues, what can I do to help
            him live with less chronic pain?
      --I'm scared to have another baby. Are there tests I can take to
            determine health of a fetus?
      --Why do Marfans' lungs collapse?
      --With such hefty medical bills, will a company employ him?
        Undiagnosed Marfan patients end up in the emergency room. The
    emergency room staff does not know what to look for and thus many
    Marfan patients do not receive the tests that could save their lives.
    The key is to build awareness and educate the medical community from
    ObGyn's to pediatricians to emergency room doctors so that they can
    recognize and diagnose Marfan syndrome. Early diagnosis and careful
    management is critical in order to preserve and enhance the life of a
    Marfan patient.
        The greatest challenges lie ahead of us. It is hoped that a firm
    understanding of Marfan syndrome and its cause, and the development of
    relevant animal models, will enable researchers to devise novel
    strategies for the prevention and cure of this and related disorders of
    connective tissue.
        Similar challenges are faced by the other heritable disorders of
    connective tissue. Dystrophic Epidermolysis Bullosa mutations have been
    identified in several families, identifying the mutations of a specific
    collagen in Dominant Dystrophic EB. DNA-based prenatal diagnosis is
    looked to as a means of saving the lives of babies affected with EB.
    Much of the research that paved the way for these and other advances
    has been supported by the Committee.
        Ehlers-Danlos (EDS) is a group of disorders caused by a defect in
    connective tissue. EDS is characterized by joint laxity, soft,
    hyperextensible skin, and tissue fragility. Manifestations are usually
    found in the joints, skin and vascular system. The degree of severity
    varies from type to type and even within each type. In some types,
    researchers have detected the specific gene affected and there are
    biochemical tests available to diagnose those types. Researchers are
    able to use that knowledge to understand how the gene abnormality
    results in an abnormal protein which then results in EDS.
        Osteogenesis Imperfecta (OI) is characterized by bones that break
    easily, often from little or no apparent cause. Most forms of OI are
    the result of imperfectly formed bone collagen, the consequence of a
    genetic defect. Research into treatments and a cure for OI shows great
    promise, thanks to individual donors, the Department of Defense, and
    public-private partnerships. Skin and DNA diagnostic tests are
    available, as well as a prenatal test. The OI Team at the DuPont
    Hospital for Children in Wilmington, DE, has developed a comprehensive
    database containing extensive information on a wide variety of clinical
    features of OI. Merck Research Laboratories and Shriners of North
    America are studying the efficacy of alendronate at 16 hospitals. At
    NIH, a clinical study is underway to assess the effects of braces on
    upright activity. A growth hormone study is starting up. Bone marrow
    transplants are being studied at St. Jude's Research Hospital in
    Memphis, TN. Like our growing database, each new piece of information
    is available for researchers to build on, to speed our progress toward
    a cure.
        Pseudoxanthoma Elasticum (PXE) is a connective tissue disorder that
    affects skin, eyes, gastrointestinal and cardiac systems. It can lead
    to central vision loss, heart disease and life threatening
    complications. During the past year, the gene locus for PXE was
    discovered. This very significant discovery was elucidated at the
    International Centennial Meeting on Pseudoxanthoma Elasticum in
    November 1997 in Bethesda, MD. This meeting, attended by 50 scientists,
    was funded by the NIH. It has energized the research community and
    provides substantial direction for the coming years. Several labs,
    funded in part with NIH grants for PXE, are working on finding the
    gene, discovering the mutations, understanding the effect of these
    mutations and searching for applicable treatments. Funds from the NIH
    make a substantial difference in the recently accelerated pace of
    research on this devastating disease. We are particularly concerned
    that clinical research funding be supported, as this will become a
    major focus of PXE research in the coming years.
        Ectodermal Dysplasias are a group of over 150 genetic disorders
    identified by abnormalities in two of more derivatives of the ectoderm.
    Researchers have localized the genetic abnormalities of X-linked
    hypohidrotic ectodermal dysplasia to a specific region on the X
    chromosome and can now predict the probability that a female is a
    carrier of the syndrome through DNA analysis.
        Sticklers syndrome has gained increasing prominence and awareness
    in the medical profession. Every parent's hope is for a life without
    pain for their child. Stickler parents know that that hope lies in
    finding a cure. First steps are being taken by the National Human
    Genome Research Institute. A five year study has been undertaken to
    better understand this complex syndrome and other connective tissue
    disorders. Additional funding is needed to accelerate the study and
    cover a broader base. The immediate benefits in research on the
    Stickler syndrome are improved sites for knowledgeable diagnoses and
    improved therapies which provide hope. There is no more worthy place
    for our tax dollars.
        Many exciting discoveries have been occurring in the
    Chondrodysplasias. After years, the gene has been identified for
    achondroplasia--one of the most common forms of dwarfism. This
    condition, caused by a gene mutation early in fetal development, occurs
    in one of every 20,000 births. Following upon this discovery was the
    identification of the gene mutation for diastrophic dwarfism, a
    recessive form. Additional positive research is being directed toward
    the goal of alleviating orthopaedic, neurological and respiratory/
    pulmonary conditions which can be lethal and have only partially
    effective surgical interventions.
        The advances in genetic research to date bring hope to the many
    individuals and families affected by heritable disorders of connective
    tissue. Yet more dollars are needed to continue the momentum necessary
    to understand these complex disorders and to translate molecular
    findings into practical therapies.
        In 1995 a workshop on Heritable Disorders of Connective Tissue was
    held at the National Institutes of Health at the recommendation of your
    committee. This workshop was a follow up of an earlier conference held
    in 1990. The workshop was critical in updating basic research findings,
    and translating these findings into practical clinical investigations.
    It served as a forum for scientists involved in connective tissue
    research and enabled the participants to focus on, and recommend,
    directions for future studies. It will soon be time to reconvene these
    collaborators in view of the rapidly changing technologies and genetic
    information.
        A higher level of investment is needed to continue at an
    accelerated rate the science and the tools of the past decade. The
    CHDCT recognizes that the fundamental way science is conducted is
    changing at a revolutionary pace. It requires investment in new
    technologies, superspeed computer networks, new infrastructure and
    personnel with new sets of skills.
        Research will lead to treatments and preventions that will stop
    this tragic economic and social drainage of money and spirit and will
    permit thousands of children and adults to realize their full potential
    as Americans. The American dream, for those with genetic disorders, can
    be attainable if we support the high quality of research that is
    currently underway.
        Many of these disorders, although incurable at the present time,
    are treatable. We stand on the edge of an extraordinary time. The
    discoveries of science and technology of the past few years provide a
    promise that is breathtaking and provides hope to all suffering from
    these disorders.
        We support the proposal of the Ad-Hoc Group for Medical Research
    Funding which calls for a 15-percent increase in funding for the NIH in
    fiscal year 1999 as the first step toward doubling the NIH budget over
    5 years. We recognize the difficulty in achieving this goal under the
    current spending limits, and encourage the Congress to explore all
    possible options to identify the additional resources needed to support
    this increase.
        Please help fund these important programs so that I can learn more
    about how to care for Michael, so we can make the medical community
    more aware of Marfan syndrome and Heritable Disorders of Connective
    Tissue so that a timely diagnosis can be made and a life can be saved.
    All the member organizations of the Coalition for Heritable Disorders
    of Connective Tissue and the patients and families they represent, join
    me in thanking this Committee and Congress for continuing support of
    research on Heritable Disorders of Connective Tissue.
                                     ______

      Prepared Statement Leonard H. Finkelstein, D.O., Chairman, Board of
      Governors, American Association of Colleges of Osteopathic Medicine
        Dear Mr. Chairman:As President of the Philadelphia College of
    Osteoapthic Medicine (PCOM) and Chairman of the Board of the American
    Association of Colleges of Osteopathic Medicine (AACOM), I am pleased
    to present the views of the 19 AACOM member schools on fiscal year 1999
    funding for health professions educational assistance programs under
    Title VII and Title VIII of the Public Health Service Act.
    Specifically, we urge the Subcommittee to provide a funding level of
    $306 million for these programs, which is only about four percent over
    the fiscal year 1998 level approved by Congress last year.
        AACOM is proud that the model of osteopathic medical education
    actively furthers the Federal objectives of addressing physician
    geographic maldistribution in the United States and increasing access
    to primary care services. I must point out that this model has not been
    developed recently in response to Federal funding requirements. Rather,
    it has been at the core of our osteopathic medical education for over
    one hundred years. AACOM member schools have a long history of
    dedication to training primary care physicians to work in America's
    smaller communities, rural areas, and underserved urban areas. Indeed,
    the mission statement of my institution, PCOM, states that we are
    ``committed to educating community responsive, primary care-oriented
    physician prepared to practice medicine in the 21st century.''
        The health professions assistance programs under Title VII of the
    Public Health Service Act have been valuable in our efforts to ensure
    this commitment. Numerous programs are particularly important to
    enhancing osteopathic medical schools' ability to train the highest
    quality physicians. Among these programs are: General Internal Medicine
    Residencies; General Pediatric Residencies; Family Medicine Training;
    Preventive Medicine Residencies; Area Health Education Centers; Health
    Education and Training Centers; Health Careers Opportunities Programs;
    Centers of Excellence; and Geriatric Training Authority.
        Title VII also authorizes student assistance programs that are
    important to osteopathic medical students. Forty-eight percent of our
    students come from families with annual incomes under $40,000. This
    Subcommittee must be concerned with minimizing the debt load of our
    graduates if they, in turn, can be expected to hold down medical costs,
    practice in primary care specialties, and locate in underserved areas.
    In addition, Exceptional Financial Need Scholarships, Financial Aid for
    Disadvantaged Health Professions Students, and Scholarships for
    Disadvantaged Students are all programs that must be maintained if we
    are to ensure access to medical education by underrepresented groups.
        Mr. Chairman, AACOM strongly recommends full funding to restore the
    Health Education Assistance Loan (HEAL) Program. Effective October 1,
    1995, a phase-out of the HEAL program began. Since that date no HEAL
    loans have been available to first-time borrowers. This action has
    created a special hardship for osteopathic medical students who relied
    more heavily on HEAL than any other source of financial assistance.
    This is especially unfortunate in light of the fact that osteopathic
    medical students have had the lowest default rate among all health
    professions students who have HEAL loans.
        It is our understanding that legislation to restore the HEAL
    program will be introduced soon. In anticipation of this
    reauthorization, we request that the Subcommittee restore full funding
    for the HEAL program.
        Mr. Chairman, in conclusion, the efforts of the Subcommittee in
    support of health professions educational assistance programs have been
    most encouraging. We look forward to your continued support.
                                     ______

     Prepared Statement of George Coling, Executive Director, on Behalf of
                        the National Fuel Funds Network
        The National Fuel Funds Network (NFFN) thanks the Subcommittee for
    the opportunity to submit this testimony. NFFN supports funding for the
    Low Income Home Energy Assistance Program (LIHEAP) at no less than $1.3
    billion for fiscal year 1999. NFFN also strongly supports the advance
    appropriations, enacted in November 1998, for fiscal year 2000 funding.
    Our nation must respond to needs of the growing number of low-income
    elderly and the needs of those in poverty. Those numbers are not
    decreasing. Therefore, we ask that the fiscal year 2000 appropriation
    be increased to $1.5 billion. This increase is reasonable compared to
    the current core and emergency funding of $1.4 billion.
        The NFFN is a membership organization comprised of over 200 dues
    paying representatives of private fuel and energy assistance funds,
    community action agencies, social service organizations, utility
    companies, trade associations and private citizens. Our member
    organizations are located in 44 states and the District of Columbia.
    The NFFN is concerned with the ongoing energy crisis being experienced
    by the poor of America.
        Since our first steering committee meeting in 1984, the NFFN and
    its member organizations have put into action a commitment to help, the
    poor of America meet their basic energy needs.
        Our member fuel funds are organizations that raise private
    contributions in local communities in an effort to pay home energy
    bills. Fuel funds range from small church groups that distribute
    hundreds of dollars in a single neighborhood to large independent
    organizations that distribute millions of dollars across a state. Fuel
    funds may be a division of a large social service agency, or a local
    utility or energy company may operate them.
        The value of LIHEAP in meeting basic human need is well documented.
    Without LIHEAP funding during periods of prolonged and extreme winter
    weather, approximately 2.8 million families with children would be left
    virtually ``out in the cold.'' In 1994, of the 5.6 million households
    who received assistance from LIHEAP, fifty percent included a child
    under the age of eighteen. One in five have a disabled person. About 33
    percent of households have elderly residents. For those states with
    extremely hot weather, the number of elderly households is more than 40
    percent. The nation needs to turn the tide on these statistics and
    provide even more resources to prevent the health effects of
    hyperthermia and hypothermia that can be life threatening to our most
    vulnerable citizens.
        Several examples from our member organizations illustrate the
    continuing need for energy assistance among America's poor and working
    poor now. In Charlotte, Crisis Assistance Ministry provides emergency
    energy assistance and several other basic needs in an effort to prevent
    homelessness among the community's low-income citizens. Every day
    during the cold weather season, more than 100 people come seeking
    assistance, while others are calling in for appointments. Over half of
    them have heat-related needs. Crisis Assistance Ministry has been
    administering emergency LIHEAP funds for the county since 1982. It also
    administers the local fuel fund of Duke Power Company and Piedmont
    Natural Gas, as well as its own funds, raised from the religious
    community and individuals. Despite having all these resources in place,
    Crisis Assistance Ministry estimates that the need is increasing about
    20 percent per year. The Ministry is still not meeting all the need,
    and cannot begin to do so without the basic resource of a LIHEAP
    program with increased funding. Thanks to the President's release of
    emergency funds in the last two fiscal years, the Ministry has been
    better able to address some cooling needs, an essential thing in the
    South.
        Last year was one of the warmest years that the Midwest has
    recorded. Nevertheless, at EnergyCare in St. Louis, the number of
    families calling for energy related help, grew by about 2,500. In the
    hot July of 1997, 2,100 families called EnergyCare for assistance in
    using energy to cool their homes.
        New Jersey offers the final example. In that state in 1997, 146,000
    households lost their energy services due to past-due bills. A
    coalition of New Jersey's top energy companies and nonprofit agencies
    has created NJ SHARES, a new nonprofit, statewide fuel fund to address
    this situation. However, this effort, funded principally by a $1
    million start up grant from the New Jersey Board of Public Utilities,
    will not meet all the need. Increased LIHEAP appropriations are
    essential for even more New Jersey families to stay warm and healthy.
        Whatever their form, all fuel funds raise and distribute private
    sector monies, and they all, inevitably, discover that the resources
    they manage and the resources provided by LIHEAP, are inadequate.
    Consequently, fuel funds become involved in attempting to increase the
    resources available to help the poor meet their energy needs.
        NFFN has identified nearly 300 fuel and energy assistance funds
    which have developed since the late 1970's to raise private energy
    assistance dollars at the local level to provide a safety net for
    households who have exhausted all avenues of public energy assistance.
    The families served by fuel funds rank among the ``poorest of the
    poor'' in America; the majority of them have annual household incomes
    of less than $10,000. Nationally, fuel funds make heating and cooling
    bill assistance payments of over $72 million each year on behalf of
    over 500,000 families. That totals $14.40 per family, and a little over
    $5 per person. These payments, while vitally needed, are quite small in
    comparison to the $1.1 billion in fiscal year 1999 LIHEAP funding.
        As a result of the decline in LIHEAP funding over the years, other
    sources of payment assistance, such as private fuel and energy
    assistance funds, have taken on increased importance. When state
    programs close before winter's end because of inadequate federal
    funding, many needy families must look to other sources of energy
    assistance. On February 4, 1998, Caroline Myers, Chair of the NFFN
    Board of Directors and Executive Director of Crisis Assistance Ministry
    in Charlotte, described typical needy clients of her energy assistance
    program to the House of Representatives Subcommittee with jurisdiction
    over LIHEAP: ``The primary common denominator that I can define is that
    they are poor. Here is a profile of that poverty in Charlotte:
      --In our program, 70 percent of clients are below the federal poverty
            guidelines, at least in the thirty days before coming to Crisis
            Assistance Ministry. On average, they pay as much as 20 to 25
            percent of their already inadequate income to heat and light
            their homes, almost as much as the federal recommendation for
            all shelter costs. For low-income families, less discretionary
            money means less food or less medicine. Their dilemma is,
            regrettably, which necessities to do without.
      --Almost 70 percent of the people that we help have earned income,
            but it is so inadequate that there is no reserve and also no
            benefits to provide pay while single parents tend sick
            children, etc.
      --Often applicants are temporarily unemployed. The loss of a job,
            even a low wage job, throws a family already struggling to make
            ends meet into immediate crisis. Savings, if any, pay the rent;
            and nothing is left for utility bills. The efforts of our
            clients are often heroic, with many working more than one job,
            as they struggle to keep a roof over their heads and their
            children warm.
      --Other recipients are disabled and struggling to pay monthly
            expenses. In some winters, gas and fuel prices increase as much
            as 30 percent. Then, these families are simply unable to keep
            up with utility bills and must seek fuel fund help. From 1980
            to 1992, for example, the national average increase in energy
            prices was 65.41 percent. In North Carolina, energy prices
            increased 97 percent.''
        From NFFN's experience, this profile of needy families reflects the
    situation in other communities, and--as shown above--families' needs
    for energy assistance is growing. In the face of this growing need, two
    things have been happening over the past few years. First, fuel funds
    have not been able to fill the gap between the need for assistance and
    available federal funds. Indeed, many fuel funds, themselves, are under
    greater pressure and struggling to maintain current funding and levels
    of service. Second, as LIHEAP payments became smaller, the states have
    had difficulty in providing a meaningful level of aid to the many
    citizens who qualified. Clearly, more federal funds are needed.
        Several other factors support the case for increased LIHEAP
    appropriations. For example, in areas without local fuel funds, people
    continue to heat with unsafe methods. Some must do without heat for
    extended periods of time--something most of us do only when the power
    lines are down. The receipt of assistance to pay utility bills can mean
    the difference between someone remaining safe and warm in her or his
    home, or suffering deadly consequences. According to a LIHEAP report,
    when asked what they did for heat when they had a heat interruption, 54
    percent of the households who had experienced a heat interruption said
    that they were not able to heat their homes. Thirty-nine percent
    reported that they heated one or two rooms with another heat source
    such as a fireplace or a cooking stove to keep warm--clearly a fire
    hazard.
        There have been a number of tragic events from using dangerous
    alternatives. House fires disproportionately take the lives of children
    and the elderly. In 1991, inappropriate heating was the third cause of
    civilian fire deaths. Recognizing the relationship between loss of
    utility service and the risk of injury and death from fires, the NFFN
    has formed a relationship with fire marshals in Philadelphia,
    Washington DC, Detroit and other communities, to educate families about
    the risk of fire and to put in place prevention measures.
        Another factor is that the need for energy assistance is just as
    important in the South as it is in the North. Nationwide, median income
    families spend an average of 3.8 percent of their monthly as in the
    household income on energy. In North Carolina, the average is 4.4
    percent. Low-income households across the country spent and average of
    12.1 percent of their monthly income on energy, compared to North
    Carolina's low-income population's spending 14 percent
        NFFN suggests that when we talk about ``the poor'', we are
    generalizing. Families and individuals move in and out of that category
    due to the circumstances of their lives. A death in the family,
    divorce, a plant closing, loss of a job, extended illness or any number
    of situations can create a crisis. These are the people that fuel funds
    and emergency assistance programs seek to help.
        A third factor concerns our children. The receipt of assistance to
    pay utility bills can make a significant difference in the quality of
    life for low-income children. In recent years, increasing national
    attention has been focused on education, yet low-income children are
    still less likely to receive a good education. A study entitled ``A
    Road Often Taken: Unaffordable Home Energy Bills, Forced Mobility and
    Childhood Education in Missouri'' explored the interconnection between
    two seemingly unrelated problems in rural Missouri households:
    unaffordable home energy bills and poor educational attainment.
    Findings conclude that a substantial portion of the low-income
    population is ``frequently mobile'' over a five year period; that one
    primary cause of this frequent mobility is the unaffordability of home
    energy bills, including home heating and electricity; and that the
    frequent mobility creates problems for both the students in these
    mobile households and for the teachers and schools who seek to educate
    those transient students.
        Another study done in Philadelphia reports that a utility shut-off
    notice is the clearest indicator of potential homelessness. When
    families are unable to maintain essential services, they may be forced
    to move. The result is abandoned properties, and the economic decline
    of neighborhoods. Intervention, in the form of energy assistance, helps
    stabilize those families.
        Reductions in LIHEAP--thankfully reversed by Congress last year--
    brought more and more families to the doors of fuel funds around the
    country. As skilled as we are in raising charitable contributions from
    private donors, we are not able to compensate for the loss of federal
    support. Most fuel funds do not distribute LIHEAP funds. Most are last
    resort programs that require that applicants have sought all other
    resources, including LIHEAP, before receiving help. When that
    assistance is inadequate or insufficient, they turn to private
    resources.
        The impact of welfare reform on energy assistance is just beginning
    to be felt. People who are leaving public assistance enter low paying
    jobs and will still be confronted with energy bills that they cannot
    pay. These families are at risk and must have support systems like
    LIHEAP and emergency assistance if welfare reform is to meet its goals.
    LIHEAP appears play an increasing role in the welfare reform
    transition. Former public assistance recipients, for the most part,
    make only slightly more than minimum wage, nowhere near the living wage
    that a family needs. In Charlotte, for example, a living wage has been
    calculated at almost $13 per hour.
        Some may suggest that private fuel funds and other charitable
    contributions will make up the deficit resulting from further cuts in
    LIHEAP funding. Others will point to fuel funds as an example of the
    kinds of help that could potentially take the place of LIHEAP. Fuel
    funds raise only about 5 percent of what is available through LIHEAP As
    thankful as we are for the continued generous response from private
    donors across the country, we are painfully aware that our efforts
    still fall far short of the need. Privately raised energy assistance
    dollars can only supplement LIHEAP dollars to a small degree, and can
    never take the place of Federal energy assistance funds. In addition,
    in an era of deregulation and restructuring of the electric utility
    industry, can we realistically expect utility companies to step up the
    pace in growing their fuel funds?
        While we who daily serve the energy needs of low-income families
    understand the difficult task of setting national priorities that is
    before Congress, we respectfully, but urgently request you, as you
    consider funding for fiscal year 1999, to keep in mind the important
    role that LIHEAP plays as a safety net for millions of our Nation's
    most vulnerable citizens. It is a broad based, effective and efficient
    program. The need is very real. We trust that your deliberations will
    significantly assist those who struggle daily to protect themselves and
    their families from extremes of weather.
        Thank you for your consideration of this testimony.
                                     ______

      Prepared Statement of Dr. Harry S. Jacob, on Behalf of The American
                             Society of Hematology
        Senator Specter and members of the Subcommittee, thank you for the
    opportunity to testify on behalf of the American Society of Hematology
    (ASH). My name is Dr. Harry Jacob and I am President-Elect of ASH. I
    have been a recipient of grant funds from the National Institutes of
    Health for many years. The Society has over 8,000 physicians and
    research scientists who are united by our interest in the workings of
    the blood and blood-forming organs and by a commitment to understanding
    and curing blood disorders. On behalf of the Society and the biomedical
    research community as a whole, we wish to thank the Subcommittee for
    their strong and unwavering support of the National Institutes of
    Health and of biomedical research. Along with many others in the
    biomedical research community, we support the development of a long-
    range plan for funding biomedical research as well as the largest
    possible increase in the next fiscal year to allow scientists in this
    country maximal opportunity to make new discoveries. In this regard, we
    are quite pleased to learn that the Administration's fiscal year 1999
    budget proposes a significant increase in NIH funding.
        I would like to use this opportunity to explain how NIH-sponsored
    basic research in the field of hematology has led to important
    discoveries and generated new treatments and pharmaceutical products of
    broad general interest. I would also like to focus on the synergy and
    cross-fertilization that is intrinsic to scientific work and show you
    how basic hematologic research has aided scientists and physicians who
    treat patients with illnesses as varied as heart disease, strokes,
    venous thrombosis, end stage renal disease, cancer, and AIDS.
    Arterial thromboembolism
        The leading cause of death in this country is cardiovascular
    disease, primarily heart attacks and strokes. In the next year, over
    600,000 Americans will have their first heart attack and nearly half of
    them will die before reaching the hospital. Hematologists have made
    several important discoveries that promise to reduce the incidence and
    the number of deaths from heart attacks and strokes. They helped
    document that coronary occlusion by platelets and coagulation proteins
    is the cause of virtually all heart attacks and demonstrated that
    aspirin, an inhibitor of platelet function, could be used to prevent
    heart attacks. Basic work by hematologists led to the development of
    therapeutic agents to dissolve blood clots that had formed in coronary
    arteries and to the development of potent agents which completely block
    platelet aggregation. The clot dissolving or fibrinolytic agents and
    this new generation of antiplatelet drugs, both marketed by American
    biotechnology companies, are saving the lives of patients who suffer
    heart attacks and strokes. In addition to helping patients, these
    discoveries have created important new business opportunities along
    with thousands of jobs and will generate at least a billion dollars of
    revenue in the next year.
    Hematopoietic hormones
        Basic research on the growth and development of the bone marrow has
    led to the discovery of several important regulatory hormones which
    have revolutionized the treatment of patients with cancer and renal
    disease. NIH-sponsored research enabled American biotechnology
    companies to develop and market erythropoietin, the hormone which
    regulates red blood cell production. It is being used to treat patients
    with renal failure who become severely anemic. This treatment, along
    with dialysis, has improved the well being and life span of kidney
    failure patients and eliminated the need for blood transfusions.
    Granulocyte colony-stimulating factor or G-CSF, another product of NIH
    sponsored research, was developed and marketed by an American
    biotechnology corporation. It is being given to cancer patients
    undergoing chemotherapy. It raises their white blood cell count and
    protects them from infection. A similar hormone, called thrombopoietin,
    which regulates platelet production, is undergoing clinical trials and
    may be used in a similar way to prevent bleeding due a low platelet
    count. These remarkable new drugs have been developed because the
    biotechnology industry has been able to rapidly translate the
    observations of NIH-sponsored scientists and produce useful products.
    The reduced need for blood transfusions in patients with kidney failure
    and the reduced incidence of infections in cancer patients will lower
    medical costs and improve the quality of life for thousands of patients
    each year.
    Venous thrombosis and embolism
        Venous thrombosis is a disorder in which blood clots form in the
    legs and pelvic veins. The most feared and sometimes lethal
    complication is pulmonary embolism, a condition in which the clots
    travel and block the circulation through the lungs. This condition can
    affect several hundred thousand people in this country each year. Until
    recently, there was little information available on the underlying
    cause of this disorder. Work by hematologists studying blood
    coagulation has identified a common mutation in one of the blood
    clotting proteins, which is present in 2 percent of the general
    population and may account for 25-30 percent of the cases of venous
    thrombosis. The identification of this mutation will allow screening to
    determine which individuals are at risk to develop venous thrombosis
    and allow early treatment. This should be particularly beneficial to
    women who can be warned to avoid drugs like the oral contraceptives or
    high doses of estrogens that may cause them to develop venous
    thrombosis. This information could improve the treatment of older
    Americans who have the highest incidence of venous thrombosis.
    Susceptible individuals may develop blood clotting after undergoing
    surgery, sustaining a fracture, or being confined to bed or a
    wheelchair. In addition to improving the quality of life and preventing
    additional complications like pulmonary embolism, the prevention of
    venous thrombosis could result in substantial savings by avoiding a
    large number of unnecessary hospitalizations.
    New anticoagulants
        I would also like to mention a new anticoagulant that may
    revolutionize our treatment of patients who develop venous thrombosis.
    Heparin has been used for over 50 years to treat patients with venous
    blood clots. It is an impure substance derived from the tissues of beef
    cattle and pigs and is a byproduct of the meat industry. At present,
    heparin is given intravenously and requires daily laboratory testing to
    adjust its dose. Despite careful laboratory monitoring, heparin still
    causes serious bleeding and lowers the platelet count in many
    recipients. Hematologists studying its mechanism of action were able to
    isolate and characterize the active fraction of commercial heparin.
    Several pharmaceutical companies developed techniques to purify large
    quantities of this heparin fraction and have completed clinical trials
    showing that it is a superior anticoagulant. Patients who receive these
    new heparins have a lower incidence of bleeding and do not require
    daily laboratory testing. This means that many patients with blood
    clots who required hospitalization for heparin therapy can now be
    treated as outpatients. The savings to the health care industry will
    run into the billions of dollars as this new drug replaces conventional
    heparin therapy.
    Therapy for AIDS
        Over two decades ago, hematologists interested in understanding the
    immune system began to characterize the cell surface proteins of
    lymphocytes. They carried out much of this work on cells derived from
    patients with various types of lymphoma. This work led to the
    classification of two major classes of lymphocytes: those that contain
    a protein called CD4 that help to produce antibodies and another that
    contains the protein CD8 which kills tumors. Years later, scientists
    studying AIDS were able to build on these fundamental observations.
    First, they showed that the number of CD4-containing cells decreased
    following infection with the virus causing AIDS and that this could be
    used as a way to follow the effects of the virus. Second, they were
    able to show that the CD4 protein was one of the receptors that the
    virus used to gain entry into lymphocytes. Within the past year, AIDS
    researchers were able to show that another class of receptors
    discovered by hematologists studying inflammation, called chemokine
    receptors, were also needed for the AIDS virus to infect cells. These
    studies demonstrate nicely how basic research in one area can provide
    information of great benefit to scientists working in other fields.
    Treatment of sickle cell anemia
        Another example of this important interrelationship can be seen in
    research on sickle cell disease. This is an important and debilitating
    disease which afflicts 1 percent of African Americans and causes
    recurrent painful crises, frequent hospitalizations, and serious damage
    to the brain, kidneys and lungs. Until very recently, there were no
    effective treatments for this disorder. Scientists studying drugs of
    use in treating cancer made the interesting observation that some
    agents which interfered with DNA synthesis in cells could stimulate the
    cells to make a form of hemoglobin which prevented sickle hemoglobin
    from precipitating with red blood cells. One of these agents, called
    hydroxyurea, had minimal toxicity and was shown to have a similar
    effect when given to patients with sickle cell anemia. An NIH-sponsored
    multi-institutional clinical trial confirmed hydroxyurea could reduce
    the incidence of painful crises in sickle cell patients and has
    provided the first effective treatment for this disorder. Patients who
    were frequent visitors to emergency rooms and often required
    hospitalization now have long periods of time free of pain.
    Conclusion
        I have tried to summarize a number of important discoveries by
    basic researchers in the area of hematology that have led to new
    methods of treating patients with many common diseases. As
    hematologists, we are quite proud that hematologic research has
    resulted in so many useful new drugs that have helped to spawn the
    American biotechnology industry. There are numerous other examples that
    could also be discussed. Hematologists were one of the first groups to
    study the amyloid proteins which are pivotal in the development of
    Alzheimer's disease. An American hematologist, E. Donnall Thomas,
    received the Nobel Prize for the development and implementation of bone
    marrow transplantation. This important technique has revolutionized our
    treatment of many disorders including various forms of leukemia,
    immunodeficiency states, bone marrow failure, and a number of genetic
    disorders that affect the brain and other organs. Hematologists are now
    working on methods to use bone marrow stem cells for gene therapy and
    expanding transplantation to treat a wide variety of malignant
    disorders. We remain confident that basic and applied biomedical
    research, when coupled with a vigorous pharmaceutical and biotechnology
    industry, will lead to better and more cost effective ways to treat
    medical disorders.
        While much has been accomplished, there is clearly much more to be
    done. We thank the members of the Subcommittee for your past support of
    the work that has led to the discoveries just discussed and hope that
    you will find a way to increase funding for biomedical research. In
    this regard, the American Society of Hematology endorses the Ad Hoc
    Group for Medical Research Funding's recommendation of a 15 percent
    increase in NIH funding for fiscal year 1999.
                                     ______

      Prepared Statement of Dr. David R. Bickers, Secretary-Treasurer, on
              Behalf of the Society for Investigative Dermatology
        Mr. Chairman and subcommittee members: I am very grateful for this
    opportunity to testify today on behalf of the Society for Investigative
    Dermatology. I am Dr. David Bickers, Secretary-Treasurer of the Society
    for Investigative Dermatology and Chairman of the Department of
    Dermatology at Columbia/Presbyterian Medical Center in New York City.
        The Society for Investigative Dermatology has as its mission the
    support of research in skin disease. Our 2,000 members include
    scientists and physician researchers from universities, hospitals, and
    industry committed to the science of dermatology. Each of our members
    firmly believes that research is critical to improved prevention,
    diagnosis, and treatment for the 60 million Americans afflicted with
    skin disease. My purpose in being here today is to personally emphasize
    the need for increased funding of the programs of the National
    Institute of Arthritis and Musculoskeletal and Skin Diseases (NIAMS).
        We support the proposal of the Ad Hoc Group for Medical Research
    Funding, which calls for a 15 percent increase in funding for the NIH
    in fiscal year 1999 as the first step toward doubling the NIH budget
    over five years. We recognize the difficulty in achieving this goal
    under the current spending limits, and encourage the Congress to
    explore all possible options to identify the additional resources
    needed to support this increase. We support an increase of 15 percent
    specifically for NIAMS as well.
        It is my understanding that all other members of the NIAMS
    Coalition will be seeking a similar amount.
        My testimony is drawn from the booklet, Skin Disease Research:
    Successes, Opportunities, Support (you have a copy before you). If any
    of the members of the Subcommittee would like to receive extra copies
    for your staff or for persons in your district, please indicate that to
    me and I will see that you receive them in the mail quickly.
    Background
        Good health depends on healthy skin. Much of what we see on the
    outside of the body is a reflection of a person's health inside. From
    the yellow of hepatitis, to the purple lesions of Kaposi's sarcoma--a
    sometime feature of AIDS, from the skin lesions of lupus erythematosus,
    to the painful deformed nails which may occur in patients with
    arthritis and psoriasis, internal health disorders often show up first
    as problems on the skin's surface. Skin conditions have profound
    effects on our ability to interact with other people. Common skin
    conditions such as acne compromise our self-confidence. Loss of hair
    sometimes says ``I am old.'' Studies in the United Kingdom reveal a
    higher rate of unemployment among acne patients than among unaffected
    people of comparable ages and abilities. Ancient prejudices and
    ignorance often lead people to shun those they deem unhealthy on the
    basis of appearances.
        The ongoing revolution in molecular and cell biology, genetics,
    immunology, information processing and laser technology provides
    unprecedented opportunities for achieving advances in basic research
    and medical treatment. The accessibility of the skin makes it an ideal
    organ to study, both at the basic cellular level and as a tissue. It
    permits us to assess the effects of new therapies both for skin
    diseases and, in some instances, internal diseases. Skin samples are
    often used to make genetic diagnosis of internal disorders and in the
    future the skin may be a very convenient target for gene replacement.
        Advances in cell biology allow us to understand the life cycle of
    skin and hair-producing cells and to explain how a malfunctioning
    immune system undermines the health of the body in general and the
    skin, in particular. We are also becoming more adept at growing skin
    cells in the laboratory and at producing artificial skin. Increasingly,
    laser surgery is replacing more invasive and traumatic traditional
    surgical methods.
        These and other advantages are towering monuments to the tenacity
    and creativity of our scientists and hold out tremendous promise for
    improvements in health care. But as spectacular as these achievements
    are, we are far from realizing their full potential. We must still do
    more to understand and treat the problems at hand rationally and
    effectively to prepare for the challenges of the next century.
        As the population ages and we live longer, dermatologists will be
    asked increasingly to treat cancers and other skin disorders that
    appear more often in older individuals. Dermatologists will need to
    find new and better ways to help prevent and heal common conditions of
    the elderly such as bed sores. Ulcers of the skin cost $8 billion per
    year. Much remains to be done--to improve diagnosis and treatment, both
    for current and future problems--and clearly more research is needed
    across the entire spectrum of the more than 3,000 dermatological
    diseases.
        Research discoveries have already reduced the costs of treating and
    curing some diseases. Expanding our research program will allow us to
    build on recent findings, to learn more about the mechanisms of
    diseases that are still poorly understood and to improve the economic
    and physical health of the nation.
        There are more than 3,000 different diseases of the skin, hair and
    nails, which in an average year affect about 60 million Americans. The
    combined annual cost to society of medical care and lost wages from
    these conditions is estimated to be $7 billion. The potential cost to
    individuals suffering from these conditions includes: discomfort and
    pain, disfigurement, disability, dependency, and death.
        Research Advances
        The past two decades have witnessed an explosive growth in
    technology and an increased sophistication in our understanding of the
    genetic and cellular mechanisms underlying many of these disorders. One
    consequence of these findings is a radical new paradigm shift in which
    the skin is now viewed as a complex organ that is intimately responsive
    to the body's immune system. Several distinct cell types in the skin
    actively generate, regulate and perpetuate immune responses. Other
    important new research findings include the following:
      --A gene responsible for the inherited form of basal cell carcinoma
            has been identified. This may lead to important new information
            about the origins of skin cancer.
      --A gene for an inherited form of hair loss has been discovered.
      --A new protein has been discovered that links collagen and vascular
            defects in scleroderma.
      --Advances in the design of drug-delivery systems allow for sustained
            release of drugs through the skin, probably leading to more
            effective treatments using this pathway.
      --Methods to grow real and artificial skin in the laboratory are
            currently used to prepare skin grafts for burns and wounds.
        Paralleling these technological advances of the past two decades,
    there has been a comprehensive focus on evaluation. Technologics beyond
    the laboratory such as clinical epidemiology, biostatistics, economics,
    and the quantitative social sciences are being used to determine the
    effectiveness of certain procedures and whether they contribute to the
    quality of life and health of both patients and society. The public
    deserves value in return for research support and health care
    expenditures, and it is incumbent upon the research community to
    address such important issues.
        As you know, medical research organizations such as the Society for
    Investigative Dermatology work closely with patient support and
    advocacy groups. We are pleased to say that for many years we have
    worked with the Coalition of Patient Advocates for Skin Disease
    Research. The many organizations that participate in the Coalition have
    been the best possible advocates for increased funding, as they
    understand that unless major research efforts are undertaken, advances
    in understanding and improvements in the health of patients will not
    occur. Every year, we participate with these organizations in
    advocating increased funding. Recently, working together, we have
    created a comprehensive analysis and a research plan for further
    progress, detailed in the document before you. May we suggest that bill
    report language be inserted in the bill report noting this document and
    its use, and urging the support of NIAMS in its publicizing? We suggest
    language such as the following:
        The Committee has learned of the efforts by the skin diseases
    researchers and patient advocate organizations to develop a
    comprehensive analysis of research opportunities and a research plan
    for further progress in finding cures and improving care for patients
    with these diseases. The Committee applauds this initiative and
    requests NIAMS to publicize and support widespread use of this
    material.
        Thank you, Mr. Chairman and subcommittee Members, for this
    opportunity to discuss with you the science of dermatology.
        I will be pleased to answer any questions you may have.
                                     ______

      Prepared Statement of Steven R. Berg, Director of Program, National
                       Alliance to End Homelessness, Inc.
    The fight against homelessness in 1998
        The national fight against homelessness is at a critical juncture.
    Despite low unemployment, all indicators are that the number of
    homeless people continues to rise. A recent study by Second Harvest, a
    nationwide nonprofit that provides food for shelters, soup kitchens and
    food pantries, showed that approximately 3.4 million people were
    homeless at some point in 1997, up from 1.3 million in 1988. The latest
    29-city survey by the U.S. Conference of Mayors, A Status Report on
    Hunger and Homelessness in America's Cities: 1997, reported continued
    increases in requests for emergency shelter. Only two of the 29 cities
    reported that all need was being met; all but three of those reporting
    indicated that homeless families with children were turned away from
    shelter.
        While this continued increase in homelessness may come as a
    surprise given the low rates of unemployment prevalent in much of the
    country, it should not. Many homeless people either can not work due to
    disabilities, or face barriers that make them likely to have the lowest
    paying jobs. The trends that brought about the sharp increase in
    homelessness since the early 1980s continue unabated:
      --Wages for the lowest-paid workers have continued to fall in real
            terms.
      --Public assistance has become less available. State after state has
            eliminated ``general relief'' programs for childless adults.
            Many people with disabilities related to substance abuse have
            been dropped from the SSI program, some as a result of
            conscious policy changes, others who should remain eligible but
            have been unable to negotiate the process for documenting their
            continued disability. States' TANF programs have terminated
            benefits to many families, and studies by the GAO and the
            states of New York and Maryland indicate half or more of those
            leaving welfare are not working steadily.
      --States have continued to reduce the number of inpatient beds for
            people with mental disabilities.
        Combined with these long-term trends, new factors have pushed the
    number of homeless people up. For the past three years there has been a
    net decline in the number of federally subsidized housing units
    available at affordable rents for low-income people. At the same time,
    the good economy has brought about skyrocketing rents in many
    locations, making it all the more difficult for people living on low-
    wage work or disability benefits to remain housed.
        Even while this grim situation persists, certain opportunities make
    it possible, with effective leadership from the federal government, to
    make serious inroads against the problem of homelessness. The good
    economy means that jobs are plentiful. One outcome of welfare reform is
    a new commitment on the part of human service providers, government and
    business to do the work necessary to make those jobs feasible for low-
    income Americans.
        Perhaps more important, a result of ten years of experience
    implementing programs under the Stewart B. McKinney Homeless Assistance
    Act is a growing body of know-how. It is largely with the membership of
    the National Alliance to End Homelessness that this know-how resides.
    The Alliance has approximately 2,000 members, in every state, nonprofit
    organizations, government agencies and private businesses that are
    actively engaged in moving people out of homelessness. They are the
    best source of information about how federal programs work, and what is
    needed to make the fight against homelessness more effective.
        Our members' experience with fighting against homelessness
    indicates the primary importance of a coordinated network of services
    and opportunities, working at the local level to ensure that there is
    affordable housing, adequate income through employment or government
    benefits for those who are unable to work, and human services for those
    who need them. This is not solely a task of the federal government, or
    indeed of government at all, but requires active participation by
    private business (providing jobs and knowledge about what kinds of
    workers are needed) and nonprofit agencies (providing commitment to
    serving individuals, plus the entrepreneurial energy to put programs
    together), as well as government (providing funding, coordination of
    programs, expertise, and networking on a local, state and national
    level).
        Federal programs funded by the departments of Labor, Health and
    Human Services, and Education provide important pieces to the puzzle
    that homeless service providers must put together at the local level.
    These efforts will become even more important in the near future, due
    to initiatives of the Congressional committees that oversee the
    Department of Housing and Urban Development. HUD, of course, runs the
    largest of the federal government's homeless-specific programs, the
    Homeless Assistance Grants Programs. In the past, local recipients of
    Homeless Assistance Grants have used that money not only to provide
    shelter and housing, but also to provide human services. In fact, in
    the most recent year for which analysis is available, more than half of
    the money from the HUD Homeless Assistance Grants went to pay for non-
    housing services. Recent Congressional initiatives, however, have
    sought to focus the HUD resources more on permanent housing, where HUD
    has a formidable expertise. This creates a challenge to other federal
    agencies, to use their expertise to fill in service gaps.
    Homeless-specific programs
        The departments under this subcommittee's jurisdiction already have
    important programs targeted specifically to homeless people. The
    Department of Education's Education for Homeless Children and Youth
    program provides money to states to ensure that homeless children are
    able to have access to school. Health Care for the Homeless, part of
    HHS's Consolidated Health Centers, funds clinics to do outreach and
    provide medical care to homeless people. The Runaway and Homeless Youth
    program, also within HHS, pays for outreach, transitional housing and
    other services to this particularly vulnerable segment of the homeless
    population. HHS domestic violence programs address one of the major
    contributing factors to homelessness among women. The Homeless
    Veterans' Reintegration Project, run by the Department of Labor, funds
    local agencies to move homeless veterans into the job market through a
    range of services. Each of these provides funding and a centralized
    locus of expertise to deal with a particularly difficult aspect of the
    problem of homelessness. For each of these programs, the National
    Alliance to End Homelessness supports a level of funding that will
    adequately address critical need.
    The PATH Program
        Perhaps the most difficult aspect of homelessness is the subject of
    the PATH program (Projects for Assistance in Transition from
    Homelessness), administered by the Substance Abuse and Mental Health
    Services Administration within HHS. PATH provides formula grants to
    each state for community-based outreach, case management and treatment
    for homeless people with severe mental illnesses, including those with
    a dual diagnosis of mental illness and drug or alcohol addiction. PATH
    grantees often search out homeless people in streets and abandoned
    buildings, and respond to calls from concerned business owners and
    others about homeless people with obvious mental illnesses who have no
    connection to local networks of services.
        In fiscal year 1996, when PATH funding was cut to $20 million, its
    grantees served 76,000 people, approximately $263 per person per year.
    This is in sharp contrast to the cost of involuntary hospitalization in
    a psychiatric facility, often hundreds of dollars per day.
        Although PATH is extremely effective, its resources are
    overextended. Those with mental illnesses constitute up to one-third of
    homeless adults. By all accounts, this group is expanding. Homeless
    service providers often identify specialized mental health outreach and
    treatment as a service that is in too-short supply. PATH's fiscal year
    1998 appropriation is $23 million, still well below its $33.1 million
    appropriation for fiscal year 1991. Even at its high point in 1994,
    PATH served 127,000 people. The most recent available count of homeless
    people with disabilities, from 1987, showed that even that long ago
    there were at least 180,000 adults with severe mental illnesses who
    were homeless. The actual number by now is almost certainly much
    higher.
        Because homeless people with severe mental disabilities are so
    difficult to move into permanent housing, and because the PATH program
    has worked so well, the National Alliance to End Homelessness believes
    that a major increase in PATH funding is necessary in order to
    complement HUD and other homeless programs and ensure that the drive to
    move homeless people into permanent housing includes those with mental
    illnesses. The Alliance recommends an appropriation of $34 million for
    fiscal year 1999.
    Other programs
        A number of programs, not specifically targeted toward homeless
    people, provide funds for the kinds of services most needed by homeless
    people. These ``mainstream'' programs have not had a sufficient impact
    on the problems of homeless people. Job Training Partnership Act
    programs are an example. For several years, the Department of Labor ran
    a Job Training for the Homeless Demonstration Project. The results of
    this demonstration showed that, for employment-related activities to
    work for homeless people, they must be at least coordinated with
    housing services, so that residence is stabilized before homeless
    people attempt to take advantage of job-related programs. With the
    demonstration over, there needs to be a concerted attempt to encourage
    JTPA grantees to coordinate their services with local homeless
    providers, so that homeless people can gain from JTPA-funded
    activities.
        The Substance Abuse and Treatment Performance Partnership Block
    Grant, administered by the Substance Abuse and Mental Health Services
    Administration, funds services that are desperately needed by up to
    half of homeless adults. The Administration has proposed an increase of
    $200 million in this block grant. Demonstration projects from the late
    1980s show that substance abuse treatment for homeless people can be
    effective if coordinated with other services. Nevertheless, there is
    little indication that homeless people are benefiting from programs
    funded by the Substance Abuse Block Grant.
        The National Alliance to End Homelessness urges the subcommittee to
    take measures to focus HHS and the Department of Labor on making their
    ``mainstream'' programs address the needs of homeless people.
    Conclusion
        The National Alliance to End Homelessness, for its members, thanks
    the Subcommittee for its attention to these issues. There is no reason
    that we need to tolerate homelessness. The know-how exists to solve the
    problem. All sectors of society are engaged. The federal government has
    programs that allow it to do its part, exercising leadership and
    filling gaps in services, efficiently and effectively. These programs
    need only to be brought to a more realistic scale, through strong
    funding for homeless-specific programs, and attention to the needs of
    homeless people when administering ``mainstream'' block grants.
                                     ______

     Prepared Statement of Robert M. Tobias, National President, National
                            Treasury Employees Union
        Chairman Porter, Members of the Subcommittee: My name is Robert M.
    Tobias, and I am the National President of the National Treasury
    Employees Union (NTEU). NTEU is the exclusive representative of more
    than 160,000 federal employees across the government. Thank you very
    much for the opportunity to come before your Subcommittee today.
        NTEU appears today on behalf of the employees we represent in the
    various divisions of the Department of Health and Human Services (HHS)
    and the Social Security Administration (SSA). This includes employees
    in the Office of the Secretary, Office for Civil Rights, Administration
    on Aging, Administration for Children and Families, Agency for Health
    Care Policy and Research and the Health Resources and Services
    Administration. In addition, NTEU represents employees within SSA's
    Office of Hearings and Appeals.
        While we are unable to comment on specific proposals included in
    the President's fiscal year 1999 budget for the Department of Health
    and Human Services, the message I want to deliver today is this.
    Federal employees represented by this Union--not just in HHS and SSA--
    but government-wide, are working smarter and accomplishing more even
    while the resources available to them have continued to decline. There
    is an essential need for stable and steady funding levels, for improved
    and expanded training programs and for continuity in direction if our
    public servants are to continue delivering top quality service to the
    American taxpayer.
        The federal government has undergone unprecedented downsizing. Over
    300,000 federal jobs have been eliminated since President Clinton took
    office. As the President pronounced in his State of the Union Address
    just one week ago, ``We have the smallest government in 35 years * * *
    a government that is leaner, more flexible, a catalyst for new ideas *
    * *''
        And I hope the President was right that we have ``moved past the
    sterile debate between those who say government is the enemy and those
    who say government is the answer''. The federal employees represented
    by this Union who continue to serve the public are competent,
    hardworking and motivated individuals who want to deliver a high
    quality product to the American taxpayer.
        The political reality is that the federal government is likely to
    continue to shrink. Many, if not most agencies have imposed
    restrictions on hiring, promotions and reassignments. Morale, in the
    wake of government bashing, budget cuts, reductions in force, efforts
    to contract out federal jobs, federal government shutdowns and the
    Oklahoma City bombing is at an all time low. We must recognize that
    only when we value the work our public servants perform can we expect
    the best and the brightest to continue to seek out careers in public
    service. The federal government operates as a business and like any
    successful business, it must recognize that its most important resource
    is its dedicated and committed workforce.
        The uncertainty surrounding both the amount of annual
    appropriations agencies can expect and the date each year when new
    spending might be enacted into law has taken its toll. When annual
    funding hangs in the balance and rumors circulate that agency salary
    and expense accounts may be slashed, even the best employees become
    consumed by threats of losing their jobs. For several years now,
    employees across government have lived under a cloud of potential
    reductions in force. As you may know, Mr. Chairman, one important tool
    federal agencies have had has been the ability to offer buy-outs to
    employees whose jobs are being eliminated. That authority expired
    December 31, 1998. If further staffing reductions are envisioned at
    agencies funded under this appropriations measure, I urge this
    Subcommittee to carefully consider the need for new buyout authority
    for these agencies.
        It is our hope, however, that agencies will be fully funded to
    enable them to continue the important work they perform. As the
    Chairman knows, the many programs administered by HHS and SSA have a
    wide impact on our Nation's citizens.
        In fiscal year 1998, HHS's Administration for Children and Families
    (ACF) received $140.7 million for program direction. This represented a
    reduction of $2.3 million from the fiscal year 1997 appropriation for
    ACF. The ACF oversees an array of important federal initiatives
    including the successful Head Start program, child abuse prevention and
    treatment programs and a host of other critical child, youth and family
    programs. Cuts in this agency's funding have hampered employees'
    abilities to fulfill the agency's mission and I urge this Subcommittee
    to be mindful of these concerns as it debates fiscal year 1999 spending
    decisions.
        Program support funding for the Agency for Health Care Policy and
    Research (AHCPR) was set at $2.2 million in both fiscal year 1997 and
    1998. Clearly, this agency will require increased funding just to
    continue its important work.
        Similarly, the Office of the Secretary should be carefully reviewed
    for its departmental management funding. In fiscal year 1998 the Office
    received $177.4 million--a decrease from its fiscal year 1997 funding
    level.
        For the Administration on Aging (AOA), program administration
    funding increased by $37,000 from fiscal year 1997 to the 1998 level of
    $14.7 million. This modest increase enacted by Congress recognized the
    important services AOA delivers with the funding it is provided and
    NTEU hopes AOA will continue to be fully funded.
        Program management funds for the Health Resources and Services
    Administration (HRSA) increased by $1.1 million from fiscal year 1997
    to an fiscal year 1998 level of $114 million. HRSA plays a central role
    in ensuring that quality health care is available to millions of
    Americans and I hope this Subcommittee will carefully review this
    agency's continuing needs.
        The mission of HHS's Office of Civil Rights (OCR) is to ensure that
    recipients of federal funding through HHS do not discriminate against
    program beneficiaries. OCR has an enormous responsibility, yet,
    historically, appropriation levels have not kept pace with its workload
    and staffing requirements. Funding for OCR in fiscal year 1998 was set
    at $19.6 million, a modest $169,000 increase over the funding received
    by OCR in fiscal year 1997. The work performed by this division will
    continue to be in the spotlight in the coming fiscal year and I hope
    this Subcommittee will fund that work to the greatest extent possible.
        NTEU is also critically concerned about funding for the Food and
    Drug Administration (FDA). Although the FDA is not funded under the
    Chairman's appropriation measure, I bring this need to your attention
    because FDA employees work in HHS facilities and alongside HHS
    employees. Underfunding compromises the important, as well as
    lifesaving, work of the FDA. Personnel levels must be brought to the
    point where timely approval can be given to medicines and other
    products without compromising accuracy, meticulousness or quality. The
    increase from fiscal year 1997's appropriation of $820 million to the
    $857.5 million FDA received in fiscal year 1998 was mostly to cover the
    costs of the new food safety initiative.
        In the five years since passage of the Prescription Drug User Fee
    Act (PDUFA) of 1992, FDA has greatly improved the speed with which it
    can approve drugs for marketing--down from 30 months to 15 months. At
    the same time, however, the number of new submissions has increased by
    50 percent. Staffing levels have not kept pace. Frontline employees are
    being asked to accept ever increasing workloads while striving to
    uphold FDA's policy of reducing approval times. While we applaud PDUFA
    and its recent reauthorization (PDUFA II) for creating a dependable
    revenue stream for the Agency through user fees and for its commitment
    to review times that will bring important drugs to consumers with
    greater speed, we caution any action that could sacrifice quality for
    speed.
        There are several areas of concern regarding the Social Security
    Administration (SSA) that I would like to bring to your attention. SSA
    continues to have two major problems with its disability system,
    Continuing Disability Reviews (CDR) and the backlog at the Office of
    Hearings and Appeals (OHA). NTEU believes that the current level of
    funding for the CDR program will permit significant progress to be made
    in that area. However, the OHA backlog problem continues because
    substantial funds are being expended in the Disability Process Redesign
    (DPR) apparently toward the goal of decreasing the backlog, but without
    appreciable results. NTEU believes that SSA could make a significant
    reduction of that backlog with a much smaller expenditure by suspending
    or terminating the Adjudication Officer Initiative of the DPR and
    continuing the highly successful and relatively inexpensive Senior
    Attorney Program (also known as the Short Term Disability Program
    Action No. 7).
        The massive increase in the disability backlog that OHA experienced
    from 1992 to 1996 has been contained and finally reversed. The case
    backlog has fallen from a high of approximately 570,000 in 1995 to
    518,862 in December 1996 and to 458,142 by December 1997. While no one
    at OHA is satisfied with the current level of cases pending, we have
    demonstrated that we can, and will continue to significantly reduce the
    backlog without significantly changing agency operations. This
    substantial reduction of the backlog is due in great part to the Senior
    Attorney Program (approximately 120,000 decisions since its inception),
    which in continued, will facilitate an even greater reduction in the
    case backlog and in processing times, and a reduction in the reversal
    rate thereby providing greatly improved service to the public.
    Senior Attorney Program
        The Senior Attorney Program is a sharply focused plan with a well
    defined target, the disability backlog at SSA's Office of Hearings and
    Appeals, which for the most part uses existing agency assets. This
    program did not require restructuring the Agency, a massive infusion of
    expensive technology, revising the decisional methodology, extensive
    employee dislocations, comprehensive, lengthy and expensive training of
    substantial numbers of employees and nearly four years of planning
    without tangible results. In short, the Senior Attorney Program, which
    produced nearly 100,000 decisions in fiscal year 1996 and fiscal year
    1997, has been relatively inexpensive and very effective and provides
    greatly improved service to the public primarily through redirecting
    current assets.
        Senior Attorneys spend approximately 30-50 percent of their time
    performing work related to the short-term disability project and most
    of the remaining 50-70 percent of their time drafting ALJ decisions.
    The ability of Senior Attorneys to perform both tasks significantly
    increases managerial flexibility, allowing human assets to be directed
    to the highest priority tasks, thereby maximizing OHA productivity.
    Agency statistics reveal the overall productivity of Senior Attorneys
    to be approximately 25-30 percent more productive that ``non-senior
    attorney'' decision writers. Unfortunately, the potential effectiveness
    of this program has been somewhat decreased by the continued fierce
    opposition of many of the Agency's ALJs, some hearing office managers,
    and many senior SSA officials, all of whom have their own agendas.
    Despite this persistent opposition, the Senior Attorney Program
    produced nearly 100,000 decisions in 1996 and 1997. With less organized
    opposition, NTEU is confident that the Senior Attorney Program can
    produce at least 75,000 decisions in fiscal year 1999 and over 100,000
    decisions in fiscal year 2000 without significantly impacting upon ALJ
    case production. Quality Assurance studies conducted by the Appeals
    Council have demonstrated that the accuracy rate of Senior Attorney
    decisions significantly exceeds that of Disability Process Redesign's
    Adjudication Officers and is somewhat higher than that of on-the-record
    ALJ decisions. The accuracy of the Senior Attorney decisions combined
    with the significantly lower payment rate of Senior Attorneys
    (approximately 25 percent) again demonstrates that the Senior Attorney
    Program can reduce the time deserving claimants must wait for a
    decision by as much as a year in many hearing offices. During the
    course of the Senior Attorney Program, the overall payment rate at OHA
    has significantly declined thereby incurring a substantial savings in
    program costs. Additionally, the implementation of the Senior Attorney
    Program has not resulted in an unacceptable increase in the number of
    ALJ decisions awaiting drafting.
        OHA has a long history of cyclical fluctuations in the cases
    awaiting drafting which can make comparisons in workload status
    somewhat misleading. OHA has established a goal that cases awaiting
    decision drafting not exceed a 10 day limit. NTEU believes that
    claimants are entitled to decisions on their applications as quickly as
    possible, and that cases decided by ALJs should be drafted as
    expeditiously as possible. However, too much emphasis has been placed
    upon the goal of maintaining the decision drafting pending level at 10
    days at the expense of claimants who deserve, but will be deprived of a
    timely award of benefits. The average processing time of a disability
    case adjudicated in OHA hearing offices was 381.54 days at the end of
    December 1997. If the OHA goal of 10 days is met, the time the case has
    spent awaiting decision drafting constitutes approximately 2.5 percent
    of the time OHA currently requires to process a case; if the awaiting
    decision drafting time were to increase to 20 days, it would still be
    only 5 percent of the total processing time. The problem at OHA is not
    the time a case awaits decision drafting, but the months and months it
    awaits a hearing and/or it awaits a decision by an ALJ. The Senior
    Attorney Program has resulted in deserving claimants receiving a
    favorable decision with an average processing time of approximately 120
    days as compared to the over 1 year for a case requiring an ALJ
    hearing. In other words, approximately 120,000 deserving claimants
    received their favorable decision only four months after filing because
    of the Senior Attorney Program. Service to the public demands that the
    Senior Attorney Program be vigorously supported.
        While the number of cases awaiting decision drafting has risen
    since September 1996, the single biggest factor in that increase is the
    marked reduction of decisions drafted by ALJs. Interestingly enough,
    despite the decline in ALJ decision drafting, SSA has purchased an
    expensive notebook computer for each ALJ. Given the fact that few ALJs
    draft decisions, and virtually none draft the much more difficult
    denial decisions, the Agency's willingness to spend such a substantial
    sum on notebook computers for ALJs while requiring its ``decision
    writers'' to use obsolete machines and software, is an insight to the
    Agency's priorities.
    The Adjudication Officer (AO) initiative of the disability process
            redesign
        The primary Long-Term Initiative purporting to improve the OHA
    workload is the Redesigned Disability Process (DPR). However, at the
    outset of DPR, SSA admitted that is was not intended to deal with the
    two largest problems plaguing the Social Security disability system,
    the lack of an effective Continuing Disability Review (CDR) and the
    backlog at OHA. SSA subsequently claimed that one goal of the
    Adjudication Officer Initiative was to reduce the OHA backlog. The DPR
    consists of 83 separate initiatives of which GAO noted over a year ago
    that none have been completed. That situation has not changed. It is
    interesting to note that the United States won World War II in less
    time than it has taken SSA to attempt to implement the AO Program.
        The initiative that SSA believes will provide relief to the OHA is
    the Adjudication Officer Initiative which began testing in November
    1995. Despite the highest level of priority, carefully selected
    personnel, a priority on data processing equipment, and the
    establishment of closely controlled, ideal test conditions, AO
    productivity remains one half the level predicted by the DPR model. SSA
    has admitted that the DPR model upon which implementation of DPR is
    predicated is flawed. Yet, at the outset of the AO test, SSA was so
    confident in the reliability of the model that it questioned the need
    for testing at all, and publicly stated that the test was not a test of
    the concept, only a test to fine tune implementation of the AO Program,
    The AO concept has undergone extensive and rigorous testing since it
    was implemented in November 1995. In February 1997, significant changes
    in the AO process were implemented and subjected to the on-going
    testing procedures. The results have not significantly changed;
    productivity remains approximately 50 percent of the projected levels
    and severe quality problems persist. Recently the Office of Workforce
    Analysis (OWA) issued a harshly critical assessment of the AO Program.
    OWA found that the AO Program was not cost neutral, and that it did, in
    fact, increase program costs.
        Currently, OHA has approximately 7,500 employees including central
    office and regional office support staff and the Office of Appellate
    Operations (the Appeals Council) who are not directly involved in
    hearing office productivity. The DPR originally estimated that AO
    productivity would be two (2) ``clearances'' a day requiring
    approximately 1,500 Adjudication Officers. Additionally, DPR
    contemplated that 3 support staff persons would be needed to support 5
    Adjudication Officers. After nearly two years of testing, productivity
    is still only slightly above 1 case a day in the best of circumstances.
    Such a level of productivity demonstrated in a carefully controlled
    test, is unlikely to be matched in a ``real world'' full scale
    implementation. Nonetheless, even accepting a productivity of 1 per
    day, 3,000 Adjudication Officers will be needed and nearly 2,000
    additional support staff. SSA has avoided providing documentation
    regarding the number of support persons involved in the AO test, but
    NTEU believes that the level of support required has been significantly
    greater than anticipated. Full implementation of the AO Program will
    require nearly as many people as OHA currently employs in its hearing
    offices and yet these people are performing only a relatively small
    portion of the work currently performed at OHA hearing offices. Of
    course, if the DPR blueprint is accurate, the work of these 5,000
    people will reduce the number of claimants requiring ALJ hearings by 25
    percent, approximately the same amount already accomplished by the
    approximately 500 Senior Attorneys in the hearing offices.
        By any objective measure the AO test has been a nearly complete
    failure. Yet SSA has continued to pursue this failed program to the
    detriment of other programs which do significantly improve the
    disability adjudication process. The DPR, particularly the AO test, has
    had no measurable effect upon the workload of OHA except consuming
    resources, both human and material, that could have been put to much
    better use.
    Recommendations
        1. The Senior Attorney program has significantly reduced the delay
    in granting deserving disabled people their disability benefits,
    stabilized the OHA workload, and reduced the overall payment rate at
    OHA, thereby contributing to a savings in program costs with a
    relatively small outlay in funds. NTEU recommends that funding for this
    program be continued to ensure 75,000 Senior Attorney decisions are
    rendered in fiscal year 1999 and 100,000 Senior Attorney decisions are
    rendered in fiscal year 2000.
        2. Modern computer hardware (including notebook computers) and
    software to facilitate the decision process should be provided to those
    individuals responsible for drafting the vast majority of OHA (ALJ and
    Senior Attorney) decisions.
        3. The Adjudication Officer Initiative of the Disability Process
    Redesign should be immediately suspended or terminated and at least
    some of the funds scheduled for that project should be redirected to
    effective efforts at reducing the OHA backlog.
        Thank you again for the opportunity to appear. I would be happy to
    answer any questions.
                                     ______

    Prepared Statement of Emily S. DeRocco, Executive Director, Interstate
                   Conference of Employment Security Agencies
    Overview
        The Interstate Conference of Employment Security Agencies (ICESA)
    is the national organization of state officials who administer the
    nation's public Employment Service, unemployment insurance laws, labor
    market information programs and, in 41 states, job training programs.
    In most states, these officials are also responsible for coordinating
    workforce development one-stop centers, and they play an important role
    in welfare-to-work services.
        As you know, appropriations for administration of unemployment
    insurance programs, employment services, labor market statistics, and
    certain veterans employment programs come from the Unemployment Trust
    Fund (UTF). The UTF, like the Social Security Trust Fund, is made up of
    dedicated revenues from state and federal employer-paid payroll taxes.
    While the trust fund revenues are sufficient to fully fund the
    operation of those programs, the focus on elimination of the federal
    budget deficit and the inclusion of unemployment trust funds in budget
    deficit calculations have undermined the funding arrangements set up by
    the system's founders. Less than 60 percent of estimated fiscal year
    1998 FUTA revenues were appropriated for employment security
    administration. A survey by ICESA a year ago showed that 43 states were
    using over $200 million in state funds to supplement federal
    appropriations for employment security administration.
        Frustration with the federal budget and appropriations process has
    convinced many states that a fundamental change in the administrative
    funding arrangements of the employment security system is needed. A
    coalition of states and business interests has developed a proposal to
    shift responsibility for collection of federal unemployment taxes to
    the states which would retain most of the funds. Twenty-six states
    currently support this proposal, and the House Ways and Means
    Committee, Subcommittee on Human Resources, intends to consider the
    legislation this session.
    One-Stop Employment Service
        For the last several years, Congress has been considering bills to
    consolidate job-training programs and develop an integrated workforce
    development system. Even though no legislation has yet been enacted,
    the public policy discussions have yielded substantial support at all
    levels of government for a one stop service delivery system, i.e.,
    ensuring that customers--jobseekers and employers--can access the full
    array of employment, unemployment, training, and labor market
    information services easily and through a single source. As a result,
    beginning in fiscal year 1994, the Department of Labor requested and
    the Congress began appropriating resources to be used as one stop
    grants for states to design and implement one stop career center
    systems.
        The Department of Labor and virtually all of the states view the
    state Employment Services as the essential ``glue'' that holds together
    the one-stop systems. While one stop grants--available to states for
    three years--have been used to build linked information systems, in
    some cases to integrate services in shared physical facilities, and to
    develop and implement new customer-friendly technologies and service
    delivery approaches, continued high quality, customer friendly service
    in communities across the nation will depend upon the strength of the
    foundation or infrastructure of the one stop system. As states complete
    their third year one stop grants--the first one stop implementation
    states' third year grants will expire in fiscal year 1999--the
    continued vitality and success of their one stop systems will be
    dependent upon their basic employment and training program funding.
    This means the state Employment Service state allotments must be shored
    up or the success of one-stop career center systems will be short-
    lived.
        As implementation of one stop systems is accomplished and one stop
    funding trends downward, we ask you to commit additional funds to ES
    state allotments- the foundation of the one stop center systems and the
    assurance of universal services for both jobseekers and employers--
    rather than funding new initiatives. The states are requesting $811
    million to support state ES allotments.
        In addition to their importance to the continued operation and
    success of state one stop systems, the state Employment Services ensure
    the only linkage between employment and training programs and the
    unemployment insurance system. The Employment Services are the vehicle
    to provide job search assistance to individuals who have been
    ``profiled'' and identified as likely to exhaust their UI benefits and
    still be unemployed. Research conducted by the U. S. Department of
    Labor and evaluated by Mathematica Policy Research, Inc., has shown
    that intensive job search assistance to unemployment insurance
    beneficiaries reduced receipt of benefits by an average of three-
    quarters of a week.
        This may not sound significant until you translate it into dollars
    and impact on the federal budget. Using economic assumptions in the
    President's Budget, there are estimated to be about 8.1 million
    unemployment insurance beneficiaries in fiscal year 1999. The average
    weekly benefit amount is estimated at $198.50. A reduction of three-
    quarters of a week of benefits would save the unemployment trust funds
    $148.88 per beneficiary. If funds were available to state Employment
    Services to provide job search assistance to just 30 percent of the
    total number of beneficiaries--2.4 million UI beneficiaries--the
    savings to the unemployment trust fund would be $357,312,000. The cost
    of providing the services would be approximately $137,856,000 (based on
    estimated average state time spent per beneficiary and staff salaries).
    This yields net savings to the trust fund of $219,445,000 in one year.
    Thus, each dollar invested in the Employment Service and directed to
    serving UI claimants saves the unemployment trust fund and the federal
    budget about $2.59. The importance of the linkage between the
    unemployment insurance system and a strong Employment Service cannot
    and should not be ignored.
        Again, an $811 million investment in the state Employment Services
    is critical to the one stop systems in the states, to providing
    effective job search assistance to unemployed workers and saving trust
    fund dollars, and to maintaining and enhancing new electronic tools to
    efficiently and effectively match jobseekers to available jobs.
    National Activities--Employment Service
        In addition to state Employment Service allotments, there are three
    programs/initiatives funded under ES national activities that are
    critical:
        The Electronic Labor Exchange--The state Employment Services are
    the source of the job vacancies currently listed in the highly
    acclaimed and often cited America's Job Bank. The success of this
    electronic labor exchange tool is well known. To illustrate its growing
    popularity, in July 1996, 7.2 million customer transactions were
    recorded, and in June 1997, over 29 million transactions were recorded,
    making AJB one of the most visited websites on the Internet. This tool
    is only valuable to jobseekers as it continues to contain active job
    vacancies, provided through the state Employment Services and their
    outreach to employers across the nation. In the coming year, America's
    Talent Bank, the resume side of the electronic labor exchange, will be
    available to job seekers and employers. We urge you to continue
    supporting these exciting tools of the state Employment Services.
        Alien Labor Certification--Federal alien labor certification laws
    ensure that admission of foreign workers on a permanent or temporary
    basis does not affect adversely the job opportunities, wages and
    working conditions of U.S. workers. State employment security agencies
    (SESAs) must oversee and evaluate the recruitment efforts of employers
    for U.S. workers and assure that ``prevailing wages'' are being offered
    for particular positions before a certification can be issued that the
    employers can hire foreign workers.
        Federal funding for administration of the Alien Labor Certification
    program by SESAs has been cut dramatically in recent years. In fiscal
    year 1997, state allocations were cut by an average of 50 percent from
    fiscal year 1996; a number of states were cut by more than 60 percent.
    In fiscal year 1998, the President's budget requested the same level of
    appropriations as fiscal year 1997, but it also stated that the
    Administration would seek legislation--which was never submitted--to
    authorize fees to support this program. These fees were estimated to
    bring in approximately $19.2 million in fiscal year 1998. The
    combination of this severe cut in funding and a significant increase in
    cases brought about by changes to federal immigration laws has resulted
    in huge backlogs-more than a year in some states. The frustration of
    parties to the pending cases has resulted in bomb threats and other
    threats of violence to state agencies. Several states are considering
    whether to refuse to continue to operate the program under these
    untenable conditions.
        In order to address this critical problem, it is essential that
    this committee restore funding to at least $50.5 million--which is the
    total of fiscal year 1998 appropriations, $31.3 million, plus the
    estimated, but non-existent, fees of $19.2 million. We also ask that
    the committee direct the Department of Labor to work with the state
    employment security agencies to streamline procedures and eliminate
    unnecessary and bureaucratic red tape that chokes the certification
    process.
        The Work Opportunity Tax Credit (WOTC) and Welfare to Work (W2W)
    Tax Credit are federal tax credits administered by state employment
    security agencies that encourage employers to hire certain jobseekers.
    Both programs enjoy broad bi-partisan support from Congress and the
    Administration. WOTC was recently extended through June 30, 1998, and
    will likely be extended at least through fiscal year 1999. The Welfare-
    to-Work (W2W) Tax Credit program, which provides tax credits to
    businesses that hire the hardest to employ welfare recipients, is in
    effect through April 30, 1999.
        In order for state agencies to make timely certifications of
    eligibility so businesses can claim the tax credit, administrative
    funds are essential. ICESA requests $20 million for state
    administration of these two programs.
    Unemployment Insurance
        We would like to thank the subcommittee for its support for a
    special appropriation of $200 million in the fiscal year 1998
    appropriations bill to bring state employment security agency computer
    systems into compliance with the Year 2000. These funds have been
    allocated, and ICESA's members are working diligently to revise
    millions of lines of program code to ensure that payment of
    unemployment benefits is not disrupted due to the ``millennium
    problem.'' Although the timetable is still very tight, Year 2000
    compliance would have been an impossible task for many states without
    these funds.
        Even during this time when our economy is healthy and dynamic, the
    unemployment insurance system plays a larger economic role than might
    be imagined. A dynamic economy means that skilled workers may be laid
    off from jobs in one sector of the economy and may find new ones in
    another sector. During the time they look for new jobs, unemployment
    benefits provide temporary wage replacement. State unemployment
    insurance programs are expected to pay $23.2 billion in benefits to 8.4
    million unemployed workers and collect $22.4 billion in state
    unemployment taxes during fiscal year 1998. Estimates for fiscal year
    1999 project 8.1 million beneficiaries, benefit payments totaling $24.2
    billion, and state unemployment tax collections of $24.2 billion.
        The federal-state partnership in the unemployment insurance program
    has worked well during most of the 62-year history of the program. The
    federal partner's responsibility for providing adequate funds for
    proper and efficient administration of state laws resulted in
    establishment of a system of administrative funding based on hard data:
    workloads (e.g., claims filed, payments made, employers subject to the
    state law) accomplished; staff productivity factors; and the salaries
    of state merit system staff. In recent years the gap between the
    funding needed based on these data and the amount actually provided has
    become so wide that it is not clear to states that a connection exists
    between these ``need factors'' and the funding provided.
        For fiscal year 1999, we urge you to provide $2.369 billion--the
    President's request--for state unemployment insurance activities.
        In addition, we urge you to appropriate $91 million authorized for
    unemployment insurance integrity activities in fiscal year 1999 by the
    Balanced Budget Act of 1997. These funds are needed to support
    intensified tax collection/audit and claims monitoring activities.
    These funds will be used to: reduce accounts receivable; register and
    tax all new employers immediately; improve collection of delinquent
    taxes; implement/improve fraud cross match programs; train staff in
    claims adjudication; and improve detection and collection of benefit
    overpayments. This $91 million appropriation will be more than offset
    in the federal budget by increased taxes collected and overpayments
    prevented or recovered.
    Labor market information
        In the debate surrounding workforce development reform, there is
    clear consensus that accurate and timely labor market information is an
    essential part of our economic infrastructure, providing information
    about employment, jobs, and workers. Such information is an invaluable
    resource for jobseekers, businesses, educators, and young persons who
    are planning careers--answering their questions of: Where are the jobs
    of the future? What changes are occurring in the skill requirements for
    today's and tomorrow's jobs? Which industries are growing rapidly?
    Where are layoffs occurring?
        State employment security agencies in cooperation with the Bureau
    of Labor Statistics and other federal agencies produce most labor
    market information. This cooperative system provides a sound basis upon
    which to build an expanded and readily accessible nationwide system of
    labor market information envisioned by workforce development reform
    legislation currently under consideration by the Congress. Today's
    information technology presents a dazzling array of opportunities to
    integrate labor market information with education/training and job
    matching data into exciting and powerful new systems. ICESA supports an
    appropriation of $55 million for BLS Cooperative Programs.
    Veterans' employment and training
        Congress has made it clear that providing employment services for
    veterans is a national responsibility. Title 38 of the U.S. Code
    includes provisions for special employment services for veterans, with
    priority given to disabled and Vietnam era veterans, through the
    Disabled Veterans Outreach (DVOP) and Local Veterans Employment
    Representative (LVER) programs. DVOPs and LVERs serve our veterans
    population by helping to ensure a smooth transition of separating
    military personnel into the civilian workforce.
        Title 38 also provides formulas to determine DVOP and LVER staffing
    levels. Since 1990, appropriations for DVOPs and LVERs have not
    supported the number of positions authorized by the statutory formulas.
    In fiscal year 1997, the appropriation funded 440 fewer DVOP
    specialists and 260 fewer LVER staff than authorized by the statutory
    formulas. Many local offices and one stops no longer have any veterans'
    staff. ICESA encourages the committee to explore funding above last
    year's level that would allow at least one DVOP and LVER in every full-
    service office. Specialized veterans' employment representatives
    working in state employment service offices and one-stop career centers
    nationwide will help ensure that our nation does not abandon the fine
    men and women separating from the military.
    Job training
        While economic growth in the United States is the envy of the rest
    of the world, one of the problems of our current economy is a lack of
    qualified workers for many job openings. The economic sectors where
    there are labor shortages include entry level jobs, where potential
    workers need basic skills, as well as information technology jobs where
    workers with highly specialized skills are needed. Federal job training
    programs for disadvantaged adults and youth help to prepare welfare
    recipients, students, and others to enter the labor force; programs for
    dislocated workers help them to develop new skills needed to
    participate in the ``new economy.'' We urge your continued support for
    federal job training programs authorized by the Job Training
    Partnership Act.
    Conclusion
        In summary, our message is one of encouraging efficient and
    effective investment of public resources in a strong workforce
    development system built on the infrastructure that exists today. With
    your help and targeted investment, we have the ability to link
    unemployment, employment, labor market information, and training
    programs together to provide seamless, high quality customer service to
    America's employers and jobseekers.
                                     ______

      Prepared Statement of Glenn A. Grant, Esq., Business Administrator,
                                 City of Newark
        Dear Mr. Chairman, thank you for the opportunity to submit written
    testimony on behalf of a proposed pilot project in Newark, New Jersey
    designed to identify and address the needs of a most vulnerable part of
    our population--children affected by domestic violence. The City of
    Newark is seeking $1 million for the Newark Kids Initiative, which is
    an effort to identify members of this at-risk group, diagnose their
    needs, and improve the system that provides services to them.
        Newark is home to over 275,000 residents, and is the most densely
    populated city in the state of New Jersey. Newark suffers from other
    concurrent difficulties, including a high unemployment rate, low per
    capita income, and poor literacy rates. The children of Newark suffer
    from a range of poverty-related ills: a high infant mortality rate, low
    birth weights, low immunization rates, and a low rate of routine ``well
    child'' care. When a child suffering from these and other problems, is
    also exposed to domestic violence, they have a broad range of physical,
    psychological and emotional needs.
        The City of Newark Police Department has taken an aggressive stand
    in response to calls to domestic violence situations. In 1997, officers
    received approximately 10,000 calls, with nearly 4,000 of those
    reported as Uniform Crime Report recognized cases. Most of these calls
    involve a combination of abusive behaviors, physical, sexual or
    emotional assault, and drug or alcohol abuse in the home. Through a US
    Department of Justice grant, Newark officers are being trained in
    techniques to respond to domestic violence. The Police Department,
    though, is just a first step in getting help to these families in
    crisis. The mission of the Police Department does not, and cannot,
    address the needs of the youngest victims of abusive family
    situations--the children. In the most severe cases, referrals are made
    to the New Jersey Division of Youth and Family Services, and a child
    may removed from the home. However, more often, the abusive parent and
    the children remain in the home, with a loose and uncoordinated
    ``safety net'' in place to aid the family.
        At the same time, the City Department of Health and Human Services
    and community service organizations see a broad range of health and
    social problems presented in their clientele under the age of 12, most
    of which stem from, or are exacerbated, by substance abuse. This
    substance abuse may be by parents or others in the home itself, in the
    neighborhood, or by the children themselves. The drug treatment
    facilities in the City are not able to handle the volume of cases
    presented, and do not provide the kind of extensive counseling and
    follow-up the entire family may need.
        The City of Newark proposes to establish a pilot project to
    identify children affected by domestic violence, research the problems
    specific to their situations in partnership with a local university,
    assess their needs, and provide referrals to the appropriate service
    providers. The program will explore possible linkages to court-ordered
    sanctions, and will work to ensure that treatment and staff training
    are sensitive to cultural norms while working enhance family
    cohesiveness.
        It is estimate that the pilot program will include 100 families,
    who will be the subjects of intensive evaluation, research, and
    coordinated service referrals. Trained civilian staff will be hired to
    assist the Police Department in identifying at-risk families and their
    children under the age of twelve from the pool of reported domestic
    violence cases. The university partner will perform in-depth research
    on the problems involved, and develop training, treatment, and referral
    protocols to address the needs of children. This may include substance
    abuse treatment for parents, medical assistance to family members,
    family and individual counseling, or other modalities discovered or
    recommended through the research. The Newark Department of Health and
    Human Services will serve as a case coordination entity for the
    children, and support and train community agencies as needed to provide
    necessary services.
        Federal assistance is requested to support the dedicated staff of
    both the Police Department and Health and Human Services Department,
    contract with a local university to perform the study and provide
    treatment recommendations, and support training for pertinent community
    service agencies to deal with the full range of problems presented by
    the children of domestic violence. The Newark Kids Initiative could
    indeed serve as a model for the nation's most vulnerable residents,
    thereby breaking the cycle of family violence.
                                     ______

    Prepared Statement of Josephine Nieves, MSW, Ph.D., Executive Director,
                     National Association of Social Workers
        On behalf of the 155,000 members of the National Association of
    Social Workers (NASW), I respectfully request that you consider NASW's
    funding requests, as well as the attached recommended report language
    to accompany the fiscal year 1999 Labor/HHS/Education Appropriations
    bill.
        NASW's requests focus on two important areas: the maintenance of
    fiscal year 1998 discretionary funding ($6 million) for Child Welfare
    Training, Title IV-B, Section 426 of the Social Security Act, and an
    increase in fiscal year 1999 funding for the health professions
    training programs administered by the Health Resources and Services
    Administration (HRSA) to $306 million.
    Maintain funding for the Child Welfare Training Program, Title IV-B,
            Section 426, of the Social Security Act, at the $6 million
            level
        NASW requests that Child Welfare Training, Title IV-B, Section 426
    continue to be funded at the fiscal year 1998 level of $6 million. This
    program is administered by the Administration for Children and Families
    in the Department of Health and Human Services (HHS). Child abuse and
    neglect has reached staggering levels. The need for skilled and highly
    qualified workers in our child welfare system is greater than ever. The
    enclosed recommended report language ensures the availability of
    professionally trained social workers within the child welfare system.
    The increased funding would help expand the pool of much-needed
    professional child welfare workers.
    Increase funding for health professions training programs administered
            by HRSA in HHS to $306 million
        NASW requests that the Subcommittee increase funding for Title VII
    and VIII (Public Health Service Act) programs to $306 million. It is
    important to provide adequate funding for the health professions
    programs, which are crucial to ensuring an appropriate supply of health
    and mental health professionals, including social workers. These
    programs have been instrumental in increasing the number of health
    providers from minority backgrounds, fostering community-based
    education, and enhancing service to underserved communities.
        Enclosed is recommended report language, which is similar to
    language included in the fiscal year 1998 House and/or Senate
    Appropriations Committee Reports for the Departments of Labor, Health
    and Human Services, and Education. This includes report language that
    addresses the need for standards and guidelines on training mental
    health professionals, including social workers, for practice in primary
    care and managed care settings targeted to underservedand rural
    communities. The language encourages collaboration between HRSA and the
    Substance Abuse and Mental Health Services Administration (SAMHSA) in
    preparing health professionals to work in public health settings and
    managed care organizations.
        Additionally, the National Institutes of Health (Nod) has
    effectively implemented fiscal year 1997 and fiscal year 1998 report
    language encouraging them to form a working group of appropriate
    institutes on child abuse and neglect research. The working group, led
    by the National Institutes of Mental Health (NIMH), is addressing the
    need to coordinate child abuse and neglect research within NIH,
    developing a consensus on a research agenda, and providing some
    leadership with other federal agencies involved with child abuse and
    neglect research. NIH Director Dr. Harold Varmus issued a report in
    April 1997 that outlined NIH current research efforts in this critical
    area and made recommendations for future action. We feel it is critical
    to recognize what NIH has done and to encourage them to continue by
    including fiscal year 1999 report language, which is enclosed.
        Also included is recommended report language supporting additional
    social work research and training programs in NIH, SAMHSA, and Centers
    for Disease Control and Prevention. We hope that you will give our
    requests for funding and our suggestions for report language serious
    consideration throughout the appropriations process.
        We appreciate the support you have given on appropriations issues
    important to social workers and the clients we serve. If you have any
    further questions or need any information, please contact Madeleine
    Golde, Government Relations Staff Associate, at 202-336-8237.
                                     ______

            Prepared Statement of the American Academy of Pediatrics
        On behalf of the American Academy of Pediatrics and the endorsing
    organizations, the Society for Adolescent Medicine and the Ambulatory
    Pediatric Association, we would like to submit this statement for the
    record.
        Fortunately, most infants are born healthy and continue to grow and
    develop normally if they have access to and receive basic health care
    services. Unfortunately, there are still far too many that suffer
    needlessly from disease, injury, abuse, and a host of societal
    problems. Our task as pediatricians is to promote preventive
    interventions and to diagnose, treat and manage acute and chronic
    problems of children and adolescents. Your task is to provide the funds
    to sustain vital federal programs that underpin and complement these
    efforts. As pediatricians we recognize the integral tie between basic
    research and the care we provide; we see the impact of poverty and
    violence on the health of our children and adolescents; and we know
    that the future of our workforce depends on the decisions we make
    today. We ask that you continue to recognize the importance of
    preventive and chronic health services, research, and the education and
    training of pediatricians and other health professionals and to
    appropriate the necessary funds to the extent possible.
        A chart at the end of this statement will offer funding
    recommendations for many programs, but we would like to focus on a few.
    Prevention and early intervention
        Childhood Immunization Program.--The CDC's childhood immunization
    program is the cornerstone of preventive health care for children
    served in the public sector and for uninsured children. Tremendous
    strides in establishing effective immunization programs have been made
    over the past few years. In addition to the cost-effectiveness of
    vaccines, the number of reported cases of vaccine preventable diseases
    are at or near all time lows. Immunization levels of two-year old
    children are the highest ever recorded. We attribute this, in part, to
    the Vaccines for Children (VFC) Program and encourage Congress to
    maintain its commitment to ensuring its viability. The VFC program
    combines the efforts of public and private pediatricians and other
    health care professionals to accomplish and sustain vaccine coverage
    goals for both today's and tomorrow's vaccines. It removes vaccine cost
    as a barrier to immunization for some and reinforces the concept of a
    ``medical home.'' To date, its successful implementation has resulted
    in the enrollment of more than 40,000 public and private provider
    sites. Yet, despite this good news, the most recent National
    Immunization Survey reports that nearly 1 million two-year-olds still
    are under-immunized. Furthermore, adolescents continue to be adversely
    affected by vaccine preventable diseases (e.g., varicella, hepatitis B,
    measles and rubella). Comprehensive adolescent immunization activities
    at the national, state and local level are needed to achieve national
    disease elimination goals. In addition, continued investment in CDC
    efforts to assist states in developing immunization information systems
    will serve to maintain high immunization levels by reminding parents
    when immunizations are due/overdue. It also helps pediatricians and
    other health care professionals know the immunization status of the
    children they serve. Obviously, the ultimate goal of immunizations is
    eradication of disease; the immediate goal is prevention of disease in
    individuals or groups. Until other remedies are firmly in place, the
    continued investment in CDC efforts must be sustained. In fiscal year
    1999 the Academy and the endorsing organizations recommend at least
    $539 million for CDC's Childhood Immunization program.
        Maternal and Child Health Service Block Grant.--The MCH Block Grant
    is a ``block grant'' that works. It provides preventive and primary
    care services to 17 million women and children, including 11.3 million
    infants, children and adolescents, 900,000 children with special health
    care needs as well as preventive services to approximately 4.8 million
    women--including one-third of all pregnant women in the U.S. The MCH
    Block Grant includes an important set-aside of 15 percent percent to
    support the Special Projects of Regional and National Significance
    (SPRANS) to improve maternal and child health and promote more
    effective delivery systems. One example is the Healthy Tomorrows
    Partnership for Children Program, a collaborative venture between the
    MCH Bureau and the Academy. The Healthy Tomorrows Partnership projects
    represent a new initiative in a community or an innovative component
    that builds upon existing community resources. These projects have
    provided: primary care for uninsured children and children insured
    through the Medicaid program; intervention and care coordination for
    children with special health needs; interventions for health promotion
    through risk reduction in families; adolescent health promotion;
    expanded perinatal care and parent education services and services for
    special child and family populations. Projects have been funded in a
    variety of communities including: Washington, DC; Chicago; New Haven;
    Dallas; Anchorage; and Milwaukee. Another important component of the
    MCH Block grant is that it addresses interdisciplinary adolescent
    health training and services and research for both the physical and
    mental health needs of adolescents. The Office of Adolescent Health
    supports initiatives such as health care programs for incarcerated
    youth, health care services for minority group adolescents, and
    violence and suicide prevention. We support the funding of the MCH
    Block Grant program at its full authorization of $705 million--a modest
    3.5 percent increase which will help to preserve and improve crucial
    public health services for children and mothers including outreach to
    the most vulnerable and at-risk families under the new State Child
    Health Insurance Program (SCHIP).
        Tobacco.--The Academy and all of the pediatric community have
    strived for decades to curb children's and adolescents' access to and
    use of tobacco. This is a silent and deadly plague. Each day 3,000
    children nationally begin to use tobacco. Of those people who will ever
    smoke, 90 percent begin before age 19. Young smokers suffer from
    respiratory problems and asthma, and among teens who are regular
    smokers, one in three will die prematurely from smoking. Overall,
    tobacco-related illnesses claim the lives of over 400,000 Americans
    each year. Tobacco prevention and cessation efforts must involve
    pediatricians, parents, schools and communities. Not only do we counsel
    our patients about the addictiveness of nicotine and its detrimental
    health effects; we also discuss with parents the impact of secondhand
    smoke on their children. Additionally, we hope to work with you to make
    sure that federal, state and local programs are effective at preventing
    tobacco use. Tobacco use truly is a ``pediatric disease'' that is
    completely preventable. We recommend at least $61 million for CDC's
    Office on Smoking and Health in fiscal year 1999, this includes funds
    for the transfer of the tobacco prevention and cessation program
    (ASSIST) currently housed at the National Cancer Institute. These
    programs have proven records of success at reducing smoking rates. The
    105th Congress has the historic opportunity to more fully address
    tobacco control issues now and save lives. We urge you to support well-
    funded and comprehensive tobacco control legislation.
        CDC injury prevention.--Injury is the leading cause of death and
    disability among children and young adults (ages 1-44). Unintentional
    injury and intentional injury are the leading causes of death for
    children and adolescents. Countless others are injured and disabled.
    Injury is costly on multiple levels--in the emotional toll it takes on
    its victims and on their families; in direct medical expenses (acute
    and chronic); and in long-term economic costs due to the years of
    potential life and productivity lost (especially with respect to
    children). In direct medical costs alone, injury costs the federal
    government $12.6 billion annually, and an additional $18.4 billion each
    year in disability and death benefits. Therefore, measures to prevent
    injury or reduce its severity are extremely cost-effective. The
    National Center for Injury Prevention and Control (NCIPC) fulfills a
    unique function in this undertaking. It works closely with other
    federal agencies; national, state, and local organizations and
    community groups; state, tribal,\1\ and local health departments; and
    research institutions to monitor injury and to develop, evaluate, and
    disseminate effective interventions to prevent injury or reduce its
    impact. The Center's work addresses many types of injuries, both
    intentional (homicide, suicide, physical and sexual assault against
    children and women, youth-perpetrated violence) and unintentional
    (motor vehicle, bicycle and pedestrian injury and home and recreational
    injury, including fires, poisonings, and falls). The Center also
    administers special programs to reduce violence against women, and
    traumatic brain injury. Additional resources would enable the Center to
    continue its important leadership in the ``Safe America'' program,
    through which NCIPC has brought together diverse public and private-
    sector entities to develop and disseminate injury prevention
    information and interventions. The initial focus of the effort is to
    reduce injury among children and adolescents. Further support would
    also enable the Center to expand efforts to reduce physical and sexual
    violence against children, develop a comprehensive youth violence
    prevention program, and ensure that every U.S. resident has access to
    the life-saving and cost-effective services of a poison center through
    national or state specific toll-free numbers. To carry out continuing
    and expanded activities, we recommend that the CDC injury prevention
    program be funded at $70 million.
    ---------------------------------------------------------------------------
        \1\ Deaths due to unintentional injuries are twice the rate for
    Native American children than for children of all other races.
    ---------------------------------------------------------------------------
        Emergency medical services for children.--In 1993, an Institute of
    Medicine report described serious deficiencies in emergency medical
    services for children (EMSC); for example, many ambulance services and
    hospital emergency departments lack child-sized equipment (e.g., oxygen
    masks, IV-tubes, neck braces) and many emergency medical personnel need
    additional training to adequately treat children, whose medical needs
    are very different than those of adults (e.g., children have more
    serious breathing problems, are less tolerant of blood loss, are more
    vulnerable to head injuries, and respond differently to medications).
    The federal EMSC grant program has helped states and localities make
    significant strides in improving EMSC through, for example, the
    development of model training programs, ambulance equipment lists,
    treatment protocols, and triage and transport systems. Grantees' work
    has been widely disseminated so that others can build upon it, thus
    enhancing the cost-effectiveness of the federal investment and the
    opportunity to improve EMSC. We know that the federal EMSC program has
    saved lives. For example, in Kentucky this year, paramedics were able
    to resuscitate a 14-year old girl in cardiac arrest, using skills
    recently acquired through training instituted with EMSC funds.
    Paramedic training and other system components, are necessary but not
    sufficient, however. Localities, states, and inter-state regions must
    get together to designate facilities based on their degree of pediatric
    emergency expertise (similar to the ``Level I, II, II'' trauma care
    designations), and to establish emergency transport protocols and
    inter-facility transfer agreements. Only when such regional systems are
    in place will a critically ill or injured child be sure to get the best
    possible emergency care. Unfortunately, there are few geographic areas
    where such arrangements have been established. The federal EMSC grant
    program is working to spur the development of such systems, an
    especially challenging task in the face of a continuous lack of
    understanding of the unique needs of children. To continue to stimulate
    life-saving EMSC system improvements, we recommend funding this program
    at $15 million.
        Head Start, Early Head Start, child care, after-school care.--The
    Academy strongly supports efforts to improve the accessibility,
    affordability and quality of early child care/education in this
    country. Recently published research on early brain development
    underscores what pediatricians have known for years--that a child's
    care in the earliest years of life are critical in developing his or
    her potential to be a healthy and productive citizen. For older
    children and teens, after-school programs can direct their energies to
    positive activities, and away from juvenile crime, gangs, tobacco,
    alcohol, drugs, and premature sexual activity. Therefore, we recommend,
    at a minimum, funding Head Start and Early Head Start at levels
    necessary to achieve the goals recently proposed by the President--to
    serve one million children in Head Start and 80,000 infants and
    toddlers in Early Head Start by the year 2002. Additionally, we urge
    funding the Department of Education's ``21st Century Community Learning
    Center Program'' at $200 million for fiscal year 1999 in order to
    expand school-based after-school care. We also urge the Committee to
    fully fund any additional spending that might be authorized this year
    to assist families rearing children, whether or not they use out-of-
    home child care.
    Pediatric research
        Agency for Health Care Policy and Research.--The AHCPR is the
    primary federal agency charged with developing clinically-based, policy
    relevant information for use in improving the health care system,
    providing leadership in health services research and providing training
    for new health services researchers, such as pediatricians. It uniquely
    serves the interest of both health care consumers and health care
    professionals. Important outcomes research supported by AHCPR have
    shown that improving quality of care can save taxpayers hundreds of
    millions of dollars per year. For example, universal implementation of
    guidelines on the treatment of otitis media with effusion, a common
    condition of the middle ear in young children, could cut the total cost
    of care in half and annually save over $700 million. Funding from AHCPR
    has supported several important studies of asthma, including a study of
    the management of acute asthma in pediatric practices and the ASTHMA
    PORT study, currently in process, that is focused on improving quality
    of care and cost savings in the treatment of asthma. In an AHCPR-funded
    study of the assessment of fevers in very young infants, the Academy is
    collecting data on how pediatricians assess febrile infants less than 3
    months of age. One product of the study will be a revised guideline for
    diagnostic work-up for infants with fever. It is anticipated that such
    a guideline will make it possible to eliminate at least 10 percent of
    the hospitalizations for observation and diagnosis of these infants
    that currently occur. Such a result would save $36 million in current
    hospital costs. Another recent AHCPR study on pediatric referrals
    identified factors related to pediatric referrals for specialty care.
    Implications from this study are being discussed in terms of
    interventions that can improve physician referral making in ways that
    impact both the quality and cost of care. To enable the Agency to
    continue its critical research that provides policymakers, health care
    providers, and patients with the information on what works and how to
    best implement what is most effective in health care we recommend
    funding of $175 million for AHCPR in fiscal year 1999. We commend this
    Committee's recognition of and recommend continued emphasis on children
    and adolescent health services issues as an AHCPR priority.
        National Institutes of Health.--Research funded by NIH has made
    great strides in improving the health status of children and youth in
    all aspects of life, from issues of child care and obesity to reduction
    of infant mortality and maternal-to-infant transmission of HIV. These
    research projects and many more improve the quality of life for many
    children and adolescents everyday. For example, research conducted at
    NIH on Sudden Infant Death Syndrome (SIDS) has clearly shown a
    relationship between infant sleep position and SIDS. In fact, as a
    result of the ``Back to Sleep'' public health campaign, the incidence
    of SIDS has been reduced by 38 percent. The development of surfactant,
    which can be administered into the lungs of premature infants, has
    resulted in fewer deaths of infants from Respiratory Distress Syndrome
    (RDS) and has saved an estimated $90 million a year in hospital costs.
    Thus, an investment in children's medical research not only saves lives
    and alleviates suffering, but also reduces future health care
    expenditures. In addition, we endorse the testimony of our pediatric
    colleagues, the Public Policy Council, that outlines in greater detail
    the importance of a strong national pediatric research agenda. We join
    with the Ad Hoc Group for Medical Research Funding in recommending a 15
    percent increase for NIH in fiscal year 1999 and also join the Friends
    of NICHD in supporting $776 million for the National Institute of Child
    Health and Human Development. In order to increase pediatric biomedical
    and behavioral research within NIH, we recommend $50 million for the
    Pediatric Research Initiative.We believe that these requests represent
    the best and most reliable estimate of the level of funding needed to
    sustain the high standard of scientific achievement embodied by the
    NIH. However, we strongly encourage Congress to explore all possible
    options to identify additional sources of funding needed to support
    these increases if we are to reach this goal under the current spending
    limitations.
    Education/Training
        Health professions training.--Title VII of the Public Health
    Service Act, Primary Care Training Grants for General Internal Medicine
    and General Pediatrics, remains a small but vital incentive program for
    generalist education and training as well as increasing the pool of
    under-represented minority group pediatricians and other health care
    professionals . These grants provide support for faculty development
    and a large number of residents to receive intensive primary care
    training in diverse ambulatory settings--this is the only federal
    support targeted to training primary care health care professionals.
    Faced with increases in the incidence of AIDS, substance abuse,
    adolescent pregnancy and other health concerns, pediatricians of the
    future will be expected to manage both acute and chronic health
    problems, care for children and adolescents with disabling conditions,
    and effectively screen and counsel for problems that are psychosocial
    or behavioral in nature. Given the complex needs of their patients,
    pediatricians will also be called upon to utilize community resources
    and to collaborate with other health care providers. Title VII grants
    in pediatrics have supported education and training in a variety of
    community and non-hospital based settings such as juvenile detention
    centers, homeless shelters, child nutrition programs, child care
    centers and community health centers. We recommend fiscal year 1999
    funding of at least $25 million for General Internal Medicine/General
    Pediatrics and join with the Health Professions and Nursing Education
    Coalition in supporting, a modest increase of $306 million in total
    funding for Title VII and Title VIII, which is last year's level plus
    medical inflation. We further recommend funding of $125 million for the
    National Health Service Corps a key component of any effort to remove
    barriers to health care and to ensure an adequate distribution of
    health care providers across the country.
    Conclusion
        Thank you for this opportunity to provide you with our
    recommendations for the coming fiscal year. In summary, the following
    list highlights programs, along with funding recommendations, of
    importance to children. The Academy joins with its many friends in
    other organizations and coalitions in presenting these recommendations.

    Recommendations for fiscal year 1999

    Department of Health and Human Services:
        Centers for Disease Control and Prevention..........  $2,800,000,000
            Childhood Immunization Funding..................     539,000,000
            Injury Control..................................      70,000,000
            Lead Poisoning..................................      50,000,000
            Office on Smoking and Health....................      61,000,000
            Folic Acid Supplement Program...................      20,000,000
        Health Resources and Services Administration........   3,734,000,000
            Ryan White Pediatric Demos......................      61,000,000
            EMSC............................................      15,000,000
            Family Planning (Title X).......................     218,452,000
            MCH Block Grant.................................     705,000,000
            National Health Service Corps...................     125,000,000
            Health Professions Training (Total).............     306,000,000
            General I.M/Pediatrics (Title VII)..............      25,000,000
            Agency for Health Care Policy and Research......     175,000,000
        National Institutes of Health.......................  15,694,000,000
            NICHD (Child Health)............................     776,000,000
            NIEHS (Environmental Health)....................     379,624,000
            Pediatric Research Initiative...................      50,000,000
        Administration for Children and Families:
            Child Abuse and Treatment and Prevention:
                Title I Grants to states....................     100,000,000
                Title II Community Based Family Resource and
                  Support Grants............................      66,000,000
            Child Care and Development Block Grant..........   1,000,000,000
        Indian Health Service...............................   2,537,456,000
    Department of Education:
        IDEA part B.........................................   4,607,500,000
        IDEA part c (formerly part H).......................     400,000,000
        IDEA section 619....................................     500,000,000
                                     ______

                Prepared Statement of the Public Policy Council
        This statement is submitted on behalf of the Public Policy Council
    which represents the Society for Pediatric Research, the American
    Pediatric Society and the Association of Medical School Pediatric
    Department Chairmen. These organizations represent thousands of
    pediatric researchers involved in basic, clinical and health services
    research. Our collective goal is to improve the quality of life for all
    of America's children. The scientists represented by our organizations
    come from medical schools, children's hospitals and other research
    facilities. They are the driving force behind the biomedical advances
    that benefit children and they also are the mentors for training our
    next generation of pediatric investigators.
        On behalf of the pediatric academic research community, our
    statement speaks about the importance of increasing funding for
    pediatric biomedical, behavioral and clinical research, and for the
    training of future pediatric bench and clinical investigators.
        Our statement addresses three issues: first, why do we need to fund
    pediatric research; second, why fund pediatric investigators; and
    third, how do we preserve pediatric research and sustain its
    investigators.
    What is the Justification for Funding Pediatric Research?
        Infants and children are leading healthier lives. Research funded
    by the National Institutes of Health (NIH) has had a significant impact
    on the well-being of children. As a result of NIH funded research,
    deaths from sudden infant death syndrome (SIDS) have been reduced by 38
    percent, the development of surfactant for infants with respiratory
    distress syndrome (RDS) has saved the lives of premature babies, and
    infants now receive a vaccine to prevent Hemophilus influenza type b
    (HIB) meningitis, one of the leading causes of mental retardation.
        However, there are still many pediatric diseases that are not
    preventable or for which treatment may not exist, may only be
    palliative or is simply inadequate. Even relatively common pediatric
    diseases, such as, cystic fibrosis and juvenile onset diabetes--
    diseases that we do know a great deal about--do not currently have a
    cure. Modern therapy for such diseases is cumbersome, costly and
    stressful for children and their families.
        Whereas it is obvious that we want to improve the health of
    children for their own sake, it may be less obvious that improvements
    in pediatric medicine will have far-reaching implications on the
    societal and economic costs of disease in adults. Many diseases usually
    associated with adulthood begin in childhood. A strengthened investment
    in pediatric research will benefit adults as well as children. Why?
    Let's mention just two examples: osteoporosis and diabetes mellitus. In
    both examples, the enormous societal and economic costs of these
    diseases are not incurred during childhood. Nonetheless, both disorders
    have their origins in pediatrics and might be less severe or
    preventable if we focus on these conditions in our children. We know
    that osteoporosis is a disease that causes crippling bone deformities,
    most commonly in post-menopausal women. But to quote a famous expert on
    osteoporosis, ``senile osteoporosis is a pediatric disorder.'' This is
    because all of us deposit bone minerals throughout childhood,
    adolescence, and early adulthood. In fact, by the age of 30, we have
    each achieved our peak bone density. After that, bone mass declines
    throughout the rest of adult life. Deficiencies in bone mass in
    childhood and adolescence thus predispose individuals to lower bone
    mass in adulthood. If we could improve acquisition of bone mineral
    during childhood and adolescence, we might prevent adult osteoporosis.
        Another example is diabetes, which causes tremendous morbidity,
    pain and suffering. There are two types of diabetes that affect adults
    and both types have their origins in childhood. Recent results of a
    large, multi-center NIH-funded study known as the DCCT (Diabetes
    Control and Complications Trial) demonstrate that by tightening blood
    sugar control, long term complication rates are reduced. The study did
    not include prepubertal children and thus, we do not know how tightly
    young children with diabetes should be controlled. Since there are also
    risks associated with tight control, this type of study in children
    must be done. The other type of diabetes known as adult onset diabetes
    is associated with environmental factors such as obesity, high fat
    diets and inadequate exercise. We are now seeing this disease in
    younger and younger children. Is the increased incidence of obesity and
    the sedentary lifestyle of our children predisposing us to an adult
    disease? The only way to answer these questions is with further
    research in pediatrics.
        The importance of the linkage of pediatric research to adult health
    can also be seen in the fact that some families have a genetic tendency
    to develop heart disease. Research indicates that this could be
    associated with a high level of cholesterol in their blood or with high
    levels of triglycerides. Although many children in these families do
    not yet suffer from heart disease the way that adults do, at what point
    does cholesterol begin obstructing blood flow injuring blood vessels
    and subsequently injuring the heart? Should children be treated with
    one of the new cholesterol lowering drugs? If so, which one and when?
    What are the side effects of these drugs in children? Are they the same
    as in adults, or are they more serious? Clearly more research is needed
    and necessary.
        Moreover, as we continue with the human genome project and learn
    more about genes associated with disease, more windows of opportunity
    between early detection and overt symptoms of disease will open for
    intervention. This aspect of that project makes research involving
    children imperative. The ability to precisely determine what disease
    will affect a person will be available before gene therapy can provide
    a cure. Moreover, as we explore this very important opportunity to
    develop preventive strategies through genetic testing of children, we
    must recognize that this is still an evolving area of medical science
    that has social, ethical and psychological implications that will need
    further study. For instance, recently it was discovered that ibuprofen
    (Advil and Nuprin) delays the onset of symptoms in some people who have
    genes that convey the susceptibility for Alzheimers disease. Would
    screening for carriers and treating them in childhood make a
    difference? Do benefits in sixty years outweigh side effects now? Once
    again, we see that to adequately answer these questions, more pediatric
    research is needed and necessary.
    Why fund pediatric investigators?
        We are in an age of great technological innovation that has allowed
    for a better understanding of the pathogenesis of disease, enhancing
    diagnostic capabilities and improving the treatment of patients.
    However, the actual practice of medicine is too often based on
    empiricism rather than evidence derived from well-controlled clinical
    trials. Clinical trials when done well can establish the usefulness of
    a particular test or treatment and examine their cost effectiveness
    compared to current practice. Unfortunately, according to a report
    issued by the Government Accounting Office, only 10-20 percent of
    medical practices are based on data from well-controlled studies. Thus,
    when your child or grandchild is being treated for an illness today
    there is only about a one in five chance that the therapy is based on
    solid evidence that it will be helpful.
        There is a growing concern among our academic colleagues that there
    is a looming crisis for the future of pediatric research. Most
    pediatric research is performed at the nation's medical schools,
    children's hospitals and the intramural programs at NIH. As the focus
    of academic health centers shifts away from the traditional roles of
    research, teaching and patient care, to one focused predominately on
    patient care, we are concerned that the quality of training of future
    generations of pediatric medical scientists will be impaired. This will
    in turn jeopardize the future health of our children. There are many
    reasons for this trend, as recently outlined in the NIH Director's
    Panel on Clinical Research 1997 Report, including the specialized,
    complex training and role of teacher-clinician-scientists, student debt
    after leaving medical school, and the changes to the health care system
    brought about by managed care.
    How do we promote pediatric research and preserve the training of
            pediatric investigators?
        The pediatric community applauds the ongoing commitment of
    Congress, through the leadership of this Committee, to increase NIH
    funding. We support the fiscal year 1999 recommendation presented by
    the Ad Hoc Group for Medical Research Funding, that calls for a 15
    percent increase in funding for the NIH as the first step toward
    doubling the NIH budget over five years. This recommendation includes
    support for increased funding for the general clinical research centers
    (GCRCs) which the Public Policy Council also supports. The pediatric
    academic societies endorse the Friends of NICHD Coalition's
    recommendation for the National Institute of Child Health and Human
    Development (NICHD) of $776 million and the overall fiscal year 1999
    Public Health Service funding recommendations of the Coalition for
    Health Funding. In particular, your Committee has helped make pediatric
    research a priority at the highest level of the NIH by establishing a
    new pediatric research initiative that was funded at $38.5 million in
    fiscal year 1998. This is a reasonable starting point. Today, we
    encourage you to increase funding for this initiative to $50 million in
    fiscal year 1999. We recognize the difficulty in achieving these goal
    under the current spending limits. However, we encourage you to explore
    all possible options to identify the additional resources needed to
    support this recommendation.
        Furthermore, we urge increased funding for training programs that
    will attract minority group students into the medical profession,
    encourage medical students to pursue clinical research, support young
    investigators, provide opportunities for mentoring by experienced
    clinical investigators as well as enhance the quality of our mentors.
    We must not short change our children from receiving care from well-
    trained and qualified pediatric investigators.
    Inclusion of children in clinical trials
        We commend this Committee's recognition and strong encouragement to
    the NIH in fiscal year 1996 ``to establish guidelines to include
    children in clinical research trials conducted and supported by the
    NIH.'' The NIH is developing these guidelines and we foresee the
    implementation later this year. We anticipate that significant advances
    will be gained in understanding the mechanism and improving the
    treatment of pediatric diseases. This new policy is an excellent
    initial step. Moreover, it reflects an important partnership and the
    commitment of the research community to work with the NIH in the
    development of proposals that will increase clinical research
    participation for children without mandating it. However, we believe
    that it should only be viewed as a first step. In order for this policy
    to be effective, it must be followed by other measures. For example,
    detailed and specific mechanisms must be outlined and established that
    will ensure implementation of the policy and a process should be
    established to assess the efficacy (or lack thereof) of the policy in
    generating both data about and therapeutic advances for children. We
    welcome and look forward to working with the NIH on these and other
    implementation issues of the new guidelines.
    Conclusion
        As pediatricians and researchers, we know first hand that there are
    many important opportunities for additional pediatric research which
    promise significant return on investment--not only improved health for
    our children today but also economic productivity tomorrow--as these
    children grow into adulthood. We support the increased investment in
    research in general and the new pediatric initiative in particular.
        In summary, the following list highlights programs, along with
    funding recommendations, of importance to children. The Public Policy
    Council joins with its many friends in other organizations and
    coalitions in presenting these recommendations.

    Recommendations for fiscal year 1999

    National Institutes of Health........................... $15,694,000,000
        NICHD (Child Health)................................     776,000,000
        Pediatric Research Initiative.......................      50,000,000
    Agency for Health Care Policy and Research..............     175,000,000
    Centers for Disease Control and Prevention..............   2,800,000,000
        Folic Acid Supplement Program.......................      20,000,000
    Health Resources and Services Administration............   3,734,000,000
        MCH Block Grant.....................................     705,000,000
        Health Professions Training (total).................     306,000,000
        General I.M./Pediatrics (Title VII).................      25,000,000
                                     ______

       Prepared Statement of the Association for Health Services Research
        Thank you, Mr. Chairman and Members of this Subcommittee, for the
    opportunity to submit this written statement on the role of health
    services research in improving our nation's health care. The
    Association for Health Services Research (AHSR) is a non-profit
    organization and the only national professional association devoted to
    improving the health status of Americans through health services
    research. AHSR represents more than 2,800 individuals who use and
    produce health services research and approximately 140 organizational
    members, including universities, insurers, providers, major employers,
    and health plans.
        Just as federal funding of biomedical research is essential to
    developing new treatments for disease, a continued strong federal
    commitment to health services research is needed to ensure that these
    discoveries are appropriately translated into the delivery of quality
    health care. By evaluating the effectiveness of health care and the
    ability of the health care system to deliver these services
    efficiently, health services research aids in the transfer of science
    from the laboratory into practical use by physicians and hospitals--
    essentially speeding the integration of biomedical research into
    patient care and disease prevention.
        Health services research also plays a critical role in educating
    consumers and purchasers about the care they receive, serving as a
    resource not just for disease treatment and prevention information, but
    also providing information, such as quality data for health plans, that
    enables consumers to better choose their health care. Furthermore, by
    examining the impact of the delivery and financing of health care on
    access and quality, health services research provides the evidence
    needed by policymakers to better determine health care priorities,
    particularly among vulnerable populations and within the Federal health
    Medicare and Medicaid programs.
        Demand for health services research among consumers, employers,
    providers, health plans, and policymakers has never been greater. As
    our nation's health care marketplace continues to become more
    sophisticated and more complex, health services research has become an
    essential resource for making informed decisions about how to deliver
    needed care efficiently. The goal is to identify which treatments work
    best for which patients and to assess the relative cost of those
    treatments so that health care providers and patients can make informed
    decisions about what regimens to choose.
                 advancing the role of health services research
        Our country is the world's leader in making some of the most
    remarkable and life-enhancing medical discoveries ever known.
    Integrating these discoveries into health care delivery requires a
    collaborative effort, particularly among the federal government's
    health research agencies. Health services research is not an activity
    about which one can say that if the federal government does not do it,
    the private sector and perhaps a state and local government will step
    in. Lack of federal support will mean a chronic under investment in
    health services research to improve the quality of health care. Each of
    the agencies plays an important role in influencing the delivery of
    health care in America and bring its own contributions or tools to the
    health care quality equation.
    Agency for Health Care Policy and Research
        The Agency for Health Care Policy and Research (AHCPR) serves as
    the focal point within the federal government for determining what
    works best in health care. The President has recommended an increase of
    $25 million for AHCPR, or a total fiscal year 1999 budget of $171
    million. These new funds will allow AHCPR to carry out several new
    directives recently mandated by Congress, including:
      --Continued research on improving the quality of care for Medicare
            and Medicaid beneficiaries, the uninsured, and children,
            focusing particularly on improving the management of chronic
            conditions such as congestive heart failure and osteoporosis;
      --Support for the Congressional initiative, the Children's Health
            Insurance Program, by providing scientific evidence on how to
            improve quality care for uninsured children;
      --The establishment of centers for education and research, as
            authorized in the Food and Drug Administration Modernization
            Act, to increase the awareness of new uses and the risks of
            drugs and other medical products;
      --Full implementation of the agency's private sector initiatives,
            including the Evidence-based Practice Centers, which provide a
            forum for physicians, health plans, employers, and researchers
            to work together in addressing prevalent and costly health
            conditions in American society; and
      --Increased awareness of the preventive care recommendations of the
            U.S. Preventive Services Task Force to encourage screening and
            immunizations.
        Recommendation.--Recognizing Congress' interest in improving health
    care quality, AHSR strongly believes that the health services research
    activities of AHCPR must be even further strengthened with additional
    funding. AHSR urges the Subcommittee to support an additional $4
    million for AHCPR for a total fiscal year 1999 budget of $175 million.
    Health Care Financing Administration
        The Health Care Financing Administration's research arm, the Office
    of Research and Demonstrations (ORD), guides the development and
    implementation of new health care financing policies and evaluates
    their impact on Medicare and Medicaid beneficiaries, participating
    providers, and states. ORD plays a critical role in creating a better
    understanding of how well the Medicare and Medicaid programs are
    performing in terms of access, quality, efficiency, costs, and
    beneficiary satisfaction and in how to further improve program
    performance.
        Recommendation.--AHSR supports the President's fiscal year 1999
    funding request of $50 million for the Health Care Financing
    Administration's Office of Research and Demonstrations.
    National Institutes of Health
        As the foremost biomedical and behavioral research institution in
    the world, the National Institutes of Health (NIH) also provides
    significant funding for health services research. While many Institutes
    fund health services research, NIH primarily supports health services
    research through:
      --Prevention and treatment programs of the National Institute of
            Alcohol Abuse and Alcoholism (NIAAA) and the National Institute
            on Drug Abuse (NIDA),
      --Studies on risk factors and cost-effective mental health care of
            the National Institute on Mental Health (NIMH), and
      --Information dissemination activities of the National Library of
            Medicine (NLM).
        Recommendation.--AHSR supports the President's fiscal year 1999
    budget request for a $1.1 billion increase for the National Institutes
    of Health and, specifically supports the increases proposed for NIAAA,
    NIDA, NIMH, and NLM.
    Centers for Disease Control and Prevention
        CDC's National Center for Health Statistics (NCHS) is the nation's
    principal vital and health statistics agency, conducting ongoing
    studies to meet the nation's health information needs. These tools
    provide the basis for research at AHCPR and NIH on specific diseases or
    within certain populations.
        Recommendation.--AHSR supports the President's request of $86
    million for NCHS.
    Conclusion
        The Congressional promise to the American people to improve the
    quality of health care will be difficult to keep unless it is coupled
    with increased health services research funding. We can not improve
    quality without a body of evidence-based science to guide clinicians
    and public and private policymakers about what works best and how to
    create systems to deliver good quality care at acceptable cost. The
    degree to which that body of evidence is available and the extent to
    which we succeed in achieving quality improvement in health care will
    depend directly on the level of funding support that is made available
    for health services research.
                                     ______

    Prepared Statement of Alan H. Richardson, Executive Director, American
                            Public Power Association
        The American Public Power Association (APPA) is the service
    organization representing the interests of the more than 2,000
    municipal and other state and locally owned utilities throughout the
    United States. Collectively, public power utilities deliver electric
    energy to one of every seven U.S. electric consumers (about 35 million
    people) serving some of the nation's largest cities. The majority of
    APPA's member systems are located in small and medium-sized communities
    in every state except Hawaii. APPA member systems appreciate the
    opportunity to submit this statement in support of fiscal year 1999
    appropriations for the Low Income Home Energy Assistance Program
    (LIHEAP).
        We fully support the Administration's fiscal year 1999 budget
    request of $1.1 billion for LIHEAP. APPA also supports the request for
    $300 million in emergency funds in fiscal year 1999 and $1.1 billion in
    advanced funding for fiscal year 2000. Because the majority of LIHEAP
    monies are needed during a short period of time in the winter months,
    advanced funding for LIHEAP is critical in enabling states to
    effectively plan for and administer the program.
        Funding cuts since LIHEAP's last reauthorization have forced a
    tightening of eligibility standards and, in some cases, significant
    reductions in benefit levels. According to the National Energy
    Assistance Directors' Association (NEADA), the primary educational and
    policy organization for state LIHEAP directors, the number of
    recipients has been cut by over one million households during the
    recent past and average benefits have declined by about 10 percent.
    Prior to the dramatic reduction in LIHEAP funding in fiscal year 1995,
    the program was serving 20 percent of the eligible population, with
    one-half of the recipients being elderly or disabled Americans living
    on fixed incomes. Without the assistance provided by LIHEAP, many would
    be forced to choose between paying their home energy bill or purchasing
    other necessities of life, such as food.
        As the debate over restructuring of the electric utility industry
    and the issue of providing and funding ``public benefits'' programs
    continues, some in Congress have stated their belief that electric
    utilities should assume the entire burden of energy assistance for low
    income customers as a cost of doing business. As these restructuring
    efforts take place at both the federal and state levels, the risks
    become greater that bills for residential customers, especially those
    with low incomes, will increase if retail markets are opened to
    competition. The need for full funding of LIHEAP remains critical in
    ensuring that all those in need of energy assistance receive help. APPA
    believes that any public benefits programs should not replace or
    supersede existing programs, such as LIHEAP, that are funded by federal
    appropriations.
        As evidence of commitment to low income assistance, public power
    systems across the country support a variety of programs providing help
    to low and fixed income customers. A survey conducted by the National
    Fuel Funds Network (NFFN) shows that publicly-owned utilities raised 14
    to 26 cents more per customer than other utilities in their efforts to
    assist low income and needy customers in paying their bills. Many
    public power systems provide special rates for low income households
    and some have residential conservation and demand side management
    programs designed to reduce energy consumption.
        In addition, the impact of welfare reform on energy assistance is
    just beginning to be felt and LIHEAP is likely to play an important
    role in the transition. Persons who will be leaving the public
    assistance rolls likely will be entering lower paying jobs and still
    will be confronted with large energy bills. These families remain at
    risk.
        LIHEAP is one of the outstanding examples of a successful state-
    operated program. The requirements imposed by the federal government
    are minimal and most important decisions are left to grantees.
        APPA urges this Subcommittee's favorable consideration of the
    Administration's fiscal year 1999 budget request for LIHEAP. Again,
    thank you for this opportunity to present our views.
                                     ______

      Prepared Statement of Deb Beck, President, Drug and Alcohol Service
                     Providers Organization of Pennsylvania
        My name is Deb Beck and I serve as the President of the Drug and
    Alcohol Service Providers Organization of Pennsylvania (DASPOP). DASPOP
    is a coalition of drug and alcohol prevention and treatment
    practitioners, programs, and drug and alcohol associations organized
    for advocacy on behalf of individuals and families in need of drug and
    alcohol prevention, education, intervention and treatment. DASPOP
    represents more than 365 organizations, programs and clinics, 1,900
    certified addictions professionals, 1,200 student assistance
    professionals, and others throughout Pennsylvania.
        I am submitting this testimony on behalf of DASPOP, the National
    Coalition of State Alcohol and Drug Treatment and Prevention
    Associations, which is composed of 33 state-based associations of
    treatment and prevention providers in 29 states and the Legal Action
    Center, a non-profit law and policy firm that represents individuals in
    recovery from and struggling with alcohol and drug problems and AIDS.
    Through federal and other funds, the programs I represent provide
    services to addicted parents and pregnant women who want a better
    future for their children, addicted individuals in the criminal justice
    system who can move to a sober and crime free life, and millions of
    children and adults at risk for developing alcohol and drug problems.
        We appreciate last year's increases for alcohol and drug prevention
    and research programs and the Committee's refusal to cut funding for
    alcohol and drug treatment programs. Providing strong support for
    alcohol and drug treatment, prevention, and research is imperative to
    maintain and improve the health and well being of our Nation. These
    programs effectively decrease alcohol and drug use, crime, health care
    costs, AIDS, and welfare dependence.
    Treatment and prevention needs in Pennsylvania and around the Nation
        Pennsylvania programs, such as Gaudenzia Inc. and the Diagnostic
    and Rehabilitation Center have been leaders in developing effective
    programs for women, youth, homeless individuals and other under served
    populations. However, according to a recent survey conducted by the
    National Association of State Alcohol and Drug Abuse Directors
    (NASADAD), on any given day in Pennsylvania there is a waiting list of
    1,400 individuals and families in need of treatment for alcoholism and
    drug dependence.
        Because of changes to welfare laws on both the state and federal
    levels, we are seeing increased demand for all levels of alcohol and
    drug prevention and treatment services supported by the Substance Abuse
    Prevention and Treatment Block Grant and we expect this trend to
    accelerate. Studies have demonstrated that 16-20 percent of the
    individuals on welfare have alcohol or drug problems. In Pennsylvania,
    an estimated 41,872 TANF (Temporary Assistance for Needy Families)
    recipients will be in need of addiction treatment. However, because of
    treatment capacity limitations due to public funding limits and
    obstacles created by some forms of managed care, many individuals will
    be unable to receive treatment during their period of welfare
    eligibility. It is imperative that sufficient treatment and prevention
    programs be available to help individuals and families move from
    welfare to work.
        Far too often, treatment is unavailable until the person is in need
    of intensive treatment or has entered the criminal justice system. In
    particular, residential treatment for women and children and for
    addicted adolescents is getting increasingly difficult to obtain. Lack
    of parity in private insurance coverage for alcohol and drug treatment
    and prevention services coupled with often ineffective and inaccessible
    consumer grievance procedures limit the ability of individuals and
    families to get help through private insurance and HMO coverage. This
    problem shifts individuals onto the public treatment system funded by
    the Substance Abuse Prevention and Treatment Block Grant.
    Recommendations
        For providers to supply these essential services in Pennsylvania
    and throughout the nation, we need your support. We urge Congress to
    adopt the following increases in fiscal year 1999 funding for alcohol
    and drug treatment, prevention, and research programs in the Substance
    Abuse and Mental Health Services Administration (SAMHSA), Department of
    Education, and National Institutes of Health. These are wise
    investments that will provide desperately needed services in
    communities across the country:
      --$1.51 billion for the Substance Abuse Prevention and Treatment
            Block Grant (an 11 percent increase over fiscal year 1998
            appropriations, including the $50 million appropriated in the
            ``Contract with America Advancement Act'' (Public Law 104-
            121)).
      --$180 million for the Center for Substance Abuse Treatment (CSAT) (a
            15-percent increase over fiscal year 1998) and $180 million for
            the Center for Substance Abuse Prevention (CSAP) (a 15-percent
            increase over fiscal year 1998), which includes $10 million for
            the High Risk Youth Grants program (a 66-percent increase over
            fiscal year 1998). These allocations would fund Knowledge
            Development and Application (KDA) activities and targeted
            capacity expansion programs that increase treatment and
            prevention services for high risk youth, ex-offenders, and
            women and children on welfare.
      --$606 million for the Safe and Drug Free Schools and Communities Act
            program (a 10-percent increase over fiscal year 1998).
      --$262.2 million for research at the National Institute on Alcohol
            Abuse and Alcoholism (NIAAA) (a 15-percent increase over fiscal
            year 1998) and $658.9 for research at the National Institute on
            Drug Abuse (NIDA) (a 25-percent increase over fiscal year
            1998).
    Treatment and Prevention Reduce Alcohol and Drug Use, Have Public
            Support
        Numerous studies have demonstrated the effectiveness of treatment
    and prevention in reducing alcohol and drug use. The most recent, the
    National Treatment Improvement Evaluation Study (NTIES), evaluated
    CSAT's demonstration programs and found sustained reductions in drug
    use. Drug use declined by 50.7 percent for crack, 55 percent for
    cocaine, 46.5 percent for heroin, and 50 percent for marijuana for the
    5,700 clients studied one year after completing treatment. NTIES also
    found a 77.6 percent decrease in violent crime, 18.7 percent increase
    in employment, and 10.7 percent decrease in welfare dependence. I have
    attached a copy of this study so that it may be included in the record.
        Prevention also has been shown to be effective in reducing use. A
    1997 NIDA study found that research-based prevention programs
    significantly reduce youth alcohol and drug use. A 1995 Cornell
    University study of 6,000 junior high students in New York State found
    that students who participate in school-based prevention programs are
    40 percent less likely to use alcohol and drugs than those who did not
    participate.
        Treatment has been repeatedly shown to be cost-effective. A 1994
    California study found that each $1 invested in substance abuse
    treatment and prevention saves taxpayers $7; a 1996 Oregon study
    determined the return to be $5.60 for every $1 invested.
        The public recognizes the value of treatment and prevention
    services. A 1995 Gallup poll found that 77 percent of Americans favored
    increased spending for alcohol and drug treatment services. Police have
    echoed the public's support for treatment. In a March, 1996 poll, 300
    police chiefs from around the country ranked drug abuse as the most
    serious problem in their communities--more serious than domestic
    violence, burglary and theft, or violent crime. Large-city police
    chiefs have repeatedly identified the shortage of treatment programs as
    the most serious limitation in their ability to address drug problems
    successfully.
    The treatment gap in our communities is growing
        Access to alcohol and drug treatment does not meet the current need
    for services. Only 50 percent of the individuals who need treatment
    receive it.\1\ Waiting lists for alcohol and drug treatment are six
    months long in some regions.
    ---------------------------------------------------------------------------
        \1\ Woodward, A., Epstein, J., Gfroerer, J., Melnick, D., Thoreson,
    R., and Willson, D. ``The Drug Abuse Treatment Gap: Recent Estimates.''
    Health Care Financing Review, Vol. 18, Number 3. Spring, 1997.
    ---------------------------------------------------------------------------
        Recent entitlement reforms will shrink existing alcohol and drug
    treatment and prevention services significantly at a time when more
    services will be required.
        Welfare reform has reduced treatment availability by making
    individuals convicted of drug felonies after August 22, 1996 ineligible
    for cash assistance or food stamps in many states. Residential
    treatment programs, particularly programs serving low-income women and
    children, have relied on the these funds to help support room and board
    costs of care. Without these funds, treatment availability will
    decrease. Welfare reform also requires states to move individuals from
    welfare to work within a given time period, or a state's federal
    welfare funding will be decreased. Several national studies have
    concluded that 16-20 percent of welfare recipients have alcohol and
    drug problems. This could translate into an additional 400,000-800,000
    adult welfare recipients needing treatment to move into recovery, off
    welfare, and into jobs.
        Loss of Supplemental Security Income (SSI) support for individuals
    with alcohol and drug problems also will increase the need for public
    treatment services. On January 1, 1997, an estimated 200,000
    individuals with alcohol and drug disabilities lost their SSI and
    Medicaid coverage. Less than 60,000 of these individuals have
    requalified for SSI and Medicaid under another disability. Methadone
    maintenance, residential, and outpatient programs have relied on
    Medicaid to provide treatment. These programs now face budget gaps
    which reduce treatment availability.
        In addition to the shortfalls created by these changes to SSI
    eligibility, the $50 million per year that Public Law 104-121 \2\
    appropriated to the Substance Abuse Block Grant for alcohol and drug
    treatment services was only appropriated for fiscal years 97 and 98 and
    will not be available in fiscal year 1999. Therefore, in fiscal year
    1999 there is an additional $50 million shortfall in treatment funding.
    ---------------------------------------------------------------------------
        \2\ The ``Contract with America Advancement Act,'' which ended
    eligibility for Supplemental Security Income (SSI) for individuals with
    alcohol and drug disabilities alone.
    ---------------------------------------------------------------------------
    Investment in prevention programs pays off: Further investment required
        The ``1997 Monitoring the Future Survey'' reported an encouraging
    result this year--after years of dramatic increases in illicit drug use
    among eighth graders, drug use remained stable for most drugs, and
    decreased slightly for marijuana and certain other substances among
    eighth graders from 1996-1997. Even more significant was the fact that
    for the first time since 1991, the 1997 survey indicated an increase in
    the percentage of eighth graders disapproving of occasional and regular
    use of various drugs, including marijuana, powder cocaine, and alcohol.
    Such shifts in attitudes among adolescents demonstrate the success of
    expanding prevention programs.
        In order to reduce the remaining high levels of alcohol and drug
    use among youth, further expansion of prevention programs must occur.
    Every adolescent should have access to alcohol and drug prevention
    services. Increased funding in fiscal year 1999 is needed to provide
    such necessary access to prevention services.
    Drug and alcohol treatment, prevention, and research funding must be
            expanded
        Substance Abuse Prevention and Treatment Block Grant--SAMHSA/
    CSAT.--The majority of SAMHSA's funding for drug and alcohol treatment
    and prevention is sent directly to states through the Substance Abuse
    Block Grant. The Block Grant is the primary source of federal funding
    for alcohol and drug treatment and prevention services, accounting for
    more than one-third of public funding for these services nationwide.
        Programmatic changes in SAMHSA's categorical grant program,
    described below, have left the Block Grant as virtually the only source
    of federal funding for community-based treatment and prevention
    services in SAMHSA. In tandem with dramatic decreases in demonstration
    funding, these changes will translate into a significant loss of direct
    services funding over the next several years.
        To help meet the pressing and increasing need for alcohol and drug
    treatment and prevention services, we urge Congress to fund the Block
    Grant at $1.51 billion for an overall increase of $200 million over
    fiscal year 1998 funding.
    SAMHSA/CSAT and CSAP--balancing the knowledge development and
            application (KDA) program with the need to target services to
            under served populations
        In fiscal year 1997, the Administration restructured CSAP and CSAT
    demonstrations into ``knowledge development and application'' (KDA)
    programs targeted at testing models of care in the community instead of
    increasing service capacity. Historically, these programs directly
    funded community-based services filling critical service gaps for,
    among others, pregnant women, women with children, people involved in
    the criminal justice system, the homeless, youth in high-risk
    environments, and community-based prevention partnerships. We are very
    concerned that these changes have translated into the loss of direct,
    community-based treatment and prevention services at a time of
    increasing need.
        We believe that funding at the Centers should be directed toward
    two major activities: the continuation of existing grants under the
    Knowledge Development and Application (KDA) Program and services
    capacity expansion for populations at high risk or which have increased
    need for treatment and prevention services. Targeting service funding
    to specific populations, such as high risk youth, offenders, and women
    and children on welfare, allows CSAP and CSAT to determine the most
    efficient and effective way to serve these populations at a time when
    treatment and prevention resources are at a premium. Indeed, the
    demonstration programs have been absolutely essential to our ability to
    test the effectiveness of services. Without them, for example, we would
    not have the outcome data I related earlier from NTIES about the
    effectiveness of federally funded treatment programs. Investment in the
    application of research findings is also a key Federal responsibility,
    and CSAP and CSAT, as the lead Federal agencies in prevention and
    treatment, are singularly equipped to translate research findings into
    innovative application programs.
        Despite studies demonstrating the efficacy of treatment and
    prevention services, funding for the Centers was dramatically reduced
    in fiscal year 1996. Currently CSAP is $87.5 million and CSAT is $52.4
    million below their fiscal year 1995 funding levels.
        For fiscal year 1999 we urge Congress to appropriate $180 million
    for CSAT and $180 million for CSAP, a $24 million increase for CSAT and
    a $29 million increase for CSAP over fiscal year 1998 funding. (CSAP's
    funding recommendation includes the recommendation of $10 million for
    the High Risk Youth Grant program).
    Safe and Drug Free Schools and Communities Act--Department of Education
        Research has demonstrated that school-based prevention programs
    that focus on personal and refusal skills development can significantly
    reduce alcohol and drug use. This program also supports student
    assistance programs that intervene with students who are beginning to
    use alcohol and drugs and refer them to appropriate services. These
    early intervention programs, which have no other source of federal
    funding, are critical to reaching youth at high risk early.
        For fiscal year 1999 we urge Congress to appropriate $606 million
    for the Safe and Drug Free Schools and Communities Act program, a $50
    increase over fiscal year 1998.
    Basic Research--NIH/NIAAA and NIDA
        Research into the causes, costs, and ``cures'' of alcoholism and
    drug dependence is an important component of our field's continuum.
    This past year NIDA scientists have observed biochemical changes in the
    brain stimulated by drug use with Positron Emission Topography (PET)
    and scientists at NIAAA have been making great strides in genetic
    research relative to alcoholism. These breakthroughs have demonstrated
    that alcoholism and drug dependence research hones our knowledge about
    addiction and improves our ability to treat and prevent it.
        We believe more resources are needed to ensure adequate research
    attention. We urge Congress to appropriate $262.2 million for NIAAA (a
    $35 million increase) and $658.9 million for NIDA (a $131.7 million
    increase).
    Conclusion
        Alcoholism and drug dependence continue to be among our Nation's
    most serious and costly health problems. The programs I have discussed
    are the first line of defense to protect our children from developing
    drug and alcohol problems, as well as the funding source of last resort
    to treat Americans who have already developed these problems. As a
    society, we must keep these programs strong. Thank you.
                                     ______

              Prepared Statement of the National Kidney Foundation
        The National Kidney Foundation (NKF) is the nation's largest
    voluntary health organization devoted to the care of patients with
    kidney disease, as well as the prevention and cure of diseases of the
    kidney and urinary tract. The NKF consists of more than 30,000 lay and
    professional volunteer constituents. The NKF is a member of the Council
    of American Kidney Societies (CAKS), and we support the testimony that
    has or will be presented by the other members of that Council: the
    American Society of Nephrology, the American Society of Pediatric
    Nephrology, the American Society of Transplant Physicians and the Renal
    Physicians Association.
        The NKF is most appreciative of the significant support that the
    Committee has provided to the National Institutes of Health (NIH)
    during the last few years. We know that the members of the Committee
    have been faced with difficult funding decisions for many worthy
    programs, and we thank you for making the NIH a priority. We are
    particularly appreciative of the 7.5 percent increase that the
    Committee provided to the National Institute of Diabetes and Digestive
    and Kidney Diseases (NIDDK) for fiscal year 1998.
        We also wish to thank Congress for its expressed interest and past
    support of the problem of kidney disease caused by pain killers. The
    NIDDK has launched a new initiative to identify the prevalence of
    analgesic nephropathy in the United States, as recommended in the House
    Committee Report to the fiscal year 1998 appropriations bill.
    Similarly, the Committee's concern about the kidney complications of
    diabetes has resulted in an NIDDK Request for Applications concerning
    diabetic nephropathy. These are important initiatives which have been
    made possible by your support, and we are grateful for it.
        Resolutions have been introduced in the House and Senate in support
    of doubling the funding for NIH over five years. We are encouraged by
    this broad and growing support throughout Congress. We urge the
    appropriate Committees, including the House and Senate Budget
    Committees, to support this effort through the identification of
    additional resources beginning in fiscal year 1999. This additional
    funding is needed to maintain our country's lead in scientific
    investigation at a time when traditional sources for funding
    fundamental investigation and clinical research are diminishing and
    threatened to disappear. We would like to request a 15 percent increase
    in the appropriation for NIDDK. This commitment of additional resources
    is essential to continue the support of new opportunities for improving
    the health of Americans which biomedical research has provided and
    continues to offer today. To that end we would like to recommend to you
    some new research opportunities and challenges in the area of kidney
    disease and to solicit your support for them.
        Proteinuria.--There are 300,000 Americans with irreversible kidney
    failure or End-Stage Renal Disease (ESRD) who require dialysis or a
    transplant to survive. We estimate that there are ten times as many
    individuals who have detectable protein in the urine, which is an early
    indication of progressive kidney disease, well before the presence of
    any other clinical or laboratory evidence of the problem. These
    Americans should become the focus of new attention for intervention and
    prevention. It is these individuals, with early kidney disease
    manifested by proteinuria, who are more likely to progress to ESRD.
    More importantly, there is a much larger number of individuals who have
    proteinuria whose kidney disease will not progress to ESRD, but who are
    still at greater risk of heart attack and stroke than Americans without
    evidence of protein in the urine. How many? No one knows for sure right
    now because not enough work has been done in this important public
    health area. We estimate the number to be in the millions.
    Nevertheless, very few of these individuals are identified or receive
    the care and attention that could prevent their morbidity and premature
    mortality. We need to know more about the incidence and prevalence of
    proteinuria, as well as the efficacy of interventions which could
    address this public health problem. The NKF is strongly committed to
    that goal. We recommend that the Kidney Program of the NIDDK be
    encouraged and provided support to gather basic epidemiologic
    information on this high risk segment of the population and to explore
    the appropriate strategies for the early identification and treatment
    of those at risk.
        Nutrition.--Malnutrition is a common complication of chronic
    dialysis patients, occurring in about 40 percent of such individuals.
    Other than age, nutritional status is the most potent predictor of
    mortality in patients with ESRD. These poorly nourished patients are
    more susceptible to infection and are more likely to be hospitalized
    than other patients. Some of these patients are compromised
    nutritionally because of the poor appetite which often accompanies ESRD
    and because of the dietary constraints which they must follow. These
    factors are complicated by metabolic problems associated with kidney
    failure which are not fully understood. Without that understanding, we
    cannot comprehensively address the problem of malnutrition in ESRD
    patients. As a first step, we recommend that the NIDDK sponsor a
    demonstration project, in conjunction with the Health Care Financing
    Administration (HCFA), which would document the efficacy of the various
    interventions that are currently available in improving the nutritional
    status of ESRD patients, including that of intradialytic parenteral
    nutrition. We ask Congress at this point to endorse such an initiative
    by providing language directing HCFA and NIDDK to work with the health
    industry to develop a clinical trial that will investigate whether
    nutritional therapy of malnourished chronic dialysis patients will
    improve their health and survival.
        Transplantation.--According to the United Network for Organ Sharing
    (UNOS) 19,817 Americans received kidney transplants between April 1991
    and March 1993. As of April 1997, 2,588, or 13 percent, of these
    individuals experienced a rejection of their transplant and had to
    return to dialysis to await retransplantation. We need to find better
    ways to prevent kidney transplant rejection. The National Institute of
    Allergy and Infectious Diseases (NIAID) has taken the lead in this
    search. These efforts must be redoubled. There is a second, and perhaps
    greater, opportunity for transplant research. As of January 21, 1998,
    there were 38,387 Americans waiting for a kidney transplant.
    Unfortunately only 11,000 kidney transplants were performed last year.
    The gap between those who need a kidney transplant and the availability
    of human organs donated for transplantation continues to grow every
    day. The greatest challenge facing the transplant community is the
    scarcity of organs for transplantation. Currently, xenotransplantation
    (animal to human transplants) is the only process on the horizon which
    could meet the need for additional transplants. As we approach the
    millennium, it is time to foster efforts which could answer the
    question of whether xenotransplantation is a viable option to solve the
    problem of supply and demand in kidney transplantation. With additional
    funding, NIAID would be able to support investigation and seek
    solutions to this problem.
        Cardiovascular Disease.--Heart Disease and Arteriosclerosis are the
    leading causes of morbidity and mortality of patients with kidney
    disease during its progressive stage to ESRD, after the onset of ESRD
    while on dialysis, and after successful kidney transplantation. Without
    careful study of the accelerated course of cardiovascular complications
    in kidney disease, we cannot address this issue comprehensively or
    provide solutions to the leading cause of death of the hundreds of
    thousands of patients with kidney disease, those on dialysis and those
    who are transplanted. As a first step, the NIDDK and the National
    Heart, Lung, and Blood Institute (NHLBI) should be encouraged to
    support basic and clinical research in this high risk group to
    determine the role of the interventional measures that have been shown
    to be promising in the general population.
        Vascular access.--Access to the vasculature is necessary to provide
    hemodialysis to patients with ESRD. It is vital to maintain the
    functioning of grafts and fistulas as long as possible. Yet, occlusion
    and complications of vascular access, including infection, constitute
    the single largest cause of hospitalization of dialysis patients, and
    are a major contributor to the increase in the cost of the Medicare
    ESRD Program. Support is needed for research to develop new techniques
    for the early identification of access problems and of new ways to
    resolve them.
        We hope that our testimony has demonstrated the importance of
    research and its potential for preventing kidney disease and improving
    the lives of kidney patients. We would be pleased to provide any
    additional information that the Committee may wish.
                                     ______

      Prepared Statement of Katherine N. Clapp, President, Fraxa Research
                                   Foundation
        My name is Katherine N. Clapp. I am from West Newbury,
    Massachusetts. My husband, Dr. Michael Tranfaglia, and I have two
    children with Fragile X, the most common inherited cause of mental
    retardation. Most Fragile X children are limited to an I.Q. of 20 to 60
    and require a lifetime of special care, at an average cost of over two
    million dollars per person. The emotional cost to affected families is
    incalculable. Like cystic fibrosis and muscular dystrophy, Fragile X is
    caused by a single gene and will someday be curable. Yet public funding
    for Fragile X research is strikingly low, in spite of its high
    prevalence and cost.
        In 1994, my husband and I joined with other Fragile X parents to
    form FRAXA Research Foundation, to fund research in universities around
    the country. The first year we raised $39,000, enough to partially fund
    two postdoctoral fellowships. Four years later FRAXA has 20 chapters,
    2000 contributors, and, in 1997, raised over $500,000 for research. We
    are currently funding 9 grants--all without a single government dollar.
    This growth was possible only because of the ground swell of support we
    received from families around the country affected by Fragile X.
        I am here to make two suggestions about what the Congress can and
    should do to help over 90,000 Americans with Fragile X:
      --Fragile X research is vastly underfunded (see Attachment No. 1).
            Present funding levels by the National Institute of Child
            Health and Human Development (NICHD) are woefully inadequate in
            light of this disease's prevalence in the population, the
            potential for the development of a cure, and the significance
            that Fragile X research has for related disorders such as
            autism. Congress should move quickly to correct this deficit. A
            modest investment made now will pay off handsomely, in terms of
            dollars saved and reduced human suffering (see Attachment No.
            2).
      --Newborns can be given a simple, inexpensive, and accurate DNA test
            for Fragile X (along with, and using the same blood spot as,
            the now-routine PKU test). This permits early diagnosis and
            intervention. Congress should provide funding to The Centers
            For Disease Control (CDC) and the Health Resources and Services
            Administration (HRSA) to develop and implement a nationwide
            newborn testing program (see Attachment No. 3).
    Prevalence
        Fragile X--sometimes called Fragile X ``Syndrome'' although its
    occurrence is now clearly definable by DNA testing--affects one in
    every 2,000 males and one in every 4,000 females. One in 400 women
    carries this disease--even though most of these carriers have never
    heard of it.
        Most studies estimate that 80 to 90 percent of affected individuals
    remain undiagnosed. In part, this is because:
      --It is relatively newly-discovered.
      --DNA testing is even more recently discovered.
      --Diagnosis is often difficult during the first few years of life.
    Potential for Treatment
        Researchers discovered the Fragile X gene on the X chromosome in
    1991. In individuals with Fragile X, this gene fails to produce a
    single protein needed in the brain, which often leads to mental
    retardation, behavior challenges such as aggression and anxiety, and
    seizures. Current research is unveiling the function of this protein
    and how it is involved in learning and memory. Other ongoing research
    is exploring ways to replace or compensate for the protein or to find
    medications that can ameliorate symptoms. Fragile X research is of
    critical importance for several reasons:
      --It will lead to an effective treatment or cure for Fragile X.
      --It is likely to lead to understanding and treatment of many cases
            of autism, since about 10 percent of autistic individuals have
            Fragile X. Fragile X is unique among the autism-spectrum and
            developmental disorders because its cause is known, which makes
            it an excellent research model for these disorders.
      --It will shed light on human intelligence and learning in general
            since Fragile X is the only single-gene disease known to
            directly impact human intelligence.
        Last year NICHD spent about 2 million dollars on Fragile X
    research, just 4 times the amount our tiny foundation raised for
    research. Only when the Congress and the NICHD expand and accelerate
    this research will the exciting projects on the drawing board reach the
    laboratories. Your Committee should help the NICHD to expand its
    Fragile X research.
    Newborn Screening
        Newborn screening of all children can be carried out by means of a
    simple blood test. Presently, every newborn donates a drop of blood for
    PKU and other tests. Each state has its own program, generally assisted
    by the Health Resources and Services Administration of the Department
    of Health and Human Services under Title V of the Social Security Act.
    Testing for Fragile X should be offered to new parents, along with
    current tests and using the same drop of blood. Dr. Roger Stevenson of
    the Greenville Genetic Center of Greenville, South Carolina--the Mayo
    Clinic of Genetics--estimates that adding this test would cost only
    about $5 per child. This small price would spare Fragile X families the
    torments of uncertainty and mistaken diagnoses that commonly mark the
    early childhood years. It would provide families the information they
    need for future family planning, and it would enable them to seek early
    interventions--educational and medical--that have been shown to improve
    lives dramatically. The Centers for Disease Control in cooperation with
    the Health Resources and Services Administration will need funds to
    develop and implement this program for the states. Please fund such
    testing.
    Conclusion
        Given its prevalence, I am sure you agree that research on Fragile
    X is underfunded. No one ever dies of Fragile X; life span is normal.
    But the hopes and dreams of Fragile X parents do die. These children
    lose the chance to lead normal, productive lives, and their basic needs
    and sustenance often become the responsibility of American taxpayers.
    Children born with Fragile X lack only one vital protein. We need your
    help to support the research that will show us how to replace or
    compensate for this protein and enable people with Fragile X to live
    normal, productive lives. Only major research can make this happen. My
    children, Andy and Laura, and thousands of other precious children
    deserve the chance this research will provide, and I hope you will make
    it happen as a priority by funding NICHD, CDC, and HRSA Fragile X
    programs.
        Thank you.
        I enclose ``Brain Briefings'', a 1998 Society for Neuroscience
    publication on Fragile X.

                                                    ATTACHMENT NO. 1
    ----------------------------------------------------------------------------------------------------------------
                                                               U.S.                                           Per
                Genetic disease               Incidence   population \1\      NIH research     Amount \2\    person
    ----------------------------------------------------------------------------------------------------------------
    Down Syndrome..........................      1/1,000       275,000                  1996         16.7         61
                                                                                        1997         17.0         62
                                                                                 1998 (est.)         18.0         65
                                                                             1999 (est.) \3\         19.0         69
    Batten's disease.......................    1/100,000         2,750                  1996          3.0      1,090
                                                                                        1997          3.0      1,090
                                                                                 1998 (est.)          3.0      1,090
                                                                                 1999 (est.)          4.0      1,455
    Duchenne's Muscular Dystrophy..........      1/1,000       275,000                  1996         10.8         39
                                                   males                                1997         14.0         51
                                                                                 1998 (est.)         14.0         51
                                                                                 1999 (est.)         16.0         58
    Fragile X..............................  \4\ 1/3,000        91,666                  1996          1.8         20
                                                                                        1997          2.0         22
                                                                                      1998NA                      NA
                                                                                      1999NA                      NA
    ----------------------------------------------------------------------------------------------------------------
    \1\ Based on a U.S. population of 275 million.
    \2\ Millions of dollars. Figures obtained from NIH Budget Office for Down syndrome, cystic fibrosis, Batten's
      disease, and Duchenne's muscular dystrophy. The Office did not have figures for Fragile X, because the amounts
      were too small.
    \3\ Based on President's projected budget.
    \4\ 1 in 2,000 males; 1 in 4,000 females.

                                Attachment No. 2
        recommendations for nichd fragile x research funding priorities
        We urge the Committee to incorporate the following language in its
    report:
        Fragile X.--The Committee commends the NICHD for its continuing
    support for Fragile X research, and includes funds necessary for the
    Institute to further expand and strengthen its research activities on
    this disorder. Fragile X is the most common inherited cause of mental
    retardation. It is unique among autism-spectrum and developmental
    disorders because NICHD-funded research has identified the cause: the
    failure of a single gene to produce a specific protein. Although the
    protein can be produced synthetically, no cure or effective specific
    treatment has been found. The Committee urges the Institute to increase
    its efforts to find a cure for Fragile X, and to expand our
    understanding of the role of the Fragile X protein in brain function.
    The Committee is pleased that the NICHD is co-sponsoring with the FRAXA
    Foundation an international Fragile X conference planned for December
    of this year. The Committee looks forward to receiving a report on the
    recommendations and goals set at the conference. An important portion
    of the conference will address increased research efforts to develop
    effective treatments for individuals with Fragile X, including testing
    of existing medications and development of new psychopharmacologic
    medications that are safe and effective. The Committee also is pleased
    that NICHD has added Fragile X patients to its expanded program of
    autism research, and urges the Institute to include Fragile X patients
    in the pediatric psychopharmacology clinical trials being conducted by
    autism investigators as another effort to develop safe and effective
    medications for individuals with Fragile X.
                                Attachment No. 3
                 recommendations for fragile x newborn testing
    Public Health Needs
        Newborn screening to identify at birth underlying conditions which
    can cause or contribute to disease, disabilities, and death represents
    a tremendous unmet opportunity for preventing morbidity, disability and
    mortality. Currently, newborn screening programs for phenylketonuria
    (PKU), sickle cell anemia, and hypothyroidism have demonstrated the
    benefits of early intervention in preventing the consequences of these
    diseases. Nutritional intervention early in life prevents mental
    retardation in children with PKU, the use of penicillin prophylaxis
    prevents severe bacterial infections in children with sickle cell
    disease, and hormone replacement prevents mental retardation in
    children with hypothyroidism.
        In light of advances resulting from the Human Genome Project and
    related research, it is now possible to extend newborn screening
    programs to a wide range of conditions, including Fragile X. As more
    and more disease genes are identified, the need for a systematic
    approach to newborn testing becomes increasingly apparent. Public
    health policy leadership is needed to meet these new challenges. This
    will require a concerted effort among national and state public health
    agencies.
        We urge Congress to provide $20 million for the Centers for Disease
    Control (CDC) and the Health Resources and Services Agency (HRSA), in
    order to develop and implement a strategy for evaluating and expanding
    newborn screening programs, including Fragile X. Together, CDC and HRSA
    can evaluate scientific and programmatic developments, translate this
    knowledge into public health program guidance, and develop
    recommendations to states for strengthening newborn screening programs.
        In particular, CDC would:
      --Hold public and professional discussions on the needs, strategies
            and benefits of newborn testing, early intervention, and
            treatment
      --Evaluate public health policy and strategies for newborn testing
            programs, and perform public health research to develop
            recommendations for strengthening and expanding effective
            approaches
      --Assess and develop methods for applying and evaluating new
            laboratory tests in newborn public health testing programs
      --Establish and evaluate the effectiveness and safety of pilot
            demonstration projects
      --Provide technical, laboratory, and evaluation assistance to states
            for implementation of newborn screening recommendations.
        HRSA would:
      --Provide technical assistance and evaluation to states to develop
            systems coordination for access to a ``medical home'' for
            families identified
      --Facilitate the development of systems of retrieval of those
            identified by the newborn testing for genetic counseling,
            follow-up and medical treatment
      --Establish a system to evaluation patient satisfaction of the pilot
            programs.
                                     ______

           Prepared Statement of the American College of Rheumatology
        The American College of Rheumatology (ACR) is an organization of
    physicians, health professionals, and scientists that serves its
    members through programs of education, research and advocacy that
    foster excellence in the care of people with arthritis and rheumatic
    and musculoskeletal diseases. The ACR is pleased to provide written
    testimony to the Senate Appropriations Subcommittee on Labor, Health,
    and Human Services regarding the Medicare Physician Practice Expense
    Regulations. The College's testimony will refer to the findings and
    recommendations of a report on physician practice expense by the
    General Accounting Office (GAO), and to recommendations that the
    Medicare Payment Advisory Commission (MEDPAC) made in its March 1
    report to Congress.
    GAO Report on HCFA's RBPE Implementation Methodology
        ACR has had the opportunity to review the final GAO report on
    HCFA's methods for revising physician practice expense payments, and we
    commend the GAO for accomplishing this significant task within a
    relatively tight timeline. Furthermore, we concur with the vast
    majority of the report's findings. The College's testimony will focus
    on the following aspects of the GAO report: (1) HCFA's methodology for
    developing direct cost estimates; (2) Linking; and (3) Use of physician
    nurses in the hospital setting.
        HCFA's Methodology for Developing Direct Cost Estimates.--The GAO
    report states that ``HCFA used an acceptable method to develop direct
    cost estimates.'' The ACR fully concurs with this assessment. ACR
    believes that the Clinical Practice Expert Panel (CPEP) methodology
    utilized to generate data on direct practice costs was an open and
    inclusive process that resulted in values that will serve as an
    effective starting point for developing appropriate practice expense
    RVUs. We reject the opinion of many stakeholders that the data is
    fundamentally ``flawed''. The intent of the CPEP process itself was to
    develop a body of data using a multidisciplinary, representative sample
    of physicians and other experts (nominated by specialty societies) with
    expertise regarding the practice expenses under their review. Every
    opportunity was provided for all affected parties to provide input. By
    the time the official transition to resource-based practice expenses
    begins in May, 1998 with the release of the proposed rule on the 1999
    Medicare Fee Schedule, physicians and other interested parties will
    have been given over ten formally promulgated opportunities to provide
    input into this process. In fact, physicians themselves will have
    actively participated in the actual development of RBPEs through every
    stage of the process, including participation in the original CPEPs, in
    the validation panels conducted in October, 1997, and the
    multispecialty panel meeting convened in December. HCFA has also
    provided a variety of other forums for physician groups to convey their
    opinions to the agency. For these reasons, we believe that the agency's
    actions to date--and the plans for future opportunities to submit
    views--already fully meets Congressionally mandated requirements in the
    Balanced Budget Act of 1997 that HCFA ``consult with organizations
    representing physicians regarding data and methodology to be used.''
        We also fully concur with the passage in the report indicating that
    ``Other methods for estimating direct expenses have limitations.'' The
    College agrees that the expense of alternative approaches such as mail
    or on-site surveys (both in time and actual cost) makes them, by
    definition, prohibitive. Additionally, these types of data gathering
    efforts are invariably plagued by low response rates, as noted in GAO's
    report, and are often hampered by design bias and potentially even by
    gaming. The report's stated concerns that activity-based or cost-based
    accounting do not provide the specificity needed to adjust the Medicare
    fee schedule, are also shared by ACR.
        It has come to the attention of the College that the coalition of
    procedurally-oriented groups has suggested that HCFA's current approach
    be replaced by a cost-accounting based methodology generated by a
    ``public-private partnership'' of HCFA and the medical specialty
    society community. The ACR finds such a proposal problematic in several
    ways. First, we believe that such an approach would result in a top-
    down RVS that would mirror the inequities in the current charge-based
    system--i.e., those services that are now reimbursed more for their
    practice expenses because of Medicare's charge-based system would still
    get more; those services that are reimbursed less would still get less.
    This is because the American Medical Association's Socioeconomic
    Monitoring Survey (SMS) data, on which the proposal would be based,
    itself is distorted by the current charge-based RVUs. HCFA's approach
    is a bottom up approach--figure out the resources that are required to
    perform each service, and then convert them into a relative value
    system (RVS), resulting in the Congressionally mandated resource-based
    relative value system.
        The College also believes that HCFA has been engaging the
    professional medical community in a ``public-private partnership'' on
    RBPEs all along, as evidenced by the preponderance of opportunities for
    input afforded to the specialty societies. Finally, it is our opinion
    that use of a cost-accounting approach would merely maintain the status
    quo where procedurally-oriented services are over-reimbursed at the
    expense of evaluation and management services.
        Linking.--ACR believes that the issue of whether to utilize the
    redundant CPT codes reviewed by the CPEPs to link the direct cost
    estimates generated by the separate CPEPs remains fundamental to the
    development of accurate resource-based practice expenses. The College
    concurs with HCFA's assertion in last June's proposed rule that the
    relative relationships within CPEPs are correct, but the relationships
    between CPEPs need to be normalized to bring the relative estimates to
    a single scale. Accordingly, ACR agrees with the GAO report that the
    CPEP estimates need adjustment and that linking is desirable. In the
    absence of such linking, the proposed RBPE RVU system would not truly
    contain ``relative'' values.
        GAO's report does raise questions regarding the specific linking
    formula utilized by HCFA, primarily regarding anomalies caused by the
    formula and the redundant CPT codes used to develop the links. While we
    believe that HCFA should remain open to the possibility of revising its
    linking methodology if credible alternate approaches are identified
    that can develop appropriate practice expense values, we reject the
    notion that the proposed linking methodology must be overhauled,
    reconstructed or abandoned. We therefore concur with the opinion of the
    Physician Payment Review Commission (PPRC) staff cited in the report
    that it is not necessary for HCFA to select new redundant codes,
    assemble new CPEPs, and estimate the linking regression on new data. It
    is our firm belief that the overall validity of the practice expense
    RVUs is dependent on HCFA adopting policies and rules to establish an
    appropriate relativity between the staff time estimates by the varying
    CPEPs. Therefore, while the College is not wedded to the specific
    linking model currently outlined by HCFA, we agree with the GAO report
    in the strongest possible terms that the CPEP estimates need some type
    of adjustment, and we believe a linking methodology is an appropriate
    approach.
        Use of Physician Nurses in the Hospital Setting.--The GAO report
    concluded that ``HCFA appropriately disallowed nearly all expenses
    related to staff that accompany physicians to the hospital since there
    is no available evidence that these expenses are not already being
    reimbursed or are a common practice.'' Some surgical groups have argued
    that surgeons often bring their nurses into the hospital and that these
    costs should be reimbursed by HCFA. GAO staff has been told by surgical
    groups that new evidence had been given to HCFA in response to the
    October rule-making notice that supports the claim that this is a
    widespread practice. GAO staff has said that it planned to examine the
    evidence and determine if it should modify its conclusion. ACR
    recommends that the GAO ask HCFA to independently validate any such
    evidence, to determine if it is the usual practice for a typical
    Medicare patient, before agreeing that such expenses should be allowed.
    MEDPAC Report on Medicare Payment Policies
        MEDPAC has recommended that HCFA not adopt its proposal to reduce
    payments for procedures provided in conjunction with an office visit or
    other E/M service without further study. The ACR strongly agrees with
    this recommendation. It is the opinion of the ACR that extending the 50
    percent discount for multiple procedures to non-surgical services would
    be highly inappropriate, at best. We believe that using reductions for
    multiple surgical procedures performed through a single incision as a
    template for reducing multiple diagnostic procedures performed during
    an office visit or other E/M services is simply illogical. In these
    situations, the only savings in physician work or practice expenses
    that could be realized is a minor reduction in the administrative time
    associated with scheduling another appointment or pulling a chart,
    which is to say the savings in practice costs would be neglible. In
    light of the lack of data provided to support making such a dramatic
    change in reimbursement for services rendered during an E/M visit, we
    strongly urge HCFA to at least pilot-test the effects of such a
    proposal before implementation.
        We also concur with the MEDPAC recommendation that a volume and
    intensity adjustment, or behavioral offset, should not be used. In its
    June 18, 1997 propose rule, HCFA stated that it intended to assume that
    50 percent of the reductions in payments for specific procedures will
    be offset by an increase in volume and intensity. The effect of this
    assumption is to increase the amount of reductions for some procedures,
    and reduce the expected gain from others. The College agrees with
    MEDPAC's view that HCFA's experience with implementation of the RBRVS
    does not support the need for such a volume and intensity adjustment.
    Further, MEDPAC correctly that the sustainable growth rate for
    physician services, also mandated by the BBA, already corrects for any
    increase in the volume and intensity of physician services. ACR
    strongly urges Congress to advise HCFA that application of a volume and
    intensity offset to the PE-RVUs is inconsistent with requirement that
    resource-based practice expenses be implemented in a budget neutral
    manner.
    Conclusion
        The ACR concurs with virtually all of the findings outlined in the
    GAO report. We believe that HCFA did utilize an acceptable method to
    develop direct cost estimates, and that while the specific proposed
    formula for linking the estimates is not perfect, some sort of linking
    or normalization is desirable. As was indicated by PPRC staff in the
    GAO report, drastic overhaul of the process, or implementation of an
    alternative approach, is not necessary. ACR agrees with the GAO that
    HCFA was correct in disallowing the costs associated with nurses who
    accompany a surgeon into the hospital, without independently verifiable
    data that this is a typical practice. The College also concurs with the
    recommendations relating to practice expense made by MEDPAC. We believe
    that it would be highly premature for HCFA to proceed with its
    recommendation to reduce payments for procedures provided in
    conjunction with an office visit or other E/M service without further
    study. We also agree that history does not support the need for a
    volume and intensity adjustment, and that the institution of the
    sustainable growth rate system makes this adjustment unnecessary.
                                     ______

      Prepared Statement of the National Association for State Community
                               Services Programs
        The National Association for State Community Services Programs
    (NASCSP) thanks this committee for its continued support of the CSBG
    and seeks an appropriation of $505 million for the state grant portion
    of the Community Services Block Grant (CSBG). The amount appropriated
    for the state grant portion in fiscal year 1998 is $491 million.
    NASCSP's request includes an increase only for inflation. Funding for
    the CSBG block grant to the states and other programs funded under the
    CSBG for fiscal year 1998 was $542 million. The President's budget
    request for fiscal year 1999 is $491 million. This amount is for the
    block grant to the states and does not include the discretionary
    programs generally included in the full block grant.
        For the past two years language has been added to the Labor HHS
    Appropriations bill that addresses the use of carry-over funds at the
    local level. The language restricts the ability of the states to
    administer the CSBG and NASCSP therefore asks that it not be included
    in the fiscal year 1999 appropriations bill.
        NASCSP is the national association that represents state
    administrators of the Community Services Block Grant (CSBG), and state
    directors of the Department of Energy's low-income Weatherization
    Assistance Program.
    Background
        The Community Service Block Grant was created as part of the
    Omnibus Budget and Reconciliation Act of 1981, during the Reagan
    Administration. The CSBG is a unique block grant that has successfully
    devolved decision making to the local level. Federally funded with
    oversight at the state level, the CSBG has maintained a local network
    of over 1,100 agencies with $5 billion in federal, state, local and
    private resources. Operating in almost every county in this country and
    serving over 11 million low-income persons, local agencies, known as
    Community Action Agencies (CAAs), provide services based on the
    characteristics of poverty in their communities. For one town this
    might mean securing jobs, for another developing affordable housing and
    in rural areas it might mean providing access to health services or
    developing a rural transportation system.
        Since its inception, the CSBG has shown how a partnership between
    states and local agencies can work to the greater benefit of citizens
    in each state. We believe it should be looked to as a model of how the
    federal government can best support self-sufficiency for low-income
    persons in a decentralized, non-bureaucratic and accountable way.
        Long before the creation of the Temporary Assistance for Needy
    Families (TANF) block grant, the CSBG was setting the standard for
    private-public partnerships that could work to the betterment of local
    communities and low-income residents. Family oriented while promoting
    economic development and individual self-sufficiency, the CSBG relies
    on an existing and experienced community-based service delivery system
    of CAAs and other non-profit organizations to produce results for its
    clients.
    Major Characteristics of the Community Services Network
        Adaptability.--CAAs provide a flexible local presence that
    governors have mobilized to deal with emerging poverty issues, i.e.,
    CAAs have demonstrated success in moving persons from welfare to work
    and in developing self-sufficiency among low-income persons.
        Leveraging Capacity.--For every CSBG dollar they receive, CAAs
    leverage over $4 in non-federal resources (state, local, and private)
    to coordinate efforts that improve the self-sufficiency of low-income
    persons and lead to the development of thriving communities. In some
    states that number is even higher. For instance in 1997 in New
    Hampshire, the CAAs leveraged $11 in non-federal resources for every
    CSBG dollar they received.
        Volunteer Mobilization.--CAAs mobilize volunteers in large numbers.
    In fiscal year 1995, the most recent year for which national data are
    available, the CAAs elicited nearly 25 million hours of volunteer
    efforts, the equivalent of 12,250 full-time employees. Using the
    minimum wage, these volunteer hours are valued at more than $100
    million.
        Emergency Response.--CAAs are utilized by federal and state
    emergency personnel as a front line resource to deal with emergency
    situations such as floods, hurricanes and economic downturns. They are
    relied on by families in their community to deal with local hardships,
    such as a house fire.
        Locally Directed.--CAAs are guided by tri-partite boards of
    directors. These boards consist of one third-elected officials, one-
    third low-income persons and one-third representatives from the private
    sector. The boards are responsible for establishing policy and
    approving business plans of the local agencies. Since these boards
    represent a cross section of the local community, they guarantee that
    CAAs will be responsive to the needs of the community.
        The statutory goal of the CSBG is to ameliorate the effects of
    poverty while at the same time working within the community to
    eliminate the causes of poverty. The primary goal of every CAA is self-
    sufficiency for its clients. This is a long-term activity that requires
    multiple resources. This is why the partnership of federal, state,
    local and private enterprise has been so vital to the successes of the
    CAAs.
    What do Local CSBG Agencies Provide?
        Since Community Action Agencies operate in rural areas as well as
    in urban areas, it is difficult to describe a typical Community Action
    Agency. But, one thing that is common to all is the goal of self-
    sufficiency for all of their clients. This may mean providing daycare
    for a struggling single mother as she completes her General Equivalency
    Diploma (GED), moves through a community college course and finally is
    on her own supporting her family without federal assistance. It may
    mean assisting a substance abuser as he seeks employment. Many of the
    Community Action Agencies' clients are persons who are experiencing a
    one-time emergency, others have lives of chaos engendered by many
    overlapping forces--a divorce, sudden death of a wage earner, illness,
    lack of a high school education, closing of a local factory or (as was
    the case in the Midwest in the eighties) the loss of family farms.
        CAAs provide access to a variety of opportunities for their
    clients. Although they are not identical, most will provide some if not
    all of the services listed below; employment and training programs;
    micro business development help for low-income entrepreneurs; a variety
    of crisis and emergency safety net services; local community and
    economic development projects; housing and weatherization services;
    Head Start; nutrition programs; family development programs.
        CSBG funds many of these services directly. Even more importantly,
    CSBG is the core funding which holds together a local delivery system
    able to respond effectively and efficiently, without a lot of red tape,
    to the needs of individual low-income households as well as to broader
    community needs. Without the CSBG, local agencies would not have the
    capacity to work in their communities developing local funding, private
    donations and volunteer services and running programs of far greater
    size and value than the actual CSBG dollars they receive.
        CAAs manage a host of federal, state and local programs which
    provide a one-stop location for persons whose problems are usually
    multi-faceted. CAAs manage the Head Start program. Using their unique
    position in the community, CAAs recruit additional volunteers, bring in
    local school department personnel, tap into religious groups for
    additional help, coordinate child care and bring needed health care
    services to Head Start Centers. They also manage the Low Income Home
    Energy Assistance Program (LIHEAP), raising additional funds from
    utilities for this vital program. They administer the Weatherization
    Assistance Program (WAP) and are able to mobilize funds for repair work
    on residences that keeps a number of elderly low-income owners in their
    homes. CAAs coordinate the WAP with the Community Development Block
    Grant program. This stretches federal dollars thus providing a greater
    return for individual tax dollars. They also administer the Women,
    Infants and Children (WIC) program as well as job training programs,
    substance abuse programs, transportation programs, domestic violence
    and homeless shelters, food pantries and gardening and canning
    programs.
    Whom does the CSBG Serve?
        National data compiled by NASCSP show that the CSBG serves a broad
    segment of low-income persons, particularly those that are not being
    reached by other programs and are not being served by welfare programs.
          --74 percent have incomes at or below the poverty level; 48
    percent have incomes below 75 percent of the poverty guidelines. In
    1995 the poverty level for a family of three was $12,590.
          --33 percent of adults served have not finished high school.
          --34 percent of all client families were ``working poor'' and
    have wages or unemployment benefits as income.
          --18 percent depend on pensions and Social Security and are
    therefore poor, former workers.
          --25 percent receive welfare benefits.
          --61 percent of households served have children.
        During the past two years, many states have been scrambling to deal
    with the new Temporary Assistance for Needy Families (TANF). The CAAs
    and their state offices have been working to assist in an easy
    transition from Aid to Families with Dependent Children (AFDC) to TANF.
        In Washington state, all of the Community Action Agencies (31) have
    established or are about to establish agreements with regional state
    public assistance agencies to work with TANF clients who have been
    referred to community action for services. The agencies programs are
    being designed to fill gaps in the community such as transportation,
    small business development and the creation of job training sites. In
    Missouri, the Community Action Agencies have three representatives on
    the Governor's Welfare Reform Committee. This committee is an advisory
    group for the Department of Social Services. In Iowa, the Community
    Action Agencies provide intensive family development and self-
    sufficiency services to families referred to them from Welfare-to-Work
    offices. The families most often referred are those who require
    comprehensive assistance.
        In New Hampshire CSBG funds are being used for alcohol and drug
    rehabilitation programs for welfare recipients to assist them in
    staying drug free and in securing and keeping jobs.
        In New York, CSBG funds are being used for family and community
    development specialists for TANF.
        In Wisconsin, 25 percent of the local agencies have applied for
    designation as the administering agency in their services area for the
    Wisconsin Works program. The other agencies will continue to provide
    supportive services such as child care, transportation and training. To
    recapitulate: The CSBG provides a community-based service delivery
    system. Each local organization, through its local board of directors,
    establishes priorities and serves its community and low-income
    residents through programs designed and delivered locally in
    partnership with state and local governments, businesses, civic and
    religious groups and others. The CSBG leverages resources that are far
    in excess of the appropriations it receives. As noted above, the CSBG
    generates $4 in non-federal funds for every CSBG dollar that is
    appropriated. Additionally, nearly 25 million hours of volunteer
    services were contributed to CAAs in 1995. CSBG agencies have used the
    increased funds they received for the last two years to continue their
    activities that lead to self-sufficiency and have become integrally
    involved in the implementation of TANF in most states across the
    nation.
        NASCSP therefore urges this committee to provide an increase that
    factors in inflation and to fund the CSBG grant to the states at $505
    million.
                                     ______

         Prepared Statement of the American Association of Health Plans
    I. Introduction
        The American Association of Health Plans (AAHP) appreciates this
    opportunity to comment on the Health Care Financing Administration's
    fiscal year 1999 budget request. The Balanced Budget Act of 1997 (BBA)
    authorizes the Health Care Financing Administration (HCFA) to charge
    each Medicare+Choice organization and Medicare risk contractor a fee
    equal to the organization's pro rata share of HCFA's estimated costs of
    enrollment and information dissemination activities. Congress
    appropriated $95 million for these activities in 1998 and suggested
    that HCFA focus first on developing and publishing the comparative
    information booklet. On December 2, 1997, HCFA announced its intent to
    assess all Medicare risk contractors a fee equal to 0.428 percent of
    their monthly Medicare payments beginning in January and continuing
    through September 1998 until it collects the fiscal year 1998
    assessment of $95 million. The BBA authorizes HCFA to collect up to
    $150 million in fiscal year 1999 for its beneficiary education campaign
    subject to the appropriations process.
        In addition, the President's budget calls for a series of new user
    fees to generate an additional $660 million. According to budget
    documents, funds collected through the user fees would enable HCFA to
    meet the new workload demands imposed by the Health Insurance
    Portability and Accountability Act and the BBA. Included in these
    additional user fees is $37 million from Medicare+Choice organizations
    for costs associated with reviewing initial applications and contract
    renewals.
        The information fee and the new user fees proposed in its fiscal
    year 1999 budget will jeopardize some of the additional benefits
    enjoyed by beneficiaries enrolled in the Medicare HMO program--benefits
    which for many enrollees have made the Medicare HMO program more
    attractive than the traditional Medicare fee-for-service program. AAHP
    believes that health plans and their enrollees should bear a share of
    the cost of HCFA's education and information dissemination campaign
    that is consistent with the proportion of total beneficiaries enrolled
    in the Medicare HMO program, as opposed to the current user fee
    structure which requires health plans to bear the entire cost.
    II. Importance of Beneficiary Education Activities
        AAHP supports efforts to ensure that beneficiaries receive
    information that will enable them to make informed decisions about
    coverage options. AAHP and its member plans are looking forward to
    working with the Health Care Financing Administration, beneficiary
    groups and others as the beneficiary education and information
    dissemination campaign moves forward. The central goal of this
    initiative, to provide more and better information to beneficiaries
    about all of the options available to them, is critical to permitting
    beneficiaries to take advantage of the expanded range of choices
    envisioned under the new Medicare+Choice program. As health plans
    participating in the Medicare program today know well, there are
    significant challenges in reaching out to Medicare beneficiaries and
    ensuring that the information they receive is useful and
    understandable. AAHP's member plans have a great deal of experience in
    communicating with beneficiaries and are constantly working to refine
    and improve our outreach and communications efforts.
        The most important aspect of our efforts is to listen to Medicare
    beneficiaries and be responsive to the information needs they identify.
    Information must be provided when, where and in a form in which it will
    be most accessible and useful to beneficiaries as they consider the
    differing options available to them under the Medicare+Choice program.
    Only an active and intensive dialogue between all parties involved in
    the beneficiary education and information campaign will allow HCFA to
    meet this challenge. HCFA has already initiated this dialogue and we
    appreciate their efforts. We are committed to playing an active part in
    this process and urge heavy reliance on beneficiary focus groups and
    other mechanisms for ensuring at each step of the campaign's
    development that it will produce information that beneficiaries can
    readily use.
    III. User Fees Are a Tax on Health Plans and Will Hurt Beneficiaries
        AAHP is concerned that the fiscal year 1998 user fee represents
    more than 20 percent of the 2 percent minimum payment update received
    in the vast majority of counties in 1998. HCFA's additional proposed
    user fees were not anticipated when Congress developed the payment
    methodology under the BBA. In addition, growth in spending for the
    Medicare+Choice program is lower than had been anticipated when
    Congress enacted the Balanced Budget Act. The table below shows some
    examples of the impact of the user fee on high and moderate payment
    counties as well as on floor counties.
         medicare information fee as percentage of 1998 payment update

                              MEDICARE INFORMATION FEE AS PERCENTAGE OF 1998 PAYMENT UPDATE
    ----------------------------------------------------------------------------------------------------------------
                                                                                                          Fee as
                                                                       User fee per   Payment update   percentage of
                         County                          Enrollees         month       (per enrollee   1998 payment
                                                                                        per month)        update
    ----------------------------------------------------------------------------------------------------------------
    High payment counties:
        Los Angeles, CA.............................         372,149           $2.72          $12.45              22
        Philadelphia, PA............................          75,730            3.07           14.08              22
    Moderate payment counties:
        Denver, CO..................................          29,086            2.20           10.08              22
        Hillsborough, FL............................          40,819            2.12            9.73              22
        Kern, CA....................................          28,377            2.24           10.24              22
        King, WA....................................          62,513            1.87            8.57              22
        Harrison, MS................................              64            2.45           11.24              22
        Hennepin, MN................................          52,100            1.77            8.11              22
    Payment floor counties:
        Bonner, ID..................................             317            1.57           33.12             4.7
        Dubuque, IA.................................           4,586            1.57           31.65            5.0
    ----------------------------------------------------------------------------------------------------------------
    \1\ Assuming a 0.428-percent assessment on the 1998 Medicare+Choice payment.

        While it is reasonable for health plans and their enrollees to
    contribute to funding HCFA's enrollment and information dissemination
    initiatives, the 14.3 percent of the beneficiaries enrolled in health
    plans should not have to bear 100 percent of the cost. Rather, they
    should pay their share of the cost, as related to their proportion of
    all Medicare beneficiaries.
        In fiscal year 1998, the user fee was applied only to Medicare
    HMOs, effectively the only type of organization participating in the
    Medicare+Choice program at that time. In fiscal year 1999,
    Medicare+Choice organizations could again be in the position of
    shouldering a disproportionate share of HCFA's beneficiary information
    user fees. Furthermore, the campaign is designed to educate
    beneficiaries regarding all their options, including providers in the
    traditional fee-for-service program. Beneficiaries in Medicare+Choice
    organizations should not have to bear the burden of the full cost of
    HCFA's education and information activities.
        Partly as a result of constrained payment growth rates under the
    new Medicare+Choice program and the imposition of a $95 million user
    fee in fiscal year 1998, a number of Medicare HMOs have announced
    reductions in the additional benefits they offer seniors. Several plans
    have ended coverage of outpatient prescription drugs, a benefit not
    covered under the traditional fee-for-service Medicare program. Other
    plans have eliminated vision and dental care benefits. Still others
    have retained these benefits but increased the cost sharing associated
    with them or raised premiums. Because the traditional fee-for-service
    Medicare program does not cover benefits like outpatient prescription
    drugs, dental, and vision, many seniors have been attracted to Medicare
    HMOs because of the more comprehensive coverage they offer. The $150
    million in beneficiary information fees authorized by the BBA and the
    $37 million in application fees requested by HCFA in its proposed
    fiscal year 1999 budget have the potential to further erode health
    plans' ability to offer these attractive benefits with little or no
    additional premium.
    IV. A Closer Look at HCFA's Planned Education Activities
        In conducting the beneficiary education and information
    dissemination activities, AAHP urges HCFA to examine its existing
    infrastructure for disseminating information to beneficiaries. Although
    HCFA currently conducts numerous beneficiary education and information
    dissemination activities, it is unclear whether HCFA will use its
    existing capabilities or create a new infrastructure to meet the BBA
    requirements. HCFA already maintains two toll-free numbers for its
    Medicare program. HCFA also needs to explore the capacity of some of
    its sister agencies that work with Medicare beneficiaries, such as the
    Social Security Administration, in conducting education activities. The
    Social Security Administration maintains a toll-free number that could
    also assist in providing information to Medicare beneficiaries.
        In addition, almost every state has a separate toll-free line
    operated by the state's Department on Aging and Department of Insurance
    under HCFA's Health Insurance Information, Counseling, and Assistance
    program. It is possible that this capacity could be tapped for the
    Medicare beneficiary education and information dissemination
    activities. States' health insurance counseling programs distribute
    comparative health plan information and it would appear that at least
    some of HCFA's efforts may be duplicative of these local activities.
        Moreover, HCFA's cost estimates for certain activities far exceed
    actual costs incurred by health plans operating similar services.
    Several health plans that operate toll-free lines to field pre- and
    post-enrollment questions reported a $5.50 or less per call estimate
    including phone calls, training, staffing, and other overhead. HCFA's
    initial per-call estimate of $7.50, which does not include training and
    other overhead, is 36 percent more than the $5.50 (or less) per call
    reported by several health plans.
        Plans' experiences in educating beneficiaries clearly show that
    certain activities are more effective than others and that the
    effectiveness of a strategy can vary geographically. As HCFA proceeds
    with its campaign, we recommend that HCFA continue to create forums so
    that health plans and others with experience in beneficiary education
    have an opportunity to share their lessons learned. For example, many
    plans no longer consider health fairs an effective communications
    strategy yet HCFA initially requested $65 million for health fairs and
    other public relations activities.
        A majority of health plans surveyed by AAHP reported an average
    health fair attendance of 100 or fewer Medicare beneficiaries. In many
    cases, average attendance was much lower than 100. Health plans have
    had as few as four, eight, and fifteen beneficiaries attend health
    fairs, even though the events are designed to accommodate a larger
    audience. Weather conditions, timing, and location of the health fair,
    along with the availability of refreshments and token souvenirs, are
    crucial factors that influence beneficiaries' attendance.
        HCFA has limited experience with program-wide information
    dissemination initiatives, and must develop the expertise to plan,
    administer and carry out the programs necessitated by the BBA. A
    massive initial effort does not allow sufficient opportunity to learn
    from experience. In addition, state experience with enrollment brokers
    has demonstrated that contracting out these activities presents
    substantial challenges to define contractor accountability and to
    monitor their performance. Consequently, even if HCFA contracts out
    significant portions of the new programs, a broad first-year effort
    would be unwise.
        When Congress appropriated $95 million for these activities in 1998
    it suggested that HCFA focus first on developing and publishing the
    comparative information booklet. The prioritization recommended by
    Congress represents a good first step to focus HCFA's efforts. AAHP
    strongly urges that steps following publication of comparative
    information consist of pilot testing of carefully designed projects
    during the initial years of the Medicare+Choice program. Pilot testing
    education and information dissemination activities will build a better
    foundation for effective education and information activities during
    future coordinated open enrollment periods than would conducting a
    range of untested activities.
        Finally, it is unclear whether HCFA has done any additional
    research or budgetary analysis to determine more accurately how much
    funding is needed for the various beneficiary education activities
    required under the BBA. Furthermore, HCFA has not indicated whether it
    intends to supplement funds authorized for its fiscal year 1998 or
    fiscal year 1999 beneficiary education and information dissemination
    campaign with other funds, such as those funds dedicated to
    administrative or program management activities.
    V. Additional User Fees Pose Additional Hardships on Beneficiaries and
            Plan
        In addition to the $150 million authorized by the BBA for
    beneficiary education activities in fiscal year 1999, HCFA has
    requested $37 million in user fees from Medicare+Choice organizations
    for reviewing initial applications and contract renewals. Such a user
    fee was not anticipated by Congress when it enacted the Medicare+Choice
    payment methodology. In addition, new user fees such as this one and
    the others included in HCFA's budget raise the question of whether it
    is appropriate to fund government activities through user fees.
        The $37 million in user fees for reviewing initial applications and
    for contract renewals represents a significant burden on the 322 health
    plans already participating in the Medicare HMO program. These user
    fees could also potentially dampen interest among new entrants to the
    Medicare+Choice program. Health plans invest considerable resources in
    becoming Medicare HMOs. It is not unusual for a plan to spend $100,000
    to $150,000 just to prepare and submit an application to become a
    Medicare risk HMO. An additional user fee of $115,000 per plan presents
    an unreasonable barrier to entry for new plans that are considering
    serving seniors through the Medicare+Choice program. Furthermore, a fee
    of this level raises the question of the actual cost for HCFA to
    conduct reviews of application and renewals and what specific resources
    the fee would finance.
        Currently HCFA does not charge an application or contract renewal
    fee. In addition, HCFA has indicated that it intends to make the
    initial application process for existing Medicare health plans to
    convert to Medicare+Choice plans fairly simple and streamlined. It is
    unclear therefore, why HCFA needs to collect what would amount to a
    $115,000 tax per health plan to conduct these limited activities. In
    addition, if this fee is approved by Congress and it subsequently
    generates more funds than HCFA spends on reviewing application and
    renewal, AAHP believes that excess funds should be returned to
    Medicare+Choice organizations so they can dedicate these resources to
    patient care.
    VI. Conclusion
        AAHP looks forward to working with HCFA as it implements its
    beneficiary education and information dissemination campaign. Health
    plans have valuable experience to share with HCFA in how to best
    communicate with seniors and how to be responsive to their information
    needs. An effective education campaign will be critical to informing
    beneficiaries about their new options under the Medicare+Choice
    program. At the same time, HCFA needs to finance this campaign in a
    manner that does not disproportionately burden Medicare HMOs. Such a
    burden has the potential to limit rather than expand consumers'
    choices, and thus to undermine the key objectives of BBA. We urge the
    Subcommittee to review the assessment of the beneficiary information
    fee and whether it is equitable. In addition, we ask the Subcommittee
    to consider carefully the appropriateness of additional user fees such
    as the $37 million in user fees for reviewing initial applications and
    for contract renewals.
                                     ______

    Prepared Statement of Daniel Paul Perez, President, Facioscapulohumeral
                                    Society
        Mr. Chairman, it is a great pleasure to submit this testimony to
    you today.
        My name is Daniel Paul Perez, of Lexington, Massachusetts, and I am
    testifying today as President of the Facioscapulohumeral Society and as
    an individual who has this rare disorder.
        As a chief patient activist for the tens of thousands of
    individuals living with Facioscapulohumeral Disease (FSHD) in the
    United States I will continue to argue the case of wanting to live life
    free from disease.
    The FSH Society
        Eight years ago, several of us with FSHD began the task of
    organizing a society of patients. The purposes of our organization,
    which represents over 1000 families that have been diagnosed with FSHD
    are: to encourage and promote scientific and clinical research and
    development through education of the general public, governmental
    bodies and the medical profession; to support such research and
    development; to accumulate and disseminate information about FSHD; to
    actively cooperate with related organizations; and to represent
    individuals and families with FSHD.
    The Clinical Picture of FSH Muscular Dystrophy
        The FSH Disorder, otherwise known as Facioscapulohumeral Muscular
    Dystrophy or FSHD, is a neuromuscular disorder that is inherited in an
    autosomal dominant fashion and has an estimated frequency of one in
    twenty thousand (1/20,000). Autosomal dominant means that there is a
    fifty-percent chance that a child will inherit the disease from an
    affected parent. The prevalence could be as much as three times greater
    than the estimated frequency stated in the literature due to an
    undetermined number of sub-clinical cases.
        The major consequence of inheriting this disease is that of a
    progressive and severe loss of skeletal muscle, with the usual pattern
    of initial noticeable weakness of facial, scapular and upper arm
    muscles and subsequent developing weaknesses of other skeletal muscles.
        The age of onset is variable and noticeable muscle weaknesses are
    usually present by the age of twenty. The penetrance of FSHD is high
    and is estimated to be near ninety-five percent. A 95 percent
    penetrance implies that the expression of the FSH disorder will be
    outwardly noticeable in 95 out of 100 patients with the FSHD genetic
    defect by the age of twenty. The age of onset and the severity of
    clinical symptoms are variable within and between families. Recent
    research has shown that in some families there will be anticipation of
    the disease. Anticipation implies that FSHD will become more and more
    severe with each successive generation affected with the disorder.
        The progression of FSHD usually begins between the first and second
    decades of life for men and between the second and third decades of
    life for women. Life expectancy is normal in many, but many if not most
    patients become significantly incapacitated in the prime of life.
    Approximately twenty percent (20 percent) of individuals with FSHD are
    wheelchair-bound by the fourth decade of life. FSHD affects both males
    and females and appears to show no racial bias.
        There are families where the parents are asymptomatic, clinically
    normal, but they have children, one or more, with FSHD. Sporadic cases
    of FSHD are common and can be caused by mutations and germline
    mosaicism.
        Lastly, an early onset, infantile form of FSHD exists where the
    symptoms are more severe than that of the typical FSHD. Children with
    infantile FSHD are wheelchair bound at a very early age. Additionally,
    the infantile form FSHD is extremely severe and may result in an early
    death. Thus, infantile FSHD resembles Duchenne muscular dystrophy in
    its clinical course and prognosis.
        Stated clearly, FSHD can be extremely severe and in some forms can
    lead to an early death. FSHD can happen to anyone of us.
    The Need For NIH Funding For FSHD
        My testimony is about the profound and devastating effects of a
    disease known as Facioscapulohumeral Disease which is also known as FSH
    Muscular Dystrophy or FSHD and the urgent need for NIH funding for
    research on this disorder. In past years and earlier this year (1994,
    1995, 1997, 1998) we submitted testimony before both House and Senate
    Appropriations Committees' subcommittees on Labor, Health and Human
    Services and Education and Related Agencies which stated that NIH and
    Congress could help bring about a significant research and scientific
    opportunity which would benefit hundreds of thousands of people
    worldwide with modest investments.
        The FSH Society has previously informed the members of this
    committee of the United States Congress on the need and rationale for
    research on FSHD. We have updated you on the most recent developments
    in clinical medicine with respect to FSHD, kept you abreast of the
    latest breakthroughs in the molecular genetics of the disease and given
    you insight into the difficulty of living a lifetime with this disease.
        Largely, thanks to your efforts, Mr. Specter, NIH research funding
    continues to grow. However, I regret to say that not all areas of
    promising research are benefiting. It saddens me to inform you that the
    American research effort on FSHD has suffered a tremendous setback in
    the past two years with loss of momentum on the only NIH project
    working on FSHD molecular genetics. At risk are invaluable and
    irreplaceable cell lines and pedigrees, which currently have no
    permanent repository. We need to create a core center for FSHD research
    to be run within the auspices of the NIH. We need intramural NIH
    programs enacted immediately. We need extramural contracts and grant
    programs enacted immediately.
        We have met at NIH with regard to the current crisis in FSHD
    research. The National Institute of Neurological Disorders and Stroke
    (NINDS), the National Institute of Arthritis, Musculoskelatal and Skin
    Diseases (NIAMS) and the Office of Rare Disorders (ORD) and the FSH
    Society recently held, for the first time ever in the United States of
    America, an International Conference on the Cause and Treatment of
    Facioscapulohumeral Muscular Dystrophy (FSHD) in Boston, Massachusetts
    on April 12, 1997. We all realize the profound loss of dedicated and
    talented professionals working on FSHD from coast to coast and the
    continuing need to attract, retain and maintain programs solely focused
    on FSHD. The purpose of the International conference on FSHD was to
    promote research in this area and to encourage scientists and
    researchers to submit the research grants on FSHD.
        In the past year the communication between the research community,
    the FSH Society, NIH (NIAMS, NINDS and ORD) and Congress has been
    unprecedented. We are indebted to the members of this subcommittee and
    to your colleague Representative Edward J. Markey from Massachusetts
    for his continued support and for the report language submitted to you
    last year and co-signers Representatives Barney Frank, John M. McHugh,
    Martin T. Meehan, Charles E. Schumer and Robert Wexler.
        In late February, 1998, after giving testimony before the House of
    Representatives on Appropriations for FSHD, we received a formal
    response to last year's report language from Congress to the Director
    of NIH with respect to research on FSHD. In the third or fourth week of
    February, 1998, the National Institutes of Health (NIH) responded to
    Congress as follows: ``The NIAMS and the National Institute of
    Neurological Disorders and Stroke (NINDS) support research on the many
    forms of muscular dystrophy including Facioscapulohumeral disease
    (FSHD). In 1990 scientists discovered the general location of the
    defective gene for FSHD on chromosome 4. However, much remains to be
    learned about the functional changes that accompany the disease and
    treatments. In April 1997, the NIAMS, NINDS and the NIH office of Rare
    Diseases, along with the Facioscapulohumeral Society, held a FSHD
    conference designed to identity medical problems associated with the
    disease and to help focus research efforts by identifying new research
    opportunities. As the next step in an effort to increase research
    interest on FSHD, NIAMS and NINDS are developing a program announcement
    to follow-up on recommendations from the April meeting. NIAMS, NNDS and
    the NIH Office of Rare Diseases will continue to work closely on
    encouraging FSHD research and to share relevant scientific advances.''
        On March 20, 1998, shortly after the response to Congress regarding
    the report language, the National Institutes of Health issued Program
    Announcement 98-044 (PA-98-044) jointly sponsored by the National
    Institute of Neurological Disorders and Stroke (NINDS) and the National
    Institute of Arthritis and Musculoskeletal and Skin Diseases (NIAMS)
    titled ``Pathogenesis and Therapy of the Muscular Dystrophies.''
        The purpose of the PA-98-044 is as follows: ``The National
    Institute of Neurological Disorders and Stroke (NINDS) and the National
    Institute of Arthritis and Musculoskeletal and Skin Diseases (NIAMS)
    encourage investigator-initiated research grant applications to study
    the pathogenesis and therapy of the various forms of muscular dystrophy
    in children and adults. Responses to this program announcement may
    include studies in appropriate animal models or preclinical or clinical
    studies in patients with Facioscapuilohumeral dystrophy (FSH), limb-
    girdle muscular dystrophy (LGMD), myotonic dystrophy, congenital
    muscular dystrophy (CMD), Emery-Dreifuss muscular dystrophy (EMD),
    Duchenne muscular dystrophy (DMD), Becker muscular dystrophy (BMD), or
    other forms of muscular dystrophy.''
        The FSH Society appreciates NIH's response to last year's Committee
    Report which encouraged NIH take steps to stimulate research in the
    area of Facioscapuilohumeral disease (FSHD) which it has done through a
    program announcement covering FSHD as well as other muscular
    dystrophies. However, the FSH Society notes that NIH has not responded
    in developing a plan for enhancing FSHD research including the question
    whether an intramural program in this area would be beneficial.
    Therefore, the FSH Society urges NIH to conduct a research planning
    conference in the near future in order explore scientific opportunities
    in FSHD research both intramurally and extramurally.
    Report Language from Congress to the NIH for Research on FSHD
        ``The Committee appreciates NIH's response to last year's Committee
    Report which encouraged NIH take steps to stimulate research in the
    area of Facioscapulohumeral disease (FSHD) which it has done through a
    program announcement covering FSHD as well as other muscular
    dystrophies. However, the Committee notes that NIH has not responded in
    developing a plan for enhancing FSHD research including the question
    whether an intramural program in this area would be beneficial.
    Therefore, the Committee urges NIH to conduct a research planning
    conference in the near future in order explore scientific opportunities
    in FSHD research both intramurally and extramurally.''
    Conclusion
        The men, women and children who live with the daily consequences of
    this devastating disease are your friends, neighbors, fellow taxpayers
    and contributors to the American way of life. With an historical 88
    percent employment rate and an average educational achievement level of
    14 years (source: Impairment and Disability Profiles on Neuromuscular
    Diseases: Facioscapulohumeral Muscular Dystrophy, Research and Training
    Center on Neuromuscular Disease, Department of Physical Medicine &
    Rehabilitation, University of California, Davis and The National
    Institute on Disability & Rehabilitation Research, 1994), we personally
    bear our burden of the health care costs and training expenses to
    prepare for and maintain financial and personal independence.
        We appeal to you today to take our hard earned tax dollars
    commensurate with our numbers and valuable contributions to American
    Society. We urge the United Sates government to allocate a proportion
    of our tax burden towards research on FSHD. The current amount per
    person per year living with FSHD is unacceptable. We ask for an overall
    research budget that will cover the creation of a core center for
    research at NIH and the expansion of extramural and intramural research
    programs.
        Time is of the essence here. Lives are in the balance and the race
    against this disease is ongoing. The FSHD community believes that now
    is the time to move to action and it demands persistent and innovative
    research programs and the willingness to take risks in previously
    uncharted territory. We who are gradually losing strength physically
    daily are gaining it rapidly in collective numbers. We who are least
    able to do the simplest physical tasks daily have undertaken the most
    complex task of FSHD. We who have the most severe limitations imposed
    on us have mobilized. We stand ready, we have moved to action, and we
    are prepared to act cooperatively with the NIH and with Congress.
        This is the United States of America, and in a country as great as
    ours with all of its technical means and ability it should be
    absolutely clear, if not completely black and white, that the number
    one priority for individuals with FSHD and the one absolutely
    commanding imperative for the Federal Government is to initiate and
    accelerate in any way possible, research on FSHD. With modest funding
    and a clear direction from Congress to the NIH to support research on
    FSHD significant progress can be made in conquering and eliminating
    this and other devastating diseases.
        Mr. Chairman, again, thank you for providing this opportunity to
    testify before your subcommittee.
                                     ______

    Prepared Statement of Paul L. Kaufman, M.D., President, Association for
                      Research in Vision and Ophthalmology
        On behalf of the Association for Research in Vision and
    Ophthalmology (ARVO), the world's largest organization of clinicians
    and scientists dedicated to the field of eye and vision research, I am
    grateful for the opportunity to provide input to the Senate
    Appropriations Subcommittee on Labor, Health and Human Services,
    Education and Related Agencies concerning the fiscal year 1999 budget
    request for the National Institutes of Health. A more detailed
    statement of our position is outlined in the testimony which will be
    submitted to the Subcommittee on behalf of the National Alliance for
    Eye and Vision Research.
        We are beginning to reap the health care benefits of our
    investment, via the NIH/NEI, in basic and clinical vision science, but
    more and more we are forced to prioritize between important and
    promising opportunities because of insufficient funding.
        It is only through further advances in research that we will gain a
    better understanding of vision disorders, and thereby develop cost-
    effective advances in disease prevention and treatment. This will be
    ever more important as our population ages, since the most common
    blinding disorders are strongly age-related.
        We now have the scientific and technological capability to make
    substantial progress in all areas of eye and vision research, if an
    expanded research effort is supported. Such progress will only be
    possible if we insure that the NEI has sufficient resources to pursue
    initiatives in the key areas outlined in the soon-to-be-released Vision
    Research Plan of the NEI.
        Tremendous advances have been made in understanding the
    epidemiology, cell, molecular-, and neuro-biology, and molecular
    genetics of age-related macular degeneration, diabetic and inflammatory
    eye disease, glaucoma, cataract, and developmental disorders of the
    visual system, and in developing pharmacologic and surgical therapies
    to redress the altered pathophysiology of these diseases. Despite
    remarkable progress, our current diagnostic, therapeutic and preventive
    measures are far from ideal in terms of efficacy, safety, tolerability
    and cost-effectiveness. The opportunities to advance our basic
    scientific knowledge of ocular and visual system pathophysiology, and
    translate it into improved therapy and prevention of disease, are
    unprecedented. However, this will require a quantum leap in funding to
    the NEI, which we hope that the Committee will allocate.
        We thank you for your continuing support for medical research
    funding, and urge you to provide a 15 percent increase in fiscal year
    1999 for the NIH as the first step toward doubling the budget over the
    next five years. Furthermore, we urge you to provide $408.6 million, a
    15 percent increase, for NEI in fiscal year 1999 as requested by the
    National Advisory Eye Council in its ``Citizens Budget Proposal''.
        Thank you for the opportunity to participate in the process.
                                     ______

     Prepared Statement of the American College of Preventive Medicine and
               the Association of Teachers of Preventive Medicine
        The American College of Preventive Medicine (ACPM) and the
    Association of Teachers of Preventive Medicine (ATPM) are pleased to
    submit jointly this statement concerning appropriations for federal
    activities in disease prevention and health promotion.
        ACPM is the national medical specialty society of physicians whose
    primary interest and expertise are in preventive medicine. ATPM is the
    professional organization of academic departments, faculty and others
    concerned with undergraduate and postgraduate medical education in
    preventive medicine. Together, these organizations are proud to offer
    the public a high degree of knowledge and skill in disease prevention
    and health promotion.
        ACPM and ATPM urge the Subcommittee to maintain federal support for
    prevention. In particular, we urge a minimal increase in the level of
    funding for preventive medicine residency training and for training
    other public health professionals included in Title VII of the Public
    Health Service Act. We also urge an increase for the activities of the
    Centers for Disease Control and Prevention and an earmark for the
    invaluable work of the Office of Disease Prevention and Health
    Promotion in the Office of the HHS Secretary.
        We are well aware of the fiscal constraints that this Subcommittee
    faces and we do not make these recommendations lightly. However, we are
    deeply concerned that weakening our nation's efforts in disease
    prevention and health promotion will become an unintended consequence
    of necessary reductions in discretionary appropriations. At a time when
    the private sector is struggling mightily to contain medical care
    costs, the nation can ill afford a diminution in public health efforts
    to prevent disease that only the government can conduct. Compared to
    the vast sums of public funds that are spent on curative medicine, the
    amounts that we recommend be targeted to prevention are small indeed.
    Training in Preventive Medicine and Public Health--$9 million
        Prevention, in its broadest sense, is practiced by all physicians
    and other health professionals who help their patients stay healthy. It
    also is the principal goal of our nation's state and local health
    departments, who perform core functions in health protection and
    promotion that no single private institution or health provider can
    fulfill. The specialty of preventive medicine bridges the gap between
    the perspectives of clinical medicine and public health.
        The tools of preventive medicine are the population-based health
    sciences, including epidemiology, biostatistics, environmental and
    occupational health, planning, management and evaluation of health
    services, and the social and behavioral aspects of health and disease.
    These are the classic tools of practice in public health agencies, but
    they have grown in importance in other health care settings where there
    is increasing recognition that improving the health of a patient
    population and reducing the costs of medical care also require
    application of the population-based health sciences.
        Departments of preventive medicine, community medicine, or social
    medicine in medical schools, schools of public health, and preventive
    medicine residency programs (which are located in medical schools,
    schools of public health, and a few health departments), are the loci
    of expertise in the population-based health sciences. Federal support
    for preventive medicine training and public health training is
    essential to help meet the workforce needs not only of public health
    departments, but also of a rapidly-evolving health care system that
    must be cost-effective and accountable.
        The small sums appropriated for preventive medicine residency
    training under Section 763 in Title VII of the Public Health Service
    Act have been the exclusive federal support for programs training
    physicians in general preventive medicine and public health (other than
    the residency programs conducted by the Centers for Disease Control and
    Prevention and the military). Medicare graduate medical education funds
    have been largely unavailable to these programs because they are based
    not in hospitals but in community outpatient and public health
    settings. Because preventive medicine programs derive little or no
    revenue from one-on-one patient care, this common source of funds for
    physician training also is unavailable.
        Currently, residency programs scramble to patch together funding
    packages for their residents. Funding from any source is available for
    only 60 percent of preventive medicine residency positions. The
    remainder of the openings go unfilled due to lack of funds, and
    potential applicants must be turned away.
        A 1991 survey of all 1,070 graduates of general preventive
    medicine/public health residency programs from 1979 to 1989 conducted
    by Battelle, an independent consultant under contract to the Centers
    for Disease Control and Prevention and the Health Resources and
    Services Administration provided a clear picture of the accomplishments
    of the training programs and the impact of these federal funds. A
    majority of the graduates have initiated or managed major programs in
    prevention and control of infectious disease, chronic disease, sexually
    transmitted diseases, or maternal and child health. In addition to
    creating and running community health programs such as these, 60
    percent of the graduates engage in research in disease prevention and
    health promotion, and 70 percent also take care of individual patients.
        This survey also documented that funds invested in training these
    physicians have a lasting impact. Ninety percent of preventive medicine
    graduates remain involved in public health or preventive medicine.
    Moreover, Title VII funds were shown to be directly related to the
    viability of preventive medicine residency programs. In programs that
    have received federal grants, the number of graduates has more than
    doubled since 1983. Conversely, the number of graduates of programs
    that no longer receive federal funds has decreased significantly.
        The training of public health professionals is closely linked to
    preventive medicine. The nation's 28 schools of public health provide
    training for physician specialists in preventive medicine as well as
    for many other health professionals who comprise our public health
    workforce. In addition to the shortage of physicians trained in
    preventive medicine, there are shortages of epidemiologists,
    biostatisticians, environmental and occupational health specialists,
    public health nutritionists and public health nurses. In addition to
    Section 763, Sections 761 and 762 of Title VII (Public Health
    Traineeships and Public Health Special Projects) support public health
    training in these areas. An appropriation of $9 million for Sections
    761, 762, and 763 in fiscal year 1998 will allow for the continuation
    of efforts to build the nation's cadre of prevention professionals.
    Finally, ACPM and ATPM support the Health Professions and Nursing
    Education Coalition's (HPNEC) recommendation of $306 million for all of
    the health professions education programs funded under Titles VII and
    VII of the Public Health Service Act.
    Centers for Disease Control and Prevention--$3 billion
        Physicians working in preventive medicine and public health rely
    heavily on the expertise and activities of the Centers for Disease
    Control and Prevention, the nation's premier agency for disease
    prevention and health promotion. Therefore, we support, alongside many
    other organizations and coalitions with a concern for prevention,
    including the Coalition for Health Funding and the CDC Coalition, a
    total CDC appropriation of $3 billion.
        Through funding of state and local prevention programs, research,
    training and surveillance, CDC has a major impact on every important
    issue in prevention. Compared to the billions that are spent on acute
    health care, our national investment in prevention continues to lag.
    The increases in health care costs we have witnessed are not a reason
    to cut back on funds appropriated for prevention. They are a reason to
    make a large investment now. Given the resources, CDC can play a
    critical role in revitalizing programs and services of proven
    effectiveness in reducing death and disability in this country.
    Reducing CDC funds would be an act of extraordinary short-sightedness.
    Time and again we have seen, as in the cases of tuberculosis and
    measles, when public health efforts falter, the nation pays a high
    price later in the costs of preventable disease.
    Office of Disease Prevention and Health Promotion--$4.6 million
        The Office of Disease Prevention and Health Promotion (ODPHP)
    stands out among federal agencies for its ability to leverage small
    amounts of funding into large accomplishments in highly innovative
    ways. ODPHP manages the Healthy People 2000 initiative, the national
    prevention strategy used by health agencies across the nation to set
    measurable objectives for health improvement. ODPHP provides guidance
    and prototype materials to health practitioners through the Put
    Prevention Into Practice (PPIP) project. It is conducting ground-
    breaking research concerning the cost-effectiveness of preventive
    services, and has long served as the focal point for coordinating
    departmental activities in prevention as well as innovative public-
    private partnerships. Explicit support for ODPHP is vital in signaling
    a continued federal commitment at the Secretary's level to leadership
    in prevention. We urge the Subcommittee to earmark $4.6 million for
    this office, an amount equivalent to fiscal year 1995 funding, before
    the budget for this office was incorporated into the amounts
    appropriated for the Office of the Secretary.
                                     ______

        Prepared Statement of the American Society of Clinical Oncology
        The American Society of Clinical Oncology (ASCO) is pleased to
    submit comments to the Subcommittee regarding the cancer research
    program supported by the National Cancer Institute (NCI). ASCO is a
    national medical specialty society representing more than 11,000 cancer
    specialists involved in patient care and clinical research.
        The nation recently received the good news, reported by NCI, the
    Centers for Disease Control and Prevention (CDC) and the American
    Cancer Society, that both the incidence of cancer and death from the
    disease have declined. This announcement represents tangible evidence
    of returns from the federal government's investment in cancer research.
    More subtle but possibly more important, we are enjoying an
    unparalleled era of discovery in genetics and molecular biology that
    will likely lead to even greater declines in cancer incidence and
    mortality in the not-too-distant future.
        However, in order to enjoy the full potential of these biomedical
    research discoveries, they must be translated into clinical
    applications. The process by which basic science is harnessed for
    patient benefit is through translational and clinical research. The NCI
    budget must fully support translational and clinical research if
    results in terms of cancer incidence and mortality are to be maximized.
        To ensure the healthiest possible environment for clinical
    research, ASCO recommends: significant increases in funding for all
    cancer research, from basic to translational to clinical; reforms in
    the peer review of patient-oriented research proposals; improvements in
    the training of clinical researchers; and Medicare coverage for the
    patient care costs of those enrolled in high-quality clinical trials.
    Although the last recommendation is not strictly in the jurisdiction of
    the Subcommittee, recognition by all third-party payors that they
    should cover patient care costs for those enrolled in such trials is an
    essential element of support for clinical research.
                            increases in nih funding
        ASCO applauds the proposal of the Clinton Administration to
    increase National Institutes of Health (NIH) funding by approximately
    8.5 percent in fiscal year 1999 and boost funding for cancer research
    by 10 percent in fiscal year 1999 and by 65 percent over five years.
    This action is a significant departure for the Administration, which
    has previously proposed very modest increases in NIH funding, and was
    apparently a response to the tremendous research opportunities that
    greet investigators today. Although we are pleased that the
    Administration has proposed to increase funding for NIH, we also
    support the more ambitious recommendation of the Ad Hoc Group for
    Medical Research Funding that the NIH budget be increased by 15 percent
    in fiscal year 1999.
        Our support for the Ad Hoc Group recommendation is not intended to
    undermine the NCI Bypass Budget. In past years, the cancer community
    has made reference to the NCI Bypass Budget, without a real expectation
    that it would be adopted. This year, in contrast, we believe the Bypass
    Budget must be seriously considered. The Bypass Budget is a concise
    document which presents the professional judgment of NCI regarding the
    funding necessary to support current cancer research opportunities.
    Because this is an era of impressive discovery in several areas of
    cancer research, the Bypass Budget makes a persuasive case for a
    substantial increase in NCI funding to take advantage of these critical
    research opportunities. Some Members of Congress have asked if NCI can
    absorb such a significant increase in funding. ASCO believes that
    increases of the magnitude proposed in the Bypass Budget--35 percent in
    fiscal year 1999--could be used productively to advance our knowledge
    of the underlying mechanisms of cancer and improve treatment of the
    disease.
             peer review of patient-oriented research applications
        Basic research findings must be evaluated in clinical trials that
    include actual patients before new therapies are accepted as standard
    medical practice. ASCO has long believed that the current process of
    peer review at NIH is not adequate to evaluate clinical research
    proposals. Study sections, which are the groups that review all
    investigator-initiated research proposals, are dominated by basic
    scientists who may not be familiar with the methodologies used in
    clinical research. Moreover, basic research involving relatively
    straightforward laboratory measures usually scores higher in the review
    process than that which includes patient-oriented outcomes.
        In order to correct these imbalances, ASCO has advocated since 1991
    establishment of a separate study section specifically dedicated to
    clinical research. Support for significant reform of the review system
    has now reached a critical mass: various Members of Congress have urged
    appointment of a special clinical research review panel; an NIH-
    appointed clinical research study group concluded that patient-oriented
    research is not treated equitably and recommended significant reforms
    of the peer review system; an Institute of Medicine study documented
    the hurdles to funding clinical research; and the National Cancer
    Advisory Board has endorsed a specific study section for clinical
    cancer research.
        Although NIH has instituted some welcome improvements in the peer
    review process, it has not established a study section for the review
    of cancer clinical research applications. The Center for Scientific
    Review, formerly called the Division of Research Grants, indicated
    several months ago that it would establish, on a pilot basis, a special
    study section for the review of cancer clinical research applications.
    Despite that announcement, no such review panel has been formed.
        Unless a more suitable review mechanism for investigator-initiated
    research applications is promptly established, a whole generation of
    potential researchers will be discouraged and major advances in patient
    care may be at risk. ASCO believes there should be no further delay in
    appointing a cancer clinical research study section, a modest step that
    will bring equity to the review of patient-oriented research
    applications. We urge the Subcommittee to require NIH to report, by May
    31, 1998, on its progress in forming the cancer clinical research study
    section.
                        training of clinical researchers
        Careers in clinical research are becoming exceedingly unattractive
    to young investigators. In addition to facing uncertainties about
    funding for their research, clinical investigators are also under great
    pressure to maximize patient care revenues, leaving little time for
    clinical research. It is difficult for physicians in this environment
    to pursue careers in clinical research. Fundamental changes in the
    health care system will be necessary to ensure a cohort of clinical
    researchers in the next generation, and NIH should be charged with
    developing recommendations to address the practical barriers to
    clinical research in a health care system increasingly dominated by
    managed care and for-profit medicine.
        In the shorter term, as NIH considers these difficult issues, ASCO
    advocates that NIH increase funding that allows experienced senior
    clinical researchers to serve as mentors for young clinical
    researchers. ASCO uses its own funds to support a training program for
    clinical researchers that includes mentoring as one of its features. We
    believe this mentoring program provides significant encouragement to
    those who are beginning their clinical research careers and should be
    replicated in NIH grants. We applaud the recent announcement by NIH of
    a Mentored Patient-Oriented Research Career Development Award that will
    provide mentored research experience for clinical investigators and
    look forward to enhanced efforts in this area, where the federal cost
    is modest and the benefits substantial.
    medicare coverage for patient care costs for patients participating in
                                clinical trials
        For the cancer community, one of the most important features of the
    President's budget is the proposal to establish a Medicare
    demonstration project that would provide reimbursement for the routine
    patient care costs for patients enrolled in cancer clinical trials. The
    best care for cancer patients is often in a clinical trial.
    Furthermore, clinical trials advance our knowledge about the best
    possible treatment for cancer. Unfortunately, the Medicare policy on
    coverage of clinical trials is unclear, and Medicare beneficiaries are
    often discouraged from enrolling in trials, even when those trials
    represent their best treatment option.
        The Clinton initiative would address this problem by guaranteeing
    payment for patient care costs for those beneficiaries who enroll in
    certain ``approved'' trials. Purely research costs associated with the
    conduct of clinical trials--including supplying the investigational
    agent and collecting and analyzing data--would continue to be borne by
    the research sponsor, whether NIH or industry. However, patients
    enrolled in approved clinical trials would be assured that the Medicare
    program would not deny payment for routine patient care costs like
    physician or hospital charges. ASCO has worked for many years to secure
    Medicare patients this guarantee of access to quality clinical trials.
    Assured Medicare coverage would not only improve treatment for the
    individual patient but also integrate clinical trials into the standard
    of care for Medicare beneficiaries with cancer. For this Subcommittee,
    the proposal is important because it creates a positive environment for
    clinical research without requiring the expenditure of discretionary
    funds.
        The Clinton-Gore clinical trials proposal is modeled after
    legislation introduced in the 105th Congress by Senators Rockefeller
    and Mack and Representatives Johnson and Cardin, except it would limit
    Medicare coverage to those trials that are sponsored by NIH and give
    the Secretary the option to expand coverage to other high-quality
    clinical trials. The Rockefeller-Mack legislation, in contrast, would
    have authorized coverage of trials that are approved by NIH, the Food
    and Drug Administration, the Department of Defense, the Veterans
    Administration, and private entities with adequate peer review systems.
    These are the criteria for coverage that were developed by ASCO and
    broadly adopted by the cancer community. The Clinton-Gore proposal
    should be expanded to meet the standards of clinical trials coverage
    outlined by ASCO, because those criteria would ensure that patients
    have access to all high-quality trials that might offer them
    therapeutic benefit. ASCO will work for the enactment of legislation to
    implement Medicare coverage for cancer clinical trials and for a
    broadening of the definition of a covered cancer clinical trial.
        We appreciate the opportunity to present ASCO's recommendations to
    enhance the climate for cancer clinical research. An NIH program that
    supports all aspects of the research continuum--from basic to
    translational and clinical research--is essential if recent reductions
    in cancer incidence and mortality are to be only the first of many
    successes in our progress toward prevention and reliable cure of
    cancer.
                                     ______

    Prepared Statement of Dr. Lee W. Saperstein, Dean, School of Mines and
                    Metallurgy, University of Missouri-Rolla
    Introduction
        Mr. Chairman, I want to thank you for this opportunity to present
    testimony to the Subcommittee on the appropriations for fiscal year
    1999 on MSHA and NIOSH programs related to mine safety and research. I
    want to commend you for your outstanding leadership and for your
    continuing efforts to ensure that the scientific and research
    capability of this nation remains second to none.
        I am Lee W. Saperstein, Professor of Mining Engineering and Dean,
    School of Mines and Metallurgy, University of Missouri-Rolla (UMR). The
    School is one of the largest academic units in the United States
    devoted to natural resources, minerals, materials, energy, the
    environment, and the safe, productive, and environmentally sound use of
    crustal resources. It is the oldest of the three component parts of
    UMR. Founded in 1870 in response to the economic needs of Missouri, we
    are part of the great Land-Grant University movement. It is axiomatic,
    but still worth repeating, that this movement put together the States
    and the federal government in a partnership that stimulates economic
    development through education and research at our leading universities.
    This is a partnership that is as timely today as it was in 1862 when it
    was first formulated.
    NASULGC Mission
        Founded in 1887, NASULGC is the nation's oldest higher education
    association. Currently the association has over 190 member
    institutions--including 17 historically black institutions--located in
    all fifty states, with a total of 3 million students. The Association's
    overriding mission is to support high quality public education through
    efforts that enhance the capacity of member institutions to perform
    their traditional teaching, research, and public service roles--roles
    which reflect a strong social commitment to investing in the
    development of America's greatest resource, its people. NASULGC does
    not receive any Federal grants. The Section on Mineral and Energy
    Resources brings together leading educators and research scholars in
    the Association's universities to promote university-based programs in
    mineral and mineral-fuel resources, and to demonstrate the importance
    to the Nation of maintaining a strong capability in research and
    education in mineral-resource engineering and science to promote public
    understanding of mineral-resource issues.
    Importance of Extramural Research
        The Government Performance and Results Act presents extraordinary
    opportunities for creative partnerships between the Federal government
    and universities. These partnerships can contribute significantly to
    the national goal of a more efficient and productive Federal government
    by providing policy makers higher quality research at lower cost to
    address society's most compelling issues. The country's investment in
    higher education continues to provide not only the incalculable
    dividends associated with a better educated workforce, but also the
    very tangible benefits that meet daily human and economic needs.
    Competitive, peer-reviewed extramural research is fundamental to
    developing the technologies which ensure safe food and water supplies,
    a healthy environment, sufficient energy sources, better medical care,
    improved communications and transportation systems, a stronger national
    defense and strategies and tools to mitigate natural hazards.
    Information from such research leads to improved management of natural
    resources and maintenance of conditions that contribute to a desired
    quality of life.
    Miner Safety and Health
        It is a long-term goal of all us who have worked on projects for
    miner health and safety that no mine worker should have his or her life
    shortened or health compromised in pursuit of a livelihood. Mining has
    historically ranked high among all industries in fatality and injury
    incidences and has unacceptably high prevalence rates in
    pneumoconiosis, silicosis, and noise-induced hearing loss. Efforts to
    date allow me to say that the more than 250,000 people who work today
    in the United States's mining and mineral industries enjoy an
    unprecedented record for safety. Accidents, both fatal and non-fatal
    disabling, are close to an all-time low as are their incidence rates
    (number of accidents normalized by the working hours of exposure). This
    enviable record is in itself no accident but is the result of both
    vigilance and research applied toward miners' health and safety.
    Inasmuch as a mine is not inherently a safe place, this record is a
    tremendous testimonial to our successes in promoting mine safety.
        The avoidance of work-place losses, in particular those that can
    lead to harm to workers, is achieved by three main thrusts: engineering
    design, worker training, and enforcement and inspection. Engineering
    design for safe mines includes, amongst many topics, roof and slope
    control, ventilation for removal of explosive and deleterious gases and
    dusts, safe and encompassing control cabins for equipment, and removal,
    by selective use of advanced mechanization and automation, of the
    worker from the active mining faces. These are topics that are
    researched in the national laboratories of NIOSH and the mining
    universities alike. Worker training may be either task (job skills) or
    safety training or both. The design of classes and training modules
    should reflect considerations of effectiveness, often called
    ``outcomes.'' Measures of desirable outcomes could include reduced
    accident rates, increased productivity, and reduced losses. Of
    particular concern to mine safety is continuing improvement in accident
    rates among those workers who benefitted from the training.
    Universities have participated actively with MSHA in creating effective
    training materials and in designing outcome assessment programs for
    when this material is presented to miners.
        Without question, the federal presence, found in enforcement
    activities of the Department of Labor's Mine Safety and Health
    Administration (MSHA) and research activities of the Department of
    Health and Human Services' National Institute for Occupational Safety
    and Health (NIOSH), has a direct influence on this outstanding record.
    The role of the States is equally as important and often performed
    collaboratively with institutions of higher education, in furthering
    the work of the federal agencies. MSHA's State Grants program and
    NIOSH's Mine Safety and Health program of extramural grants are
    relatively modest in scope but they are key to the maintenance of the
    State-federal partnership for mine safety. I will elaborate on each.
    Mine Safety and Health Administration
        NASULGC urges full funding of the fiscal year 1999 budget request
    of $211.2 million for MSHA. However, we would like to draw your
    attention to that part of MSHA that works with the States and with
    institutions of higher education, namely the State Grants program found
    within the Technical Support line of the MSHA budget. The 1999 request
    for State Grants is $6.013 million; we urge full funding of this line.
    Indeed, we urge that, where possible, MSHA consider expansion of that
    request and further involvement of universities in the achievement of
    their mission.
        The Mine Safety and Health Administration is a component part of
    the Department of Labor and is charged with fostering the health and
    safety of American miners. The State Grants program has participants
    from 44 States and the Navajo Nation. Monies are distributed by a
    formula that is reflective of a State's mining activity. The money is
    often spent on safety-related items that are specific to the geographic
    region; often the money is spent on training-program development and
    delivery. Universities, with their particular experience in course
    development, have cooperated on much of this course development. This
    cooperation can be seen with eight of the 44 State programs being
    centered in colleges or universities. Further numbers of States have
    contracted with colleges and universities to provide training or
    training materials. For example, both Pennsylvania and West Virginia
    contract with their respective State Universities for these materials.
    Penn State, West Virginia U., and the University of Kentucky cooperate
    to present a series of TRAM (Training Resources Applied to Mining)
    conferences to showcase new developments in mine training.
        MSHA, through its Educational Policy and Technical Support
    Divisions, provides training support that ensures that the nation's
    mines are able to deliver safety and task training required within the
    federal mine safety law. MSHA hopes to expand its Technical Support
    functions to provide mines and miners with an understanding of
    currently available technologies that will assist with the safety
    mission. Our universities are willing partners in this push for safety
    through training and better use of technology. As we train, we are
    providing one of the three requisites described above for safe mines.
    Of course, MSHA's main business, which we acknowledge but in which we
    do not participate, is enforcement of the nation's mine safety laws. As
    can be seen in the next section, universities look for scientific and
    technological solutions to on-going problems with the expectation that
    these solutions will make for easier compliance with the safety laws.
    Office of Mine Safety and Health Research, NIOSH
        Recently, the National Institute of Occupational Safety and Health
    (NIOSH), which reports to the Centers for Disease Control and
    Prevention, Department of Health and Human Services, was given
    responsibility for research into problems of miner health and safety.
    This area of research had been part of the mission of the Bureau of
    Mines but was transferred upon the closure of the Bureau. NIOSH has
    established an Office of Mine Safety and Health Research and oversees
    the work of two national laboratories: Pittsburgh and Spokane Mine
    Safety and Health Research Centers. This research domain is one in
    which there used to be strong links between the federal laboratories
    and the universities. There are still strong emotional ties and a very
    clear parallelism of purpose. NASULGC urges the restoration of formal
    links between the laboratories and the universities. We believe that
    these links return a value in research accomplished that is far greater
    than the dollar investment in them.
        The Office of Mine Safety and Health Research was funded in fiscal
    year 1998 at $32 million. During that fiscal year a recurring amount of
    $4 million has been added to bring their total annual budget to $36
    million. The budget includes $0.5 million in extramural funding for
    research. We urge two modest but important moves: first is to increase
    the extramural research share of the budget to one million and the
    second is to consider restoration of cuts that were made when the
    function was transferred from Interior to HHS. These requests would
    expand the fiscal year 1999 budget to $42 million.
        The last requisite for safe and healthy mines is to have inherently
    safe technology and mine design. This need drives the research
    conducted by the Office. Research is needed to develop technology that
    removes or mitigates the hazards to workers at active mine locations.
    For all the advances that we have achieved, we are still uncertain over
    the reliable provision of breathable environments that rarely if never
    exceed thresholds for dust and other contaminants. Although equipment
    is more reliable than in the past, we cannot predict breakdowns and
    failures nor can we guarantee freedom from fires. We construct our
    mines within the earth and though we know a lot about its geology and
    its mechanical behavior, we still cannot predict exactly where or when
    it might fail disastrously. These problems, however, and others are
    amenable to research and may given the right combinations of talent
    yield their secrets. When they do, we will progress to another level of
    mine safety. We will also be able to share our technology with workers
    in other but related fields where vigilance is today's only insurance
    from accidents.
        Again, Mr. Chairman, thank you for the opportunity to be here today
    and I look forward to working with you and answering any questions you
    may have.
                                     ______

         Prepared Statement of Ron Kramis, Ph.D., Fibromyalgia Network
                          fibromyalgia syndrome (fms)
        Mr. Chairman and Members of the Committee, people with fibromyalgia
    syndrome (FMS) battle diffuse pain from head-to-toe, severe fatigue,
    unrestful sleep, concentration difficulties, and a myriad of symptoms.
    Studies have shown that FMS afflicts at least 2 percent of the general
    population (mostly women in the prime of their life), the symptoms
    don't go away, and prescribed therapies are ineffective. Last year a
    multi-center study published in the June issue of Journal of
    Rheumatology revealed that 26 percent of the FMS patients surveyed were
    receiving some form of disability payment. Then in September, two more
    articles from the multi-center study appeared in Arthritis &
    Rheumatism. The first stated that the average cost of treating an FMS
    patient was $2,274 per year. The second article indicated that despite
    the variety of treatments employed, patients showed no significant
    improvement over the seven-year follow up period. The high disabling
    rate, coupled with the lack of effective therapies, should have
    triggered NIH to fund more research on this condition (four years of
    Congressional language have failed to accomplish this). Instead, the
    National Institute of Arthritis, Musculoskeletal and Skin Diseases
    (NIAMS) opted last year to fund a cost-containment study on FMS to help
    out the HMOs, not the patients who suffer so miserably.
    Could FMS be a Product of Stress or Mental Status?
        The answer to this question was provided by neurophysiologist
    Ronald Kramis, Ph.D., of Portland, OR, during his public witness
    testimony to the House Appropriations Subcommittee on Labor-HHS in
    January of this year:
        ``In any chronically painful condition you are going to develop
    some psychologically associated conditions. But, it is very clear that
    there are physiological mechanisms here which are known from the basic
    sciences to be related to the persistent pain that is occurring in
    these individuals. There is an unfortunate tendency right now, because
    the medical community does not have the means to treat this disease and
    they do not understand it, that there is a push to do cost-containment
    studies and get rid of these people rather than try to treat them.
    Individuals with FMS have a real disease, it's not going away, they
    will continue to tax the socio-economic system, and cost-containment is
    not the answer.''
    Fibromyalgia: Pain Without Injury
        There is a major problem of faulty logic in the way this highly
    disabling condition is being perceived. The pain of fibromyalgia is not
    usually fazed by modern therapies and when you look at the tissues that
    hurt, you won't see any evidence of injury or disease. It's pain
    without tissue pathology. Just because you can't see the pain, some
    might say that the pain is not real, the usual assumption being that it
    is ``psychological.'' That's the faulty logic often employed. Pain does
    not require obvious tissue disease to be real and excruciating.
        You can understand this phenomenon quickly with a simple test. With
    your thumb and all four fingers, reach across your chest and firmly
    squeeze the back top of your shoulder muscle near the base of your
    neck. Squeeze modestly, but until it hurts--and then squeeze a bit
    more. Maintain that pressure. Now, consider living with that sensation,
    not just in your shoulder, but throughout your entire body, day after
    day, year after year. If you are able to do that, you will have some
    understanding of the quality of life of people who must endure the
    symptoms of FMS.
        Most people who do this test will experience a deep, diffuse,
    distressing pain--all in the absence of tissue pathology. This test
    doesn't produce any injury to the shoulder, but the pain felt was real.
    Some people may be surprised at how little pressure was necessary.
        The occurrence of body-wide pain in the absence of tissue damage,
    as in fibromyalgia, interferes with all aspects of a person's life and
    undermines their credibility. The problem is that normal activities can
    be exhausting, sleep is disturbed, the ability to concentrate is
    impaired, gastrointestinal function is often abnormal, persistent
    headaches are common, and the unrelenting pain that no one can see is
    often detrimental to their personal and professional lives--as it
    creates a ``credibility gap.''
    Pain is Determined by the Central Nervous System
        Pain is most often perceived as if it were occurring in some
    peripheral tissue when an injury or disease is present, but the actual
    sensation of pain clearly does not occur there. The initial information
    (signal) about damage to tissues comes from the periphery. Yet, the
    perception of that signal as painful occurs in the central nervous
    system, or CNS (brain and spinal cord), not in the tissues--even though
    it feels as if the pain is in those tissues.
        If one thinks that the cause of pain must be in the tissue felt to
    be painful, one can jump to the wrong conclusion that diffuse pain
    syndromes such as fibromyalgia fall into the category of
    musculoskeletal diseases. Then when research fails to show signs of
    injury or disease in the painful tissues, false assumptions are often
    made that the pain is not real but of psychological origin.
        To further advance the science of fibromyalgia syndrome (FMS) and
    related chronic pain disorders, it is imperative to look beyond the
    tissues that hurt--the musculoskeletal structure--and examine the role
    of the central nervous system. Distortions in the way the central
    nervous system operates can lead to chronic pain without tissue injury.
    This usually results in disturbed sleep, severe fatigue, concentration
    problems, and GI upset--basically all of the symptoms of FMS.
    Relevant Research Findings in FMS
        People with FMS have a threefold increase of substance P in their
    spinal fluid, which among other things, functions as a pain messenger.
    This finding is not new; it has been confirmed in three different
    laboratories. Based on the substantial body of literature from
    neuroscientists, people with such a high level of substance P would be
    expected to have their entire central nervous system functioning off
    kilter in a hypersensitized state. Substance P is also known to
    regulate a multitude of body systems and it is no surprise that
    individuals with FMS have numerous symptoms. More recently, elevations
    in nerve growth factor have been found in the spinal fluid of people
    with FMS and there is compelling scientific evidence to link this
    abnormality to the high production of substance P and disordered sleep.
        Another finding that points to the central nervous system as the
    source of problems in FMS includes lower than normal blood flow levels
    to two major pain processing areas in the brain (the thalamus and
    caudate nuclei). The principal investigator in this study, Laurence
    Bradley, Ph.D., says that this pattern of reduced blood flow in the
    brain resembles that of other chronic pain conditions involving nerve
    injury and metastatic cancer.
        The groundwork for understanding the neurological processes
    involved in pain (in the absence of tissue injury) has already been
    done for other chronic pain conditions. This science needs to be
    applied to the study of FMS. There are a large number of pain
    researchers who would be eager to apply their knowledge to the study of
    FMS if only NIH would provide sufficient opportunity to do so.
    Economic Responsibility
        A recent multi-center study showed that 26 percent of the patients
    surveyed were receiving some form of disability compensation. The
    average annual health care cost for a fibromyalgia patient is $2,274.
    Over 20 billion dollars per year are being spent on fibromyalgia
    patients because physicians are unable to provide them with therapies
    that work. Despite this huge financial drain and frustrating attempts
    by clinicians to treat the pain, the quality of life for a person with
    fibromyalgia is poor.
        Ordinarily, when a medical condition produces a high degree of
    work-disability and treatments are not effective, rational thinking
    would lead to more research on the condition. For FMS, fears over the
    costs that may be required to help people with this medical problem
    have overshadowed rational thinking. Last year, NIAMS added a cost-
    containment study to its list of funded projects. This study is
    designed to trim $1,200 per year off of the HMO health care costs of
    tending to each person with FMS. The needs of patients with FMS are
    being forced into second place, behind the needs of cost-cutting HMOs
    to make a profit.
        The cost issue is real, but disregarding individuals with FMS is
    not an effective approach. People racked with the unyielding pain and
    draining fatigue of FMS will continue to seek medical attention, and in
    the absence of effective therapies, many will be forced to apply for
    disability compensation.
        Economic responsibility to ensure that adequate research is being
    done on FMS rests on the shoulders of this Appropriations Committee and
    NIH. This Committee has passed language for the past 4 years, urging
    NIAMS to step up its research program on FMS. NIAMS has refused and,
    instead, has stepped into the cost-containment funding arena--an action
    that will only escalate patient suffering. Regardless of all of the
    mishaps that have been occurring at NIH, it is still up to this
    Committee to enforce economic responsibility in research matters
    pertaining to health conditions such as FMS.
    Recommendations
        NIAMS has traditionally been the home of FMS research and should
    step up its efforts in this area (NIAMS-funded research has been
    stagnant for three years). However, with modern advances in our
    understanding of chronic pain syndromes, it is appropriate for the
    neurological Institute (NINDS) to also be a significant sponsor of
    research on FMS. Here are our recommendations:
        NIAMS, in cooperation with NINDS, the Office of Alternative
    Medicine (OAM), the Office of Behavioral and Social Sciences Research
    (OBSSR), and the National Institute of Dental Research (NIDR),
    published an RFA on March 26 of this year. The estimated funds
    available adds up to only $1.85 million after years of NIH doing
    precious little. This RFA was not a surprise; it was recommended last
    year by both the House and Senate Appropriations Committees. Although
    one of the areas of interest includes pain-related research, many of
    the other items being solicited have to do with psychiatrizing FMS.
    Pharmacological treatments are not even listed, but proposals for
    behavioral and alternative therapies are being solicited in place of
    testing traditional medicines used for other painful conditions. We ask
    this committee to urge NIH to place stronger emphasis on pain mechanism
    research, investigation of disease markers, and pharmacological
    interventions--the three areas that will help FMS patients the most.
        NIAMS and NINDS should routinely publish a 2-year PA on FMS to
    generate grant proposals from scientists of all different specialties.
    The PA will also work to lower the pay-line for FMS grants, which is a
    necessary step because only a few investigators have sufficient
    preliminary data on FMS to compete with applications for researching
    other medical conditions that have been studied for years.
        A Special Emphasis Panel (SEP) was set up 2 years ago to grade
    research grant proposals submitted to NIH on FMS and the related
    condition, chronic fatigue syndrome. This SEP needs to be recognized by
    NINDS and other Institutes at NIH.
                                     ______

     Prepared Statement of the Population Association of America (PAA) and
                  the Association of Population Centers (APC)
        Thank you, Mr. Chairman for this opportunity to present the
    position of the Population Association of America (PAA) and the
    Association of Population Centers (APC) to the Subcommittee on Labor,
    Health and Human Services and Education on fiscal year 1999 funding for
    the National Institutes of Health (NIH), specifically the National
    Institute on Aging (NIA), and the National Institute of Child and
    Maternal Health (NICHD). You are a long-standing friend of both
    organizations and we want to emphasize how grateful we are for your
    appreciation and support of demographic research.
        As you know, PAA is a scientific and educational society of
    professionals working in demographic research. APC is a consortium of
    27 leading American population research centers. In addition to their
    academic roles, members of both organizations provide federal, state
    and local government agencies, as well as private sector institutions,
    with data and research to guide decision-making.
        In this testimony, we wish to express our support for the National
    Institutes of Health (NIH), specifically NIH support for demographic,
    social and behavioral research, and share recent demographic trends and
    research findings of interest with Congress.
        Demographic research covers many issues important to our nation,
    such as retirement, minority health, disability and long term care,
    child care, immigration, labor force participation, worker retraining,
    family formation and dissolution and population forecasting. The United
    States is undergoing far-reaching shifts in its demographic composition
    and distribution. Such changes often are not recognized or understood
    until they confront society with new and immediate needs--often
    requiring federal and state expenditures. Incorporating demographic,
    social and behavioral research into long term policy discussions allow
    such changes to be tracked and anticipated in a manner that promotes
    more coherent and efficient planning and policy implementation.
        NIH, specifically the National Institute of Child Health and Human
    Development (NICHD) and the National Institute on Aging (NIA) provide
    primary support for demographic research. We would like to take this
    opportunity to share with you information concerning aging, trends in
    adolescent health, the incidence of teenage pregnancy and abortion
    prevalence and changes in fatherhood.
    The National Institute of Child Health and Human Development (NICHD)
        NICHD has a well-established, successful population research
    program. NICHD is currently funded at $674 million with $39.6 million
    of the budget for research funded through the Demographic and
    Behavioral Sciences. Among the many areas of demographic research
    supported by NICHD are families and households; marriage and family
    change; fertility and family planning; teen pregnancy; mortality; HIV
    prevention; and population movement, distribution and composition.
    NICHD also funds a highly regarded population research centers program.
    Population research centers provide a critical core of professionals
    who conduct research in a cost-effective manner. Further, the centers'
    training programs are an essential source of population scientists who
    bring fresh perspectives, ideas and improved methodologies to
    demographic research.
        As you can see from the wide range of research topics listed above,
    NICHD-supported demographic research provides important, ongoing
    information critical to policymakers. Last year's committee report for
    the fiscal year 1998 NICHD appropriation specifically mentioned the
    National Longitudinal Study of Adolescent Health, also known as the Add
    Health Survey, and this committee's interest in continued reporting on
    this study. We are pleased to provide some information in this
    testimony that focuses on Add Health, your interest in the decreasing
    rates in teen pregnancy and abortion, the Fatherhood Initiative, and
    the Family and Child Well-Being Research Network.
    Add Health
        The Add Health survey is the first comprehensive national study of
    the social, psychological and environmental determinants of adolescent
    health. This study provides information that is valuable to parents,
    educators, researchers and policymakers. Although teens are generally a
    very healthy sub-group in the population, one in five has a serious
    health problem which are often costly and affect adult health. Each
    year, in the mid-1980's, the lifetime cost of injuries to young people
    15-24 years of age were estimated at $39.4 billion; public support for
    families headed by adolescents cost $16.7 billion per year; treatment
    costs for adolescents with mental health problems were estimated at
    $3.5 billion annually; and $2.0 billion or more per year was spent on
    facilities for delinquent adolescents.
        One of the key findings from the Add Health study was that ``family
    connectedness'' played a central role in protecting adolescent health:
    adolescents who felt loved and cared for by their parents and were
    satisfied with their family relationships were least likely to smoke,
    drink or use illegal drugs; least likely to become sexually active at a
    young age; least likely to be emotionally distressed or contemplate or
    attempt suicide, and least likely to engage in violence.
        Determining how to prevent and treat adolescent health problems
    will contribute to a stronger and healthier society. PAA and APC hope
    this committee will continue to support research, such as the Add
    Health study, that adds to our understanding of changes in the teenage
    and adult population.
    Teen Pregnancy and Teen Abortion
        There are encouraging trends in teen pregnancy and the prevalence
    of abortion. The teen birth rate has been steadily decreasing in recent
    years. Since 1991 the rate has declined 12 percent to 54.7 per 1,000 in
    1996. Between 1991 and 1995, the teen birth rate dropped 17 percent
    among non-Hispanic blacks and by more than 9 percent among non-Hispanic
    whites. The teenage Hispanic population did not show a comparable
    decline in birth rates between 1991 and 1995. Another encouraging note
    is that there was a decline in the teen abortion rate in the early
    1990's. These data suggest that the decrease in the teen pregnancy rate
    is not being driven by an increase in abortion.
        Although rates of teen pregnancy are decreasing, the United States
    still has one of the highest teen pregnancy rates among industrialized
    countries. NICHD is currently supporting a study to identify key groups
    of young women who are at a higher risk of becoming a teen parent. One
    such group, younger sisters of pregnant and parenting teens, have more
    permissive childbearing attitudes than do their age and socio-economic
    status-matched peers who do not have an older sister who is a teen
    parent. Realization of this type of information will prove very
    important when creating intervention programs targeted at further
    decreasing the teenage pregnancy rate.
    Fatherhood
        The declining significance of marriage has the particular effect of
    weakening the ties of men to women and children, with a resulting
    burden to the welfare system and to women and children themselves.
    Thus, it is important to understand the conditions which help to
    sustain men's obligations to family members. NICHD, in conjunction with
    the Federal interagency Forum on Child and Family Statistics and the
    National Center on Fathers and Families, launched a Fatherhood
    Initiative to review the capacity of the federal statistical system to
    conceptualize, measure and gather information from men about their
    fertility and role as fathers. This same study identified ways to
    improve data collection and research in this area.
    Family and Child Well-Being Research Network
        Finally, we wanted to bring you up-to-date on NICHD's Family and
    Child Well-Being Research Network--an interdisciplinary data system
    focusing on child- and family-related research that relies on cross-
    agency cooperation. The network is comprised of scientists from seven
    universities collaboratively working with federal officials from NICHD,
    the Office of the Assistant Secretary for Health, of the Department of
    Health and Human Services (DHHS), the Administration of Children and
    Families, of DHHS, the Census Bureau and the Department of Education.
    This network currently addresses a variety of questions about the
    interrelations between parent characteristics, family structure and
    organization, neighborhood attributes and different forms of social
    support. The network is committed to increasing the visibility of basic
    research findings to those involved in formulating public policy.
    Projects such as the Family and Child Well-Being Research Network
    perform the important task of helping synthesize research into sensible
    policy solutions.
        NICHD's Family and Child Well-Being Research Network, in
    cooperation with federal statistical agencies and the research
    community developed a comprehensive set of indicators of child well-
    being. Information from these indices are published annually by
    executive order. The first report titled, America's Children: Key
    National Indicators of Well-Being, was released in 1997. This report
    provides a much improved information base that summarizes the changes
    in the overall well-being of American children and families on an
    annual basis.
        PAA and APC enthusiastically support initiatives such as NICHD's
    Family and Child Well-Being Research Network that provide quick access
    to data and are efficient and effective resources for policy-related
    research in cross-disciplinary fields.
    The National Institute on Aging (NIA)
        The NIA also has a well established and widely respected
    demographic research program which provides crucial information on the
    implications of an aging of the American Population for our country.
    Currently, the NIA is funded at $519 million, with $38 million of that
    budget dedicated to demographic research--training, career development,
    and demographic, economic and epidemiologic research. As the US
    population ages and Congress contemplates changes in Medicare and
    Social Security, the demography of the elderly steadily become more
    important. The NIA has a strong history of supporting the collection of
    data which allows demographers to study questions of concern to
    policymakers. Chief among these are the NIA-supported studies, the
    Health and Retirement Study (HRS) and its auxiliary survey, the Asset
    and Health Dynamics of the Oldest-Old (AHEAD) study. You have been a
    solid supporter of these two studies over the years, Mr. Chairman, and
    we would like to express our gratitude for your support.
    Health and Retirement Study (HRS)
        As you know, the HRS focuses on retirement decisions and includes
    data on disability, work history, health and health insurance, pensions
    and retirement plans and obligations to family that may bear on
    retirement decisions. Using HRS data, researchers are able to explore
    issues related to health, disability and labor force participation;
    prospects for economic security; cognitive changes, health insurance
    coverage in the decade before Medicare eligibility.
        HRS research conducted by economists at the University of
    Pennsylvania, for example, indicated that while pre-retirement savings
    appears to be substantial ($340,000 for the median household), the
    present value of Social security wealth accounts for a large share of
    average total wealth (about $145,000). To meet a post-retirement income
    target of 70-80 percent, an average couple in their mid-50's would have
    to save $10,700 each year until age 65. This would translate into a
    savings rate of 23 percent, far greater than typical savings rates in
    the U.S. Persons in poor health are even less well prepared for
    retirement, with only $5,000 in pension wealth and $80,000 in Social
    Security wealth.
    Asset and Health Dynamics of the Oldest-Old (AHEAD)
        The companion survey of HRS, AHEAD, provides unique information on
    the dynamics of health, economic resources and health care services.
    The study provides badly needed data on the costs and burdens of
    chronic disease and the consequences for the extended family. Over
    time, AHEAD will provide data on how families redistribute their
    resources across generations, and how these flows interact with public
    sector transfers. Such a study is needed to make informed policy
    decisions on initiatives such as Medicare/Medicaid coverage for
    community long term care and health care reform.
        AHEAD data and research are also providing insights into the
    complex family support system which sustains persons of all ages in
    times of need. Despite the stereotype of the ``greedy geezer'',
    analyses of AHEAD indicate that financial transfers overwhelmingly flow
    from parents to children, even when the parents are very old. These
    transfers disproportionately target adult children in the family who
    are relatively less well off than their siblings. Adult children who
    benefit from such transfers, however, are far more likely to provide
    personal care as their parents become disabled in later life.
        HRS and AHEAD data also provide opportunities to track the
    cognitive performance of older persons as they age. In the total non-
    institutionalized population age 70 and over, about 5 percent have
    severe cognitive impairment and another 48 percent score below average.
    As expected, persons of low education and limited financial resources
    are more likely to evidence cognitive deficits in middle and late life.
        Finally, PAA and APC are interested in and support the current
    efforts to strengthen the Federal Forum on Aging Related Statistics
    that coordinates data across federal agencies. The forum is an example
    of NIA's interest in supporting NIH's innovative endeavor of
    streamlining federal databases and making data accessible to
    researchers from varied fields.
        PAA and APC would like to thank you for the opportunity to present
    this information. Demographic data and research are important tools for
    policymakers that can both save public funds and promote more informed
    decision-making. If this vital research is to continue producing
    relevant and timely information, adequate funding and Congressional
    support are needed. The Population Association of America and the
    Association Population Centers support a 15 percent increase in funding
    to sustain the momentum of demographic research in the National
    Institutes of Health as part of the broadly based support to double the
    the funding for the NIH over the next 5 years.
                                     ______

       Prepared Statement of the American Association for Cancer Research
        The American Association for Cancer Research (AACR) is the premier
    professional association of basic, clinical, and translational cancer
    researchers. Its membership of 14,000 scientists is committed to the
    understanding, diagnosis, treatment, and prevention of cancer. The
    AACR's international headquarters is located in Philadelphia,
    Pennsylvania. We appreciate the opportunity to present a statement to
    the Committee Record on behalf of increased funding for cancer
    research.
        Cancer is a disease which devastates its victims. Based upon
    today's incidence rates, 42 percent of Americans alive today will
    develop cancer, and over 20 percent will die from this disease.
    Cancer's daily death toll is 1,550 people, one person every 57 seconds.
    To fully grasp the concept of cancer's death rate, imagine five Boeing
    747 jumbo jets crashing EVERY DAY for a year, and that will equal the
    number of Americans who die annually from cancer--over 565,000. In
    fact, the number of Americans who die of cancer each year exceeds all
    U.S. combat deaths in all of the wars in this century. This should
    shock the public into action; it should be our wake-up call. The
    ravages of cancer are not acceptable to those of us on the front lines
    of the fight against cancer, and especially not to its victims and
    their family members. Indeed, the human toll of this disease is painful
    to quantify.
        The AACR fully supports the priorities and programs articulated in
    the fiscal year 1999 ByPass Budget of the National Cancer Institute
    (NCI). We call on Congress to consider seriously the priorities
    outlined in this important document and to provide a funding level for
    the NCI of $3.1 billion in fiscal year 1999 in order to fully fund
    these opportunities for accelerated progress against cancer. The 1999
    ByPass Budget specifically outlines the following:
      --Extraordinary Opportunities in cancer genetics; preclinical models
            of cancer; imaging technologies; developmental diagnostics;
            and,
      --NCI Challenges which are to dramatically increase access to and
            participate in clinical trials; enhance investigator-initiated
            research; support and encourage clinical investigators;
            restructure and expand NCI Cancer Centers; develop state of the
            art informatics systems; study emerging trends; and increase
            training and education.
        These priorities are vitally important to our national effort to
    conquer cancer. We need your support for the fiscal year 1999 ByPass
    Budget to fully pursue them.
        The importance of investments in scientific research has recently
    gained momentum in Washington. The AACR is encouraged by the Clinton
    Administration's proposal to increase cancer research spending at the
    National Institutes of Health (NIH) by 65 percent over the next 5
    years. The increase requested for the NCI is part of an unprecedented
    $1.5 billion increase requested by the Administration for NIH in fiscal
    year 1999. The AACR also supports Senator Specter's Resolution to
    increase the funds provided to the NIH this fiscal year by $2 billion--
    in increase of 14.65 percent--and the AACR asks that you support the
    spirit of this Resolution as the Budget Committee develops its
    priorities, and when the Subcommittee marks up its fiscal year 1999
    bill. We recognize that, in order for you to support our request for
    increasing the appropriations to the NCI, it is important for you to
    understand what has been accomplished and what needs to be done now.
    The research community is committed to working with your colleagues in
    the leadership and on the Budget Committee to realize the potential
    advances outlined in the ByPass Budget.
        Twenty-five years ago the nation enacted legislation to wage a war
    against cancer, funding a program of research, establishing a network
    of cancer centers, and developing national programs to improve
    diagnosis and treatment. The progress made to date has been
    extraordinary. We have established a research infrastructure that is
    the envy of the world. We have attracted the best and brightest minds
    to the problem of cancer, and we have made research discoveries that we
    did not even think were possible when the National Cancer Act was
    passed.
        Our investment in basic research has produced unprecedented
    opportunities for advances on all fronts in our national war to
    eradicate cancer. These victories in basic research have often been
    difficult. Cancer has proven to be an extraordinarily complex disease
    that presents an ongoing challenge beyond what cancer researchers
    imagined 25 years ago. Significant progress has been made that has
    allowed us to cure certain types of cancer and has led to the
    development of new diagnostic, therapeutic, and prevention strategies
    for several other cancers. Researchers are beginning to understand the
    causes of cancer and also to make inroads into cancer control through
    new methods of screening high-risk individuals and advances in
    diagnosis. The battle against cancer is now turning in our favor, as
    demonstrated by the recent announcement of a decline in mortality of
    several cancers.
        Regrettably, at this, our moment of greatest potential, we are
    losing momentum. Just when the possibility of eliminating cancer has
    never been greater, we are facing a critical loss of national will. We
    are also faced by the grim reality that we have not fought the ``war''
    that the public believes has been waged against cancer. In fact, there
    has only been a skirmish.
        A crisis of unprecedented proportions has developed and continues
    to threaten continued progress in research. The AACR believes that this
    crisis will block further progress and could even reverse past
    advances. While we recognize the extraordinary support that Congress
    has provided to cancer research in the past, our resources to combat
    this disease remain inadequate. The legacy of years of inadequate
    investment in basic, translational, and clinical cancer research--
    combined with the devastating limitations that managed care has
    recently placed on clinical research and the declining support for
    young investigators is strangling the pace of discovery in basic
    research findings into effective treatments for people diagnosed with
    cancer.
        The cost of care for persons with cancer exceeds $107 billion
    annually, yet the research budget proposed for cancer is $2.7 billion.
    No company in America would stay in business with an investment in
    research and development that is less than 3 percent. No general would
    ever go to war with such limited resources. What a terrible irony that
    $61 billion was spent on the Gulf War and that a sizable proportion of
    that money was invested to ensure that no more than 10,000 Americans
    lost their lives, yet America tolerates 560,000 deaths from cancer
    every year. One person dies of cancer every 57 seconds. That is why the
    following points are so important.
        Research grants.--When the National Cancer Act was signed into law,
    40 percent of approved research grants were funded. This year, less
    than 23 percent of approved research grants will be funded. We reject
    far more approved research than we fund. As a result we can only afford
    to fund research that is a sure thing. We are unable to fund the
    innovative, high risk science which may have the greatest potential to
    significantly advance the frontiers of science or to fund the plodding,
    methodical, and costly translational studies needed to bring exciting
    advances out of the lab and to the cancer patient.
        Clinical research.--We believe that current levels of NCI funding
    remain an impediment to a fulsome clinical research enterprise.
    Certainly Congress has provided tremendous support for the NCI in the
    context of significant fiscal pressures over the past several years.
    However, we are gravely concerned about the shortage of physician-
    scientists dedicated to clinical and translational research as well as
    those who are unable to obtain research funding and are leaving careers
    in academic medicine to pursue careers in clinical practice. Further, a
    predictable, sustainable budget that reflects a level of funding
    adequate to pursue the existing tremendous research opportunities is
    vital if we are to achieve the appropriate balance of basic and
    clinical research.
        Clinical trials offer the most promising therapy for cancers which
    have not been cured through standard therapies (commonly referred to by
    patients as ``slash, burn, and poison''). Yet, we accept the fact that
    our nation's programs of clinical research, which have led in the
    development of curative treatments for a few cancers, are stagnant or
    declining. It is unacceptable that only 2 percent of adults with cancer
    are actually treated on clinical trials that test the best available
    therapies.
        Translational research.--Translational research is less an entity
    unto itself than part of a process that may lead ultimately to general
    human applications. It is the bridge between progress in the laboratory
    and new methods of prevention, diagnosis, and treatment, and it is thus
    essential to progress against cancer. Translational research has been
    responsible for some of the most stunning clinical successes of this
    century, including the description of molecular mechanisms of colon
    cancer, the engineering of effective AIDS treatments, and the
    development of new treatments to reduce the side effects of
    chemotherapy, to name just a few. Unfortunately, however, as scientific
    complexity increases and, conversely, the complexity and often the
    toxicity of modern treatments escalate, the valley between those
    discovering molecular relationships in the laboratory and those who
    translate those discoveries into meaningful treatments has widened and
    deepened. The path to discovery is multifaceted, dependent on
    continuous productive interactions between basic and clinical
    scientists both in the laboratory and at the patient's bedside. Yet
    this highly innovative approach to research does not compete well in
    the current environment due to funding constraints.
        Tobacco.--For decades, the tobacco industry has denied that smoking
    is the major causative factor in lung and numerous other cancers.
    Researchers have now demonstrated that active tobacco smokers have a
    greater than 15-fold increase in their risk for lung cancer as compared
    with nonsmokers. Tobacco use is the cause of more than 160,000 cancer
    deaths each year in the United States and is responsible for about 30
    percent of all cancer deaths annually. In addition, smoking and other
    tobacco use have been determined to be a major cause of many other
    serious illnesses and deaths each year, most notably from cancers of
    the pharynx, larynx, esophagus, oral cavity, pancreas, bladder, and
    other organs.
        What has not been known until very recently is that former smokers
    continue to be at high risk for lung cancer for many years after
    smoking cessation because they carry long-term DNA damage in their
    lungs. It has been found that these DNA changes are associated with the
    development of cancer, that the changes persist for many years after
    smoking cessation, and that the lung tissue may never return to its
    normal state. Since DNA damage is absent from the lungs of lifetime
    nonsmokers, this leads to the conclusion that the changes observed in
    former smokers are directly related to their previous smoking. Those
    who have stopped smoking can remain from 1.5 to 4 times more likely
    than nonsmokers to develop lung cancer. In fact, over half of all lung
    cancers in the United States occur in former smokers.
        Therefore, the AACR urges Congress to ensure that public health
    funds obtained from the tobacco settlement are provided to the National
    Institutes of Health (NIH) and the NCI for additional peer-reviewed,
    national cancer research programs of the highest quality. It is highly
    appropriate that funds be provided from the tobacco settlement for
    research, and it is essential that the amount be consistent with the
    scope and gravity of this epidemic.
        Specifically, these new resources should be directed to the NCI in
    support of important priorities in basic, clinical, and translational
    cancer research. We ask Congress to ensure that the resources provided
    through the tobacco settlement will: markedly increase the cancer
    research budget of the NCI; underwrite the cost of participation in
    clinical research trials ontobacco-related cancers that will contribute
    to curative or preventive new therapies; and supplement, not supplant,
    current resources provided to the NIH and NCI.
        To exploit the research opportunities that exist and to build on
    the promising developments of just the last few years alone, the AACR
    believes that a real War on Cancer is now warranted. Congressional
    support of cancer research has been considerable over the past 25 years
    but far too much work remains to be done and our casualty rate is far
    too high. Without your leadership in support of our National Cancer
    Program, we will not be able to do our job at both laboratories and
    hospitals across the country.
        Thank you for the opportunity to present this statement.
                                     ______

        Prepared Statement of the College on Problems of Drug Dependence
        The College on Problems of Drug Dependence (CPDD) is the nation's
    longest standing organization that addresses the problems of drug
    dependence and drug abuse and the leading scientific society in the
    field of drug dependence research. CPDD urges the Committee's continued
    support of the National Institutes of Health (NIH), the National
    Institute on Drug Abuse (NIDA), and the Substance Abuse and Mental
    Health Services Administration (SAMHSA).
    National Institute on Drug Abuse
        CPDD sincerely appreciates the almost unparalleled 7.6 percent
    increase provided to NIDA in this fiscal year 1998, and urges that the
    Committee increase this base in fiscal year 1999 to continue the
    ongoing peer-reviewed research funded by NIDA. Such research is
    essential for continuing to further our understanding of the etiology,
    prevention, and effective treatment of substance abuse problems.
        Despite these recent increased appropriations and encouraging
    decreases in certain categories of drug use, drug use trends remain
    mixed and more research is necessary to provide effective interventions
    to reduce overall illicit drug use and achieve the goals of the
    National Drug Control Strategy to reduce the prevalence by 50 percent
    by 2007. The 1997 Monitoring the Future Study found that illicit drug
    use among younger adolescents appears to be slowing. However, there
    were again increases in the fraction of twelfth graders using drugs
    such as marijuana, cocaine, LSD and cigarettes, and this population's
    increased use of drugs is particularly alarming as they are poised at
    the brink of exiting our school system, a means to monitoring youth
    drug use. As the Institute of Medicine recommended in their 1996 Report
    on Opportunities in Drug Abuse Research, there is a need for additional
    monitoring to provide more information about escalation to abuse and
    dependence. The inconsistencies in drug use patterns command our
    attention and demand that we continue to expand our efforts to identify
    and disseminate science-based information on the perils of drug use and
    the most effective practices for prevention and treatment. We must
    remember that drug abuse in fact is a preventable behavior.
        It is important for Congress to recognize that research is
    essential to produce significant and long lasting changes in drug use.
    We have learned a lot about the causes of drug abuse, and our latest
    treatment advances reflect some of that knowledge. Some of what leads
    people to abuse drugs is inherited from their parents. Availability of
    drugs is also an important determinant of initial use, but much less
    important to addicts, though even they turn out to be somewhat
    sensitive to the price. We are also learning about the increased risk
    for drug abuse which children with certain types of psychiatric and
    behavioral problems have and the need to treat these disorders if we
    are going to prevent substance abuse problems. Something happens to the
    brains of people who use drugs regularly. We are learning a tremendous
    amount about this, taking advantage of some of the latest techniques
    from the neuroscience. Indeed, drug abuse research is coming of age.
    NIDA was established just over two decades ago. It funds virtually all
    drug abuse research in the United States and more than 85 percent of
    all drug abuse research worldwide, few other governments support this
    research. There is little pharmaceutical industry research in this area
    and few foundations support any basic research, since the market
    potential for medications in this area is fairly modest. As the
    Institute of Medicine Reported in 1996, ``The field is on the threshold
    of significant advances and a sustained research effort will strengthen
    society's capacity to reduce drug abuse and ameliorate its adverse
    consequences.''
        Great strides are being made in understanding the causes of drug
    abuse, and the scientific community relies upon NIDA's support.
    Researchers now have the ability to show in detail what drugs are
    actually doing to and in the brain--we can actually visualize as it
    happens where drugs are binding in the brain. We have discovered the
    specific brain circuits involved in drug use and we are beginning to
    unveil the changes in activity patterns in these circuits during the
    processes of addiction and withdrawal. Researchers have identified the
    genes for the receptor sites for practically every illegal substance.
    The next step is to develop new addiction medications. NIDA devotes
    about $80 million of its budget to drug development. We rely upon this
    investment which is not complemented by industry sponsored research;
    NIDA's support in this arena is unparalleled and therefore all the more
    vital.
        To build upon these and other past breakthroughs and to exploit the
    opportunities that exist, CPDD recommends additional research in the
    following broad areas:
        Increase basic drug abuse research.--The explosion of new
    information in neuropharmacology and other neuroscience has the
    potential to provide major breakthroughs in drug abuse treatment and
    prevention. We need to better understand the role of heredity and other
    sources of individual differences as risk factors for drug abuse. We
    also need additional information on the harmful effects of acute and
    chronic exposure to drugs of abuse.
        Maintain and expand our knowledge of trends in drug abuse
    practices.--Continued support is needed for large scale surveys that
    provide an informed public policy. We need better access to existing
    data, which would facilitate our understanding of drug abuse and its
    consequences; we need improved methods for obtaining scientific data on
    newly emerging drug abuse problems; and we need to support more long-
    term prospective studies on risk factors that co-vary with the
    development of drug abuse problems. Large scare ethnographic studies
    funded by NIDA play a vital role here. These should lead to the
    development of more comprehensive and systematic surveillance of young
    adult populations.
        Increase research on the effectiveness of drug abuse prevention and
    public policy initiatives aimed at reducing demand for drugs among our
    youth.--The DARE program has been widely implemented despite adverse
    evaluations in part because there is a dearth of alternative programs
    that have moved beyond the initial pilot evaluation stage. Effective
    prevention programs must be based upon an understanding of the causes
    of drug experimentation and even more critically on the escalation from
    drug experimentation to drug abuse and dependence. Additional research
    is also needed on prevention programs for high risk youth and on the
    general patterns of termination and escalation.
        Increase research on the development of new drug abuse treatments
    and on the evaluation of existing treatments.--Improved treatment
    strategies that combine the use of medications and behavioral
    treatments are needed, as are new treatments that reduce relapse. We
    also need additional evaluations of treatment effectiveness for special
    populations. For example, what are the best ways to link drug abuse
    treatment to the criminal justice system, in order to take maximal
    advantage of the leverage of criminal sanctions?
        Increase research on the relationship between drug abuse and the
    transmission of AIDS.--We need a better understanding of how drugs
    alter the likelihood of risk-taking behaviors that increase HIV
    transmission since an estimated one-third of HIV cases result from drug
    use, and we need improved treatments targeted to the abuse of drugs by
    persons who are infected with the HIV virus. Further, we need a better
    understanding of the effects of drug abuse on the immune system in
    order to better prevent and treat AIDS and its associated opportunistic
    infections.
        The College on Problems of Drug Dependence also recognizes the
    public interest in reducing tobacco use, particularly youth tobacco
    use, as evidenced by the June 1997 draft global tobacco settlement.
    Despite Congressional attention to this issue as articulated by the
    profusion of tobacco related bills pending action by the 105th
    Congress, we recognize the political roadblocks to codification of a
    tobacco settlement. If the public health goals of both the June 20,
    1997 proposal and the pending legislation are to be attained, a vast
    amount of research must be done, and should be funded as soon as is
    possible. Your support for NIDA is vital as current prevention and
    treatment programs are not powerful enough to assure that, even with
    adequate program funding, the goal of reducing adolescent cigarette use
    rates by 60 percent within ten years can be achieved or that most
    current smokers will quit within the next decade. Modern research has
    provided a much better understanding of the etiology and health
    consequences of tobacco consumption, and the basic biological effects
    of nicotine and other tobacco ingredients. The combination of large
    scale epidemiological studies and laboratory research have been
    critical in creating a public awareness of the dangers of smoking and
    have indeed forced the tobacco companies to accept their responsibility
    for a public health disaster of the first order. Health scientists have
    established that tobacco use can become addictive; this is the
    cornerstone to the proposed regulation of nicotine by the FDA and an
    aspect of the settlement strongly supported by the College. NIDA
    funding provided the initial research leading to the development of
    nicotine replacement medication and NIDA and other NIH institutes have
    supported research that has improved the efficacy of gums and patches.
    These advances have enabled large numbers of Americans to give up
    tobacco smoking.
        Whatever else emerges from the settlement discussions, two
    scientific aims are important:
        We need to develop better tools for monitoring use patterns so we
    have adequate and reliable performance measures for compliance with or
    achievement of the goals of any settlement. The Monitoring the Future
    and Youth Risk Behavior surveys are not sufficient on their own. This
    matter needs to be studied carefully.
        FDA and NIDA should work together to help develop the scientific
    foundation, now lacking, for even thinking about regulating nicotine in
    tobacco products.
    Substance Abuse and Mental Health Services Administration
        The research dissemination and training programs of the Substance
    Abuse and Mental Health Services Administration (SAMHSA) are also an
    essential part of our national drug abuse treatment and prevention
    strategy. We are especially supportive of the training and
    demonstration grant functions of the Center for Substance Abuse
    Treatment (CSAT) and the Center for Substance Abuse Prevention (CSAP).
        Much more needs to be done to determine the feasibility of
    implementing NIDA-supported research advances in community prevention
    and treatment programs. There is a tremendous gap between what is known
    about prevention and treatment effectiveness and what is actually being
    done in many communities. We need more research on the barriers to the
    implementation of effective new treatment and prevention programs. The
    treatments and the prevention strategies that emerge from NIDA-
    supported research require community-based programs to evaluate their
    effectiveness. CSAT and CSAP demonstration grants provide a critical
    link between research and its implementation. Furthermore, SAMHSA
    training programs are needed to insure that counselors, educators, and
    other professionals have the necessary knowledge of new advances in the
    field. The large cut that these programs experienced in fiscal year
    1996 have severely curtailed their effectiveness.
    Funding request
        CPDD urges the committee to provide the highest possible increase
    for NIDA in fiscal year 1999. Further, the College on Problems of Drug
    Dependence supports the Ad Hoc Group for Medical Research Funding's
    proposal to increase funding for the NIH overall by 15 percent this
    fiscal year, as the first step toward doubling the budget over five
    years. Similarly, we encourage continued support for SAMHSA, and
    request that adequate support be provided for the demonstration and
    training programs supported by CSAT and CSAP.
        Thank you for the opportunity to submit the views of the College on
    Drug Dependence.
                                     ______

            Prepared Statement of the Research Society on Alcoholism
                        fiscal year 1999 recommendation
        The Research Society on Alcoholism (RSA) is a professional research
    society whose 1,200 members conduct basic, clinical research and
    psychosocial research on alcoholism and alcohol abuse.
        Alcoholism is a tragedy that touches all Americans. One in ten
    Americans will suffer from alcoholism or alcohol abuse, but their
    drinking will impact on the family, the community, and society as a
    whole. Alcohol is a factor in 50 percent of all homicides, 40 percent
    of motor vehicle fatalities, 30 percent of all suicides, and 30 percent
    of all accidental deaths. Every American is affected and all Americans
    bear the cost. Children exposed to alcohol during pregnancy are
    afflicted with birth defects and mental retardation. Nearly 7 million
    children live with an alcoholic parent, often in chaotic homes where
    they suffer physical and emotional abuse.
        Alcoholism and alcohol abuse cost the nation nearly $100 billion
    annually. One tenth of this pays for treatment; the rest is the cost of
    lost productivity, accidents, violence, and premature death.
    Prohibition did not solve the problem of alcoholism, and current
    therapy is simply not good enough. Only research holds the promise of
    effective prevention and treatment of alcoholism; however, alcohol
    research is woefully underfunded. The National Institute on Alcohol
    Abuse and Alcoholism (NIAAA) funds over 90 percent of all alcohol
    research conducted in the United States. For 1998, the budget of the
    National Institute on Alcohol Abuse and Alcoholism (NIAAA) is $227
    million. We are committing to alcohol research only $2 for every $1,000
    lost from alcohol abuse and alcoholism and only $12 for every affected
    individual. In 1997, NIAAA could fund just 25 percent of all grant
    applications; the comparable figure for NIH is 29 percent.
        The inability to fund outstanding grant applications comes at a
    time of unprecedented opportunities in alcohol research. In the next
    few months you will learn of important new findings on the genetics of
    alcoholism. For the first time scientists, funded by the NIAAA
    Collaborative Study on the Genetics of Alcoholism (COGA), have
    identified discrete regions of the human genome that contribute to the
    heritability of alcoholism. This first success in the genetic mapping
    of a complex biological and behavioral disorder must be followed by an
    expensive, labor intensive effort to pinpoint and identify the genes of
    interest. Armed with this knowledge, health providers may one day be
    able to identify individuals at risk and target these individuals for
    prevention programs. Genetic research will accelerate the rational
    design of drugs to treat alcoholism and may improve our understanding
    of the interaction between heredity and environment in the development
    of alcoholism.
        One of the most promising areas of alcohol research is in the field
    of neuroscience. The development of effective drug therapies for
    alcoholism requires an improved understanding of how alcohol changes
    brain function to produce craving, loss of control, tolerance, and the
    alcohol withdrawal syndrome. Naltrexone, a drug that blocks the brain's
    natural opiates, reduces craving for alcohol and helps maintain
    abstinence. Ongoing clinical trials will help determine which patients
    benefit most from naltrexone and how the drug can best be used. Another
    promising drug, acomprosate, has proven effective in European trials
    and is undergoing evaluation in the United States.
        One of the most tragic consequences of alcoholism is Fetal Alcohol
    Syndrome (FAS). FAS is a permanent condition characterized by mental
    retardation, small size, behavioral problems, and specific facial
    abnormalities. Fetal alcohol syndrome is the most common, preventable
    cause of mental retardation in the United States. If pregnant women did
    not drink, there would be no fetal alcohol syndrome; however, as we
    know too well, many individuals cannot stop drinking, even when the
    consequences are well known.
        From animal studies we have learned that alcohol's effects during
    pregnancy depend on the timing, pattern, and amount of alcohol intake.
    Magnetic resonance imaging, brain wave recordings, and behavioral
    assessments of affected children have identified specific changes in
    brain structure and function that result from heavy prenatal alcohol
    exposure. A better understanding of alcohol's effects on the developing
    brain will allow us to better target the treatment of exposed people.
    This research will allow those with FAS to maximize their potential and
    circumvent some of their deficits. An improved understanding of risk
    factors will help us target and prevent FAS.
        Recent research has shown that even light drinking during pregnancy
    can interrupt normal development. Consequently, most researchers
    recommend that pregnant women abstain totally from drinking. In the
    laboratory, it has been shown that low doses of alcohol can interfere
    with normal processes of development. We are optimistic that
    understanding the mechanism by which alcohol disrupts fetal development
    will lead to effective strategies for reducing deficiencies associated
    with FAS.
        Alcohol abuse and alcoholism are devastating problems of national
    importance. Alcohol research has now reached a critical juncture, and
    the scientific opportunities are numerous. With the continued support
    of this Committee and the Congress, we are optimistic that the next few
    years will bring significant advances in alcohol research.
        Recommendation.--The Research Society on Alcoholism requests that
    funding for NIAAA in fiscal year 1999 be increased by $34 million (15
    percent) to $261 million. This request balances the impact of the
    disease and the abundance of research opportunities.
                                     ______

      Prepared Statement of Heather R. Fraser, Cystic Fibrosis Foundation
        On behalf of the 30,000 children and young adults with cystic
    fibrosis (CF) in this country, the Cystic Fibrosis Foundation (CFF) is
    pleased to submit public witness testimony to support fiscal year 1999
    appropriations for the National Institutes of Health (NIH). The
    Foundation applauds this Subcommittee for the CF-specific language
    included in the Appropriations Bill last year. Your collective vote of
    confidence in the NIH served to make the future for me, and many other
    individuals with this disease, much brighter.
        Four years ago, my health status was in a radical state of decline.
    On average, I was hospitalized every four months to receive IV
    antibiotic therapy to treat recurrent respiratory tract infections.
    Then Pulmozyme, the first new drug in 30 years designed
    specifically to CF patients, was made available in January of 1994. I
    felt as though I had been given a new lease on life. Suddenly, I had
    more energy to do what I was used to doing, and even some ``reserve''
    to do things I had previously been unable to accomplish. And yet, for
    all its merit, Pulmozyme could only do so much to protect my
    lungs from the nemesis of chronic infection. Over time, my respiratory
    status resumed its downward course. Oral antibiotics continued to
    become less and less effective. And just when it seemed as though I was
    losing my battle against this insidious disease, the aerosolized
    antibiotic TOBI--was approved.
        Over dramatization? No way--over exuberance, coupled with the
    utmost gratitude for the scientists and clinicians that helped bring
    this drug to fruition. They gave me and many others with this disease
    the greatest gift in the world--time. I know TOBI--is not a ``forever
    fix'' and am sobered by the reality that my pulmonary status will again
    one day require stronger therapeutic intervention. What will my
    armament be then? This year, you will hear testimony punctuating the
    need for increased federal funding for many entities, including medical
    research. It is my hope that one day there is not going to be the need
    for extensive deliberation--not because an infinite pool of resources
    has suddenly become available, but because a portion of that need has
    been eliminated. For individuals with CF, this will occur the day
    researchers correct CF cells permanently. The Foundation is counting on
    your continued investment to write the final chapter of our success
    story.
        The CFF urges the House of Representatives to concur with the
    President's recommendation to double the funding for the NIH over the
    next five years and, as a down payment on this commitment, provide an
    increase of at least 15 percent in fiscal year 1999. We request your
    continued support of the full spectrum of research--basic, clinical,
    and translational--sponsored by the National Institute on Diabetes,
    Digestive, and Kidney Disorders (NIDDK) and the National Heart, Lung,
    and Blood Institute (NHLBI). The resource capacity of these two
    Institutes is of paramount importance to propel the frontiers of CF
    research into the new millennium. The CFF believes this funding level
    is justifiable and an appropriate allocation, given the clear and
    pressing research opportunities which exist.
        Current success rates enable funding of a little more than two out
    of every 10 approved research grants.--In essence, this biomedical
    research policy allows us to open only two out of every ten ``doors of
    opportunity.'' This is unconscionable, and one cannot help to wonder
    what progress could emerge and how many lives would be saved if all
    these meritorious projects were funded. At a minimum, 50 percent of the
    approved research projects must be funded by the NIH in fiscal year
    1999.
        Support to General Clinical Research Centers (GCRC) to translate
    research progress from test tube to bedside must be increased.--These
    74 centers are specifically equipped to provide support to clinically
    trained investigators to examine disease conditions and to access new
    therapies. With the advent of managed care and the increasing
    constraints that academic medical centers are operating under, more and
    more ancillary costs for clinical trials are being passed on to GCRCs.
    GCRCs are pivotal to the identification of new therapies to treat and
    eventually cure CF and other life-threatening diseases. For viability
    to be sustained, there needs to be an increase of at least 15 percent
    provided to these centers.
        The NIH has a clear and important role in translational and
    clinical research. The Foundation recently completed a study looking at
    the therapeutic benefits of high-dose levels of ibuprofen to reduce
    airway inflammation in the prophylactic management of CF. This is a
    study that the private sector would not have undertaken due to the
    modest rate of return, but nonetheless was an important clinical
    research initiative to the CF population. The NIH must have the
    resources to explore these types of clinical research opportunities.
        Further, we ask this Subcommittee to direct the NIDDK, NHLBI, and
    the National Center for Research Resources to develop key mechanisms to
    assure rapid translation of basic research into new therapeutic
    interventions. While we applaud the acquisition of new knowledge
    through current programs at the NIH, a mechanism must be created to
    nurture clinical research. Creative development of an institutional
    infrastructure, similar to that already in existence to support basic
    research in teaching institutions, should be created to support and
    monitor ongoing clinical trial investigations.
        The NIH has an incredible track record in developing basic research
    and understanding of cellular processes. However, it is naive to think
    that the pharmaceutical and biotechnology industries are prepared to
    lead the effort to take this newly acquired knowledge and follow it
    through to clinical evaluation. Unless there is a permanent mechanism
    in place, drug development opportunities, along with many lives, will
    be lost.
        Clinical research training opportunities must be expanded.--A cadre
    of well-trained clinical investigators is vital to further progress
    made in the research laboratory, and to translate that progress to
    patients. Never before has the need been more urgent and the number of
    candidates so small. Additional initiatives in post-doctoral training,
    support for new and young investigators, and programs to facilitate the
    mentoring of these individuals are pressing priorities. Simply, we
    stand to lose the next generation of clinical scientists. There must be
    opportunities present to allow clinical scientists to obtain support
    for their research endeavors. This must occur at both the program
    level, with funding provided for clinical research, and the review
    level, to ensure that individuals familiar with clinical research will
    review and evaluate clinical research proposals.
        The current research infrastructure must also be updated to
    maximize the progress of an expanded national research enterprise.--
    Research management costs must be adjusted proportionately to support
    intramural program operations and provide training for scientific
    program officers. Institutional research capacity is critical and thus,
    enhanced resources must also be directed toward extramural facilities,
    state-of-the-art equipment and instrumentation, and computer
    technologies.
        The NIH and Cystic Fibrosis Foundation continue to work together to
    provide a base for leadership in this country that is unparalleled. As
    a Foundation, we understand current funding constraints and that
    federal programs--regardless of their merit--have been placed in
    competitive positions. However at the end of a day, when I retreat home
    exhausted, in part due to work but more worn out as a result of dealing
    with the daily rigors that are the unwelcome hallmark of this disease,
    that cavalier acceptance is just not justified.
        Sadly, there will be casualties at the close of this debate.
    Nevertheless, we must work together to ensure that the human cost is
    kept to a minimum. This can clearly be accomplished by a guaranteed
    investment in biomedical research. On behalf of the Cystic Fibrosis
    Foundation, I close by urging this Congress to seriously consider the
    President's recommendation to double NIH appropriations over five
    years, and provide a 15 percent increase in funding for fiscal year
    1999.
        Thank you.
                                     ______

        Prepared Statement of the Joint Council of Allergy, Asthma, and
                                   Immunology
        The Joint Council of Allergy, Asthma, and Immunology (JCAAI) is
    pleased to submit public witness testimony in support of fiscal year
    1999 appropriations for allergy, asthma and immunology programs
    supported by the National Institutes of Health (NIH). These programs
    are supported primarily in two of the NIH Institutes: the National
    Institute of Allergy and Infectious Diseases (NIAID) and the National
    Heart, Lung and Blood Institute (NHLBI). The JCAAI is a professional,
    nonprofit organization comprised of the American Academy of Allergy,
    Asthma and Immunology and the American College of Allergy, Asthma and
    Immunology, and it consists of more than 4,000 researchers and
    clinicians who are dedicated to providing care for the 50 million
    Americans who suffer from allergic or immune disorders.
        First, we would like to express our appreciation for the tremendous
    support this Committee has provided to the NIH during the past two
    years. We know that you have been faced with tremendous budget
    constraints and we sincerely appreciate your making the NIH a priority
    for funding increases. We urge your continued leadership for NIH and
    for the allergy, asthma, and immunology programs supported by the NIAID
    and the NHLBI. Further, we are supportive of the legislative proposals
    that have been proffered to double the budget of the NIH, such as Sen.
    Res. 170. We have encouraged our members to educate their elected
    officials to obtain the broadest base of support in Congress to achieve
    this important objective.
        The JCAAI supports the Ad Hoc Group for Medical Research Funding
    proposal to double the budget for the National Institutes of Health
    over the next five years. Our national research enterprise is poised to
    make significant strides if the necessary funds are available to pursue
    the scientific opportunities, preserve the integrity of the research
    infrastructure, and adequately support and mentor physician
    investigators as the health care marketplace dramatically alters.
    Asthma and allergic diseases
        Allergic diseases, including asthma, afflict twenty percent of
    Americans. The term allergic diseases describes a myriad of medical
    conditions such as asthma, allergic rhinitis, atopic dermatitis, food
    allergies and anaphylaxis. Asthma alone afflicts 14 million Americans,
    the prevalence is on the increase and the associated economic costs of
    this disease are quite significant.
        In 1999, the NIAID will renew the Asthma, Allergic and Immunologic
    Diseases Cooperative Research Centers. These centers provide an
    infrastructure and collaborative environment to study the complex
    problems associated with asthma, allergic and immunologic diseases. An
    important object of these research centers is to integrate basic and
    clinical research initiatives to improve the diagnosis, prevention, and
    treatment of these diseases.
        Allergic diseases.--Allergic rhinitis (hay fever) alone affects as
    many as 35 million Americans and is the most common chronic disease.
    Food allergies and food intolerances are also a major problem. Eight
    percent of children under six years of age experience food
    intolerances.
        Allergic reactions can be minor, such as reactions to pollen, mold,
    or dust, or they can be severe and potentially fatal, such as reactions
    to penicillin, insect venom, or allergic reactions to food. As many as
    2 million people experience severe reactions to insect stings every
    year, and many experts believe life-threatening allergic reactions to
    food may occur just as frequently.
        Research.--A variety of therapies have been developed to treat
    allergies, but researchers still do not fully understand certain
    critical aspects of allergies. When an allergic individual comes in
    contact with an allergen (the allergy-provoking substance), immune
    system cells produce an unusual type of antibody known as
    immunoglobulin E, or IgE, which starts the allergic reaction.
    Researchers are attempting how to comprehend how the immune system
    recognizes an allergen, why some people have a more severe reaction to
    an allergen, and what factors, including environmental and genetic,
    might be responsible for allergic diseases.
        NIAID-supported researchers are among the leaders in the study of
    allergies. For example, they identified the IgE antibody and they have
    identified the structure of the IgE receptor. By blocking the activity
    of the receptor, researchers may be able to provide a new therapy for
    allergies. NIAID-supported research has also demonstrated that DNA
    vaccines are capable of stimulating an immune response that may
    diminish allergy symptoms. Such vaccines could provide a more potent,
    consistent, and convenient treatment than the current therapy of
    allergy shots.
        Asthma.--Asthma is a major health problem. As many as 15 million
    people in the U.S. have asthma, and the number of people with self-
    reported asthma increased from 10.4 million in 1990 to 14.6 million in
    1994. The actual number of asthmatics may be higher--asthma is
    sometimes difficult to diagnose because it often resembles other
    respiratory problems such as emphysema. Children have a 41 percent
    higher prevalence of asthma than that of the general population and an
    estimated 4.8 million children under age 18 have asthma. It is the most
    common chronic disease in children, and it is one of the most common
    reasons for missed days of school (parents are also forced to miss work
    to care for their asthmatic child). Recent research has identified that
    very early exposure to asthma-causing agents, in infancy or prior to
    birth, may determine a child's chance of developing asthma. Further,
    clinical and epidemiological data suggest that viral respiratory
    infections and exposure to allergens are the most important risk factor
    early in life that may lead to wheezing, prolonged alterations in
    airway function and chronic asthma.
        Asthma is approximately 25 percent more prevalent in African-
    American children than in Caucasian children, and asthmatic African-
    American children experience more severe disability and have more
    frequent hospitalizations than their Caucasian counterparts. In 1993,
    African-Americans aged 5 to 14 were four times more likely to die from
    asthma than Caucasians, and those aged 0 to 4 were six times more
    likely to die from asthma. Asthma is also more prevalent in African-
    American adults than in Caucasians. Their hospitalization rate in 1992
    was 400 percent higher than for Caucasians and their age-adjusted
    mortality rate was 300 percent higher. The reason for the higher
    incidence is uncertain; however, lack of access to proper medical care
    is related to the poor outcomes.
        Direct and indirect costs for asthma were an estimated $6.2 billion
    in 1990, 43 percent of which was associated with emergency room use,
    hospitalization, and death. Inpatient hospital costs represented the
    largest single direct expenditure, totalling $1.6 billion, and
    emergency room use cost another $295 million. In 1993, asthma was the
    first-listed diagnosis in 468,000 hospital admissions and asthmatic
    children under age 15 experienced 159,000 hospitalizations (asthma is
    the leading cause of hospitalization of children).
        Research.--Asthma varies from person to person--symptoms range from
    mild to severe. While there is not a cure for asthma, it can be
    controlled with proper measures, including medications, learning to
    manage episodes, and learning to identify and avoid what triggers an
    episode. Triggers include controlling irritants in the air--90 percent
    of children with asthma and half of adult asthmatics have allergies;
    avoiding excess physical exertion; and managing emotions. Medications
    consist of anti-allergy drugs, corticosteroids, and bronchodilators.
        In August 1996, researchers (Weinstein, et. al.) published a report
    that summarized the results of a study to examine the economic impact
    of a short-term inpatient hospitalization program for children with
    severe asthma. The program, based in part on programs developed by
    NHLBI, significantly reduced inpatient and emergency care days for the
    subsequent 4 years of follow-up. In a study of 59 children, the median
    of 7 inpatient days the year prior to rehabilitation was reduced to
    zero (0) days during each of the following 4 years. Emergency care
    visits were reduced from 4 in the year prior to rehabilitation to zero.
    The year before rehabilitation, medication charges as a percentage of
    medical charges was 9 percent; by the third and fourth years of follow-
    up they were 45 percent of total medical charges.
        The NIAID National Cooperative Inner-City Asthma Study has designed
    new strategies to reduce asthma morbidity and mortality. The first
    phase of the study looked at over 1,500 children and discovered factors
    including high levels of indoor allergen, especially cockroach allergen
    (the leading asthma-producing material that children were exposed to),
    high levels of smoking among family members; and exposure to high
    levels of nitrogen dioxide. In the second phase, 1,000 high risk
    children and their families were assisted by a nurse practitioner in
    managing the child's condition and instituting environmental controls.
    This resulted in significant reduction in asthma symptoms, improved
    school attendance, and a 30 percent decrease in asthma-related
    hospitalizations and unscheduled physician and emergency room visits.
    The NIAID has continued the study to disseminate the results.
    Research enterprise
        The JCAAI is gravely concerned about the integrity of our research
    environment. In July, the Journal of the American Medical Association
    published an article entitled ``Preventing the Extinction of the
    Clinical Research Ecosystem.'' The authors made recommendations
    regarding the appropriate steps that must be undertaken if we are to
    preserve our national capacity to translate research findings from the
    laboratory to the patient. A strong cadre of highly trained, expert
    clinical scientists are key to achieving that objective, and this cadre
    of experts is presently threatened. It is imperative that we move
    forward in addressing the following: establishing a process for setting
    broad goals in clinical research; provide additional resources for
    clinical research; restructure the approach to clinical research
    training to maximize the entry of talent into the field of clinical
    research; and, provide resources for clinical investigators to maintain
    clinical, laboratory and patient care responsibilities.
        We recommend that Congress consider these priorities as you develop
    your funding recommendations for fiscal year 1999.
    Summary
        Allergies and asthma are serious health problems, affecting
    millions of Americans in both acute and chronic forms. Through research
    supported by the NHLBI and NIAID, researchers and clinicians have
    learned much about how to diagnose and treat these diseases, but much
    more remains to be done. The JCAAI requests a 9 percent increase for
    the NIH in fiscal year 1998 to explore some of the exciting research
    opportunities that exist in these areas.
        Thank you for your consideration of our request.
                                     ______

        Prepared Statement of the National Coalition for Cancer Research
        On behalf of the 22 organizations of the NCCR, a coalition of
    organizations dedicated to cancer research, please accept this
    testimony to the Committee record. The NCCR is comprised of 22 not-for-
    profit lay and professional organizations devoted to the pursuit of
    cancer research. These organizations which consist of 55,000 cancer
    researchers, nurses, physicians, and health care workers; tens of
    thousands of cancer survivors and their families; 40,000 children with
    cancer and their families; 82 cancer hospitals and cancer centers
    across the country; and more than 2 million volunteers, and on their
    behalf I appear before you today in support of the National Institutes
    of Health and the National Cancer Institute.
        Let me say at the outset, that the NCCR recognizes the commitment
    this Subcommittee has demonstrated in the past to cancer research. We
    understand the real funding constraints you are under and have already
    written to the House and Senate Budget and Appropriations Committee
    Chairmen asking that they enable you to provide the NCI with an
    increase by first increasing the health function of the Congressional
    Budget and subsequently by providing your Subcommittee with the
    increased allocation necessary to achieve this goal.
        The indispensable and long-term value of investing in scientific
    research today has recently gained momentum here in Washington. The
    NCCR is encouraged by the Clinton administration's initiative to
    increase cancer research spending at the National Institutes of Health
    by 65 percent over the next five years. The increase requested for the
    NCI is part of an unprecedented $1.5 billion increase requested by the
    Administration for NIH in fiscal year 1999. The NCCR commends Senator
    Specter's Resolution to increase the funds provided to the NIH this
    fiscal year by $2 billion, an increase of 14.65 percent, and asks that
    you support the spirit of this Resolution when the Subcommittee marks
    up its fiscal year 1999 bill. But for you to consider our request for
    increasing the appropriation to the National Cancer Institute, it is
    important that you understand what has been accomplished, and what
    needs to be done now, and that we as a community are committed to
    working with your colleagues in the leadership and on the Budget
    Committee to realize these gains.
        In 1972, we conceptualized a great endeavor--a War on Cancer.
    President Nixon pledged the full resources of our government to conquer
    this dreaded disease. Unfortunately, only limited research funding
    trickled out and we supported only a small skirmish. This was not an
    American-style effort to go to the moon, to crack the atom, or to fight
    a Gulf War. This effort could only support a few thousand investigators
    to fight only a limited engagement. Still, six cancers were essentially
    cured, including those that primarily affect young people, such as
    leukemia and testicular cancer. However, today the big six cancer
    killers (lung, breast, colon, prostate, bladder, and brain cancer)
    continue to ravage the bodies of their victims. Now, 25 years after
    this country pledged to go to war against cancer, one half of all
    American men and one third of all American women will be struck by the
    horror of being diagnosed with cancer during their lifetimes. One
    fourth of all Americans will one day die from this most unpleasant and
    painful disease. During the approximately 2\1/2\ hour period that this
    hearing will be in session, 161 Americans will die from cancer,
    compared with 11 who will die from AIDS and 7 who will be murdered. It
    would take 5 Boeing 747 jumbo jets crashing EVERY DAY for a year to
    equal the half million Americans who die each year from cancer. This
    number of cancer deaths per year exceeds all U.S. combat deaths in all
    of the wars in this century. This carnage on our people from cancer
    must stop, and it can, with research funded by this Congress. In the
    past, medical research has conquered the pain of amputation, surgery,
    and dental procedures, as well as infectious diseases such as typhoid
    fever and pneumonia; one day, medical research will conquer AIDS and
    cancer. We have already proved that we can cure six cancers through
    medical research; now it is time to eradicate the other major cancers.
    However, this will be slow to be realized at the current funding
    levels, when only one penny out of every ten tax dollars is spent to
    research this tremendously costly disease. If we doubled our effort on
    cancer today, it would still cost less than one-third of our space
    effort and only one-twentieth of the cost of the Gulf War. Taxpayers
    are far more endangered by a ``berserk'' cancer cell than by a bullet
    from an enemy, and they want to be protected against cancer.
        No one can predict when or where cures or successful prevention
    strategies will originate, but all agree that they will only come from
    funding a large base of investigations. At present the cancer research
    cup is three-fourths empty. Of every 100 grants approved for funding
    after critical peer review, less than 25 will receive funding. The
    other 75 unfunded projects represent lost opportunity, valuable time in
    the fight against cancer, and more lives lost.
        Health care costs for cancer exceed $107 billion annually and over
    half of the medical costs of cancer are due to the treatment of breast,
    lung and prostate cancers. However, we only invest about 2 percent of
    cancer's health care costs in research to find effective prevention
    measures, treatments and cures for cancer. The federal research budget
    for cancer is only $2.5 billion. Even the National Cancer Institute's
    Bypass Budget request of $3.191 billion, which the NCCR supports, is a
    conservative investment when contrasted with the $100 billion that will
    be expended in care.
        It is the NCCR's central conviction that the solution to the
    complex problems surrounding cancer--the reduction in morbidity,
    mortality, and the high costs of medical care--will come in a stepwise
    manner from the generation of new knowledge through research. The NCCR
    entreats you to exert your leadership and provided an unparalleled
    increase to the NCI, full funding of the NCI's Bypass Budget request of
    $3.191 billion, a 25 percent increase over the current fiscal year. At
    a minimum, the NCCR supports the Ad Hoc Group for Medical Research
    Funding's proposal that you increase funding for the NIH overall by 15
    percent this fiscal year, as the first step toward doubling the budget
    over five years. As stated, the NCCR supports the Congressional
    leadership demonstrated in Senate Resolution 170 to increase by 14.65
    percent the budget of the National Institutes of Health, including the
    National Cancer Institute, and we appreciate the President's request to
    increase funding for cancer research across the Institutes by 10
    percent and the NCI by 9 percent. But to equitably fund science, we
    must rely upon the expert recommendations of scientists, and the Bypass
    Budget request of the NCI is just that--an estimate by experts in the
    field of research of how much is needed to ``sustain current successful
    efforts--and increase our capacity to reduce suffering due to cancer.''
    We urge your leadership in eradicating cancer by appropriating a 25
    percent increase to the NCI which will enable the following:
      --fund a greater proportion of fully approved investigator initiated
            research applications;
      --support of the priorities identified in the By Pass Budget,
            including cancer genetics; preclinical models of cancer;
            detection technologies; developmental diagnostics;
      --strengthened efforts in translational research to more rapidly
            translate research progress from the bench to the bedside;
      --initiatives to incentivize the research collaboration and establish
            a strong partnership between the government, academia and
            industry to maximize our research investment;
      --expand cancer prevention and detection research programs;
      --strengthen our current efforts in cancer survivorship research to
            ensure the highest quality of life after cancer; and
      --added support, such as the NCI scholars program, to enable
            outstanding new investigators in basic, clinical or population-
            based biomedical research to establish independent research
            careers.
        In order to be most effective, funding must be provided in a manner
    that enhances creativity--encourages the risk taking inherent in
    innovation. Research funding must be sustained, also, in order to
    prevent the detrimental interruptions to investigators and research
    institutions that have long lasting effects.
        Progress depends in no small extent on insuring the continued and
    sustained renewal of the intellectual resources at the heart of the
    creative process--the dedicated, highly educated, creative scientists
    that determine the success of these endeavors. Regrettably, there is a
    trend of the ``brightest and best minds'' in our country away from the
    biomedical sciences into careers that appear more challenging and a
    more important part of our nation's future. This trend must be
    reversed.
        Maintaining the integrity of a group of top-notch academic health
    centers and strengthening a related group of research universities is
    also of vital importance. Clearly, these institutions provide the
    ``environment'' and many of the resources necessary to a full spectrum
    of investigational and educational programs. The preservation and
    enhancement of these centers of excellence is an urgent matter of
    public concern. The chaotic conditions of the ``health care
    marketplace'' and the increasingly severe financial constraints that
    result, are forcing academic health centers devoted to research and
    education toward the ``endangered species'' designation. A strong and
    vital national research program is one of the cornerstones of
    preservation for these centers.
        Patient-centered research merits careful attention because it is
    the link between laboratory discoveries and the advances in prevention,
    diagnosis and treatment that improve medical practice and the quality
    of life of patients and their families. This transition is currently
    threatened by the practices of various health care management companies
    and by the payment practices of insurers. Further, the nominal support
    provided by the NCI to this endeavor--less than 10 percent of NCI's
    total budget--is causing many talented clinical researchers to go the
    way of the dinosaur as they are forced away from research and into
    clinical practice.
        Experimental therapy administered under the aegis of a fully
    approved clinical trial is often the best therapy available to many
    patients. It is important that patients not be denied access to
    clinical trials. The knowledge gained through these studies is
    important to progress, and the treatment offered may represent the best
    alternative available to the patient participants. Yet insuring
    participation in clinical trials due to charges in the health care
    marketplace is compromising our capacity to translate research from the
    laboratory bench to the bedside. The NCCR supports the spirit of the
    Administration's proposed demonstration to provide medical coverage for
    Medicare beneficiaries who participate in federally-approved cancer
    clinical research trials, but urges this Subcommittee to fund this
    demonstration in this fiscal year, rather than rely upon funding this
    program with receipts garnered through tobacco legislation which has
    not, and which may not, be enacted.
        Public support for medical research has never been articulated as
    clearly than over the past year. Since the June 20, 1997 global tobacco
    settlement, there has been a groundswell of public support to enhance
    our medical research enterprise to combat the effects of tobacco use.
    Congressional efforts to attend to this issue are evidenced by the
    profusion of tobacco related bills pending action by the 105th
    Congress. However, the NCCR recognizes the political roadblocks to
    Congressional codification of a tobacco settlement and urges this
    Subcommittee to meet the public health goals of both the June 20, 1997
    global tobacco proposal and the pending legislation to fund research as
    soon as is possible by providing a substantial increase to the National
    Cancer Institute this year. Your support for the NIH is vital as
    current prevention and treatment programs are not powerful enough nor
    swift enough to protect the 160,000 people who will die this year in
    the United States from cancers caused by smoking. Prevention and
    cessation programs alone cannot stop the threat of cancer, for recent
    studies have found that even former smokers continue to be at high risk
    for lung cancer for many years after smoking cessation because they
    carry long-term DNA damage in their lungs. Scientists have recently
    learned that these DNA changes are associated with the development of
    cancer, that the changes persist for many years after smoking
    cessation, and the lung tissue may never return to its normal state.
    Since DNA damage is absent from the lungs of lifetime nonsmokers, this
    confirms that the changes observed in former smokers are directly
    related to their previous smoking. Those who have stopped smoking can
    remain from 1.5 to 4 times more likely than nonsmokers to develop lung
    cancer. In fact, over half of all lung cancers in the United States
    today occur in former smokers. These new findings have alarming public
    health consequences for both current and former smokers. Bolstering the
    budget of the NCI will enable scientists to conduct important studies
    into the long-term adverse effects of tobacco carcinogens in proportion
    to the devastation caused by tobacco-induced cancers on our public
    health. Specifically, additional funding would support research to
    identify the specific DNA alterations associated with smoking and their
    role in lung cancer. Further investigations must be conducted to
    unravel the pathways and the timing of events leading to cancer. It is
    important to increase our understanding of the carcinogenic effects of
    tobacco, of how these malignant lesions can be treated most effectively
    after diagnosis, and of how these cancers can be prevented.
    Epidemiological studies are also required to increase our knowledge
    base of statistical trends in cancer to guide early detection efforts
    and facilitate the control of cancer. We cannot wait for broad
    Congressional codification of last summer's tobacco settlement, the
    time is now to stop the effects of tobacco use and this Subcommittee
    can do so by increasing the budget of the National Cancer Institute.
        We hope that you will find the rationale on which we base our
    recommendations to focus on cancer research compelling, and that you
    will be able to direct funds to cancer research to open the doors for
    researchers to find new methods for the prevention and treatment of
    cancer. Thank you for the Subcommittee for this opportunity to present
    this statement.
                                     ______

                   Prepared Statement of the FDA-NIH Council
        Mr. Chairman, Members of the Committee, thank you for the
    opportunity to present a statement to the Committee as you deliberate
    funding priorities for fiscal year 1998. The FDA-NIH Council
    appreciates the opportunity to submit testimony concerning the
    importance of a sustainable, predictable funding base for the National
    Institutes of Health (NIH). In past years, this Committee has been
    vitally important in addressing the funding needs of the NIH, and the
    research community is grateful for your support of the crown jewel of
    the Public Health Service.
        The FDA-NIH Council is a coalition of 24 organizations comprised of
    patient advocates, academic scientists, health professionals, and
    medical research-based corporations. These partners in the process of
    medical discovery and innovation have come together to seek common
    ground in addressing the complex challenges the Food and Drug
    Administration (FDA) and the National Institutes of Health face.
        There is an intricate process of medical discovery and innovation
    that relies on the relationship of inter-dependent partners--
    government, academia, biomedical research industries, foundations,
    health professionals and consumers. Medical research and innovation
    seek to improve health and the quality of life by finding ways to cure
    and prevent disease. Breakthroughs come from a process of innovation,
    each advance building upon the one that preceded it. From research in
    academic, government and industry laboratories, and from the
    accumulation of clinical experience in managing disease, our
    information about the mechanisms of disease and innovation in medicine
    are continually developed. As a representative of industry, I welcome
    the opportunity to address the unique contributions of the government
    in this regard as it is the national commitment to the NIH which lays
    the foundation of our ability to bring research discoveries from the
    laboratory to the consumer.
        All of the partners in the process of medical discovery are
    interdependent, each contributes a piece to the puzzle. The success of
    our national enterprise is not possible without each piece being
    vibrant and strong. A healthy partnership between government, industry,
    academia and non-profit foundations is critical to maintain the U.S.
    position as the world leader in medical research and innovation. Most
    importantly, the millions of Americans afflicted with catastrophic,
    acute and chronic diseases are the REAL beneficiaries of this
    partnership.
        The NIH is the primary funding source for basic research through
    universities and independent research institutions throughout the
    country. The NIH also plays a critical role in support of clinical and
    translational research. NIH-supported research has led to major
    advances in the understanding and treatment of various diseases and
    disabilities. NIH-funded researchers are now at the forefront of the
    global effort to build upon these findings and develop new, more
    effective treatment regimens. Success against disease will only be
    possible with a strengthened national research effort. Therefore,
    continued support of the NIH is critical to the vitality of our medical
    research enterprise.
        At the present time, our national support of the NIH is less than 3
    percent of our national health care costs. In essence the NIH is
    investing less than 3 percent of the national costs of illness in
    research efforts to find effective treatments and preventatives. From a
    business standpoint, it is logical that this investment paradigm should
    change as there is no health-care or science-based corporation in
    America who could sustain an effective operation with a 3 percent
    investment in innovation. To that end, the FDA-NIH Council is pleased
    to support proposals put forward in the House and the Senate in the
    last Session of the 105th Congress to double the NIH budget over the
    next five years. We commit to this Committee that FDA-NIH Council will
    work to support to realize these proposals.
        Industry presently devotes approximately 20 percent of its U.S.
    sales to research and development. This investment, which is greater
    than that of the NIH, is directed toward efforts quite different from
    the NIH but complimentary and equally essential. Our basic research
    efforts are more targeted and our clinical research initiatives are
    more expansive and directed toward the end product. Industry does not,
    and cannot, devote resources to the discovery of new knowledge at the
    basic, fundamental level that the NIH supports. Industry's
    responsibility in this partnership is the maturation of scientific
    knowledge and the translation of research discoveries from the bench to
    the bedside through targeted basic and applied research efforts. In
    addition, industry is closely aligned with academic medicine in centers
    throughout the country. Through the collaborations with universities
    and independent research institutes industry is involved in developing
    new technologies, setting standards for adopting and disseminating
    technologies, and supporting cutting-edge applied research to bring
    innovation to the marketplace.
        Throughout modern history, there have been revolutions in medicine
    that have saved millions of lives. The development of antibiotics,
    vaccines, and proven surgical techniques have constituted the
    revolutions of the past. We are now on the threshold of the next great
    revolution in modern medicine, gene therapy. Each time researchers
    discover a gene, they open the door to a new therapy or cure. Today,
    when we talk about our medical research enterprise, we speak from the
    standpoint of great success and even greater opportunities.
        Treatments for people with chronic diseases have stemmed from
    medical research and innovation.--medications control a variety of
    chronic diseases such as hypertension, high cholesterol and diabetes;
    asthmatics regularly participate in competitive sports where prior to
    innovative therapies they were subject to frightening breathing
    attacks; angina and shortness of breath associated with cardiac disease
    are now effectively managed through the use of medication; and the hope
    of gene therapy offers great potential to help persons with genetic
    diseases as well as for others suffering with a variety of chronic
    conditions.
        People with life threatening and chronic diseases look to medical
    research and innovation for the promise and hope of a cure.--Today, we
    have drugs to cure testicular cancer, childhood leukemia, and Hodgkin's
    disease, and to prevent strokes or permanent heart damage from heart
    attacks. Research efforts are starting the long process to develop and
    validate diagnostic markers and other tests to diagnose disease or
    determine the state of a chronic disease before it is evidenced (or
    worsens) in order to offer treatments prior to prevent disease
    progression.
        Medical research and innovation have prevailed to improve the
    quality of life for millions of us, but the challenge remains to find
    answers for millions more who face disease and disability.--Our current
    armament of therapeutic options consist of many half-way technologies
    and it is imperative that we push forward to develop effective cures
    and treatment for may of the hardest diseases that continue to confront
    us--cancer, heart disease, strokes, Alzheimer's disease, Parkinson's
    disease, multiple sclerosis, cystic fibrosis and others.
        The health of our nation is dependent upon a strong national
    commitment to medical research. The research opportunities have never
    been greater, or more exciting. Further, our leadership in the
    international arena in medical research and innovation is at a critical
    juncture, due to our international competitors' expansion of their
    research investment over the past two decades. Today, Japan and Germany
    devote a greater percent of their GNP to research and development than
    the U.S. does. This is a warning sign which should be taken seriously
    as we contemplate national priorities.
        As we enter the new millennium, we have attracted some of the best
    scientific minds to our national enterprise, and initiated ground-
    breaking programs that have already yielded critical knowledge, and
    improved patient care and quality of life. However, we are confronted
    with the extraordinary challenge of how to maintain the integrity of
    our research efforts, and rapidly and cost-effectively translate that
    research and development into use by health professionals and
    consumers, in both the public and private sectors.
    Budget Request
        We must position our national research efforts by providing a
    sustainable, predictable funding base for the National Institutes of
    Health augmented by new resources in order to pursue the extraordinary
    research opportunities which await. In that regard, the FDA-NIH Council
    urges Congress to enact a plan that will provide for a doubling of the
    NIH budget over the next five years. The FDA-NIH Council supports the
    vision articulated in H.R. 83, S.R. 15 and S. 124 which call for a
    doubling of the budget for the NIH in response to our declining
    commitment to research, based on the proportion of GNP invested in
    research, over the past 30 years. As a starting point, the FDA-NIH
    Council recommends an increase of at least 15 percent for fiscal year
    1999 as the first step in achieving this goal.
        While many other witnesses, representing a broad cross section of
    disease and research organizations will draw very compelling cases to
    devote these additional resources to specific disease research, members
    of the FDA-NIH Council would like to draw your attention to the
    capacity of our national research enterprise and its long term health
    as it undergoes the transformation required to meet the challenges of
    the next millennium. These needs will be critical to effectively
    undertake the many important research priorities that my colleagues
    will bring to your attention.
        Translation of new knowledge into clinical practice.--A balance in
    our federally-funded research program requires that we adequately
    support the translation of research from the test tube to the patient.
    As new knowledge is discovered, it is vitally important for the NIH to
    support early patient-oriented research to determine the application of
    laboratory advances to persons with disease. This early research must
    validate test tube observations prior to the maturation and full
    exploitation of advances in the marketplace. Further, training and
    educational programs require adequate resources to ensure that the next
    generation of clinical scientists is in place to continue the rapid
    translation of research from the bench to the bedside.
        Integrity of the peer review system.--As mentioned earlier in this
    statement, the United States has a national research capacity and track
    record that is unparalleled throughout the world. One of the core
    components of this research capacity is the integrity of our peer
    review system. Unlike many other agencies of the government, such as
    the Department of Defense, the peer review system of the NIH is
    critically important to the allocation of resources by the NIH. In
    fact, peer review is the cornerstone to insure that stewardship of the
    American taxpayer's contribution to this important initiative and
    direct our investment to the areas of greatest scientific opportunity.
        Resources for Research Support.--As the research capacity of the
    NIH expands, the expertise and staffing necessary to appropriately
    oversee that enterprise must be available. Management support budgets
    of the NIH must be carefully evaluated to ensure scientific program
    staff are in place to effectively guide an expanding research effort.
        Research Infrastructure.--The sophistication of our research
    initiatives requires an ever-increasing sophistication in our physical
    plants support our national research efforts. Research facilities,
    equipment and instrumentation, and animal facilities must be state-of-
    the-art in order to fully exploit our research potential.
        The FDA-NIH Council recognizes that the Members of this great body
    have a very tough job in terms of weighing the available resources and
    numerous worthy federal programs. We recognize the tough choices that
    you have ahead of you. And, we recognize and are extremely grateful for
    the support that this Committee has provided to the NIH in the past.
    However, we also believe that the functions of the NIH are vital to our
    economy and the health and welfare of our citizens. Health must be one
    of our nation's top priorities, for a wealthy and economically sound
    country is predicated on the health and well being of its citizens.
        Thank you for the opportunity to present a statement before the
    Committee today. We appreciate your support of this agency and look
    forward to working with you in the coming months.
        The members of the FDA/NIH Council are: the A-T's Children Project,
    Candlelighters Childhood Cancer Foundation, Allergy and Asthma
    Network--Mothers of Asthmatics, Inc., Alliance for Aging Research,
    Schering-Plough Corporation, Albert B. Sabin Vaccine Foundation,
    American Medical Association, Merck & Co., Inc, Pfizer, Inc., American
    Veterinary Medical Association, Joint Council of Allergy, Asthma and
    Immunology, American Society of Tropical Medicine and Hygiene, Allergan
    Inc., American Academy of Pediatrics, National Multiple Sclerosis
    Society, Monsanto Company, Arthritis Foundation, Glaxo Wellcome, Inc.,
    American Social Health Association, Cystic Fibrosis Foundation,
    Bristol-Myers Squibb Company, American Association for Cancer Research,
    National Depressive and Manic-Depressive Association, Society of
    Toxicology, Research Society on Alcoholism, Theracom, Parkinson's
    Action Network, and the Autism Society of America.
                                     ______

      Prepared Statement of the American Society of Tropical Medicine and
                                    Hygiene
        The American Society of Tropical Medicine and Hygiene (ASTMH)
    appreciates the opportunity to submit written testimony concerning
    fiscal year 1999 funding for the National Institutes of Health and the
    Centers for Disease Control and Prevention.
        The ASTMH, founded in 1903, is a professional society of
    approximately 3,500 researchers and practitioners who are dedicated to
    addressing the growing global threat of tropical infectious diseases.
    ASTMH members are involved in all areas of tropical disease research
    such as identifying biochemical and genetic factors that disrupt
    parasite development within mosquito vectors in order to develop novel
    control strategies for malaria and lymphatic filariasis.
        A strong U.S. research agenda relating to infectious diseases is
    critical at this time when the ease of travel and openness of trade
    exposes the world's population, including U.S. citizens, to new and re-
    emerging infectious disease agents. Last year it was Cyclospora, a
    parasite that found its way across the border by way of Guatemalan
    raspberries and lettuce. And we are all now familiar with the re-
    emergence of tuberculosis and emergence of new diseases such as
    Hantavirus within the U.S. In total, 30 new human pathogens have been
    recognized in the last 25 years. It also is evident in our new world
    economy that, in addition to humanitarian reasons, investments that
    help ensure healthy populations in developing countries benefit the
    world's population as a whole. We must continue to be vigilant in our
    efforts to control and eradicate infectious diseases through
    prevention, treatment, and continued surveillance. As we approach the
    21st century, it is time to protect our national security and declare
    war on malaria, diarrheal disease, and the myriad of other infections
    caused by viral, bacterial, fungal and parasitic disease agents.
    National Institutes of Health
        ASTMH thanks the Committee for your strong support for medical
    research funding. We are particularly pleased with the 7.1 percent
    increase Congress provided to the NIH for fiscal year 1998, and by your
    continuing commitment to provide funding that will sustain our research
    infrastructure in the years to come.
    National Institute of Allergy and Infectious Diseases
        The NIH's tropical disease research program is funded primarily by
    the National Institute of Allergy and Infectious Diseases (NIAID) and
    there are several issues relating to NIAID's research efforts that we
    would like to highlight.
        Infrastructure Issues.--From fiscal year 1993 through fiscal year
    1998, NIAID has received significant funding increases for both the
    intramural and extramural programs of about 40 percent. Unfortunately,
    the research management and support (RMS) budget, which provides
    administrative support for the extramural program, has increased by
    only 0.1 percent during this same time period. This resulted from a 7.5
    percent cut in fiscal year 1996 that reduced the RMS budget back to
    fiscal year 1993 levels. The ASTMH is concerned that we are not
    providing the Institute with the resources necessary to manage our
    important infectious disease programs. We are not arguing for large
    increases, but are merely calling for responsible stewardship of the
    extramural programs and grants to ensure that we are effectively
    meeting the goals and objectives of our research programs.
        Malaria.--Globally, infectious diseases are the leading cause of
    morbidity and mortality, accounting for 1-3 times the mortality and
    morbidity resulting from heart disease, cancer and stroke combined. Of
    these infectious diseases, malaria continues to be the most devastating
    with a World Health Organization estimate of nearly 500 million
    clinical cases and 2-3 million deaths annually--and the majority of
    these deaths are African children under the age of 5. But even in the
    U.S., over 1,000 cases of malaria are reported every year, with local
    transmission being documented by the Center for Disease Control and
    Prevention (CDC) in California, Florida, New Jersey, New York, Texas,
    Michigan and Georgia. The Society applauds NIH Director Dr. Harold
    Varmus and NIAID Director Dr. Anthony Fauci for their leadership at
    home and abroad in advancing the international collaborative research
    project, the Multilateral Initiative on Malaria, and for implementing
    NIAID's Research Plan for Malaria Vaccine Development. Malaria is a
    complex disease and its control will require a significant research
    effort in vaccine development as well as other research areas. We are
    pleased that NIH recognizes this and is willing to commit significant
    resources towards solving this problem. We urge the Committee to be
    supportive as well.
        International Tropical Disease Research Programs.--NIAID's support
    for international tropical disease research is critical for advancement
    of our scientific understanding of emerging, re-emerging and other
    tropical diseases. Through these programs, U.S. researchers are able to
    collaborate with their colleagues worldwide in efforts that are
    absolutely mandatory to gain research expertise in areas endemic for
    tropical infectious diseases. Two programs in particular have been
    critical in these efforts and the ASTMH urges the committee to not only
    continue these programs, but to increase support for these important
    projects. They are:
        International Collaborations in Infectious Disease Research.--An
    international research program to support collaboration between U.S.
    scientists and foreign research institutions for work in countries
    where tropical diseases are endemic, and
        Tropical Disease Research Units.--A domestic grant program that
    promotes the application of modern biomedical technologies to the
    development of preclinical evaluation of new vaccines, therapies, or
    vector control methods for tropical parasitic diseases.
    Fogarty International Center
        NIH also supports emerging infectious disease research and training
    through the Fogarty International Center (FIC). Recently FIC initiated,
    in concert with the NIAID, an International Training Program in
    Emerging Infectious Disease whereby U.S. universities provide training
    for scientists from regions of the world where some of the most
    important emerging and re-emerging diseases are endemic. This program
    promises to provide a mechanism to transfer the most recent scientific
    advancements and technologies to endemic areas and consequently
    increase our understanding of the biology, epidemiology and methods for
    control of emerging pathogens.
        The ASTMH is encouraged by the initial awards made to thirteen U.S.
    universities and encourages the FIC to re-issue its Request for
    Applications and expand funding opportunities to additional research
    universities. This is an extremely worthwhile program that is essential
    if we are to expand overseas training and capitalize on recent
    scientific advancements. We urge the Committee to provide sufficient
    funds to allow the FIC to fund as many meritorious awards as possible.
    Centers for Disease Control and Prevention
        The ASTMH appreciates the Committee's support for funding increases
    in fiscal year 1998 for the CDC's infectious diseases program. We are
    especially pleased with the increases over fiscal year 1997 levels for
    the National Center for Infectious Diseases emerging and re-emerging
    infectious diseases program.
        Emerging Infectious Diseases Strategic Plan.--As you know, CDC is
    in the process of developing its second five-year plan to address
    emerging infectious disease threats through the year 2002. This report,
    titled ``Addressing Emerging Infectious Disease Threats II: Entering
    the 21st Century'' soon will be released and will provide the blueprint
    for the CDC's activities to combat emerging infectious diseases in
    collaboration with other U.S. agencies and international organizations.
    These efforts are critical in establishing priorities relating to
    surveillance, applied research, training, and disease prevention and
    control of emerging infectious diseases in the coming years.
        Infrastructure Needs.--The Society strongly urges the Committee to
    support CDC's infrastructure needs that include the need for new
    laboratory space to handle all of the pathogens that are being examined
    by CDC scientists in Atlanta. With recent outbreaks of new infectious
    diseases, such as avian influenza in Hong Kong, CDC laboratories are at
    capacity and they have had to reduce existing pathogen research to make
    room for the new pathogens. Space limitations that require the
    cessation of surveillance or research activities on one pathogen to
    make room for work on a new disease agent is a dangerous situation that
    must be addressed.
    Conclusion
        As the 20th Century comes to a close we must change our vision of
    U.S. national security. We are at war, but this time infectious
    diseases are our enemy. Infectious disease agents have no respect for
    political borders, and social or economic status do little to ensure
    safety from new diseases or those re-emerging as a consequence of drug
    resistance or other causes. To be prepared for a battle that
    undoubtedly will intensify, we must have adequate surveillance systems
    and modern infrastructure, coupled with scientific expertise in both
    basic and clinical research, if we are to develop the tools necessary
    to rapidly respond to, and control, the threats posed by infectious
    diseases.
        The ASTMH greatly appreciates your support of these activities. We
    urge you to continue your efforts to double the NIH budget over the
    next five years and towards this end we request a 15 percent increase
    for the NIH budget in fiscal year 1999. We also request that the
    Committee provide a $15 million increase for the CDC's emerging
    infectious diseases activities.
        Thank you for providing us with this opportunity to express our
    appreciation and concerns.
                                     ______

                Prepared Statement of the Society of Toxicology
        The Society of Toxicology (SOT) is pleased to have this opportunity
    to submit written testimony in support of fiscal year 1999 funding for
    the National Institutes of Health (NIH), and specifically for the
    National Institute of Environmental Health Sciences (NIEHS).
        The Society of Toxicology (SOT) is a professional organization that
    brings together over 4,000 toxicologists in academia, industry, and
    government. A major goal of SOT is to promote the use of good science
    in regulatory decisions. With scientific data as our guide, we can use
    sound judgment in addressing numerous environmental issues. In
    particular, we work closely with the National Institute of
    Environmental Health Sciences (NIEHS) in addressing research related to
    environmental risk.
    Research Opportunities
        Members of the Society of Toxicology strongly believe that our
    investment in biomedical research must be increased and sustained over
    the long-term if we are going to take advantage of the many exciting
    research opportunities which exist in the area of environmental health
    sciences. We are appreciative of the outstanding research efforts of
    NIEHS and are supportive of the research priorities identified by NIEHS
    Director Dr. Kenneth Olden.
        Research supported by NIEHS is helping us to better understand how
    our environment affects our health. Research is being conducted to
    study the effects of air pollution such as ozone, particulate matter,
    and acid aerosols on our respiratory health. NIEHS supported research
    has shown the harmful health effects of lead especially in children,
    leading to the reduction of many sources of environmental lead.
    Researchers are now expanding their efforts to better understand why
    some people are more susceptible to environmental exposures than
    others. The Environmental Genome Project will further explore these
    questions. Finally, NIEHS under the auspices of the National Toxicology
    Program are making progress in developing new and innovative transgenic
    animal models to more efficiently test the toxicity of chemicals. This
    increased efficiency will allow for more chemicals to be tested more
    quickly.
        SOT also supports the research NIEHS is conducting on the potential
    adverse effects of endocrine disruptors. Endocrine disruptors are
    compounds in our environment which may have an affect on thyroid and
    reproductive function and development. The Society believes that
    additional research is needed to determine the nature and the extent to
    which this is a human health problem.
    Superfund Basic Research Program
        One program we would like to highlight is the Superfund Basic
    Research Program. This program is administered by NIEHS although it is
    funded through a pass through from the Environmental Protection Agency
    (EPA) to NIEHS. The Superfund Basic Research Program is the only
    scientific research program focused on health and cleanup issues for
    Superfund hazardous waste sites. It represents an important
    collaboration between EPA and NIEHS to ensure that environmental
    cleanup decisions are based on sound environmental health science.
        The Superfund Hazardous Substances Basic Research Program supports
    university and medical school research to understand the public health
    consequences of local hazardous waste sites, as well as to develop
    better methods for remediation. Currently, there are 18 programs at 70
    universities involving more than 1,000 scientists. It is important to
    note that this is the only university-based research program that
    brings together biomedical and engineering scientists to provide the
    science base needed for making accurate assessments of human health
    risks and developing cost-effective cleanup technologies.
        The primary purpose of SBRP is to provide the scientific basis
    needed to make accurate assessments of the human health risks at
    hazardous waste sites. In addition, research data is used to determine
    which contaminated sites must be cleaned up first, to what extent clean
    up is needed, and how best to clean up contaminated sites in the most
    cost-effective manner. Research projects include basic research on the
    potential chemical effects on cancers, such as breast and prostate,
    birth defects, and other environmental health-related diseases.
        Communities near hazardous waste sites want to know if hazardous
    chemicals are reaching their water or air supplies. They want to know
    if low levels of these contaminants affect their health and their
    children's health. They want it cleaned up. Our universities are
    responding with technology driven research efforts which are results-
    oriented and economically feasible, and are scientifically credible
    with the public. This is only possible because of the research effort
    funded through the Superfund Basic Research Program and administered by
    NIEHS.
    Funding Request
        The Society of Toxicology strongly supports efforts to double
    funding for the NIH over five years. To accomplish this, we urge the
    Committee to provide a 15 percent increase for both the NIH and NIEHS
    in fiscal year 1999. NIEHS is particularly deserving of this increase
    given the enormous role they are playing to expand our understanding of
    how the environment potentially affects our health. Whether it is
    exploring asthma incidence in children, testing the toxicity of
    chemicals, or better understanding the genetics underlying
    environmental risk factors, NIEHS supported research is leading the way
    in bridging the gap between public policy and environmental health
    science.
        Thank you for considering our request. We look forward to working
    with you in the future as you determine the Committee's funding
    priorities.
                                     ______

      Prepared Statement of the National Deppressive and Manic-Depressive
                                  Association
        The National Depressive and Manic-Depressive Association (National
    DMDA) is pleased to have this opportunity to submit written testimony
    in support of fiscal year 1999 funding for mental health research
    supported by the National Institutes of Health (NIH) and the National
    Institute of Mental Health (NIMH).
        With more than 275 support groups in nearly every state, National
    DMDA is the nation's largest patient-run, illness specific organization
    committed to advocating for research toward the elimination of
    depressive illnesses, educating patients, professionals and the public
    about the nature and management of depression and manic-depression as
    treatable medical diseases, fostering self-help, eliminating
    discrimination and stigma, and improving access to care. National DMDA
    was founded in 1986 and is headquartered in Chicago, Illinois. A
    distinguished scientific advisory board of more than 65 members reviews
    all materials published by National DMDA, and provides critical and
    timely advice on important research opportunities and treatment
    breakthroughs. This Board includes the leading researchers and
    clinicians in the field of depressive disorders.
    The Impact of Depressive Illness
        More than 18.4 million American suffer from depression every year.
    An additional 2.3 million people suffer from manic-depression or
    bipolar disorder. Women are more than twice as likely as men to
    experience major depression. Depression is the leading cause of suicide
    in America--the financial burden of which is over $10 billion a year.
    Two out of three people with mood disorders do not get proper treatment
    because their symptoms are not recognized, are misdiagnosed, or due to
    the stigma associated with mental illness, are blamed on personal
    weakness.
        According to a recent study by the World Health Organization (WHO),
    the World Bank, and the Harvard School of Public Health, unipolar major
    depression is the first-ranked leading cause of disability in the world
    today and bipolar disorder is the seventh-ranked cause of disability.
    The economic cost of depressive illnesses in the United States is
    estimated to be almost $44 billion per year in direct and indirect
    costs including absenteeism, mortality, and lost productivity. We
    cannot continue to ignore the seriousness of mental illness but must
    instead must focus our research resources on better understanding
    depressive illnesses, improving treatments, and seeking a cure.
        Our investment in research into new treatments for depression and
    manic-depression has paid off in many ways. For example, more than $145
    billion has been saved since 1970 as a result of the development of
    lithium treatment for manic-depression--almost $6 billion per year. A
    study supported by the NIMH showed that intervention to prevent
    depression in the workplace resulted in $1,314 per person in increased
    Federal and state taxes generated over a two and a half year period,
    with a cost of only $286 per person. Finally, it has been shown that
    every $1 spent on treatment of depressive disorders yields between $3
    and $9 in net economic return on employment earnings.
    Research Progress
        Due to research supported by the NIMH over the past five years, we
    have seen the development of new, more effective medications for both
    depression and manic-depression. As a result of a recent clinical
    trial, we now know that the anti-depressant fluoxetine (Prozac) is
    effective in children, although it is not as effective as it is in
    adults--an issue which requires more study. Also, we have a better
    understanding of depressive illnesses and are learning more about their
    impact on cardiovascular disease and stroke. The comorbidity of
    depression and alcohol and tobacco use is also becoming more clear.
    Research indicates that treating only addiction and not depression
    leads to failure and relapse and vice versa. The comorbidity of
    diabetes and depression has also been documented. Unfortunately, we
    still have a long way to go before we are able to fully understand and
    treat depressive disorders.
        St. John's Wort.--National DMDA is pleased that NIMH is working
    with the Office of Alternative Medicine (OAM) at NIH to conduct a study
    of the effectiveness of Hypericum perforatum, or St. John's wort, in
    patients with mild to moderate depression. Many consumers are trying
    St. John's wort as an alternative to prescription anti-depressants
    based on anecdotal experiences and promising results reported from
    European studies. These short-term studies indicate that St. John's
    wort may be beneficial in treating mild to moderate depression with
    fewer side effects than prescription anti-depressants. It does not
    appear, however, to be as effective in treating severe depression or
    manic-depression. Unfortunately, hundreds of thousands consumers are
    using St. John's wort with little scientifically proven information
    about how the herb works, what dose is appropriate, its effectiveness,
    potential dangerous interactions with other prescription drugs, or the
    long-term effects of use. The three year OAM/NIMH study will provide us
    with the database necessary to answer some of these questions. National
    DMDA is playing an active role on the advisory committee overseeing
    this research effort and hopes that consumers will soon have the
    information they need to make an informed decision about the use of St.
    John's wort.
        Bipolar Disorder.--We are also encouraged by NIMH's increased focus
    on bipolar disorder. Research in this area has been seriously
    underfunded in recent years. In fact, in 1996, NIMH spent only $33
    million on bipolar research--less than 5 percent of its total budget.
    Given the WHO study cited above which shows that bipolar disorder is
    the seventh-ranked cause of disability in the world today, we must
    expand our research efforts as they relate to manic-depression.
    National DMDA hopes that NIMH will move quickly to implement clinical
    trials on the effectiveness of new antipsychotic or anticonvulsant
    medications such as gabapentin or lamotragive for treating bipolar
    disorder. In addition, research efforts must focus on the early
    detection and management of bipolar disorder in clinical care settings.
    Finally, additional research is needed on the diagnosis and treatment
    of manic-depression in children and adolescents.
    Research Opportunities
        National DMDA recently surveyed its scientific advisory board
    members to get their views on where NIMH's basic and clinical research
    efforts should be focused. In conducting this exercise we wanted to get
    the views of the leading scientists who are working on depressive and
    manic-depressive illnesses to ensure that the research we are
    supporting is the most current and productive. It is not surprising
    that the vast majority responded that the area of genetics is the most
    ripe for basic research. Current research indicates that there is a
    genetic predisposition to manic-depression. We urge NIMH to pursue this
    research aggressively by continuing research studies of individuals
    with manic-depression and their family members. Other factors to
    examine in relation to genetics include the role stress and the
    environment play in triggering depressive episodes.
        Other important research opportunities include research to better
    characterize subtypes of depression; find treatments with fewer side
    effects and understand the psychopharmacology of current
    antidepressants; functional brain imaging and neurobiological research
    to understand the role gender plays in the predisposition to depressive
    illnesses; and studies to close the gap between what is known about
    treating depressive illnesses and what is practiced particularly in
    managed care settings. These are just a few of the research areas where
    great opportunities exist. Even as the Decade of the Brain comes to a
    close, we have only begun to scratch the surface in our understanding
    of brain function and mental illness. Given the advances in
    neurobiology in recent years, we should designate the 21st Century the
    ``Century of the Brain'' and pursue and aggressive mental health
    research agenda.
    Funding Request
        Of course, an aggressive research agenda requires sustained
    funding. While we recognize the Subcommittee's current budgetary
    constraints, National DMDA supports efforts to double the budget for
    the NIH and NIMH over the next five years. This will allow us to take
    full advantage of the many exciting mental health research
    opportunities that exist today. We urge the Committee to provide a 15
    percent increase for NIH and NIMH in fiscal year 1999 as the first step
    to doubling the budget.
        We appreciate your past support for medical research funding and
    look forward to working with you in the future to ensure the long-term
    sustainability of our mental health research infrastructure.
                                     ______

    Prepared Statement of the National Alliance for Eye and Vision Research
        The National Alliance for Eye and Vision Research (NAEVR), an
    umbrella organization of twenty-eight professional, lay advocacy and
    industry organizations dedicated to eye and vision research,
    appreciates the opportunity to submit testimony in support of funding
    for the National Institutes of Health and the National Eye Institute.
        The National Alliance would like to begin by thanking Committee
    members for your commitment to medical research supported by the
    National Institutes of Health and the National Eye Institute. Without
    this support we would not be on the verge of many new discoveries in
    eye and vision research. We are beginning to reap the benefits of our
    investment due to the amazing advances in basic and clinical science,
    but more and more we are forced to prioritize what areas of research to
    support because we do not have the funding available to fund all of the
    opportunities that exist. This is true in all areas of vision research,
    and in the public and private sectors.
    Priority Setting
        We understand that the Committee has expressed concern about how
    the NIH sets its research priorities and has asked NIH to pay careful
    attention to the economic and societal impact of diseases when planning
    its research funding allocations. It is our hope that you will closely
    examine the process that the National Eye Institute (NEI) has used
    since it was created nearly twenty-five years ago to involve the eye
    and vision research community and the public in setting its research
    funding priorities.
        The NEI and the National Advisory Eye Council (NAEC) are just now
    completing work on their seventh strategic plan, Vision Research A
    National Plan: 1999-2003. This plan is the result of a unique
    partnership between all of the stakeholders in the eye and vision
    research community including NEI staff, the NAEC, research scientists,
    lay advocacy organizations, foundations, industry, professional
    societies, and the general public. In order to reach all interested
    parties, NEI posted several questions on its web site to gather input
    from the eye and vision research community about its views about the
    most important research accomplishments in the last five years, and the
    most important areas to be explored in the next five years. Expert
    panels in each area of vision research were assembled and, based on
    their expertise and the input received from the process outlined above,
    set goals and objectives and determined research needs and
    opportunities for the next five years. This report will be published
    soon and will serve as the driving force behind our vision research
    efforts leading into the 21st Century.
        Those of us in the extramural community believe that this plan
    reflects the best in terms of balancing research opportunities with
    compelling societal and economic concerns.
    The Importance of Vision Research
        When asked what sense do you fear losing the most a majority of
    Americans respond ``vision''. In the U.S. today more than 1.1 million
    Americans are legally blind and an estimated 80 million are at risk of
    developing potentially blinding eye diseases. 120 million Americans
    wear corrective glasses or contact lenses and 12 million suffer from
    some form of visual impairment that cannot be corrected by glasses. The
    annual cost of eye and vision disorders is $38.4 billion. As our
    population ages, these costs will increase significantly and present
    many challenges to our health care system.
        It is only through further advances in research that we are going
    to gain a better understanding of vision disorders that can lead to
    cost-effective advances in disease prevention and treatment. We now
    have the scientific and technological capability to make substantial
    progress in all areas of eye and vision research, IF an expanded
    research effort is supported. This research progress will only be
    possible if we can insure that the NEI has the resources necessary to
    pursue initiatives in the key areas outlined in the soon-to-be-released
    Vision Research Plan.
        In order to give you a sense of the research needs and
    opportunities that exist today, we would like to outline several
    diseases and disorders where research has the most promise.
    Age-related Macular Degeneration
        The leading cause of blindness in the elderly is age-related
    macular degeneration (AMD), a retinal disease which causes loss of
    central vision. More than 1.7 million Americans over age 65 suffer from
    AMD and this number is expected to triple by the year 2020. At the
    present time, there is no cure for AMD and treatment remains limited.
    While laser treatment has been found to have some effect in delaying
    some forms of AMD, no current treatments exist that will reverse the
    slow loss of central vision that results from this disease. However,
    recent research developments are encouraging.
        NEI-supported researchers are making progress in unlocking the
    mysteries of AMD. Scientists have mapped genes of several different
    forms of heritable macular disease, are exploring retinal
    transplantation and growth factors, and are testing new treatments
    including the effects of antioxidants on the progression of AMD.
        The NEI is also actively pursuing studies in the use of alternative
    therapies for the treatment of AMD. The Age-Related Eye Disease Study
    (AREDS), which is designed to improve our understanding of AMD and
    cataract, includes the study of the effect of vitamins and antioxidants
    as treatments for AMD and cataract. In addition, the NEI will be
    sponsoring a workshop with the Office of Dietary Supplements in
    February to develop a research plan to evaluate the effect of two
    carotenoids, lutein and zeaxanthin, on AMD and cataract.
    Low Vision
        A related area of concern is low vision, or vision impairment which
    is not correctable by glasses or contact lenses. As many as 12 million
    Americans suffer from visual impairments which affect their ability to
    read, drive, work, and perform many everyday activities we all take for
    granted. The most common eye diseases which cause visual impairment in
    adults are AMD, cataract, glaucoma, diabetic retinopathy, and optic
    nerve atrophy. Even more serious are the eye diseases which cause
    visual impairment in children. These include retinopathy of
    prematurity, cortical visual impairment, and coloboma. Low vision in
    children often affects their development and results in the need for
    special education, vocational training, and social services throughout
    their lives. The cost of these impairments is more than $22 billion
    each year.
        Many important aspects of low vision are ripe for continued
    exploration. One which deserves particular mention is the advancement
    of technology and assistive devices to help those with visual
    impairments to carry out everyday functions as independently as
    possible. Issues to explore include providing sufficient training in
    the use of these devices, reducing their cost, and improving the
    functionability and appearance of these devices if they are to be
    accepted by users. Researchers remain frustrated because advances in
    low vision devices seem not to be reaching the people with impairments,
    in part because of a lack of insurance coverage for evaluations and
    devices. Scientists are researching better ways of presenting hard to
    read computer graphic user interfaces, and developing telescoping and
    other optical devices to improve intermediate distance tasks and
    peripheral vision.
        Under the auspices of the National Eye Health Education Program
    (NEHEP), NEI is working with its private sector partners to launch a
    program directed at low vision in order to increase public awareness
    about visual impairment and the impact it has on everyday life. The
    program will provide information about low vision services and the
    devices which are currently available to assist those with visual
    impairments. This effort will not only be directed at those suffering
    from visual impairments but also to medical professionals, eye care
    specialists, managed care organizations, and family members. NAEVR
    supports this public education partnership and encourages the Committee
    to support it as well.
        Diabetes.--Diabetic retinopathy, the leading cause of blindness in
    individuals with diabetes, causes vision loss in more than 24,000
    Americans each year. In fact, if a person has diabetes, they are 25
    times more likely than the general population to go blind. Despite the
    success of research in developing treatments to slow the progression of
    blindness, little is known about the mechanism that triggers diabetic
    retinopathy.
        Researchers supported by the NEI are focusing their research
    efforts on gaining a better understanding of diabetic retinopathy by
    examining the cell biology of the retina, including cell growth
    factors; how blood flow is regulated in the retina; and the development
    of new drugs which inhibit an enzyme which appears to be involved in
    the development of diabetic retinopathy. Research in these areas will
    lead to better treatments, strategies for prevention, and hopefully, a
    cure. The recent funds made available for diabetes research in the
    Balanced Budget Act will help serve to push forward these important
    research pursuits and give hope to the millions of Americans who suffer
    from diabetes and risk blindness from diabetic eye diseases.
        Glaucoma.--As many as three million Americans have glaucoma and
    approximately 120,000 are blind because of this disease. It is the
    leading cause of blindness in African Americans and the second leading
    cause of irreversible vision loss overall in the United States.
    Glaucoma is a strongly age-related disease and is especially prominent
    in ``old'' elderly (75-80+). Specifically, at least 5 percent of white
    Americans and 10 percent of black Americans in this age group have this
    disease.
        Treatments for glaucoma are available. In the last five years, as a
    result of NEI-sponsored glaucoma research, three new drug therapies,
    which lower intraocular pressure, have been introduced. Unfortunately,
    however, many individuals with glaucoma are not receiving treatment
    because glaucoma usually has no symptoms in its early stages and they
    are unaware that they have the condition.
        A recent national survey by the Glaucoma Research Foundation, a
    member of NAEVR, indicated that public awareness of glaucoma and its
    risk factors is extremely low--only 11 percent of African American's
    surveyed were aware that they are risk, and only half of the African
    American's surveyed had an eye exam in the last two years. Public
    education efforts have included the development of a public service
    announcement by the NEI for use in January during Glaucoma Awareness
    Month.
        Much progress has been made on identifying a glaucoma gene for
    juvenile open angle glaucoma. Since this discovery, a total of nine
    genes have been mapped for glaucomas or ocular diseases associated with
    secondary glaucomas such as congenital glaucoma, primary open angle
    glaucoma in adults, and Rieger syndrome. More research must be done to
    more fully understand genetic predisposition and the other factors
    which trigger glaucoma.
        Tremendous advances have been made in the cellular and molecular
    biology of the ocular fluid formation and drainage tissues which
    regulate intraocular pressure, opening up new approaches to the
    pathophysiology and potential therapy of pressure elevation. But those
    with glaucoma lose vision not from high intraocular pressure per se,
    but from pressure-related and other types of damage to the optic nerve
    and retinal ganglion cells at the back of the eye, which conduct the
    visual signals from the retina to the brain. Recent advances in the
    neurobiology of how retinal ganglion cells die and might be protected
    have opened the possibility of treating these cells directly. Related
    to this is our increasing understanding and technology for evaluating
    the role of vascular circulation at the back of the eye in the
    pathophysiology and therapy of glaucoma. These are areas of great
    opportunity, which could be pursued even more aggressively with
    sufficient resources.
        Cataract.--Cataract is the leading cause of blindness in the world.
    A cataract is a lens opacity which interferes with vision. It occurs
    most often in adults 50-60 years and older. In the U.S., 1.35 million
    cataract surgeries are performed each year to remove cataracts at an
    estimated cost of $3.5 billion, much of which is paid for by Medicare.
        Because the U.S. population is aging, it will be important to focus
    our research on what aging factors lead to cataract. At this point,
    little is known about events which trigger cataract formation. Several
    major hypotheses have been proposed to explain age-related cataracts.
    Researchers must now turn their attention to proving or disproving
    these hypotheses and improving our understanding of cataract formation.
        Dry Eye.--Recent advances in basic research have led to unexpected
    discoveries which have implications for improving the treatment of
    ``dry eye'', a symptom of Sjogren's Syndrome which affects women
    between the ages of 40 and 60. Further research must now be done to
    translate these basic research advances to improve clinical diagnosis
    and treatment. Animal models which are currently being studied show the
    link between androgen sex hormones and the lacrimal gland, which might
    explain why women are more likely to develop Sjogren's Syndrome than
    men. If this holds true, hormone modulation therapies may be used to
    successfully prevent and treat primary lacrimal deficiency and to treat
    ``dry eye''.
        Myopia.--Myopia, or nearsightedness, occurs in approximately 25
    percent of the population. Myopia results when the images of distant
    objects are focused in front of, instead of on, the retina and is
    usually due to the fact that the eye is too long. Because myopia
    affects such a large percentage of the population, it is important that
    researchers continue their work to better understand ocular growth and
    its affect on vision. This research will help scientists determine the
    risk factors for myopia and develop treatments to slow the progression
    of this condition.
    Eye Diseases and Tobacco Use
        In the past several years, there have been many studies published
    which implicate tobacco use as a risk factor in vision disorders such
    as age-related macular degeneration and cataract. For example, recent
    studies by vision researchers published in the Journal of the American
    Medical Association have shown that current smokers have a
    significantly higher risk of developing late age-related macular
    degeneration than nonsmokers. If Congress chooses to act on legislation
    implementing a global tobacco settlement which includes additional
    funding for tobacco-related research, we hope members of the Committee
    will remember that tobacco use is causally linked to several vision
    disorders. Additional funding for research directed to explore this
    link will help us better understand tobacco use as a risk factor and to
    develop new treatments and prevention strategies to address this risk.
    Conclusion
        The members of the National Alliance for Eye and Vision Research
    are supportive of an increased research focus on eye and vision
    disorders, such as those outlined above, and hope that the Committee
    will allocate additional funding to the NEI to allow these critically
    important research efforts to continue and expand. As we enter the 21st
    Century, we must ensure that we are doing our best to find ways to
    prevent and treat eye and vision disorders, and are providing quality
    eye care services and devices for those who are already suffering from
    visual impairment.
        We thank you for your continuing support for medical research
    funding. Because NAEVR is supportive of efforts to double the NIH
    budget over the next five years, we urge you to provide a 15 percent
    increase in fiscal year 1999 for the NIH as the first step toward
    doubling the budget. Furthermore, we urge you to provide $408.6
    million, a 15 percent increase, for NEI in fiscal year 1999 as
    requested by the National Advisory Eye Council in its ``Citizens Budget
    Proposal''.
                                     ______

          Prepared Statement of the National Aging and Vision Network
        The National Aging and vision Network is comprised of individuals
    and representatives of public and private agencies that provide vision
    rehabilitation services to persons who are older and blind, who reside
    in all 50 states, the District of Columbia, and the territories. Formed
    in 1994, the Network's goal is to increase the availability of
    responsive, high quality services for older individuals who are blind
    or severely visually impaired, through the vision-related
    rehabilitation system, the aging network, and the health care system.
    Network members collaborate on advocacy efforts, share vital
    information on service delivery mechanisms, develop outcome measures,
    and work to develop and maintain funding resources to support essential
    services.
    Appropriation for Title VII, Chapter 2 of the Rehabilitation Act
        For fiscal year 1999, the Network strongly urges the Subcommittee
    to increase the funding for Title VII, Chapter 2 to $13 million. This
    amount will trigger the formula funding mechanism established by
    Congress in the 1992 amendments to the Rehabilitation Act. Both House
    and Senate versions of pending amendments to re-authorize the Act
    retain this authority.
        However, the formula will not trigger until the Chapter 2
    appropriation level reaches $13 million. With an appropriation of $13
    million, each state will receive a minimum of $225,000. States with
    larger populations of older individuals would receive proportionally
    increased amounts.
        Since its first funding in 1986, this program has been one of the
    most successful and cost-effective programs initiated by Congress. In
    1996-97 the grantee states used the funds to deliver services to over
    27,000 older individuals. The number of persons served through this
    program has doubled in the five year period since a minimum funding
    level of $160,000 per state was established.
        Documented program evaluations show that these services have
    enabled older individuals who become blind to continue to live
    independently in their own homes and communities. The program has
    helped these individuals to regain self-reliance by providing the
    skills needed to perform the most basic tasks of daily living, and to
    remain active and contributing members of their communities.
        The types of services provided by grantee states include: training
    in how to travel safely; communications skills; training in activities
    of daily living; low vision services and adaptive devices; individual
    counseling and support services to family members; and community
    integration. The goal of all these services is to reduce the need for
    costly support services such as in-home and community-based services
    and/or premature nursing home placement.
        There are already approximately 5 million individuals age 55 or
    over who are experiencing severe vision loss. This number is expected
    to double by the year 2030. Funds for vision-related rehabilitation
    services for this population are not provided through the Older
    Americans Act, Medicare, Medicaid, or any other consistent funding
    mechanism. Attached to this statement is a chart based on the 1995
    Census Survey of Income and Program Participation showing the numbers
    and prevalence of severe vision impairment of individuals who are age
    55 and over and 85 and over in states represented on this Subcommittee.
    (See Attachment A)
        With funds currently available we are only able to serve a small
    number of these individuals. Because the $13 million dollar
    appropriation will trigger the formula grant process, this small
    increase will have a significant effect in allocating funding for these
    services.
                                  Attachment A
        These numbers represent individuals who on the Census Survey of
    Income and Program Participation identified themselves as having
    difficulty seeing words and letters in ordinary newsprint even with
    glasses or contacts or who reported not being able to see words and
    letters in newsprint at all.

    ----------------------------------------------------------------------------------------------------------------
                                                         Number of     Percentage of     Number of     Percentage of
                          State                         respondents    total number     respondents    total number
                                                          age 55+     of respondents      age 85+     of respondents
    ----------------------------------------------------------------------------------------------------------------
    Arkansas........................................          93,960              16          19,400              47
    Hawaii..........................................          20,710               9           3,430              26
    Iowa............................................          70,860              10          17,200              29
    Mississippi.....................................          98,340              18          19,730              53
    Missouri........................................         133,120              11          29,750              32
    Nevada..........................................          24,070               8           3,090              26
    New Hampshire...................................          20,650               9           4,190              28
    North Carolina..................................         211,820              14          37,670              43
    Pennsylvania....................................         324,720              11          64,110              32
    South Carolina..................................         109,380              15          18,370              46
    Texas...........................................         464,330              14          87,930              43
    Utah............................................          26,310               9           4,920              27
    Washington......................................          96,990               9          18,960              28
    Wisconsin.......................................         110,140              10          24,320              29
    ----------------------------------------------------------------------------------------------------------------

        The data was calculated in 1997 by Emilie Schmeidler and Drew
    Halfmann, Programs and Policy Research, American Foundation for the
    Blind. It was based on state populations from the 1995 census.
                                     ______

          Prepared Statement of the American Foundation for the Blind
    Introduction
        The mission of the American Foundation for the Blind is to enable
    persons who are blind or visually impaired to achieve equality of
    access and opportunity that will ensure freedom of choice in their
    lives. AFB accomplishes this mission by taking a national leadership
    role in the development and implementation of public policy and
    legislation, informational and educational programs, and quality
    services.
        We appreciate the opportunity to submit our appropriations
    recommendations for fiscal year 1999 to the Subcommittee on Labor,
    Health and Human Services, Education and Related Agencies. This
    document is presented in tabular summary form to facilitate its
    readability. Additional information to substantiate the rationale for
    each funding recommendation will be furnished to the Subcommittee upon
    request. Please note that the recommendations (in millions of dollars)
    contained herein do not reflect adjustments for inflation. Therefore,
    if our recommended amount for each program or activity cannot be
    appropriated, we urge the Subcommittee to increase the appropriation by
    at least a factor for inflation.

    Individuals with Disabilities Education Act national activities
    personnel preparation to improve services and results for children with
    disabilities

                        [Part D. subpart 2; section 673]

    Fiscal year 1997 appropriation....................................$93.33
    Fiscal year 1998 appropriation....................................  82.1
    Fiscal year 1999 authorization...................................( \1\ )
    President's fiscal year 1999 request..............................  82.3
    AFB fiscal year 1999 recommendation...............................  90.0

    \1\ Such sums.

        We remain seriously concerned about adequately funding personnel
    preparation to address the shortage of teachers who are trained to deal
    with the unique needs of blind or visually impaired children. We
    suggest that a funding priority be established for preparation of
    personnel to address this need. The shortage in the field is
    tremendous; within special education, the shortage of personnel for
    instruction of students with visual impairments ranks second when
    measuring staffing needs. Only the need for teachers of students with
    multiple disabilities, many of whom also have visual impairments, is
    greater in terms of shortages. We are concerned that the restructuring
    of the personnel preparation section and the addition of the new State
    Improvement Grants to address some of the personnel preparation needs
    in the states (and a necessary appropriation for that section), may
    cause a diminution in the appropriation for the personnel preparation
    programs that remain under federal control. A priority with sufficient
    funding is necessary to guarantee an adequate number of qualified
    personnel who can instruct blind and visually impaired students in such
    specialized services as orientation and mobility and the use of
    braille. These are skills which Congress recently recognized in the
    IDEA reauthorization as important to such children's education.

    Individuals with Disabilities Education Act technology development,
    demonstration, and utilization, and media services

                        [Part D. subpart 2; section 687]

    Fiscal year 1997 appropriation.................................... $30.0
    Fiscal year 1998 appropriation....................................  34.0
    Fiscal year 1999 authorization...................................( \1\ )
    President's fiscal year 1999 request..............................  34.0
    AFB fiscal year 1999 recommendation...............................  45.3

    \1\ Such sums.

        Access to adaptive technology, such as talking computer terminals,
    has a significant impact on the appropriate education for children who
    are blind or visually impaired. In addition, incentives for development
    and availability of new technologies as funded under this part are of
    crucial importance to students with low incidence disabilities,
    including those who are blind or visually impaired, because of the
    small size of potential markets.
    Video Description
        This recommendation includes $3.0 million for video description
    which is a $1.5 million increase over the 1998 allocation. Video
    description provides blind persons with narration of visual elements of
    television, cinema, and performing arts. The reauthorization of IDEA
    includes language limiting, beginning in 2001, the video description or
    captioning that can be funded under this section. Part of the rationale
    for the limiting language is that the transition to private funding of
    captioning should be well underway by that time due to the publication
    of the Federal Communications Commission's regulations on captioning in
    August 1997. However, the FCC has not regulated on video description
    and hence there will be no requirements for video described programming
    which would attract private funding. Additionally, video description is
    a newer technology which is not as advanced as captioning in its
    movement toward the development of private funding sources. In the
    eight years that funds have been available for video description
    production and research, the allocation has fluctuated between $1
    million and $1.5 million.

    Individuals with Disabilities Education Act Services for Deaf-Blind
    Students

                             [Section 661(i)(1)(A)]

    Fiscal year 1997 appropriation....................................$12.83
    Fiscal year 1998 appropriation..........................................
    Fiscal year 1999 authorization..........................................
    President's fiscal year 1999 request....................................
    AFB fiscal year 1999 recommendation...............................  29.2

    \1\ Such sums.

        The discretionary programs reorganized by the IDEA Amendments of
    1997 no longer provide a separate programmatic line for deaf-blind
    centers and services. However, Congress recognized the importance of
    the federal role in providing services to this population by including
    services to deaf- blind students in several sections of newly
    reauthorized Part D (technical assistance, regional resource centers)
    and by maintaining the floor of $12.83 million in the 1997
    appropriation below which total funding for these students would not
    fall (Section 661(i)(1)(A)). While this is no longer a line item, we
    believe that this floor does not take into account the current needs of
    this population which now numbers 11,000 children, an all-time high. We
    believe that direction from the Subcommittee to recognize the need for
    increased funding to this population is imperative to assure that the
    $12.83 million floor does not become a ceiling beyond which additional
    funding will not be provided. The currently identified population of
    11,000 children is an all-time high. Of these children, 5,000 are being
    educated in the local school districts which means that coordinators
    must provide technical assistance in very wide geographic areas. This
    has resulted in an increasing number of special educators and general
    educators who need basic training in instruction of the children who
    are deaf-blind.

    Rehabilitation Services Independent Living Services for Older Blind
    Individuals--Title VII, Chapter 2

    Fiscal year 1997 appropriation.................................... $9.95
    Fiscal year 1998 appropriation.................................... 11.00
    Fiscal year 1999 authorization..........................................
    President's fiscal year 1999 request..............................  11.2
    AFB fiscal year 1999 recommendation...............................  13.0

        The recommended appropriation level will trigger the formula
    funding mechanism established by Congress in the 1992 amendments to the
    Rehabilitation Act. At that level, each state would receive a minimum
    of $225,000. States with larger populations of older individuals would
    receive proportionately larger amounts. There is no other national
    service delivery program specifically targeted for older individuals
    who are blind. Funds for vision-related rehabilitation services for
    older people who are blind are not provided through the Older Americans
    Act, Medicare, Medicaid, or any other consistent funding mechanism.
    Prevalence data for severe vision impairment calculated from the 1995
    Census Survey of Income and Program Participation shows, for example,
    that, in Pennsylvania, 11 percent of the population over age 55 and 32
    percent of the population over age 85 has either difficulty seeing
    words and letters in ordinary newsprint even with glasses or contacts
    or can't see words and letters in newsprint at all. (Attachment A) In
    Iowa this prevalence rate is 10 percent for individuals over age 55 and
    29 percent for individuals over age 85.

    Rehabilitation Services Rehabilitation Training

                        [Part D. subpart 2; section 687]

    Fiscal year 1997 appropriation................................   $399.63
    Fiscal year 1998 appropriation................................     39.63
    Fiscal year 1999 authorization..........................................
    President's fiscal year 1999 request..........................      33.7
    AFB fiscal year 1999 recommendation...........................      43.6

        Long-term grants under the Rehabilitation Act provide the only
    source of funding for college-based programs to train orientation and
    mobility instructors and rehabilitation teachers for the blind. As a
    result of the 1992 amendments to the Rehabilitation Act, the
    eligibility rate for clients has increased. The pending 1998 amendments
    to the Act will reenforce that trend. The services of these
    professionals are extremely important to the needs of people who are
    newly blind and eligible for rehabilitation services. The services
    these specialists provide include: using specialized adaptive devices
    and techniques for personal management at home and at work; using
    adaptive computer equipment to read information and using braille and
    other methods to take notes and maintain files; and using specific
    orientation and mobility techniques for safe and independent travel.

    Rehabilitation Services Braille Training Projects

                              [Section 803, part B]

    Fiscal year 1997 appropriation..........................................
    Fiscal year 1998 appropriation..........................................
    Fiscal year 1999 authorization..........................................
    President's fiscal year 1999 request....................................
    AFB fiscal year 1999 recommendation...............................   1.0

        Since fiscal year 1993, more than $2.2 million has been allocated
    to the effort to increase braille literacy by the Department of
    Education. Although the authority for funding these projects is
    contained in Section 803 of the Rehabilitation Act, allocations for the
    projects were made from funds appropriated for Title III Special
    Demonstration Programs as a result of the budget scoring agreement with
    regard to Title VIII programs. These braille training projects provide
    braille literacy training to rehabilitation professionals, parents of
    blind children, and family members of blind individuals in the form of
    instructional materials such as computer tutorials and the creation of
    a national network of experts in teaching braille.

    Helen Keller National Center for Deaf-Blind Youth and Adults

    Fiscal year 1997 appropriation.................................... $7.34
    Fiscal year 1998 appropriation....................................   7.5
    Fiscal year 1999 authorization...................................( \1\ )
    President's fiscal year 1999 request..............................   8.2
    AFB fiscal year 1999 recommendation...............................   8.6

    \1\ Such sums.

        The Helen Keller National Center is the only entity in the world
    whose sole mission is to provide comprehensive training, independent
    living skills, and employment preparation to young people and adults
    who are both deaf and blind. HKNC also provides technical assistance
    and training to public and private service providers. Currently, there
    are more than 11,000 deaf-blind children under the age of 22--the
    greatest number in our history--who will need such services. This
    increase will also allow for urgent building repairs as well as
    equipment and training in computer and other technologies.

    American Printing House for the Blind

    Fiscal year 1997 appropriation.................................... $6.68
    Fiscal year 1998 appropriation....................................   8.2
    Fiscal year 1999 authorization...................................( \1\ )
    President's fiscal year 1999 request..............................   8.3
    AFB fiscal year 1999 recommendation...............................   9.2

    \1\ Such sums.

        The American Printing House for the Blind provides special
    education teaching aids for students who are blind, provides braille
    textbooks for elementary and secondary students, and develops tape
    recorders and other devices used by blind or visually impaired
    students. Most of these products would not be commercially available
    because of the limited market for these products. Decisions and
    procedures regarding the selection, purchase, distribution, and
    recirculation of these products reside at the state and local levels,
    where assessment of students can best drive such decisions. The
    increase will permit APH to increase the per capita allocation to
    states for textbooks and other educational materials and to develop
    guidelines for computer-administered testing of visually impaired
    students.
                                     ______

     Prepared Statement of Wanda K. Jones, Dr. P.H., Public Health Service
       Office on Woman's Health, Department of Health and Human Services
        I am delighted to have an opportunity to provide information on the
    National Osteoporosis Educational Campaign; a public/private
    informational campaign designed to improve the quality of life and
    reduce health care costs for America's aging population.
        At least 25 million Americans are afflicted with osteoporosis, most
    of them women. Osteoporosis robs bones of their mineral and organic
    reinforcements, decreasing bone density and increasing susceptibility
    to fractures. It is a major underlying cause of bone fractures in older
    women, often taking away their independence at a time they should be
    enjoying life. Women with bone fractures can even die from surgery-
    related complications, with a reported mortality rate of 20 percent in
    the first post-surgery year for women.
        We are lucky to live in a time with new medications that can help
    prevent or treat osteoporosis. Even so, this disease leads to 1.5
    million fractures a year, mostly in the hip, spine and wrist, and costs
    $10 billion annually.
        Much of the pain, suffering and costs associated with osteoporosis
    could be avoided if women would take preventive measures early in life.
    Current evidence indicates that young women can increase their peak
    bone mass, promote long-term bone health, and reduce the risk of
    disease later in life by following effective dietary, exercise, and
    lifestyle practices. Yet we have so far not been able to effectively
    communicate this prevention message to young women. Studies show that
    less than 25 percent of adolescent females get the required daily
    allowance of calcium; the prevalence of smoking among female high
    school seniors now exceeds that for their male counterparts; over 18
    percent of all adolescent females in a recent survey had used alcohol
    in the preceding month; vigorous physical activity was significantly
    less common among female high school students than among male students;
    and 95 percent of anorectic and bulimic patients were adolescent
    females.
        In September 1996, the U.S. Public Health Service's Office on
    Women's Health (PHS OWH) convened a task force to design a blueprint
    for a national osteoporosis education campaign. The Task Force
    recommended that getting osteoporosis prevention messages to the 13 to
    18 year old group should be a priority. These are the years appear when
    girls begin making their own decisions about diet, smoking, exercise
    and leisure activities, and start shifting away from their parents'
    advice to their peers and the popular media. These are also the years
    when girls are on the verge of accruing 90 percent of peak bone mass.
    The National Osteoporosis Foundation (NOF) and the Osteoporosis and
    Related Bone Diseases National Resource Center (ORBDNRC) subsequently
    recommended that girls ages 9-12 years also be included in this project
    and these organizations have joined with the PHS OWH to develop this
    educational initiative.
        Research reveals that selecting effective health education
    approaches and messages for adolescent females is far from simple. So,
    prior to developing and implementing health education programs targeted
    to adolescent females, the PHS OWH, NOF, ORBDNRC, and the National
    Institutes of Arthritis and Musculoskeletal and Skin Diseases (NIAMS)
    felt it was necessary to conduct a study to determine how to reach
    adolescent females with prevention messages. This study was designed to
    identify effective health education approaches and apply the lessons of
    practical experience to meet health education objectives for target
    populations.
        There were several key strategies used to collect data. First of
    all, an exhaustive search was conducted of the published literature
    using online databases such as Medline to gather findings on adolescent
    females' knowledge, attitudes, and practices concerning bone health and
    the prevention efforts aimed at this population. Secondly, a
    questionnaire was prepared to use in interviews with representatives of
    organizations that have developed messages and implemented programs for
    adolescent females, including the NHLBI Education Programs Information
    Center, the National Maternal and Child Health Clearinghouse for
    Alcohol and Drug Information, Girl Scouts of the USA, Future Homemakers
    of America, Inc., and Girls Clubs of America. Thirdly, baseline data
    was gathered on adolescent females' knowledge of bone health and its
    relative importance to them. And finally, adolescent and young women
    representing diverse population groups ages 9 to 18 were recruited for
    focus groups to solicit and explore their responses to prepared
    questions concerning their knowledge of bone health and preferred
    prevention messages, approaches, and channels.
        The principles, patterns, and criteria for developing message
    content, designing effective approaches, selecting and using channels,
    and addressing adolescent populations were identified. Apparent gaps in
    the knowledge base and any conflicting findings were also highlighted.
        From the findings of this study, the PHS OWH is collaborating with
    the Centers for Disease Control and Prevention (CDC), the National
    Institutes of Health (NIH) and the NOF to establish a national
    education campaign on osteoporosis to increase bone healthy behaviors
    of women and their understanding of the importance of bone health.
    Attention will first be placed on 9 to 12-year-old girls, just
    approaching their peak bone building years, but as the campaign
    develops, it will expand to cover 13 to 18-year-old girls. An
    interesting finding of this recent study is that it is important to
    make efforts to change the behaviors of parents, who are critical role
    models on these issues for pre-teens. Thus, parents will also be
    targets of an expanded educational program.
        The PHS OWH, NIH, CDC, and NOF would like to see significant
    strides made to reverse the current trend in teen health so that there
    is a marked increase in physical activity, a greater consumption of
    calcium among 9-18 year olds, and adoption of other healthy lifestyle
    behaviors associated with bone health. We believe a long term national
    campaign can help effect these changes and are committed to working
    with our collaborators to ensure that this educational program can
    continue past the initial year of funding provided by the PHS OWH.
        In the past century, we have done much to increase the life
    expectancy of women. As a result, in the next century we will see a
    significant increase in the number of older women in our population. We
    must use visionary, long-term strategies to ensure that these bonus
    years for women are fruitful, rewarding and comfortable. Only by
    preparing women in their pre-teen and teen years for a lifetime of good
    health will we achieve that goal.
                                     ______

      Prepared Statement of Cornelius J. Pings, President, Association of
                             American Universities
        The Association of American Universities (AAU), an organization of
    62 public and private research universities across the U.S. and Canada,
    appreciates this opportunity to submit for the record testimony in
    support of the fiscal year 1999 budget for the National Institutes of
    Health (NIH) and the Department of Education's graduate education
    programs. We are joined in this statement by the American Council on
    Education and the National Association of State Universities and Land-
    Grant Colleges. AAU has also submitted separate testimony with these
    two organizations on behalf of the important Federal student aid
    programs funded by this Subcommittee.
        We address the Subcommittee at a time of great promise for
    biomedical research. We are very grateful for the Subcommittee's
    consistent, strong support of NIH. You have been strong advocates of
    biomedical research, even when reductions were being made elsewhere in
    your appropriations bill. Your commitment to the biomedical enterprise
    has done much to create the current atmosphere in which support for NIH
    is spreading throughout the country and the Congress. We are greatly
    heartened by this groundswell of public sentiment for investing in
    biomedical research and the possibility that the burgeoning economy and
    the fiscal accomplishments of Congress will permit the lifting of the
    yoke of deficits to finance this priority.
        You have received testimony from many witnesses which describes the
    tremendous opportunities in science and the breathtaking speed at which
    discoveries are being identified--discoveries which ultimately will
    unlock the key to disease and hold the promise of improved health for
    our citizens.
        The AAU takes pride in the fact that so much NIH research is
    conducted on the campuses of AAU institutions--at their graduate
    schools and academic medical centers. In fact, in fiscal year 1997,
    over $4.5 billion was awarded by NIH through its peer review process to
    AAU institutions.
        As institutions which support strong research programs in many
    scientific disciplines--including physics, chemistry, mathematics,
    computer science, and engineering--we want to emphasize that biomedical
    research is heavily dependent on the discoveries and progress of many
    sciences, not just those that are most closely associated with
    biomedical research.
        Dr. Burton Richter, the Nobel Prize-winning physicist at Stanford
    University, uses the example of HIV protease inhibitors to make this
    point. Protease inhibitors were synthesized by chemists based on the
    structure of HIV protease determined by biologists using physicists' x-
    ray diffraction techniques. The drug companies then finalized their
    formulations using x-ray beams from synchrotron radiation sources from
    accelerators.
        The AAU calls on Congress to support all science research with
    vigor, not only the biomedical sciences.
        The AAU supports efforts underway throughout the biomedical
    community to increase substantially the funding for NIH. We join the Ad
    Hoc Group for Medical Research Funding in its call for a 15 percent
    increase for NIH in fiscal year 1999, as the first step in a five-year
    effort to eventually double NIH funding. As was indicated earlier, we
    feel it is important that the other sciences receive similar support.
    We are greatly encouraged by the President's request for an 8.4 percent
    increase for NIH as the starting point for the debate this year on the
    NIH appropriation.
        As enthusiastic as we are about the goal of increasing NIH funding
    by 15 percent this year, we must emphasize that stability in funding
    over a multi-year period is crucial to progress of science. Dramatic
    fluctuations in funding increases may well be more harmful to
    biomedical science than consistent modest increases. Science cannot be
    conducted productively in single year increments--one year of generous
    resources, the next with cutbacks and constraints.
        In advocating significant increases in NIH funding, we are acutely
    aware that these levels are very unlikely to be reached under the
    current discretionary spending caps without damage to the other
    important programs funded by this Subcommittee. We encourage Congress
    to consider making support for NIH at higher levels possible by
    identifying additional resources, such as through investing a potential
    budget surplus or designating revenues from a possible tobacco
    settlement.
        We realize that the scientific community and the Congress have a
    grave responsibility to taxpayers to defend funding increases of the
    magnitude we are advocating. We feel confident that the scientific
    fields can support high quality research at these levels. The way in
    which science is now conducted is virtually transforming the activities
    and structure of the modern laboratory. For instance, the human genome
    project requires computing and informatics capacity that would have
    seemed unfathomable fifteen years ago. Substantial new resources could
    be applied to providing the new technologies and the properly trained
    personnel to help usher in a new era of scientific achievement. Our
    organizations hope to play a part in spurring the scientific
    leadership, both at NIH and among its extramural partners, to engage in
    comprehensive, ``outside the box'' planning for how significant
    spending increases could most productively be spent.
        AAU would like to highlight needs which have too often been given
    short shrift and which should be addressed if new resources become
    available. AAU continues to emphasize the investigator-initiated grant
    as the bedrock on which the successful NIH enterprise is built. But we
    also want to focus attention on pressing needs in two areas: clinical
    research and institutional infrastructure.
        The dominance of market forces in the health care system has
    drained resources that previously had been used to subsidize clinical
    research and support clinical investigators. Training and career
    support for clinical researchers at all levels--post-doctoral, new and
    junior researchers, and established investigators--need strengthening.
    The General Clinical Research Centers program, which supports inpatient
    and outpatient research facilities, trained research support staff,
    career training, and other resources crucial to clinical research,
    should be targeted for additional resources.
        The second area of concern is institutional infrastructure.
    Individual research efforts cannot thrive without buttressing some of
    the critical infrastructure needs of the biomedical enterprise.
    Additional resources need to be invested in renovating outdated
    facilities, supporting animal research facilities, financing state-of-
    the-art instrumentation and developing new research technologies. In
    addition, the AAU encourages Congress to consider reinstituting a peer-
    reviewed, accountable institutional grant program that can be targeted
    to specific institutional needs, such as bridge grants for
    investigators, support for trial projects and unorthodox research
    ideas, aid for new investigators, and the acquisition of expensive
    shared resources.
        We would like to conclude with a few words about graduate
    education. AAU continues its strong support of the graduate education
    programs funded by this Subcommittee--those authorized by Title IX of
    the Higher Education Act. These programs are the only source of
    fellowship support for extremely well-qualified students who have
    financial need in disciplines such as the humanities, which are not
    supported elsewhere in the Federal budget.
        Thank you for this opportunity to express our views and add our
    voices to the growing chorus of advocates for biomedical research.
                                     ______

         Prepared Statement of the American Association of Blood Banks
        The American Association of Blood Banks (AABB) offers this
    statement in support of increased funding for the National Institutes
    of Health (NIH) and the National Heart, Lung, and Blood Institute
    (NHLBI). The AABB appreciates the generous support that transfusion
    medicine researchers have received from the NIH through the
    Congressional appropriations process. This statement discusses the
    current state of transfusion medicine research and signals areas that
    the Association believes merit continued research support.
                    the american association of blood banks
        AABB is the professional society for 8,500 individuals involved in
    blood banking and transfusion medicine. AABB also represents more than
    2,200 institutional members including community and Red Cross blood
    collection centers, hospital based blood banks, and transfusion
    services as they collect, process, distribute, and transfuse blood and
    blood components. AABB members are responsible for virtually all of the
    blood collected and more than 80 percent of the blood transfused in
    this country. Throughout its 50-year history, the AABB's highest
    priority has been to maintain and enhance the safety of the nation's
    blood supply.
        Many AABB physicians and scientists conduct research designed to
    assure that the American people have access to the safest transfusion
    services possible. The NIH and other federal agencies fund much of this
    research.
        The National Blood Foundation (NBF), founded in 1983, supports
    patient and donor care through medical research and education as a
    program of the AABB. The AABB is developing a cadre of transfusion
    medicine researchers by supporting early career research in issues
    affecting transfusion medicine. NBF grant recipients have the
    opportunity to demonstrate superior research ability in NBF grant
    sponsored research which often enables them to secure larger grants for
    additional research from the NIH.
                  scope and importance of transfusion medicine
        Transfusion Medicine is a multidisciplinary specialty encompassing
    both clinical practice, broad research responsibilities and
    professional and public education activities. Each year in the United
    States, more than 23 million units of blood components are transfused
    into approximately four million patients, providing fundamental support
    for many different surgical and medical treatments. Blood is needed for
    the care of patients with cancer; for accident and burn victims; for
    newborn babies needing intensive care; for transplant patients; for
    millions of patients who undergo surgery; and for individuals with
    heart, lung, liver or bowel diseases. A ready supply of safe blood is
    also vital to the military. Future advances in the health care of the
    nation will depend on continued progress in the provision of safe and
    effective transfusion services.
        As a direct result of transfusion medicine research--much of it
    funded by the federal government through the NIH--the United States
    blood supply is now safer than ever.\1\ The NIH is currently sponsoring
    several important transfusion medicine research projects that can be
    expected to lead to further improvements in the safety and efficacy of
    blood transfusion. However, there are important research opportunities
    in this field that require additional investigation to assure that
    patients have access to the safest possible blood supply.
    ---------------------------------------------------------------------------
        \1\ A General Accounting Office (GAO) report on blood safety
    released on March 12, 1997, entitled ``Blood Supply: FDA Oversight and
    Remaining Issues of Safety,'' found that overall, the blood supply ``is
    very safe.''
    ---------------------------------------------------------------------------
                recommendations for improving transfusion safety
        Despite the great progress that has been made in the selection of
    donors who are at low risk for disease transmission and the use of and
    improvements to an extensive battery of tests to eliminate infected
    donors, the prevention of HIV and other transfusion-transmitted
    infections remains a top priority of transfusion medicine researchers
    and all recipients of blood. The AABB urges the NIH to continue
    research into the development of enhanced infectious disease tests and
    donor screening methods to further improve blood safety.
    Prevention and Early Detection of Transfusion Transmitted Pathogens
        Current blood screening tests detect the presence of the antibodies
    produced in response to the targeted virus, rather than the virus
    itself. Each improvement to the test has lead to a decrease in the
    ``window period'' (the period of time between infection with a viral
    disease such as AIDS and Hepatitis C and the ability to detect the
    virus via screening tests).
        To improve infectious disease tests even more, the NHLBI is funding
    research into the use of gene amplification technology for the
    detection of the genetic material of viruses that cause AIDS and
    Hepatitis C. If successful, this research could lead to blood screening
    tests that further reduce the window period. However, before this
    technology can be implemented for screening blood collected for
    transfusion, more research is needed to address substantial technical
    and operational challenges.
        Pathogen Inactivation.--The risk of acquiring identified pathogens
    through transfusion is lower than ever, yet world-wide travel and
    changing demographics could spread new viruses, bacteria and parasites
    into the U.S. blood donor population. Therefore, the prevention of
    transfusion transmitted diseases remains a top priority of transfusion
    medicine research. Whereas certain technologies are already under
    development with private sector support, newly emerging strategies
    which hold promise for pathogen inactivation need federal grant
    support.
        For example, to address these threats, technologies to sterilize
    cellular blood components are under development. Unfortunately, current
    sterilization methods also damage or destroy the blood cells.
    Nevertheless, emerging strategies hold promise for pathogen
    inactivation that does not impair the efficacy of cellular blood
    components. The AABB is pleased that the NHLBI co-sponsored with the
    FDA last year, a workshop on pathogen inactivation and is funding
    research on viral and pathogen inactivation in cellular blood
    components with clinical trials. Research in this area is also
    proceeding in the private sector.
        Support is needed for research on pathogen inactivation related to
    CMV transmission. Additionally, support is needed for research that
    explores the biology, transmissibility and inactivation potential of
    Creutzfeld-Jakob disease, and other spongiform encephalopathies
    referred to as CJD.
        Donor Screening.--Donor questioning is a critical step in
    maintaining a safe blood supply. Over the years, the questions
    presented to blood donors have been continuously revised, and today,
    questioning more directly addresses issues such as travel to regions
    with endemic disease patterns and sexual and drug use patterns. As a
    result of improved donor screening and education efforts, the volunteer
    donor pool is now primarily comprised of persons with lower infectious
    disease risks.\2\
    ---------------------------------------------------------------------------
        \2\ General Accounting Office report on blood safety released on
    March 12, 1997, entitled ``Flood Supply: Transfussion-Associated
    Risks.''
    ---------------------------------------------------------------------------
        Additional research is needed to refine and validate donor
    screening protocols. A report of the NHLBI funded Retrovirus
    Epidemiology Donor Study published in the March 26, 1997 issue of the
    Journal of the American Medical Association concludes that, although a
    stringent donor screening system is in place, a small percentage of
    donors with risk for infectious disease continue to donate blood.\3\
    Although sophisticated laboratory testing that is conducted on all
    donated blood would have detected virtually all HIV or other infections
    among most of these donors, it is disturbing that this link in the
    blood safety process appears to be incomplete. The AABB urges the NHLBI
    to fund research to develop more effective donor screening methods to
    emphasize the potential adverse impact on patient health of providing
    misleading or inaccurate information during the blood donation process.
    ---------------------------------------------------------------------------
        \3\ The study found that 186 of every 10,000 survey respondents
    (1.9 percent) reported some risk for infectious disease that would have
    resulted in deferral during the donation process had that risk been
    revealed.
    ---------------------------------------------------------------------------
    evaluation of the role of biological response modifiers in transfusion
                                   reactions
        Lifesaving blood transfusions carry risks other than transmission
    of infectious diseases. Clinical and experimental studies have
    identified several families of molecules which play a significant role
    in altering a patient's response to transfusion. These adverse
    responses (known as transfusion reactions) range from fever, hives,
    shaking chills and low blood pressure to severe allergic reactions,
    shock and even death. Transfusion Medicine researchers now know far
    more about these families of biological response modifiers which
    include histamine, complement, cytokines, bradykinin and other
    biologically active molecules. Studies of the role of these mediators
    in adverse reactions to transfusion and research into how to modify and
    control these response modifiers is needed. Basic and clinical research
    in these areas will provide a fruitful avenue for improving the safety
    of blood transfusion for adult and infant transfusion recipients alike.
                           immunology of transfusion
        Even compatible blood transfusions are recognized by the recipient
    as foreign substances. Though blood transfusion is a lifesaving
    therapy, transfused blood components are still recognized as a foreign
    substance by the human body. It is known that blood transfusion can
    produce adverse changes in the body's natural immune defenses. These
    changes include the potential for decreasing the natural defenses of
    transfusion recipients in their fight against bacterial infection and
    preventing or decreasing the incidence of cancer recurrence. It may
    seem paradoxical, but more and more evidence is accumulating to show
    that blood transfusion may, in certain situations, prove to be a double
    edged sword. Lifesaving transfused blood may actually promote certain
    diseases in the recipient, while preventing the risks of blood loss.
    Bone marrow transplant patients, cancer patients and other
    immunosuppressed recipients, men and women, the very old and the very
    young are all at risk for these types of immunological complications.
    Fundamental basic research by Transfusion Medicine specialists is
    needed to gain vital knowledge on how to combat this adverse aspect of
    blood transfusion. Transfusion researchers are also poised to make
    great strides in understanding the molecular biology and function of
    blood cell antigens.
        Blood transfusion involves the transplantation of living cells from
    the blood donor to the recipient. This procedure can suppress the
    transfusion recipient's immune system, thereby decreasing the
    recipient's defenses against postoperative bacterial infection and
    tumor recurrence. Preliminary research suggests that when standard
    blood components are modified in certain ways, such as by exposure to
    gamma irradiation or by removal of donor leukocytes or donor plasma,
    the immune altering effect of transfusion may disappear. The role of
    cytokines as mediators of transfusion-associated immune modulation may
    represent a possible avenue of research.
        Blood transfusion can also stimulate immune reactions to tissue
    (HLA antigens), platelet antigens, and red cell antigens, significantly
    impairing the ability to support transfusion-dependent patients. The
    AABB urges the Subcommittee to support research to prevent transfusion
    related immune suppression.
                   peripheral blood stem cells and cord blood
        Red blood cells that carry oxygen, white blood cells that fight
    disease and platelets that stop bleeding are all produced from a single
    progenitor cell known as a hematopoietic stem cell. Transplants of
    these stem cells are increasingly replacing bone marrow transplants for
    reconstituting bone marrow in chemotherapy patients. Because of their
    ability to multiply into many different types of blood cells, stem
    cells may also become the ultimate vehicle for curing diseases through
    gene therapy.
        Recently, it has been found that considerable quantities of stem
    cells can be collected from the blood stream. Stem cells are also
    increasingly collected from the blood remaining in the placenta and its
    attached umbilical cord after delivery of newborn babies. Although the
    total volume of blood is small and is normally discarded after birth,
    research indicates that the amount of stem cells is great enough to
    perform stem cell transplantation in children with leukemia and other
    diseases.
        The AABB is pleased that the NHLBI is funding a five-year multi-
    center study of the transplantation of stem cells collected from cord
    blood. To establish the necessary infrastructure for this research, the
    institute established a network of umbilical cord blood banks and
    transplant centers. This research will help determine the clinical
    efficacy of cord blood stem and progenitor cell transplants.
        This initiative is expected to pose new questions on the proper use
    of peripheral blood stem cells and cord blood. A variety of both
    biological and technical issues require continued investigation. These
    include proper immunologic and functional characterization of the stem
    cell, investigation of methods of stimulating stem cell production in
    normal donors, and optimum methods for the collection, processing and
    storage of stem cells. The AABB supports basic and applied stem cell
    research.
        Improving Transfusion Medicine research training and its clinical
    research infrastructure is vital to furthering Transfusion Medicine
    research productivity. Such an infrastructure is currently nonexistent.
    Accordingly, the AABB supports development of a system of linked
    Centers of Transfusion Excellence for Research and Training. Such
    Centers could provide the critical mass of resources needed the to
    accomplish NIH/NHLBI sponsored research initiatives in the Transfusion
    Medicine areas outlined above.
                        fiscal year 1999 funding levels
        The AABB is sensitive to the many demands on the discretionary
    funds in the federal budget. However, we view medical research funding
    as an investment in America's future competitiveness. Consistent with
    the Ad Hoc Group for Medical Research Funding, the AABB endorses a 15
    percent increase in NIH funding for fiscal year 1999 as a first step
    toward the goal of doubling the NIH budget over the next five years.
    This recommendation is consistent with recently articulated
    congressional support for doubling the amount authorized for basic
    science and medical research for a number of research agencies,
    including the NIH. Additionally, this level of funding would sustain
    the current rate of growth NIH has experienced during the past decade.
        On behalf of the many scientists devoted to improved blood
    transfusion practice, the thousands of health care professionals who
    work daily to deliver blood services, and the millions of American
    transfusion recipients, the AABB appreciates this opportunity to
    discuss federal support for research in transfusion medicine before the
    Subcommittee.
                                     ______

     Prepared Statement of K. Kimberly Kenney, Executive Director, Chronic
       Fatique Immune Dysfunction Syndrome (CFIDS) Association of America
        Mr. Chairman, thank you for the opportunity to submit testimony to
    the Committee for the third consecutive year. My name is Kimberly
    Kenney, and I am executive director of The CFIDS Association of
    America. The Association is the world's largest and most active
    charitable organization dedicated to conquering chronic fatigue and
    immune dysfunction syndrome, or CFIDS, also known as chronic fatigue
    syndrome or CFS. With more than 23,000 members and a mailing list of
    nearly 200,000, The CFIDS Association is the leading non-profit
    501(c)(3) organization working to conquer CFIDS. In its mission to
    conquer CFIDS, the Association supports education, public policy and
    research programs. Nearly all of the funds which support these programs
    are donated by persons with CFIDS and those who care about them. Since
    our founding in 1987, we have funded over $3.3 million in direct
    research grants and have distributed hundreds of thousands of copies of
    our magazine, The CFIDS Chronicle.
        CFIDS is a serious and complex illness that affects many different
    body systems. The cause has not yet been identified and there is no
    cure. The illness is characterized by bone-crushing fatigue, persistent
    flu-like symptoms, intractable pain and Alzheimer-like cognitive
    deficits. These and other symptoms can come and go, complicating
    treatment and the ability to cope with the illness. In addition, most
    symptoms are invisible, making it difficult for others to understand
    the problems that persons with CFIDS have. The illness is often
    severely disabling and can last for many years. Further, it is often
    misdiagnosed because there is no diagnostic laboratory test and it
    closely resembles other disorders including multiple sclerosis, Lyme
    disease, lupus and post-polio syndrome. Studies using the restrictive
    research definition of CFS have reported that at least 500,000 adults
    in the United States suffer from CFIDS. Although little study has been
    done on CFIDS in children and adolescents, it is clear that kids do get
    CFIDS. The lack of understanding about CFIDS by pediatricians, school
    teachers and administrators and other children can make for a
    nightmarish experience for the young patient and his/her parents.
        The CFIDS Association leads efforts to make CFIDS a recognized
    mainstream medical concern. A foundation of knowledge and experience
    has been created through an expanding research effort. Patient care and
    diagnosis remain more art than science, but meaningful advances promise
    to be imminent and initiatives underway to educate healthcare
    professionals will improve understanding of the complexity of this
    illness among providers.
        I am honored to report to the Committee the progress being made in
    unraveling the mysteries of CFIDS. This committee has provided
    leadership and vision for the federal agencies which must meet the
    needs of persons with CFIDS. The CFIDS-related report language in the
    fiscal year 1998 appropriations bill was greatly appreciated by the
    CFIDS community. I ask for your continued support of activities which
    have been critical to this improved understanding.
        Please allow me to recount some of the specific accomplishments of
    the past year that underscore the value of continued federal investment
    in these activities:
      --In its first year, the Department of Health and Human Services
            Chronic Fatigue Syndrome Coordinating Committee (DHHS CFSCC),
            on which I serve as one of two patient advocates, has made
            important progress in raising awareness of CFIDS within the
            government and coordinating government activities across
            agencies. Yet its real and potential effects could extend far
            beyond the government's reach into the general public, the
            medical community and private research. The Committee's next
            meeting, April 28-29, will include a day of pediatric CFIDS
            science designed to identify the most promising areas of
            investigation. The following day the Committee will establish
            priorities for action and further inquiry.
      --The Office of the Secretary for Health produced one of 1997's
            greatest achievements--a medical education program broadcast by
            satellite across the country. Many federal agencies and patient
            representatives participated in the creation of this program:
            it was conceptualized and written by a team of patient
            advocates and staff from DHHS, the National Institutes of
            Health (NIH) and Centers for Disease Control (CDC); promoted by
            the Health Resources and Services Administration (HRSA) and
            patient advocates; and broadcast on satellite by CDC and over
            the Internet by a private company.
      --The Association's partnership with HRSA's Area Health Education
            Centers (AHEC) to promote the satellite program within the
            health care community was integral to the success of the
            program. The AHEC system's expertise in training health care
            workers resulted in 78 satellite viewing sites and over 1,200
            provider-participants.
      --The extramural CFS research effort at NIH continues to make
            progress. The National Heart, Lung and Blood Institute's
            (NHLBI) first CFS research grant was made to Harvard's Roy
            Freeman, MD, who is investigating abnormalities in the
            autonomic nervous system. Additionally, the National Institute
            of Allergy and Infectious Disease (NIAID)-funded CFIDS
            epidemiology study at DePaul University received a supplemental
            grant to expand its research of children and adolescents with
            CFIDS.
      --CDC's CFIDS research program has shown improvement. The second
            phase of a large community-based study of CFIDS in Wichita,
            Kan. began in late 1997. CDC's steps to augment its pediatric
            CFIDS research program, as requested in fiscal year 1998's
            report language, are very encouraging. In addition, CDC has
            recommended the creation of a unique ICD-9 code for chronic
            fatigue syndrome. The new code, 780.71, should improve the
            tracking of CFS cases in the healthcare system and lead to
            better reimbursement by insurance companies and more useful
            epidemiological data.
      --The association between CFIDS and the Gulf War syndrome was
            strengthened by CDC research which showed that primary symptoms
            experienced by both groups are the same--fatigue, cognitive
            abnormalities and widespread muscle and joint pain. This data
            supports the need for improved communication between civilian,
            military and government scientists working to define both
            illnesses.
      --In response to pressure from CFIDS advocates, the Food and Drug
            Administration (FDA) approved limited distribution and a
            clinical study of Ampligen, a drug which has shown benefit in
            treating CFIDS. We remain supportive of this and other studies
            which give CFIDS patients access to promising drugs at the
            earliest opportunity.
        These achievements have been facilitated through fiscal year 1997's
    significant, though comparatively small, combined federal investment of
    $14 million. While these accomplishments show clear progress in the
    federal commitment to battling CFIDS, it is apparent that Congressional
    and private support for bolstering this effort is still necessary.
      --Problems with the CDC bureaucracy continue to exist. We have been
            extremely frustrated in our efforts to track the agency's use
            of funds allocated to its CFIDS program. In March, CDC
            officials provided The CFIDS Association with a line-item
            accounting of its CFS spending in fiscal year 1996 and fiscal
            year 1997 and a plan for fiscal year 1998 spending. In each of
            the three years, total spending added up to exactly $5,789,000,
            but the amount spent in each object class varied widely from
            year to year (See Appendix). For example, ``Supplies'' were
            $600,871 in fiscal year 1996, $86,027 in fiscal year 1997 and
            estimated at $180,222 in fiscal year 1998. We could find no
            explanation for these spending disparities after reviewing
            CDC's CFS activities over the past 30 months. Mr. Chairman, we
            ask that you question CDC officials about this matter when they
            come before you this spring.
      --Similar difficulties have been experienced with the NIH. Despite
            repeated requests, NIH delayed for five months before providing
            a total for fiscal year 1997 funds spent on CFIDS. Despite the
            generous 7 percent increase Congress provided NIH in fiscal
            year 1997, total CFIDS funding was 10 percent less than NIH had
            planned to spend on CFIDS in fiscal year 1997, and it was only
            2 percent ($150,000) more than was spent in fiscal year 1996.
            In addition, the fiscal year 1998 estimate is 5 percent below
            the funding level estimated in 1997. The erosion of NIH support
            for CFIDS research underscores the need for clearer direction
            from this Committee.
      --Concerns remain high about the obstacles persons with CFIDS
            encounter when seeking disability benefits through the Social
            Security Administration. The SSA's Office of Disability has
            drafted a ruling to guide the adjudication of CFS disability
            claims. There are a number of problems with the first draft of
            the ruling, but SSA has committed to working with The CFIDS
            Association to improve it. We are cautiously optimistic, and
            encourage the Committee to reiterate its support for improving
            SSA's response to CFS disability claims.
      --The scientific advances that have been made, while encouraging,
            have not helped the individual patients who are desperate for
            better care. Diagnosis is still made by excluding all other
            possible causes of symptoms, a long and costly process.
            Patients who find a physician knowledgeable and willing to
            treat them commonly experience a discouraging (and potentially
            dangerous) process of trial and error using any number of
            usually inadequate symptomatic medicines. Advances in
            biomedical research still provide the greatest hope for helping
            individual patients, and we hope the Committee will continue
            its support of expanded CFIDS research.
      --A broad-based, comprehensive CFIDS education effort could also help
            individual patients by improving the health care industry's
            understanding, diagnosis and treatment of CFIDS. The satellite
            training program was an important first step. There is still an
            enormous need for more pervasive educational programs which,
            ideally, would again combine the resources of CDC, HRSA,
            researchers, clinicians and advocates.
      --Per the Committee's fiscal year 1997 report language, the CFSCC
            formed a task force to consider the issue of changing the name
            ``chronic fatigue syndrome'' to one which more appropriately
            reflects the disease's pathophysiology. The task force
            determined that, while there is enormous support from all
            sectors to change the name, science has not progressed to the
            point of clear consensus for a suitable alternative name. We
            actively seek to advance understanding so that a less
            stigmatizing name might be adopted and broadly announced.
        To encourage continued growth in the CFIDS research effort and to
    undertake programs that will begin to address the real-world needs of
    CFIDS patients for earlier detection, better care, and improved access
    to Social Security disability benefits, we must request an expansion of
    resources dedicated to these crucial efforts.
        The CFIDS Association of America offers the following
    recommendations for fiscal year 1999 appropriations and committee
    report language:
    Secretary for Health
        The Association requests that Congress earmark $1 million of the
    discretionary funds allocated to the Secretary of Health and Human
    Services to maintain the Department of Health and Human Services
    Chronic Fatigue Syndrome Coordinating Committee (DHHS CFSCC). We ask
    that the Committee include report language directing the use of this
    body to coordinate CFIDS research across the Public Health Service by
    defining priorities and creating a yearly action plan. Included in the
    purview of the CFSCC, we recommend oversight into programs,
    performance, budget allocations and priorities. Finally, we ask that
    the Committee support the renewal of the CFSCC's charter beyond its
    expiration in 1998.
    National Institutes of Health
        Despite the Committee's generous report language directing NIH to
    provide additional resources for CFIDS research, it appears that this
    direction has not been heeded by the agency. While the Committee's
    reluctance to earmark funds for medical research is well understood,
    the erosion of NIH funding for CFIDS research underscores the need for
    stronger direction from this Committee. The Association requests that
    Congress appropriate an additional $10 million to NIH for extramural
    grants focused on promising areas of CFIDS research. We support the
    Congressional proposal to double the NIH's budget within the next five
    years, as biomedical research gives us the greatest hope for conquering
    CFIDS. We ask that the Committee include report language continuing to
    direct NIH spending priorities to investigations that will define the
    pathophysiology of the illness and identify diagnostic markers. We also
    request that the Committee include report language establishing the
    need for a special Program Announcement dedicated to the study of all
    facets of pediatric CFIDS. Finally, the Association asks for report
    language urging NIH officials to identify appropriate NIH advisory
    committees for CFIDS representation and ensure appointment of qualified
    persons thereon.
    Centers for Disease Control and Prevention
        At the CDC, the Association requests that Congress appropriate a $5
    million increase to expand laboratory studies (including serial
    analysis of genomic expression (SAGE) studies) and surveillance
    projects, including outreach to populations not formerly recognized as
    being affected by CFIDS, namely minority populations and children and
    adolescents. We are concerned that CDC may be delaying the addition of
    a neuroendocrinologist to its CFS research group as directed by the
    Committee, and request reiteration of the Committee's support for this
    addition.
    Social Security Administration
        Despite the regular attempts by this Committee to secure the
    attention of SSA officials to the unique problems that CFIDS patients
    encounter in the process of applying for SSDI benefits, the situation
    remains that CFIDS patients regularly encounter SSA employees
    unfamiliar with or erroneously informed about CFIDS and its diagnosis
    and the functional limitations the illness imposes. The Association
    asks the Committee to once again remind SSA, through report language,
    of its support for developing and implementing appropriate training
    agendas and materials for SSA and Disability Determination Service
    employees, and of its support for the formation of an active CFIDS
    advisory committee within SSA. Finally, we request that the Committee
    direct SSA to expedite efforts to investigate obstacles to benefits for
    persons with CFIDS and to keep medical information updated throughout
    all levels of the application and review process.
    Health Resources and Services Administration
        The Association requests an appropriation of $500,000 to HRSA to
    develop a training curriculum for health care providers in practice and
    providers in-training through the existing Area Health Education Center
    Program. The curriculum, once distributed, would improve the detection,
    diagnosis, treatment and management of CFIDS patients. Effective
    programs could yield healthcare spending savings equal to many times
    this small investment.
    Department of Education
        The Association requests report language directing DOE's Office of
    Special Education Programs to inform educators about CFIDS and the
    special educational needs of students with CFIDS.
        Members of the Committee familiar with our issue will recognize
    some of these requests from previous years. The Association has strived
    to make consistent, reasonable requests with the goal of providing
    greater clarification of issues critical to those who suffer from the
    disease. Using this strategy, we have been rewarded through the
    progress in many areas which I mentioned earlier. However, there are
    still great challenges ahead.
        We sincerely hope that, once again, Congress will work with us to
    secure a dedicated and effective federal response to CFIDS so that we
    can put an end to the suffering caused by CFIDS at the earliest date
    possible. The CFIDS Association of America will continue its efforts to
    inform Congress about CFIDS to secure support for this committee's
    leadership on the illness, as well as that shown by other individual
    Members. We will also continue our efforts to hold the federal agencies
    accountable for the direction delivered by Congress through the
    Appropriations bill and its accompanying report language.
        Mr. Chairman, we have all worked diligently to develop a basic
    understanding about CFIDS. The investment we've made over the last
    decade will soon generate dividends in terms of more definitive means
    of diagnosing, treating and, perhaps, preventing the illness. Your
    commitment to this effort is needed now more than ever. We must
    capitalize on the opportunities now before us so that the children,
    teens and adults with CFIDS experience improved care and function. They
    wish desperately to return to productive lives as students, parents,
    employees and citizens. Thank you for your efforts on their behalf, for
    your attention to our cause and for your thoughtful consideration of
    our requests.

    APPENDIX.--CENTERS FOR DISEASE CONTROL AND PREVENTION, NATIONAL CENTER FOR INFECTIOUS DISEASES DIVISION OF VIRAL
                       AND RICKETTSIAL DISEASES CHRONIC FATIQUE SYNDROME DISTRIBUTION OF RESOURCES
    ----------------------------------------------------------------------------------------------------------------
                                                                        Fiscal year     Fiscal year     Fiscal year
                                                                           1996            1997        1998 estimate
    ----------------------------------------------------------------------------------------------------------------
    Estimate personnel..............................................        $980,198      $1,072,006        $987,521
    Travel..........................................................          25,290          81,875         117,236
    Transportation..................................................              28           1,418          18,568
    Rent/communications.............................................           8,750         159,589          90,500
    Printing........................................................  ..............           3,894           5,500
    Other/miscellaneous.............................................         320,620         172,648         483,046
    Supplies........................................................         600,871          86,027         180,222
    Equipment.......................................................         599,092         373,917         370,877
    Extramural agreements...........................................       1,588,042       2,132,014       1,827,918
                                                                     -----------------------------------------------
          Total direct program costs................................       4,262,947       4,083,388       4,083,388
                                                                     ===============================================
    Program support costs\1\........................................       1,526,053       1,705,612       1,705,612
                                                                     -----------------------------------------------
          Total costs attributed to CFS research at CDC.............       5,789,000       5,789,000      5,789,000
    ----------------------------------------------------------------------------------------------------------------
    \1\ Overhead to the National Center for Infectious Diseases and the Centers for Disease Control

                                     ______

     Prepared Statement of John S. Gustafson, Executive Director, National
          Association of State Alcohol and Drug Abuse Directors, Inc.
        Mr. Chairman and Committee Members, my name is Jack Gustafson and I
    am the Executive Director of the National Association of State Alcohol
    and Drug Abuse Directors or NASADAD.
    Appropriations request
        Thank you for the opportunity to submit this testimony on the need
    for the Federal government to make an increased investment in the
    provision of alcohol and other drug prevention, treatment and research
    services. Specifically, we are supporting a 15-percent increase of $254
    million to the Substance Abuse Block Grant that is currently funded at
    $1.36 billion. The funding level of $1.36 billion includes a 2-year
    transfer of $50 million appropriated to provide treatment to former
    recipients of Supplemental Security Income (SSI) and Social Security
    Disability Income (SSDI). Although the legislative authority for this
    additional $50 million was only for fiscal year 1997 and fiscal year
    1998, we are urging that this level of funding be maintained based on
    the need for treatment.
        We are also supportive of funding increases to the following other
    programs:
      --$180 million each for the Centers for Substance Abuse Prevention
            and Treatment to support Knowledge Development and Application
            (KDA) programs;
      --$611 million for Safe and Drug Free Schools and Communities;
      --$262.2 million for the National Institute on Alcohol Abuse and
            Alcoholism and
      --$658.9 million for the National Institute on Drug Abuse.
        In supporting these increases, we emphasize the need for new and
    stronger linkages between these Federal programs and the Substance
    Abuse Block Grant that is the primary commitment to Federal funding and
    partnership with the states.
    About NASADAD
        NASADAD represents the concerns of State Alcohol and Drug Abuse
    Directors who administer and fund prevention and treatment services
    through a network of over 7,000 primarily not for profit community
    providers. State agencies provide a wide array of treatment,
    prevention, and support services to Americans of all income levels.
    Because substance abuse is a critical concern for many health and
    social service systems-our members are actively involved in issues such
    as AIDS, tuberculosis, health services for pregnant and parenting
    women, welfare reform, child abuse and neglect, employment, juvenile
    crime, and criminal justice.
    Three key issues
        I would like to discuss three key issues:
        Welfare reform and need for treatment.--It is estimated that over 1
    million welfare mothers have a substance abuse problem that requires
    treatment. As welfare reform is implemented, States are under pressure
    to find the resources needed to provide treatment services to get these
    mothers back to work. There are now long waiting lists for treatment.
    Without new dollars, it will be difficult for moms receiving Temporary
    Assistance for Needy Families (TANF) and others in need to receive
    appropriate treatment.
        Prevention.--Prevention of alcohol and other drug problems in our
    youth remains a high priority. As a Nation, we continue to be alarmed
    by the number of youth who are initiating alcohol and drug use. The
    Office of National Drug Control Policy (ONDCP) has begun its media
    campaign on drug prevention in earnest. Now it is up to States to
    provide programs that will meet the increased demand for prevention
    services that can logically be expected as a result of that campaign.
        Formula consensus.--State Alcohol and Drug Abuse Agencies take
    seriously the charge given last year by House and Senate appropriators
    to work closely with the authorizing committees, SAMHSA, and the field
    on developing consensus on the formula issue.
    Substance abuse problems
        It is important to have a sense of the scope of the problem as
    funding decisions are considered. The National Household Survey on Drug
    Abuse, funded by the Department of Health and Human Services, provides
    a good overview of the extent of alcohol and drug abuse problems in our
    country. Here are the most current statistics:
      --13 million Americans use illicit drugs.
      --9 million youths (under age 21) consume alcohol. Of these, 4.4
            million are binge drinkers, including 1.9 million heavy
            drinkers.
      --An estimated 10.1 million Americans use marijuana or hashish. Of
            these, 2.4 million are new users, many of whom were youth.
      --The number of cocaine users is 2.6 million.
      --There were an estimated 141,000 new heroin users in 1995. Most of
            these new users were under age 26. The rate of heroin
            initiation for the age group of 12-17 reached historic levels.
      --More than half of the youths ages 12-17 reported that illicit drugs
            like marijuana and heroin were easy to obtain. 15 percent of
            youths reported being approached by someone selling drugs.
    Public system
        Now that you have an idea of the extent of the problem, I would
    like to share with you information about our current treatment and
    prevention efforts. In 1995, State Alcohol and Drug Agencies
    administered over $4 billion in substance abuse services. This level of
    funding supported nearly 1.9 million treatment admissions for alcohol
    and other drug problems. Also out of the $4 billion, States spent over
    $583 million on prevention services.
        The Substance Abuse Block Grant is currently funded at $1.36
    billion and is the primary federal commitment to substance abuse
    prevention and treatment. Twenty percent of the Substance Abuse Block
    Grant is for Prevention. The block grant represents about 1/3rd of
    overall funding for the State publicly supported system.
    Number of persons needing treatment
        Every year, NASADAD completes a survey of our State Agencies to get
    a rough estimate of the number of individuals who have requested or
    need treatment services. This survey helps to supplement the national
    estimates that are done on a periodic basis of individuals who have
    drug or alcohol problems.
        States report how many people they currently have on their waiting
    lists as well as make projections about how many TANF or former
    Supplemental Security Income (SSI)/Social Security Disability Income
    (SSDI) recipients need treatment in their individual States. The last
    survey was done in August of 1997 and shows the following:
      --On a national basis, States estimate that more than 1 million
            individuals need alcohol and other drug treatment.
      --Of that 1 million, there are 52,419 on waiting lists, 240,291 are
            former SSI/SSDI recipients, and 779,710 are TANF recipients.
        Here are some numbers from that waiting list for a few States
    represented on this Subcommittee: Pennsylvania: 49,721; Iowa: 9,149;
    Wisconsin: 20,858; Texas: 87,917; and North Carolina: 25,108
        It is important to note that these numbers are just the tip of the
    iceberg and were collected prior to implementation of many Federal and
    State welfare reforms. The number of those needing treatment is
    expected to expand exponentially as welfare reform progresses.
    Department of Labor--Welfare to work
        NASADAD is well aware of how important our treatment system is to
    getting TANF moms and others back to work. We have been working closely
    with the Department of Labor and the Private Industry Councils (PICs)
    to help assure the success of the 2-year Welfare to Work program
    authorized and funded by Congress last year.
        One thing that is clear to all of us--State administrators,
    providers, employers, and welfare experts--is that the long waiting
    lists for treatment serve as a barrier to getting these moms back to
    work. It is also clear that unless TANF recipients get the treatment
    they need--job retention will be a major problem for families, States,
    and employers.
    How States would spend new dollars
        The following are examples of how States would use additional block
    grant funds to meet the need for increased prevention and treatment
    services:
      --First and foremost, reduce the number of people on current waiting
            lists;
      --Place professional staff in local welfare and Private Industry
            Councils (PICs) offices to screen TANF recipients and provide
            intensive case management for those identified as having a
            substance abuse problem;
      --Develop new services for working TANF recipients such as weekend or
            evening treatment programs and lunch time prevention education
            programs;
      --Establish employee assistance programs for employers who hire
            former welfare recipients with substance abuse problems;
      --Work in concert with child welfare agencies to provide services to
            children of substance abusers;
      --Expand after-school programs that prevent illicit alcohol, drug,
            and tobacco use by children and youth.
      --Create new mentoring programs that engage business leaders in
            reaching out to youth to build esteem and life skills as well
            as to avoid substance abuse.
    Treatment effectiveness
        One question that always arises is: How effective is treatment? I
    am pleased to share that a newly released longitudinal study, funded by
    the National Institute on Drug Abuse, overwhelmingly confirms the
    effectiveness of treatment. The study, called the Drug Abuse Treatment
    Outcome Study or DATOS, tracked more than 10,000 patients in 11 cities
    over a three-year period. Building on two earlier nationwide studies,
    DATOS investigators have amassed a wealth of information on drug abuse
    treatment outcomes, retention rates, and treatment histories.
        Among the patients that DATOS studied, drug use dropped
    significantly from the 12-month period before treatment to the 12-month
    period after treatment began. This was true for all types of treatment
    studied. Treatment also led to significant improvements in other
    aspects of patient's lives--such as reduced involvement in illegal
    activity.
        Another Federal report, The National Treatment Improvement
    Evaluation Study (NTIES), sponsored by SAMHSA studied 5,388 patients
    over a 5-year period. In addition to reducing drug use, NTIES showed an
    18.7 percent increase in employment and a 77.6 percent decrease in
    violent crime.
        The DATOS and NTIES reports also echo findings of States on
    treatment effectiveness. In a NASADAD report. Alcohol and other Drug
    Treatment: Policy Choices in Welfare Reform, States documented
    substantial improvements in employment status and other areas of
    patient lives from before treatment to after treatment:
      --Arkansas had a post-treatment employment increase of 127 percent.
      --A women's treatment program in Pennsylvania found that 80 percent
            of its graduates remained sober and employed after leaving
            treatment.
      --A Wisconsin based women's treatment program found that 65 percent
            of their clients had their children returned out of foster care
            and 61 percent went to work.
      --Missouri's AOD system found that clients' employment increased by
            50 percent while their involvement in the legal system was cut
            in half.
    Prevention effectiveness
        Many studies also demonstrate the effectiveness of prevention. A
    1997 NIDA report found that research based prevention programs
    significantly reduces youth alcohol and drug use. A study by Cornell
    University in 1995, found that students who participated in prevention
    programs are 40 percent less likely to use illicit alcohol and drugs.
        We are all very excited about the ONDCP media campaign on drug
    prevention that is now underway--and I am sure that many of you have
    seen the public service announcements on TV or noticed the full page
    ads in the Washington Post and other papers. As a result of this
    campaign, we are anticipating a major increase in the demand for
    prevention services. We will need additional dollars to provide
    prevention programs or we will end up with a situation where
    frustration on the part of parents and communities is an unintended
    result of the media outreach effort. I have already talked about the
    kinds of innovative programs States would initiate with additional
    dollars.
        Let me just add that a Federal commitment of dollars to prevention
    helps to leverage additional State, Community, and volunteer resources
    that are needed to reach our youth and other vulnerable groups.
    Formula consensus
        Before I end, I want to note that NASADAD members have already met
    to formulate an agreement on recommendations for the Substance Abuse
    Block Grant Formula. At issue for States is whether or not the current
    formula incorporates the best available data on the need for substance
    abuse services and the cost of delivering these services.
        On January 20 and 21, 12 State Officials--including 7 State Alcohol
    and Drug Abuse Directors--spent over 15 hours in discussions and
    negotiations on the Substance Abuse Formula. This is the first time
    that States have had such an opportunity to provide their input on
    formula elements as other reports were crafted by academic economists
    and policy think tanks. The agreements that were made at this meeting
    are still being vetted so that they will have the benefit of review by
    all the States. But I can share with you the essence of the discussion.
        Fiscal year 1998 base funding essential.--First, States agree that
    large shifts in funding, as proposed by SAMHSA in the last
    appropriations cycle, are disruptive to the service delivery system and
    should be avoided. When one State has a gain of 20 percent in one
    fiscal year, and another States loses 20 percent, dramatic service
    reductions will occur. Individuals and families in treatment will have
    services terminated. In addition, community providers, required by the
    law to be non-profit, will close or down size in the face of cuts. For
    this reason, States agree that a base funding level of the fiscal year
    1998 appropriations for all States should be maintained.
        Study needed.--Second, the proposed shift to non-manufacturing
    wages adjusted for health specific occupations--is some improvement
    over the use of manufacturing wages for the Substance Abuse Block
    Grant. It is by no means adequate. States have concerns that the
    formula does not incorporate the most up to date information on wages,
    or other elements of the cost of services. In addition, the use of
    general population statistics--weighted by age--raises questions. Many
    States and experts believe that other data for measuring the need for
    services would be more accurate.
        It was agreed that a study should be undertaken by an objective
    organization, such as the National Academy of Science (NAS), with input
    from the States, which can more carefully select and recommend the most
    appropriate formula components to Congress. The NAS has completed
    several previous studies on alcohol and other drug issues and health
    outcome measures and is viewed as an objective and reliable body.
        Interim formula.--Finally, States recognize that it could require
    up to two years for such a study to be completed and that a decision
    must be made regarding how new dollars would be allocated in the
    interim. It was agreed that during this interim, the fiscal year 1998
    base for all States should be retained and new dollars would be
    distributed to all States utilizing the non-manufacturing wages
    adjusted for health specific occupations.
        Preliminary talks with the ``field'' of substance abuse indicate a
    general support for this approach. NASADAD will be continuing to
    consult with States, providers, counselors, advocates and others to
    reach a consensus that can be utilized by the authorizing and
    appropriating committees for fiscal year 1999.
        Thank you for the opportunity to submit this testimony.
                                     ______

        Prepared Statement of Carole S. Downing, MSW, National Multiple
                               Sclerosis Society
                         national institutes of health
        Current research and treatment possibilities make this the most
    exciting time in the history of MS research. Now is a time to even
    further increase our commitment to NIH. We are extremely grateful for
    the fiscal year 1998 appropriation of $13.6 billion, a 7.1 percent
    increase over the fiscal year 1997 appropriation. We in the MS
    community are pleased with the trend of recent NIH budget increases
    which show the commitment by Congress to NIH and its importance to the
    health of Americans. Thank you, too, for your fervent commitment Mr.
    Chairman.
    National Institute of Neurological Disorders and Stroke
        Important intramural and extramural research on the MS disease
    process is being conducted under the auspices of the NINDS. The NINDS
    intramural program is doing several important studies using MRI imaging
    and the drug Betaseron, the very first drug for the underlying disease
    approved by FDA in 1993. The effect of interferon beta lb (Betaseron)
    has now been studied in a group of 14 patients with early mild,
    relapsing-remitting MS to test its ability to reduce alterations in the
    blood-brain barrier. In those studied, all have had a dramatic
    reduction in lesions, with complete cessation of disease activity, as
    measured by MRI, for many. These findings suggest an important site of
    action for beta-interferon, and point to new avenues of research
    involving early drug intervention to be further pursued. The studies
    also provide further evidence of the usefulness of MRI in monitoring
    both disease activity and response to treatment. A study such as this
    could be used as a foundation for more research if there were more
    resources.
        NINDS also supports a substantial program of extramural research on
    MS. If there were more resources, we would suggest that the following
    topics are especially ripe for further examination: sex-based
    differences in disease prevalence and outcomes, regeneration of lost
    myelin and nerve tissue, clinical-pathological correlations of disease,
    and adhesion molecule function in cell traffic across the blood-brain
    barrier. The National Multiple Sclerosis Society and the NINDS have
    identified target areas of MS research with enormous potential for
    investment including:
      --Identifying the targets in the immune-system attacks in MS and
            developing new methods to block or repair the destruction of
            the myelin insulation that coats nerve fibers;
      --Investigating cellular and molecular mechanisms underlying
            recovery, including myelin-producing cells, production of
            myelin, and regeneration of nerve cells;
      --Conducting early phase clinical trials for new therapeutics that
            have not been picked up by the research pharmaceutical firms
            and developing new methods to enhance recovery including
            further research on the blood-brain barrier; and
      --Increasing the number of MS clinical research centers. These
            research centers would focus on the interface of basic and
            clinical research. Such a funding scheme could help build
            collaborative research efforts to speed transfer of basic
            research finding to clinical practice and could create a
            nationwide network of innovative research centers. This is the
            kind of program that might well be supported jointly between
            NIH and NMSS.
        The National Multiple Sclerosis Society urges a 15 percent increase
    above last year's appropriation of $780,713,000.00 for the National
    Institute of Neurological Disorders and Stroke. Surely we must step up
    our research on neurological disease when we are so close to more
    significant advances.
    National Institute of Allergy and Infectious Disease
        NIAID also conducts research important to solving the puzzle of MS,
    now identified as an autoimmune disease. During the fiscal year 1997
    fiscal year over $21.4 million will be spent on MS specific research
    projects.
        NIAID researchers have proposed the idea of a vaccine for the
    treatment of MS and other autoimmune diseases. They have discovered
    that some of the cells involved in the immune response (called T cells)
    attack the brain in people with MS. Drugs that suppress the immune
    system are being given to some patients in an attempt to suppress the
    activated T cells. The next step would be to develop a more specific
    treatment that can attack the activated T cells without affecting
    healthy cells. This targeted approach may serve as a model for treating
    other autoimmune diseases such as juvenile diabetes and lupus.
        The NIAID is also undertaking an initiative on gender-based
    differences in autoimmune diseases. There will be collaboration with
    NINDS and other relevant Institutes including the Human Genome
    Institute. Understanding the gender-based differences in the disease
    process will lead to new understanding of the role of hormones, stress
    and/or genes in the beginning of the disease and its progression.
    Increasing this area of research could indeed be helpful in answering
    the question of why two times more women than men have MS, and what
    science can do about this. Another fruitful area is the study of
    genetic susceptibility to MS and related complex neuro-immunological
    disorders. The NIAID has already made good progress in this area so
    further resources are needed to build on this success.
        These and other research grants are certainly exciting and need to
    be extended. Thus we also urge you to increase by 15 percent the $1.350
    billion research budget of NIAID so that basic and clinical immunology
    and autoimmunity research can continue and advance.
    National Center for Medical Rehabilitation Research
        The relatively new National Center for Medical Rehabilitation
    Research, has great potential for those living with MS. Each of the
    research projects studies ways to increase the independence of persons
    living with disability through preserving function and creating
    compensatory technology. Many suggested research projects, so far, have
    gone unfunded. The following are just two of the areas for which
    investment now could yield significant results: > developing new
    assistive devices; < developing coping skills creating alternative ways
    to achieve parenting and job skills using technology.
    NIH as a Whole
        We are members of the Ad Hoc Group for Medical Research Funding and
    concur with their budget proposal for NIH. For 1999, the Ad Hoc Group
    supports a 15 percent increase in NIH funding across Institute lines as
    the first step toward the goal of doubling the NIH budget in five
    years. Along with others in the voluntary health organization community
    we recognize the difficulty of achieving the goal of a 15 percent
    increase to 15.64 billion under the current spending caps. A national
    commitment to double the NIH budget over the next five years will
    necessitate that the Congress identify additional resources. We would
    urge the Budget Committees to explore all options carefully including
    adjusting the spending caps, increasing revenues from a tobacco
    settlement and/or tax, and investing part of the surplus.
                          ii. department of education
    Rehabilitation Services Administration
        The U.S. Department of Education, Rehabilitation Services
    Administration provided funding to the National MS Society for a 3-year
    demonstration project designed to help maximize job retention and
    enhance job satisfaction for persons with disabling chronic illnesses
    such as multiple sclerosis. The model that has been implemented
    involves meeting directly with employers and their employees with a
    chronic illness who are experiencing difficulties at work. It examined
    job performance barriers and offered recommendations on how to provide
    reasonable accommodations. Through the Project Alliance intervention,
    it is estimated that more than 80 percent of those in the program have
    retained their current position.
        Project Alliance is complete and now as part of an ongoing
    commitment to employment for people with disabilities, we ask you to
    encourage RSA to fund a job retention pilot program for people with
    chronic illness especially those with a relapsing-remitting condition.
    National Institute of Disability and Rehabilitation Research
        The National Institute of Disability and Rehabilitation Research
    (NIDRR) has two separate areas of funding requirements, its basic
    research program and the Technology Related Assistance Program for
    People with Disabilities (Tech Act). Included in high potential basic
    research areas are: a longitudinal survey of the impact of managed care
    on individuals in various disability groups; and evaluation of the
    effects of the Americans with Disabilities Act on the daily lives of
    those living with mobility disabilities.
        The Society applauds the decision of the NIDRR to initiate a new
    MS-focused center. With proper funding the MS Research and
    Rehabilitation Training Center should be able to answer crucial
    research questions concerning the effectiveness of rehabilitative
    services for MS patients. The Society is already commenting to the
    NIDRR on the priorities for such a center. We look forward to
    translating the results of this research through our new clinical
    services programs department.
        It is urgent that you consider the cost of our proposed investment
    in biomedical research based on future benefits and savings both to the
    individual and society. This is true in both biomedical and
    rehabilitation research. Funding programs of early intervention to keep
    people working prevents early eligibility for Social Security
    Disability Insurance and the slow dissolution of an individual's funds
    leading to Medicaid coverage and the need for income supports. The fact
    that $11 can be saved for every dollar ($1) spent on rehabilitation
    testifies to its cost-effectiveness. Findings of a long-term health
    survey published recently by Dr. Kenneth G. Manton of the Center for
    Demographic Studies at Duke University clearly showed that medical
    research reduces and delays chronic illness and disability and
    contributes substantial savings in Medicare.
        In summary, we suggest that the only way to control health care
    costs, the only way to make sure that young adults with MS remain
    independent, productive, tax-paying citizens is to increase support for
    government funded biomedical and rehabilitation research. Many experts
    now foresee MS as a family of largely controllable diseases with
    preventable disability but only if research continues at a rapid pace.
    We ask that you consider a 15 percent increase for fiscal year 1999 for
    NIH and a 7 percent increase for the rehabilitation research programs
    at the Department of Education. Thank you for allowing me to submit
    this testimony.
                                     ______

    Prepared Statement of Joe L. Mauderly, Senior Scientist and Director of
           External Affairs, Lovelace Respiratory Research Institute
        It is proposed that the Department of Health and Human Services
    (HHS), through its constituent agencies, participate in an interagency
    effort to establish and maintain the National Environmental Respiratory
    Center to facilitate a national initiative to understand the
    respiratory health risks of combined exposures to mixtures of airborne
    contaminants in the outdoor, home, and workplace environments.
    the nation faces a dilemma concerning the respiratory health effects of
         environmental and occupational exposures to airborne toxicants
    The U.S. has a large burden of respiratory disease
        Respiratory diseases now kill one out of four Americans.--Among
    cancers, which are the second leading cause of death, lung cancer is
    the single largest killer. Nearly 200 thousand new cases of respiratory
    tract cancer are expected this year, and 170 thousand Americans will
    die from these cancers. Lung cancer kills more than twice as many women
    as breast cancer, and more than twice as many men as prostate cancer.
    Excluding cancer, chronic respiratory diseases and pneumonia are the
    third leading cause of death in the U.S., killing over 188 thousand
    Americans in 1995. Pneumonia and heart-lung failure are the terminal
    conditions for many of our elderly and together, pneumonia and
    influenza are the sixth leading cause of death. Asthma, growing
    unaccountably in recent decades, now afflicts 15 million Americans,
    including 5 million children. The incidence of asthma increased 61
    percent between 1982 and 1994. Asthma is the leading chronic disease of
    children, and asthma deaths among children nearly doubled between 1980
    and 1993. Chronic obstructive lung disease afflicts nearly 16 million
    Americans and causes 1 million hospitalizations annually. Allergic
    rhinitis (hay fever) afflicts 39 million Americans, 50 percent of whom
    are children. Viral respiratory infections are the most common cause of
    hospitalization of infants and cause a tremendous loss of productivity
    in the adult workforce.
        Despite workplace standards, occupational exposures are still
    associated with numerous respiratory diseases, including allergic
    sensitization, rhinitis and bronchitis, pneumoconiosis, and cancer.
    Indeed, occupational lung disease is the number one work-related
    illness in the U.S. in terms of frequency, severity, and degree of
    ``preventability''. NIOSH estimates that as much as 30 percent of
    chronic obstructive lung disease and asthma in adults may be caused by
    occupational exposures, and that 20 million workers are exposed to
    agents that can cause these diseases. The national health burden for
    occupational asthma is estimated to be as high as $400 million yearly.
    The relationship between inhaled pollutants and respiratory disease is
            not well understood
        The extent and nature of the association between environmental air
    pollution and respiratory disease are only partially understood. Air
    pollution is known to aggravate asthma, emphysema, bronchitis,
    infections and other respiratory illnesses. For example, particulate
    matter (PM) is statistically associated with death in elderly persons
    with heart and lung diseases, and this mortality is thought to occur
    largely from aggravation of their preexisting diseases. It is
    plausible, but much less certain, that air pollution might play a role
    in causing some diseases. For example, secondhand tobacco smoke is
    suspected of playing a role in conversion of the respiratory immune
    responses of children from normal Th1 to allergic Th2 responses.
    Seemingly to the contrary, the incidence of asthma is increasing while
    levels of most measured pollutants in the U.S. are decreasing. The
    reason for this is unknown, but speculations include vehicle traffic-
    related increases in ultrafine particles, which may be increasing but
    contribute too little mass to be detected by present air quality
    measurements. It is often easier to establish a link between
    occupational exposures and respiratory disease, but the impacts of many
    occupational exposures are still unclear. While it is known that
    occupational exposures to airborne dusts, chemicals, and allergens are
    linked to respiratory disease, it is often difficult to determine the
    relative contributory roles of the occupational exposures vs. exposures
    in the home and general environment and personal factors such as
    smoking. Tobacco smoke remains the most important confounding factor in
    determining the effects of both environmental and occupational
    exposures.
    uncertainty about the health effects of pollutant mixtures or combined
        exposures to multiple agents is an especially important problem
    Little is known about the health effects of combined or sequential
            exposures to multiple toxicants
        Agencies, researchers, congress and the public are becoming
    increasingly aware that addressing the health consequences of air
    pollution one pollutant at a time is approaching a point of diminishing
    returns. Paradoxically, as levels of regulated pollutants and workplace
    contaminants fall due to existing controls, and the most obvious health
    effects are reduced, the uncertainty faced in estimating the remaining
    health effects of airborne agents becomes larger. Air contaminants
    always occur as mixtures; nobody ever breathed only one pollutant at a
    time! It is increasingly clear that we must improve our ability to
    understand and control health risks from mixtures of toxic agents,
    typically at low concentration, and from combinations of sequential
    exposures to toxicants, at different times and in different locations.
    The effects of involuntary exposures to environmental air pollutants
    are be difficult to distinguish from the effects of home and workplace
    exposures, the effects voluntary activities such as smoking, cooking,
    use of household and personal aerosols and volatile materials, and
    other activities involving exposures to inhaled materials.
        It is difficult to link health effects to specific pollutant
    classes, and even more so to individual pollutants. We know that
    multiple pollutants can cause the same effects (eg, inflammation,
    cancer). We also know that some pollutants can amplify the effects of
    others (eg, acid particles and ozone, radon and cigarette smoking). We
    do not know, but can presume likely, that a mixture of pollutants, each
    within its individually acceptable concentration, could present an
    unexpected aggregate health risk that is unacceptable. Moreover, our
    growing understanding of atmospheric chemistry is revealing an
    increasing number of reaction products for which there is little or no
    health information. Our poor understanding of the toxicity of toxicant
    mixtures makes it difficult to identify and prioritize the sources or
    practices whose management would most efficiently reduce the effects,
    and to compare the potential health gains to the financial,
    technological, and lifestyle commitments required to achieve them.
    we have neither the regulatory nor the scientific ability to deal with
                               combined exposures
        Present environmental and workplace air quality regulations address
    individual pollutants, or pollutant classes, one at a time. The present
    approach to implementing the National Ambient Air Quality Standards
    under the Clean Air Act addresses the levels of six individual
    pollutants (eg, carbon monoxide), or pollutant classes (eg, particulate
    matter), individually. In contrast, the nearly 200 Hazardous Air
    Pollutants regulated under the Act are addressed by controlling the
    aggregate emissions of any or all of the compounds on a source by
    source basis with little consideration of the ambient levels or the
    individual or combined health effects of the compounds. For
    occupational exposures, OSHA sets Permissible Exposure Limits (PELs)
    and NIOSH sets Recommended Exposure Limits (RELs) for dozens of
    individual compounds and a few classes of agents such as petroleum
    distillates, welding fumes, wood dust, etc. Neither the environmental
    nor the occupational air quality or exposure regulations address the
    potential interactions among the individual agents, or the need for
    special limits for individuals with other risk factors. Under this
    regulatory strategy, a simultaneous exposure at the maximum allowable
    levels to all environmental and occupational air contaminants combined
    would theoretically be regarded as having no greater risk than exposure
    to only one of the agents at its regulated level!
        Regulatory approaches and their legislative foundations are not the
    key problem; they can be changed. The overriding issue is our lack of
    knowledge about the health risks of pollutant mixtures, and the lack of
    ongoing research and research paradigms that will provide a basis for
    such changes. Although several laboratory studies with two or three-
    component mixtures of inhaled toxicants have been done, only a
    miniscule portion of the nation's research effort has focused in this
    area. Similarly, epidemiology has undervalued the combined exposures
    issue. Co-pollutants are most often viewed by epidemiologists as
    confounders to be minimized so that the effects of the one pollutant of
    interest can be isolated at its highest level of statistical
    significance, which may be just the opposite of the approach needed to
    understand the greater truth about the effects of the pollutant
    combinations and interactions. The research strategies that presently
    exist for addressing combined effects and interactions are limited, and
    creative thinking is needed to develop new approaches. Researchers have
    largely limited their thinking to testing simple combinations for
    effects that are more or less than additive; however, the myriad
    possible combinations cannot all be tested this way. Another common
    approach is to test the components of complex mixtures to determine
    their individual contributions to a single effect. The relevance of
    this approach depends on correctly identifying the effect and
    understanding its mechanisms. Both these and new approaches are needed.
     the national environmental respiratory center is a new initiative to
        improve our understanding of the respiratory health effects of
                   pollutant mixtures and combined exposures
    The center is intended to be a long-range, interagency,
            interdisciplinary initiative
        The Center is being initiated this year with core funding provided
    for in the EPA fiscal year 1998 appropriations. The scope of the needed
    effort extends beyond the conduct of individual studies, or even a
    ``program project'' of research as might be funded through typical
    granting mechanisms. Identifying the bounds of the problem,
    benchmarking current thinking, and identifying the best paths forward
    will require the organized input of health specialists, atmospheric
    scientists, epidemiologists, risk assessors, and regulatory
    strategists. A central source of information specific to the health
    effects of pollutant mixtures and reaction products, research underway,
    and specialized research resources is needed. Researchers across the
    country need access to specialized facilities, but these need not be
    duplicated in multiple locations. Intellectual input and financial
    support needs to be sought from a broad range of Federal and non-
    Federal sources. It is appropriate for this long-term and challenging
    activity to be undertaken by an independent organization with high
    credibility, experience in the combined exposures field, and a strong
    commitment to success.
        It is important that multiple agencies support the work and
    objectives of the Center. No single agency has the sole mandate for
    addressing the combined exposures problem, although EPA is readily
    identified as the agency with lead responsibility regarding management
    of environmental exposures. The Department of Health and Human
    Services, through NIEHS and NIOSH, and to a lesser extent through
    NHLBI, and its other constituent organizations, certainly has a stake
    in the health effects of mixed exposures, as do the Departments of
    Energy, Defense, Labor (OSHA), and Commerce (NOAA). Existing
    interagency committees and other Federal and government-industry
    working groups, such as the Committee on Environmental and Natural
    Resources Research (CENR) and the North American Research Strategy for
    Tropospheric Ozone (NARSTO) touch on these issues, but none has taken
    up the challenge of assuming the lead role of focusing attention,
    facilitating communication, and conducting research on the problem.
    Lovelace is experienced in combined exposures research, and committed
            to meeting the challenge
        The Lovelace Respiratory Research Institute is an independent,
    nonprofit organization totally dedicated to respiratory health
    research. It is also among the nation's few organizations having
    substantial experience in evaluating the health effects of mixtures of
    inhaled toxicants and combined or sequential exposures. It has strong
    expertise in the generation of complex atmospheres, inhalation
    exposure, respiratory dosimetry, measurement of health responses and
    determining their mechanisms, and the use of radiotracers to track
    compounds through the body. Lovelace has researched health risks from
    complex chemical mixtures involved in fossil fuel technologies, diesel
    exhaust, and combined radiation, chemical, and cigarette smoke
    exposures of workers. Work for a broad range of Federal and non-Federal
    sponsors has focused on the mechanisms of respiratory disease, health
    risks from complex mixtures and their constituents, interspecies
    similarities and differences, susceptibility from pre-existing
    respiratory disease, and the utility of animal responses for predicting
    human health risks. As one example, Lovelace recently developed the
    first successful rodent model of cigarette smoke-induced lung cancer
    and demonstrated that smoking markedly increased the cancer risk from
    irradiation of the lung. Based on its past research, current
    involvement in national occupational and environmental health issues,
    and focus on reducing respiratory disease, Lovelace has a strong
    commitment to the success of this new venture.
        Lovelace operates the taxpayer-owned, recently privatized,
    Inhalation Toxicology Research Institute facility, an ideal physical
    location of the Center. It has several specialized facilities that can
    serve the scientific community as user facilities, such as laboratories
    for working with engine exhaust, tobacco smoke, and other complex
    mixtures. The facility has the nation's broadest capability for
    capability for exposing cells, tissues, and all species of laboratory
    animals to airborne materials and evaluating responses from the
    molecular to the clinical levels.
                The Center Will Meet Specific Needs to Facilitate a Broader
                        National Effort
        The Mission of the Center is to catalyze, facilitate, and
    participate in a long-range national initiative to understand
    respiratory health risks from combinations of inhaled airborne
    environmental and occupational pollutants. The Center's goal is to help
    place the respiratory health risks from variable, mixed pollutant
    atmospheres in their appropriate context as a basis for regulatory and
    technological decision making. It is the role of the Center to
    facilitate this initiative by complementing the efforts of other
    interagency and government-industry groups to raise and maintain the
    visibility of the issue and make progress in its resolution.
        The Center will perform the following functions:
        Conduct Research.--The Center will conduct intramural and
    collaborative research relevant to understanding the respiratory health
    risks of combined exposures to airborne toxicants, and the exposure-
    response, mechanisms, susceptibility, and interspecies extrapolation
    issues important to advancing our understanding of respiratory disease
    and the control of health risks. The advice of a scientific advisory
    committee and other external scientific peer review will be used in
    guiding the Center's research program. This effort will be expanded by
    complementary research funded through collaborations with external
    scientists making use of the Center's specialized facilities.
        Provide Information.--The Center will develop, maintain, and make
    broadly available information related to combined exposures issues.
    Researchers, agencies, congress, industry, students, and the public
    will access listings of published research, ongoing research, relevant
    scientific and regulatory issues, and research resources by phone, fax,
    e-mail, and the internet. The Center will develop and keep current
    information specific to combined exposures issues that is not currently
    maintained in organized form by other organizations. It will also
    provide links to the many related data bases on air contaminants and
    health that are maintained by other organizations.
        Facilitate Communication and Planning.--The Center will coordinate
    workshops and conferences on the health effects of pollutant mixtures
    and combined exposures. Current knowledge will be benchmarked.
    Particular emphasis will be given to establishing a continuing
    communication loop between health scientists and atmospheric scientists
    to focus the efforts of both research communities on the exposures and
    effects thought to be the most important. Multiple government and non-
    government research sponsors and researchers from numerous
    organizations and disciplines will be brought together to identify
    critical research gaps and optimize the use of resources. This effort
    will complement other interagency and government-industry coordination
    activities.
        Provide Research Facilities.--The Center will develop and maintain
    certain specialized facilities needed for research on mixtures,
    reaction products, and combined exposures. It will make the facilities
    operated by Lovelace available for use by researchers in other
    organizations, collaborating and providing assistance as appropriate.
    It will also assist researchers in identifying and accessing
    specialized resources and collaborators in other organizations.
    HHS Should Participate in the National Environmental Respiratory Center
        Initial funding for the Center was provided in the amount of $2
    million in the fiscal year 1998 EPA appropriation. The Center can only
    be successful as a long-term initiative, with a broad base of support
    that includes key Federal agencies. Lovelace seeks support from HHS to
    expand the combined exposures research program beyond the small scope
    possible with the core funding from EPA, and is also seeking funding
    from other agencies. Lovelace is also seeking funding from non-Federal
    entities such as individual companies and trade associations for both
    undesignated support for the Center and specific research projects
    related to the Center's mission.
        HHS and its constituent agencies are clearly stakeholders in
    combined exposure issues. For example, Environmental health is central
    to the mission of NIEHS and NHLBI has interest in the role of combined
    exposures in the mechanisms of lung disease. NCI has expressed interest
    in pursuing the mechanisms by which combined exposures might act
    synergistically to cause cancer. Lovelace's recent development of an
    animal model useful for evaluating the interactions between cigarette
    smoking and occupational exposure is especially relevant to the mission
    of NIOSH. That agency's most recent strategic plan specifically
    recognizes the importance of combined occupational exposures and
    interactions among toxic agents. That plan calls for new approaches to
    identify synergistic effects of multiple exposures, to improve
    laboratory and statistical analysis methods and to develop hazard
    controls that take into account the components of the mixture. Support
    of the Center through NIOSH would ensure that the national initiative
    in the area of combined exposures includes occupational concerns and is
    not limited to agents of concern only in the general environment.
                                     ______

      Prepared Statement of Gerald G. Krueger, M.D., American Academy of
                                  Dermatology
        Mr. Chairman and members of the Subcommittee, my name is Gerald G.
    Krueger, M.D. I am a Professor of Dermatology at the University of Utah
    School of Medicine. I am also the chairman of the American Academy of
    Dermatology's Research Council. I am currently the principal
    investigator of a grant from the NICHD, and serve as co-investigator of
    two grants funded by the NIDA. My curriculum vitae has been enclosed
    for your information.
        My colleagues and our patients thank you, Chairman Specter, and
    members of the Subcommittee for your continued support for the National
    Institutes of Health (NIH) and the Centers for Disease Control and
    Prevention (CDC). The Academy acknowledges the very difficult choices
    that this Subcommittee has made over the last few years. We are
    grateful that biomedical research enjoys bipartisan support in this
    Subcommittee and in the Congress.
        Our Nation's biomedical research infrastructure is an intricate
    relationship of academia, industry, and the federal government. The NIH
    serves as the primary source for basic research through universities
    and independent research institutions. This synergy has alleviated
    suffering for millions of Americans by fostering the development of
    innovative drugs and vaccines. Biomedical research is also the
    foundation upon which all medical care is based. Without the NIH, we
    would not be the world leader in research and patient care.
        Dermatologists are trained to treat over 3,000 disorders of the
    skin, hair, nails, and mucous membranes. Support for the NIH, most
    especially NIAMS, has broadened our knowledge of common as well as rare
    skin diseases.
        The American Academy of Dermatology joins with our professional and
    patient advocate colleagues to support a funding increase of 15 percent
    for the NIH in fiscal year 1999. In addition, the Academy also requests
    an increase for the Centers for Disease Control and Prevention's Skin
    Cancer Prevention Program. This program is currently funded at a level
    of $1.8 million. We request that funding for this program be increased
    to $5 million in fiscal year 1999.
        Skin cancer is the most frequent cancer diagnosis, more than all
    other cancers combined. This year, over 1 million new cases of skin
    cancer will be diagnosed in the United States. Nearly 80 percent of the
    new cases will be nonmelanoma skin cancers, namely basal cell or
    squamous cell carcinomas. Although both basal cell and squamous cell
    carcinomas have a cure rate of 95 percent if detected and treated
    early; 1,200 Americans, like Congressman Steve Schiff, will die of
    these nonmelanoma skin cancers.
        A recent ``report card'' issued by the National Cancer Institute
    (NCI), the American Cancer Society, and the CDC concluded that we have
    made great strides in reducing cancer incidence and mortality. The
    report stated that cancer incidence and mortality had declined, in some
    cases significantly, for nearly all forms of cancer. However, the
    report noted two deadly cancers that are on the rise--non-Hodgkin's
    Lymphoma and melanoma.
        Melanoma is the most deadly form of skin cancer. It is estimated
    that 41,600 new cases of melanoma will be diagnosed this year, an
    increase of 3 percent over last year's levels. This year, 7,300
    Americans will die from melanoma, accounting for six out of every seven
    skin cancer deaths. While the death rate from melanoma continues to be
    highest for older white males, melanoma strikes across the age spectrum
    and is now the most common cancer among people between the ages of 25
    and 29.
        Skin cancer is preventable. A determined public health effort of
    prevention, education, early detection, and basic biomedical research
    into the mechanisms of skin cancer will reduce the incidence and
    mortality of skin cancer. The Academy believes that this important skin
    cancer prevention program should receive additional resources to
    enhance the multi-faceted activities of the National Skin Cancer
    Prevention Program. If funding levels were to be increased from the
    current level of $1.8 million to $5 million in fiscal year 1999, the
    funds would be well spent. These additional dollars would allow the CDC
    to expand the Skin Cancer Prevention Education Program to additional
    states and territories, to coordinate and implement skin cancer
    prevention programs, to supplement its on-going Youth Risk Behavior
    Survey, support behavioral research, and strengthen professional
    education.
        Skin cancer can also be effectively treated, if found early. I
    invite all the members of the Subcommittee to participate in an
    upcoming annual skin cancer screening of Congress. Members of the
    Washington, D.C. Dermatological Society will conduct a free skin cancer
    screening on May 13, 1998, between 9:30 am and noon in the Rayburn
    First Aid Station, Room B344.
        Biomedical research is beginning to provide answers to our
    questions about skin cancers. Last year, researchers supported by the
    National Institute of Musculoskeletal and Skin Diseases (NIAMS) and the
    NCI significantly advanced our understanding of skin cancer. Scientists
    identified the gene that is the cause of a rare inherited disorder,
    basal nevus syndrome, and acquired basal cell carcinoma. Researchers
    believe that their findings may eventually lead to innovative
    treatments for basal cell carcinomas. We are also hopeful that NCI-
    supported scientists will be successful in their efforts to develop a
    melanoma vaccine.
        The research supported by the NIH is crucial to our fight against
    other chronic, debilitating and sometimes fatal skin diseases. Skin
    diseases are an important health concern for this country, as they are
    the most common cause of chronic illness in the United States. This
    year, it is estimated that 60 million Americans will be affected by
    skin disease, costing our economy over $7 billion in treatment costs
    and lost productivity. Occupational skin diseases remain one of the
    most common causes of workers' compensation claims.
        Psoriasis is a common skin disorder, affecting six million people
    in the United States. Previously, scientists believed psoriasis to be
    primarily a disorder of the keratinocytes, the most common cell in the
    outer layer of the skin. Recent investigations have greatly altered our
    understanding of psoriasis. Researchers now view psoriasis as an
    immunologic disorder, and this observation has led to new treatments
    for psoriasis. A tissue bank established by the National Psoriasis
    Foundation and supported by the NIAMS is helping scientists make
    progress in identifying the genes linked to this disease.
        Eczema is a term often used to describe a family of conditions that
    include: atopic, contact, occupational seborrheic, and stasis
    dermatitis. Millions of Americans suffer from some form of eczema.
    While bench-to-bedside research pays dividends, there is much we do not
    know about how to prevent and best treat eczema. There is considerable
    interest around the world in identifying the numerous elements that
    trigger eczema and protecting patients from them.
        Alopecia areata is a disease that causes hair loss on the scalp and
    elsewhere on the body. In its most severe form, alopecia universalis,
    all hair on the entire head and body are lost, leaving the skin
    unprotected from the sun and other environmental hazards. The nose and
    sinuses are also unprotected from foreign particles and bacteria.
    Children are the most often affected by this disorder. While alopecia
    areata is not life threatening, it is emotionally and psychologically
    devastating to these young children. In a recent issue of Science
    magazine, there was an article describing the discovery of the
    ``hairless'' gene, the gene for alopecia universalis. While this
    discovery is very exciting, the discovery of the ``hairless gene'' does
    not unlock the secret of alopecia areata, and additional research is
    needed if we hope to develop more effective treatments or a cure.
        Systemic lupus erythematosus (lupus of SLE) is a disease that
    disproportionately affects young African-American women, and a disease
    of great interest to members of this Subcommittee. Research has
    significantly broadened our knowledge of the genetic factors involved
    in lupus, including those infectious agents and other environmental
    factors that trigger this disease in susceptible individuals. Research
    has also helped us to develop special prevention and education programs
    in lupus. These programs have allowed us to screen many young African-
    American women for this disease. The severity of the disease will be
    drastically reduced, if we can identify and treat the disease at its
    earliest stages.
        Scleroderma is another serious disease that predominantly strikes
    women of childbearing years. Scleroderma is a chronic, auto-immune
    disease of the connective tissue. Scleroderma patients overproduce the
    protein, collagen. Its cause or causes are unknown. The treatment
    program for these patients varies widely, depending on the severity of
    the symptoms. Patients with this disease may have thickening of the
    skin, especially around the joints; Raynaud's Phenomenon, an abnormal
    sensitivity to cold; gastrointestinal, renal, cardiac, dental, and
    pulmonary problems. The NIAMS supports both basic and clinical research
    on scleroderma. Recently, NIAMS added scleroderma to the list of
    diseases eligible for applications under the Specialized Centers of
    Research (SCOR) program.
        Vulvodynia is a spectrum of chronic vulvar pain disorders. Today,
    no one knows what causes vulvodynia. Some cases of this disorder may be
    attributed to compression or disease of the pudendal nerve, others to
    Human Papilloma Virus (HPV), chronic candida infection and reactions to
    the anti-fungal treatments for candidiasis, but there is not clear
    agreement. There is also no specific test for vulvodynia and the
    diagnosis is often after ruling out other illnesses or infections.
    Unfortunately, there are no cures for this disorder, and few effective
    treatments for its symptoms. Additional research is desperately needed
    to answer the numerous questions concerning this disorder.
        Sjogren's Syndrome is a third auto-immune disease that
    predominantly strikes women. The clinical manifestations of Sjogren's
    Syndrome are the result of decreased exocrine gland function throughout
    the body. Patients suffer a profound reduction in their quality of
    life, as the disease causes great discomfort in all areas of the body.
    In addition, Sjogren's Syndrome is associated with a number of life-
    threatening complications, including renal disorders and vascular
    complications. Currently, there is no known cure for Sjogren's Syndrome
    and the treatments available are aimed only at relieving the many
    symptoms of this syndrome.
        Dermatitis herpetiformis, also known as gluten sensitive
    enteropathy, is an intensely itchy, chronic disorder that may start at
    any age, including childhood. Most patients who suffer from this
    disease have an associated sensitivity to gluten--a protein found in
    wheat, oats, barley, rye, and other grains. Dermatitis herpetiformis
    may often be confused with many other conditions, and patients may be
    misdiagnosed before being effectively treated. Like Sjogren's Syndrome,
    individuals with dermatitis herpetiformis have a marked increase in the
    incidence of certain histocompatibility antigens and it is not uncommon
    that these two disorders are occasionally seen in the same patient.
        The Ichthyoses are a family of skin diseases in which there is
    abnormal development of the outermost layers of the skin. Researchers
    have discovered that the genes for many of the molecules involved with
    the structure of our skin are clustered on chromosome 1, in an area
    called the epidermal differentiation complex. Recent findings have
    linked several forms of ichthyosis, including a form that causes self-
    amputation, to mutations of a region of chromosome 1--the first time
    that disease was clearly linked to the epidermal differentiation
    complex.
        Epidermolysis bullosa (EB) is another rare skin disease that has
    provided us with a great deal of information about skin. EB is
    characterized by extreme fragility of the skin. In EB, the slightest
    touch causes blistering, in many cases its symptoms resemble severe
    burns. EB can lead to severe loss of mobility, disability and even
    death. Researchers have identified specific genetic defects that cause
    several forms of EB. The establishment of an EB registry has allowed
    scientists to collect medical information and tissue and blood samples
    from EB patients, greatly facilitating efforts to identify the genetic
    causes of EB.
        Pemphigus, like EB, is a blistering skin disease. In pemphigus,
    patients produce autoantibodies that attach the demosomal proteins that
    hold the skin together. The basic molecular mechanism for this
    blistering disease has been uncovered by research funded through the
    NIAMS. Future research in this disease is needed to learn how and why
    the body produces these autoantibodies as well as to determine the
    relative role of environmental factors--such as viruses, bacteria,
    allergens and toxins--to this disease.
        Ehlers-Danlos Syndrome is another group of rare inherited disorders
    that affects the skin as well as the joints and other organs. Patients
    with Ehlers-Danlos Syndrome have a defect within their collagen. This
    defect leads to extremely fragile skin that bruises and tears easily,
    joints that are hypermobile, and bruising and bleeding tendencies. The
    NIAMS has been the lead institute in research efforts to understand the
    mechanism of wound healing and this effort must continue to be
    supported.
        Marfan Syndrome is a heritable disorder of the connective tissue,
    caused by a single abnormal or mutant gene. In addition to the skin,
    patients with Marfan Syndrome suffer from abnormalities in three areas:
    the eye, the skeletal system and the cardiovascular system. The
    severity of this syndrome varies greatly; and as there are no objective
    tests for diagnostic confirmation, diagnosis can be difficult. There is
    still no cure for Marfan Syndrome, although a variety of treatments
    have been used with some success.
        Ectodermal Dysplasia (ED) is not a single disease, but a group of
    closely related disorders. More than 130 types of ED have been
    identified. Individuals with ED have absent or poorly functioning sweat
    glands; abnormal hair and hair follicles, and the natural hair and skin
    oils may be missing. Patients with ED are prone to rashes and are slow
    to heal when they are bruised or cut. Many are photosensitive, but the
    most common trait is the absence of teeth. Although many types of this
    disease have been identified and documented, there is a great deal that
    we do not know about these disorders. Additional research is needed to
    improve the care and management of these patients.
        Pseudoxanthoma elasticum (PXE) is a heterogeneous inherited
    disorder, the hallmark of which is the dystrophic calcification of the
    elastic tissue of the skin, the eyes and the arteries. Because the skin
    manifestations of this disease are so prominent, the dermatologist is
    often the specialist who makes initial diagnosis and who can coordinate
    the care of the PXE patient with the ophthalmologist, cardiologist,
    vascular surgeon, plastic surgeon, and other health professionals. PXE
    may be inherited as either an autosomal recessive or dominant trait,
    but environmental influences may modify the clinical expression of this
    disease. This year, the locus for the PXE gene was isolated. This small
    step points us toward a cure for PXE.
        Sturge-Weber Syndrome is characterized by an extensive vascular
    nevi or port wine stain at birth, involving the upper eyelid and
    forehead. In Sturge-Weber, the port wine stain is associated with
    various neurological abnormalities as well as irregularities in the
    eyes and internal organs. Children with Sturge-Weber begin to have
    seizures at one year of age. These convulsions are caused by an
    excessive growth of blood vessels on the brain, and often appear on the
    opposite side of the body from the port wine stain. The cause of this
    syndrome is unknown and more research is needed. Recent research has
    helped us to understand that port wine stains develop within the first
    2 to 8 weeks of gestation. Additional research is needed for us to
    better understand the role that angiogenesis may play in these stains.
        Porphyrias are a group of seven rare and complex disorders. The
    porphyrias are characterized by a mutation in genes that code for
    various enzymes of the heme biosynthetic pathway; and each porphyrias
    is biochemically unique. What causes these genes to mutate is still
    unknown. These diseases are often manifest in a variety of cutaneous
    lesions and patients are also very sensitive to sunlight and to many
    drugs. There is no cure for porphyria and treatment varies depending on
    the type. Additional research is needed to better understand what
    causes the genes to mutate. Better understanding of this process could
    eventually lead to the development of new and better treatments.
        Vitiligo is a disease in which patients develop white spots in the
    skin that vary in size and location. These ``spots'' develop when the
    pigmented cells of the skin, melanocytes, are destroyed and melanin can
    no longer be produced. It is estimated that 1-2 percent of the
    population suffer from vitiligo, and in earlier times, these
    individuals were often associated with lepers. Although more noticeable
    in darker complected individuals, vitiligo strikes all races equally.
    More research is needed to understand why the body destroys these cells
    and to understand the relationship of this skin condition to its many
    complications, including Graves' Disease and other diseases of the
    thyroid, deafness and blindness.
        The Academy also supports adequate funding for other institutes at
    the NIH, as skin disease research is supported throughout the NIH. The
    most important institute to skin researchers is the NIAMS; however,
    adequate funding levels for several other institutes is especially
    important to skin disease research.
        The National Institute for Allergy and Infectious Diseases (NIAID)
    funds important research on AIDS, sexually transmitted disease (STD),
    and other infectious diseases. Dermatologists daily treat the many
    cutaneous manifestations associated with HIV infection. These diseases
    include bacterial infections, viral infections, fungal and yeast
    infections, protozoal infections, hyperkeratotic and neoplastic disease
    of the skin. Dermatologists also treat other STDs, such as genital
    herpes, human papilloma virus, and genital warts. Future research
    opportunities for HIV and other STDs include the development of topical
    microbicides, new and more effective therapies, vaccines and improved
    prevention strategies. In addition, the NIAID also provides funding for
    immunologic skin disease.
        Our skin is our first defense against disease and toxins in the
    environment. The Academy supports increased funding for the National
    Institute of Environmental Health Sciences (NIEHS). Our specialty has
    taken the lead in recognizing environmental hazards to the skin, at
    home and at work. Increased funding for NIEHS will allow this institute
    to expand research on the action spectrum for melanoma, percutaneous
    absorption of toxic and other chemicals and how that absorption may be
    affected by exposure of the skin to ultraviolet radiation.
        Expanding our basic knowledge of the human skin will provide
    insight into other systemic diseases and may provide better treatments.
    The skin is an excellent delivery system for drugs. The development of
    skin patches and other devices allow for sustained release of drugs.
        Mr. Specter and members of the Subcommittee, as I stated earlier,
    biomedical research is the foundation upon which all advance in medical
    treatment are based. I appreciate your attention and the opportunity
    you have given the American Academy of Dermatology today and welcome
    the opportunity to answer any questions.
                                     ______

        Prepared Statement of the American Association of Dental Schools
        The American Association of Dental Schools (AADS) represents all of
    the dental schools in the United States, as well as advanced dental
    education, hospital dental residency programs, and allied dental
    education institutions. It is within these institutions that future
    practitioners, educators, and researchers are trained; significant
    dental care provided; and the majority of dental research conducted.
    The AADS is the one national organization that speaks exclusively for
    dental education.
        While dentistry has made significant progress in preventing oral
    disease and developing primary care treatments, little more than half
    of all Americans have access to routine dental care. A 1995 Centers For
    Disease Control (CDC) survey revealed that nearly half (44.3 percent)
    of adults report having no dental insurance. Consequently, oral
    diseases are still among the most prevalent and common of all chronic
    health conditions. A 1996 Healthy People 2000 review conducted by the
    CDC reports that in the United States, 94 percent of adults have
    evidence of past or current tooth decay, and only one third of adults
    age 35-44 years have all of their permanent teeth. Periodontal disease
    is also pervasive among adults 18 and over.
        Oral cancer is more common than leukemia, Hodgkin's disease,
    melanoma of the skin, and cancers of the brain, cervix, ovary, liver,
    or stomach. Each year there are approximately 30,000 newly diagnosed
    cases of oral cancer, and 8,000 deaths. Accordingly, poor oral health
    has a tremendous economic impact on our country, causing our nation's
    workforce to miss more than 164 million hours of work annually.
        The NIH reports that half of U.S. children already have cavities by
    age 7, and eighty-four percent of all children have experienced dental
    decay by age 17. Oral conditions left untreated severely impair a
    child's ability to concentrate in school and result in more than 52
    million hours of time away from the classroom annually. If the nation
    is serious about having all children ready to learn by the time they
    enter school, we must improve access to comprehensive health services,
    including adequate oral health care. The importance of oral health will
    also be addressed in a U.S. Surgeon General's report that is currently
    under development for a release date of Spring, 1999.
        Our funding requests for fiscal year 1999 reflect the expanding
    role of dentistry in our nation's health care system and the changing
    nature of the profession. Dental education institutions play an
    important role in providing oral health services in the community, and
    these institutions provide a significant amount of care to underserved
    and uninsured populations. Because the Subcommittee is under severe
    fiscal constraints, we have focused on dental education and research
    programs that are extremely cost-effective and will yield a significant
    return for the federal investment in improving access to primary health
    oral care.
        General Dentistry Residencies.--General Dentistry Residency
    training programs provide dentists with the skills and clinical
    experiences needed to deliver a broad array of oral health services to
    the full community of patients. Dentists who have had the benefit of
    this advanced residency training consistently refer fewer patients to
    specialists, which is especially important in rural and underserved
    urban areas where logistical and financial barriers can make
    specialized care unobtainable.
        The General Dentistry Residency program has been a highly effective
    tool in improving access and availability of primary care services.
    Eighty-seven percent of those who receive General Dentistry Residency
    training remain in primary care practice. Compared to private practice,
    these residents treat 4 times the number of developmentally disabled, 6
    times the number of medically compromised, and 26 times the number of
    HIV/AIDS patients.
        Most current grantees include off-site rotations to underserved
    communities, where general dentistry residents provide oral health
    services to populations, such as the poor, the developmentally
    disabled, the elderly, and patients with infectious diseases. The
    following are a few examples of programs that are current or past
    recipients of General Dentistry Residency Training Grants, enabling
    these institutions to initiate or expand their training programs:
      --Temple University School of Dentistry's General Dentistry Residency
            training program has a unique partnership with the Philadelphia
            Parent Child Center, a large Head Start program for 427
            children in North Philadelphia. General Dentistry residents
            provide oral health screenings and follow-up services to 3-5
            year old children enrolled at the Center. The General Dentistry
            Residency program at Temple also works with the University's
            ``Outreach Program,'' which conducts health education, health
            promotion, and oral screenings to populations in the diverse
            neighborhoods surrounding the University. Many of these
            patients traditionally do not seek services from a dentist in
            private practice. Temple University first established its
            General Dentistry Residency program with four residents in
            1990, with a HRSA General Dentistry Residency Training grant. A
            second three-year HRSA grant was awarded in 1992 which enabled
            the program to expand to six residents.
      --The University of Iowa College of Dentistry received a General
            Dentistry training grant in 1991 which allowed for expansion of
            the residency program to include the establishment of an off-
            site clinic at the campus in Oakdale, Iowa, to provide
            residents with experience in rural practice. The College of
            Dentistry is currently in the process of developing a state-
            wide network of general dentistry training programs linked with
            the College and Federally Qualified Health Centers in Iowa.
            Expansion grant funding under the General Dentistry Residency
            program will be sought to support the first stage of
            implementation planned at the Broadlawns Medical Center located
            in Des Moines, which serves inner city poor and the medically
            indigent population of Polk County. The second phase of the
            project will facilitate the opening of three additional general
            dentistry training program sites in community-based settings.
      --The University of Mississippi School of Dentistry (U.Miss) has
            successfully competed for two recent three-year General
            Dentistry grants. The first grant, awarded in 1993, established
            the General Dentistry Residency program at the School of
            Dentistry. In 1996, a second three-year grant resulted in the
            expansion of general dentistry residents from 3 to 5,
            facilitating the opening of a new dental clinic in a converted
            shopping mall located in one of Jackson, Mississippi's
            economically distressed neighborhoods. At the ``Jackson Medical
            Mall'' where the new dental clinic is located, residents gain
            experience providing dental care to the physically or
            psychologically challenged and other special patient
            populations that have experienced barriers to obtaining oral
            health services.
      --At the University of Missouri-Kansas City School of Dentistry
            (UMKC), General Dentistry residents deliver dental care
            services to underserved populations in two area health clinics.
            One of the clinics is in a predominantly Hispanic community
            where most of the patients are Spanish-speaking only. The other
            clinic serves a large number of indigent, homeless, and HIV/
            AIDS patients. The UMKC general dentistry program was
            established with a HRSA General Dentistry grant in 1987, with
            four residents. The program expanded in 1993, from four to
            eight residents, with a second three-year HRSA grant.
      --At the University of Oklahoma College of Dentistry (OU), residents
            participating in the General Dentistry Residency program spend
            two days a week providing oral health services at the ADENT
            Clinic located at Children's Hospital in Oklahoma City. General
            Dentistry residents at OU also provide a significant amount of
            free dental care through the Friendly Smiles Program, in which
            needy children are identified by the county and referred to the
            dental school clinic for treatment and preventive oral health
            care. The General Dentistry Residency program at OU was
            established with the support from a General Dentistry grant
            that ended in 1991. Today the program is self-sustaining and
            provides important clinical training and a valuable public
            health service to the community. Program evaluations confirm
            the success of General Dentistry Residency programs in meeting
            federal primary care objectives. The Bureau of Health
            Professions' evaluation of this program found that:
            ``Considering the relatively modest investment of funds by the
            federal government, the impact on the growth and scope of
            General Dentistry programs and the subsequent effect on dental
            care has been substantial.''
        And all of this is achieved with start-up grants which provide
    federal support for no more than three years. This requires
    considerable skill, as General Dentistry Residency programs must
    attract enough self-pay patients and patients with dental insurance to
    offset the losses incurred in treating the indigent. Unlike their
    medical counterparts, dental programs cannot rely on reimbursement
    through Medicare because the program essentially excludes dental
    services, and Medicaid coverage is extremely limited, especially for
    adult care.
        Demand for General Dentistry training continues to outpace supply
    for this primary care training as approximately 300 additional training
    positions are needed to accommodate the number of current applicants.
    Without Federal support, it would be extremely difficult to create new
    programs because of the lead time needed for these programs to become
    self-sufficient, and because of the high cost of start-up funding for
    dental equipment and instrumentation.
        The 1995 Institute of Medicine (IOM) Study of Dental Education
    recommends that postdoctoral education in general dentistry should be
    available for every dental graduate and that an emphasis should be
    placed on creating new General Dentistry Residency positions.\1\ While
    progress has been made in meeting the current and future demand for
    primary care training and care, much work still needs to be done. In
    1997, the first year enrollment for all accredited dental residency
    programs would have accommodated only 63 percent of all U.S. dental
    school graduates. For these reasons, we urge the Subcommittee to
    support an appropriation that will permit continued progress towards
    achieving the workforce training goals set forth by the IOM. The AADS
    is seeking an inflationary increase of $200,000 over fiscal year 1998
    levels for the General Dentistry Residency Training program, resulting
    in an fiscal year 1999 budget of $4 million for this cost-effective and
    proven primary care program.
    ---------------------------------------------------------------------------
        \1\ Field, Marilyn J., Ph.D., Editor, Dental Education at the
    Crossroads, Challenges and Change, National Academy Press, Washington,
    D.C., 1995, p.14.
    ---------------------------------------------------------------------------
        The AADS would also like to bring to the attention of the
    Subcommittee legislation developed by the Senate Labor & Human
    Resources Subcommittee on Public Health and Safety, S. 1754, that would
    reauthorize the Title VII and Title VIII Health Professions Education
    and Training programs. S. 1754 would authorize the primary care dental
    program to include both General Dentistry Residency Training and
    Pediatric Dentistry Residency Training support. The AADS fully supports
    this expansion because, as with General Dentistry training; many
    applicants to Pediatric Dentistry training positions are turned away
    due to lack of positions. Pediatric Dentistry training positions have
    not expanded in the last 20 years, despite increased societal needs.
    Pediatric Dentistry is the dental counterpart to general pediatrics.
    While preventive dental care for children is one of the great successes
    in public health, there is still a significant unmet need, and with the
    establishment of the new State Children's Health Insurance Program
    (SCHIP) we expect the need for trained pediatric dentists to increase.
    Because the fiscal year 1998 appropriation provided $3.8 million for
    General Dentistry alone, the addition of Pediatric Dentistry to the
    authorization would require additional funding to ensure that critical
    training needs in both areas are met.
        Ryan White HIV/AIDS Dental Reimbursement Program (Part F, Ryan
    White CARE Act).--Federal support for this program increases access to
    oral health services for people living with HIV/AIDS and at the same
    time, provides dental students and residents the education and training
    necessary to deliver oral health care to HIV/AIDS patients. Thus, two
    major federal objectives--service to patients of limited means and
    education of future practitioners--is accomplished with this important
    but very modest federal program.
        As a result of immune system breakdown that occurs, HIV/AIDS
    patients are more susceptible to oral diseases, such as oral lesions
    that cause significant pain and oral infection leading to fevers,
    weight loss, and difficulty in eating, speaking or taking medication.
    Extreme pain in the mouth is frequently the symptom that motivates
    patients to seek care. In fact, many of the first physical
    manifestations of HIV infection are found in the oral cavity, and a
    dentist is often the first health care professional to diagnose these
    patients. Moreover, the development of some oral problems may signify
    that HIV infection is progressing.
        Oral health care has continued to be a major need of HIV/AIDS
    patients, and consistently ranks high in surveys of health needs of
    HIV/AIDS patients.
        It is important to remember that private insurance and Medicaid
    coverage for dental services is very limited or simply unavailable for
    adults. This lack of sufficient reimbursement particularly affects
    those dental education clinics that serve as the safety net for a
    significant number of Medicaid and HIV/AIDS individuals. The Ryan White
    HIV/AIDS Dental Reimbursement program facilitates treatment of patients
    by alleviating some of the financial burden faced by institutions,
    allowing some dental treatment facilities to stay open despite chronic
    under-reimbursement. This program represents a partnership between the
    federal government and dental education programs, in which the
    government partially offsets the costs dental education programs incur
    by serving a disproportionate share of HIV/AIDS patients. Dental
    education institutions accept this partnership because it helps us to
    continue to deliver and expand care for people living with HIV/AIDS.
    The program has also enhanced relationships of dental education
    institutions with state and local AIDS care programs.
        In 1997, 104 dental education programs provided oral health
    services to approximately 70,000 patients, and collectively incurred
    $15 million in uncompensated costs. The Ryan White HIV/AIDS Dental
    Reimbursement program retrospectively reimbursed these dental treatment
    facilities a total of $7.3 million for services delivered.
        A preliminary evaluation of program participants found that this
    program had a positive impact in the following areas: integrating oral
    health care with other services, increasing the support and commitment
    among providers to HIV/AIDS education and provision of care, increasing
    the providers' knowledge about infection control and treatment, and
    increasing patient access to oral health.
        Early in the epidemic, the majority of patients seeking dental care
    were severely immuno-compromised. Thus, dental intervention was
    directed towards eliminating infection and pain with definitive
    procedures which had the lease likelihood of exacerbating the patient's
    already fragile condition. With the advent of multi-drug therapies,
    many patients are living longer and more stable lives. Therefore,
    dental intervention has increased in scope from palliative care to the
    full range of dental procedures like periodontal procedures, root
    canals, and advanced restorative procedures such as crowns, bridges,
    and partial dentures. Restoring oral health function is of course
    directly related to nutrition, which is so critical for immuno-
    compromised patients. We expect unreimbursed oral health costs will
    continue to rise as the number of individuals living with HIV
    increases.
        For these reasons, AADS urges a modest increase of $1.2 million
    over the fiscal year 1998 levels for this important program, resulting
    in an fiscal year 1999 budget of $9 million for the Ryan White HIV/AIDS
    Dental Reimbursement program.
        National Health Service Corps Scholarship and Loan Forgiveness
    Programs.--We strongly support the NHSC Scholarship and Loan
    Forgiveness Programs, which assist students with the rising costs of
    financing their health professions education while promoting primary
    care access to underserved areas. This is particularly significant
    given that the average graduating dental student debt is $82,000.
        Over the last several years, and most recently in fiscal year 1998
    appropriations report language, Congress has instructed the NHSC to
    increase dental participation in the loan repayment and scholarship
    awards programs. The number of dental loan repayment awards has
    increased slowly in recent years, yet we believe that additional loan
    repayments could be awarded. Problems continue to exist in the
    scholarship program, which has completely abandoned dental scholarships
    (the last dental scholarship was issued in 1994). We believe it is
    critical that the NHSC commitment to dentistry be maintained and
    strengthened as the need for dental providers is becoming more
    pronounced in underserved areas throughout the nation. According to a
    Department of Health and Human Services survey, currently 3,032
    dentists are needed to service 957 designated dental Health Professions
    Shortage Areas (HPSAs), as compared to 1,400 dentists needed for 792
    dental HPSAs prior to 1993. Accordingly, the AADS requests the
    Subcommittee to further pursue the need for increased dental
    participation in both the NHSC scholarship and loan repayment programs.
        Health Professions Education and Training Programs for Minority and
    Disadvantaged Students.--We want to express our strong support for the
    various programs that play a critical role in the recruitment and
    retention of disadvantaged students and the recruitment of
    disadvantaged faculty. We request funding increases for the minority
    and disadvantaged assistance programs that are proportional to current
    funding levels within the context of the fiscal year 1999 budget
    request of $306 million for all Title VII and Title VIII Health
    Professions programs recommended by the Health Professions and Nursing
    Education Coalition (HPNEC). The funding levels advanced for the
    following programs as part of HPNEC's fiscal year 1999 budget request
    will maintain our nation's strong commitment to diversity and
    opportunity in the health professions: Scholarships for Disadvantaged
    Students, Exceptional Financial Need Scholarships, Loans for
    Disadvantaged Students, the Centers of Excellence program, the
    Disadvantaged Assistance program (Health Careers Opportunity Program/
    Federal Financial Assistance for Disadvantaged Health Professions
    Students), and the Faculty Loan Repayment program.
        Other Programs Under Title VII of the Public Health Service Act.--
    We also urge the Subcommittee to fund the following programs at the
    levels advocated by the HPNEC Coalition because of their importance in
    promoting access to healthcare for special populations: Rural Health
    Training and the Health Education and Training Centers programs,
    Geriatric Initiatives, Area Health Education Centers, and Allied Health
    Special Projects.
        Student Loan Programs.--The AADS is concerned about the ability of
    students pursuing a health professions education to access affordable
    federal financial aid due to the phase-out of the Health Education
    Assistance Loan (HEAL) program. We welcomed the Secretary of
    Education's earlier action raising the annual and aggregate
    unsubsidized Stafford Loan limits. However, this action does not meet
    the full need of the health professions community due to the
    limitations accompanying the new policy. Currently, only students
    attending schools which disbursed HEAL loans in fiscal year 1995 are
    eligible. Many dental schools which did not borrow under the HEAL
    program prior to fiscal year 1995 now have students who need to access
    additional loan funds. We believe that using this eligibility time
    frame is arbitrary, and creates a two-tiered system, thus locking out
    many deserving health professions students from the lower cost federal
    student aid program. The AADS is urging the Department of Education to
    broaden the pool of students eligible for the increased annual and
    aggregate Stafford loan limits to accommodate all health professions
    students seeking assistance. We request the Subcommittee's support for
    this effort.
        National Institutes of Health/National Institute for Dental
    Research.--We strongly commend and thank Chairman Specter for his
    leadership in the area of biomedical research, proven by the
    significant increases in the funding levels for the National Institutes
    of Health (NIH) during his Chairmanship. As the National Institute of
    Dental Research (NIDR) celebrates its 50th anniversary, our nation's
    dental education institutions are particularly thankful for the
    continued strong federal commitment in this area of research which over
    the years has opened new pathways to better diagnosis, prevention and
    treatment of oral disease. Support for the NIDR has yielded results
    applicable not only to oral health, but to health in general. NIDR's
    objective is to promote the advancement of research in all sciences
    pertaining to the mouth and facial structures, to seek ways of treating
    and preventing oral diseases, and to facilitate the transfer of
    knowledge into practical help for the public. Scientific areas
    providing great research opportunities on which NIDR will focus in
    coming year include pain research, dental and craniofacial genetics,
    oral and pharyngeal cancer, gene therapy using salivary glands, and
    biomimetics (an interdisciplinary study leading to the replication of
    the process of new cell growth and repair which occurs in living
    organisms). The AADS is particularly pleased that the NIDR plans to
    pursue strategies strengthening its commitment to recruiting and
    retaining young health professionals in the field of biomedical
    clinical research. The recent decline in young men and women entering
    this field threatens our clinical research infrastructure and the
    ability of our nation to fully benefit from increased investments and
    discoveries in the area of biomedical research. The AADS endorses the
    testimony of the American Association for Dental Research regarding
    research priorities and the request for a 15 percent percent increase
    over fiscal year 1998 funding levels, resulting in a budget of $240.8
    million for the NIDR in fiscal year 1999.
        Agency for Health Care Policy Research (AHCPR).--The AADS joins the
    Friends of AHCPR in supporting a budget of $175 million in fiscal year
    1999. A particularly important AHCPR activity is the Dental Scholar in
    Residence program, which is now moving into its second year. The Dental
    Scholar in Residence was established in 1997 to assist the agency in
    conducting research to improve the delivery of effective dental and
    oral health services and to facilitate collaborative relationships
    among professional, educational, research, and other health industry
    sectors involved with oral health care. The very first recipient of
    this award focused on efforts to increase communication, cooperation,
    and collaboration among communities engaged in quality improvement
    efforts and the dental profession, and examined the integration of oral
    health services into comprehensive primary care systems. This work will
    help improve the knowledge base for informed oral health care policy.
        Conclusion.--Finally, the AADS would like to recognize the
    achievements of the U.S. Public Health Service on the occasion of its
    bicentennial year in 1998. In 200 years much has been accomplished in
    conquering disease and disabling conditions. In this century alone, 30
    years of have been added to the average life span. Fully 25 of those
    added years are due to public health interventions. But to continue
    meeting the challenges ahead we must continue to invest in a continuum
    of public health activity that not only includes biomedical and
    behavioral research, but also invests in disease prevention and health
    promotion, targeted health care services for vulnerable populations,
    education of a primary care and public health workforce, and health
    services research.
        Mr. Chairman, I thank you again, on behalf of the AADS and its
    membership, for this opportunity to present our views and our budget
    requests for dental education programs in fiscal year 1999. We believe
    these programs are important public health activities essential to
    maintaining a highly-skilled, well-trained health professions workforce
    and achieving important national oral health goals.
                                     ______

      Prepared Statement of Alan Shalita, M.D., President, Association of
                           Professors of Dermatology
        Mr. Chairman and Members of the Subcommittee: My name is Alan
    Shalita, M.D. I am a Distinguished Teaching Professor at the State
    University of New York (SUNY) Health Science Center in Brooklyn and my
    curriculum vitae is enclosed. I am also the current president of the
    Association of Professors of Dermatology (APD). The membership of the
    APD includes the heads of all academy departments of dermatology, as
    well as all dermatology program directors. The APD receives no federal
    funding.
        My colleagues and our patients thank you, Chairman Specter, and
    members of the Subcommittee for your continued support of the National
    Institutes of Health (NIH). The membership of the APD is grateful that
    biomedical research enjoys bipartisan support in this Subcommittee and
    in Congress.
        Our Nation's biomedical research infrastructure is an intricate
    relationship of academia, industry, and the federal government. The NIH
    serves as the primary source for basic research through universities
    and independent research institutions. This synergy has alleviated
    suffering for millions of Americans by fostering the development of
    innovative treatments, including drugs and vaccines. Biomedical
    research is the foundation upon which all medical care is based.
    Without the NIH, we would not be the world leader in research and
    patient care.
        To ensure that the mission of the NIH continues and that we are
    able to exploit the many research opportunities before us, the APD
    joins with our sister societies in dermatology, as well as the
    Coalition of Patient Advocates for Skin Disease Research, the NIAMS
    Coalition, and the Ad Hoc Group for Medical Research Funding to request
    a funding increase of 15 percent for the NIH in fiscal year 1999.
        One in three Americans suffer with a serious skin disease. Our
    economy also suffers. The cost of treatment of skin disease will exceed
    $7 billion this year, and occupational skin disease ranks among the
    most prevalent causes of workers' compensation claims. While few skin
    diseases are fatal, they are chronic, costly, and common. They inhibit
    the ability of many Americans to live independent, productive, and tax-
    paying lives. They can also be disfiguring and can cause the patient to
    suffer emotional and psychological distress.
        We are poised at the brink of an exciting new era of dermatology,
    during which we expect to make rapid advances in the understanding of
    skin biology and the pathogenesis of skin disease. This new knowledge
    will provide us more effective treatments for many skin diseases. It is
    critical that we do not lose the scientific momentum of the previous
    decades of NIH funded research.
        Much of the skin disease research conducted at the NIH is funded by
    the National Institute of Arthritis, Musculoskeletal and Skin Diseases
    (NIAMS). The NIAMS research portfolio is very diverse. It supports
    basic and clinical research encompassing an astonishing number of
    diseases affecting the three largest organ systems in the body. As our
    population ages, the debilitating diseases of the skin, joints, bones,
    muscles, and connective tissue will affect an ever larger proportion of
    our population.
        A 15 percent increase in the budget of NIAMS would provide a fiscal
    year 1999 appropriation of $316 million. This amount represents
    approximately 2 percent of our annual expenditure for skin disease
    treatment. Without adequate funding, many promising new areas of
    research will not be advanced. Opportunities to relieve the pain and
    suffering of our patients and their families will be delayed.
        There are a number of immediate opportunities in basic skin
    research that I would like to share with you. Advances in molecular
    biology and genetics have helped us to make great strides in
    understanding skin disease. The establishment of a basic science base
    has greatly assisted our search for mutated genes responsible for
    various genetic skin disorders. Now, the search for these genes can be
    more easily narrowed to candidate regions, such as the epidermal
    differentiation complex and other areas of chromosome 1.
        Scientists now know the location of a gene that predisposes people
    to systemic lupus erythematosus (lupus), a chronic autoimmune disease
    that has been of great interest to members of this Subcommittee.
    Researchers have localized the gene to a region near the end of the
    ``long arm'' of chromosome 1. Additional research is needed to help us
    to identify those infectious agents and environmental factors that
    trigger this disease in susceptible individuals. In addition, funding
    of prevention research in lupus has helped us to develop sophisticated
    education programs to screen young African-American women at risk for
    the disease. It is hoped that these screening programs will allow us to
    diagnose the disease at its earliest stages, thereby reducing the
    severity of the disease and its costs.
        The Ichthyoses are a family of heritable skin diseases in which
    there is an abnormal development of the outermost layers of the skin.
    Previously, scientists had demonstrated a linkage between certain forms
    of ichthyosis and mutations in a particular gene that codes for the
    most common proteins in our epidermis, the keratins. In more recent
    findings, another rare form of this disease has been shown to be linked
    to a mutation in a region of chromosome 1, called the epidermal
    differentiation complex. It is hoped that this discovery will one day
    lead to relief from the self-amputation that is a characteristic of the
    disease.
        In the past decade, important advances have been made in our
    knowledge of the structure and function of the skin, largely through
    understanding the more serious forms of genetic diseases, such as
    epidermolysis bullosa (EB). EB is a complex group of genetic disorders
    that cause the skin to be so fragile that the slightest friction can
    cause blistering of the skin. These blisters often lead to infection.
    In its most severe form, the blistering of EB leads to chronic,
    unremitting wound healing which results in extensive scarring of the
    affected skin. It is our hope that EB will be the first candidate for
    gene therapy in skin disease. Researchers are now exploring the use of
    retroviruses and other exciting avenues for gene therapy in EB.
        Recent studies have significantly advanced our understanding of
    skin cancer, the most common of all cancers. This year, over one
    million Americans will be diagnosed with some form of skin cancer, more
    than all other cancers combined. This year, 8,500 individuals will,
    like your colleague Steven Schiff, die from skin cancer. While we mourn
    these individuals, I can report that we are making progress in our
    battle against skin cancer.
        Scientists have uncovered a gene involved with the most common form
    of skin cancer--basal cell carcinoma. A mutation in the gene that
    controls the growth and development of the skin, may be responsible for
    a rare, inherited disorder called basal cell nevus syndrome, as well as
    acquired basal cell carcinoma. Scientists hope that this discovery will
    lead to more novel, less invasive treatments for skin cancer.
    Scientists are also hard at work on the development of a melanoma
    vaccine.
        The poets contend that the eyes are the mirror to the soul. As a
    dermatologist, I can tell you that it is the skin. The skin is the
    mirror to internal disease. There are very few diseases that do not
    have skin manifestations. In addition, the skin is also an efficient,
    important and potent delivery system for drugs for many diseases.
    Therefore, skin disease research is necessary if progress is to be made
    in treating many other illnesses.
        In addition to the important research at the bench, clinical
    research is a very important mission and one that has been historically
    underfunded at the NIH. Improved support of clinical research is
    extremely important if we are to take the discoveries I discussed
    earlier and translate them into improvements in patient care.
        Clinical research is in jeopardy. Managed care has significantly
    impacted the financial ability of our major academic health centers to
    support clinical research. The APD supports the recommendations of the
    Nathan report and an increased commitment by the NIH in the area of
    clinical research.
        Funding basic and clinical research will be unnecessary, however,
    if we are unable to attract and retain the brightest minds in basic and
    clinical skin research. A diverse base of scientific talent is needed
    to ensure the survival of the NIH, academia and industry. The education
    of the next generation of scientists, especially physician scientists,
    must remain a national priority.
        As a professor and researcher, I can attest to the steady decline
    in the number of physicians who elect to pursue a career in research.
    Our young people have been discouraged by the unpredictability of
    funding. Managed care has also played a role, inhibiting the ability of
    experienced clinical investigators to mentor their younger colleagues.
    The training of physician scientists has proven to be one of our most
    productive ways to integrate basic and clinical research. Physician
    scientists are our best hope of translating the exciting advances in
    molecular biology and genetics to the bedside. The APD, therefore,
    supports efforts by the NIH to offer new and expanded initiatives in
    research training.
        Our Nation's biomedical research effort is a complex, balanced
    system that synergizes contributions made by universities, industries,
    and government. Our unique biomedical research infrastructure has
    allowed us to lead the world in biomedical research, to reap numerous
    Nobel Prizes in Medicine and Physiology, and to birth the biotech
    industry.
        I urge you to maintain our position, and again request a 15 percent
    increase in appropriated funding for the NIH in fiscal year 1999.
                                     ______

       Prepared Statement of the American Academy of Physician Assistants
        On behalf of the more than 31,000 clinically practicing physician
    assistants in the United States, the American Academy of Physician
    Assistants is pleased to submit comments on fiscal year 1999
    appropriations for Physician Assistant (PA) education programs that are
    authorized through Title VII of the Public Health Service Act.
    Overview of Physician Assistant Education and Practice
        As committee members may be aware, PA programs provide students
    with a primary care education that prepares them to practice medicine
    with physician supervision. The first PA program was started at Duke
    University approximately 30 years ago, and today there are 104
    accredited PA educational programs.
        Prior to admission, the typical PA student has a bachelor's degree
    and over four years of health care experience. PA education typically
    is 25 months in length and includes more than 400 hours in basic
    sciences, more than 149 hours in behavioral sciences, and more than 535
    hours in clinical medicine. PA students also complete more than 2,000
    hours in clinical rotations, with an emphasis on primary care. Upon
    completion of an accredited PA program, PAs must complete a rigorous
    national certifying exam administered by the National Commission on
    Certification of Physician Assistants. To maintain their certification,
    PAs must complete 100 hours of continuing medical education every two
    years and take a recertification exam every six years.
        PAs work in virtually every type of medical and surgical specialty,
    including family/general medicine, internal medicine, obstetrics/
    gynecology, pediatric medicine, occupational medicine, and emergency
    medicine. PAs' primary employment settings include individual physician
    offices, group practices, managed care organizations, hospitals, and
    outpatient clinics.
    Contribution of PAs as Primary Care Providers
        The PA profession has a long standing commitment to practice in our
    nation's small towns, rural areas, and underserved communities. PAs
    play a pivotal role in expanding access to primary care services,
    particularly in medically underserved communities. Data collected in
    1997 show that over half of the PA profession is in family/general
    practice medicine, general internal medicine, general pediatrics, and
    obstetrics/gynecology. More than a third of the profession practice in
    communities of less than 50,000 people.
        Studies conducted by the Rand Corporation have found that PAs save
    costs, can perform a substantial portion of the functions in an
    ambulatory care practice, and are widely accepted by patients. The
    congressional Office of Technology Assessment studied health care
    services provided by PAs and determined that ``within their scope of
    practice, physician assistants provide health care that is
    indistinguishable in quality from care provided by physicians.''
    Critical Role of the Title VII, Public Health Service Act, Programs
        Despite an increase in state health insurance reforms, a reduced
    rate of growth in health care spending, and the emergence of a new
    children's health insurance program, a growing number of Americans lack
    access to primary care, either because they are uninsured,
    underinsured, or they live in a community with an inadequate supply or
    distribution of providers. The growth in the uninsured US population
    increased from approximately 32 million in the early 1990s to more than
    40 million today. Simultaneously, the number of medically underserved
    communities continues to rise, from 1,949 in 1986 to 2,723 in 1998.
        The role of the Title VII programs is to alleviate these problems
    by supporting access to quality, affordable, and cost-effective care in
    areas of our country that are most in need of health care services,
    specifically rural and urban underserved communities. This is
    accomplished through the support of educational programs that train
    more health professionals in fields experiencing shortages, improve the
    geographic distribution of health professionals, and increase access to
    care in underserved communities.
        The Title VII programs are the only federal education programs that
    are designed to address the supply and distribution imbalances in the
    health professions. Since the establishment of Medicare, the costs of
    physician residencies, nurses and some allied health professions
    training has been paid through Graduate Medical Education (GME)
    funding. However, GME has never been available to support PA education.
    More importantly, GME was not intended to nor does it generate a supply
    of providers who are willing to work in the nation's medically
    underserved communities. That is the purpose of the Title VII Public
    Health Service Act Programs, which support such initiatives as loans
    and scholarships for disadvantaged students, scholarships for students
    with exceptional financial need, centers of excellence to recruit and
    train minority and disadvantaged students, and interdisciplinary
    initiatives in geriatric care and rural health care.
    Title VII Support of PA Education Programs
        Federal funding for PA education programs is authorized through
    Section 750 of the Public Health Service Act and supports the planning,
    development, and operation of projects for the education of PAs and PA
    faculty development programs. The funds ensure that PA students from
    all backgrounds have continued access to an affordable education and
    encourage PAs, upon graduation, to practice in underserved communities.
    These goals are accomplished by funding PA education programs that have
    a demonstrated track record of: (1) placing PA students in health
    professional shortage areas; (2) exposing PA students to medically
    underserved communities during the clinical rotation portion of their
    training; and (3) recruiting and retaining students who are indigenous
    to communities with unmet health care needs.
        Following are three examples of how well PA programs have responded
    to the intent of the Title VII programs.
      --A Texas PA program established the objective of having its students
            complete their family medicine rotation in medically
            underserved sites. Through assistance from Title VII funding,
            the PA program established sufficient clinical training sites
            to require each student to complete a family medicine rotation
            in a rural medically underserved community. As a result of this
            requirement, a greater percent of the program's graduates now
            enter family medicine and take positions in medically
            underserved communities.
      --Several PA programs, including the University of California--Davis,
            the University of Texas--Galveston, and the University of
            Washington, have used Title VII funding to ``place bound''
            students. The ``place bound'' PA students are indigenous to the
            underserved communities where they receive their training and
            return to their communities to practice after graduation. These
            programs specifically target Hispanic and rural disadvantaged
            students.
      --A Washington state program recently placed two PA graduates in the
            Yakima Valley Farmworkers Clinic. One PA was previously a
            medical assistant and from a migrant family; the other PA was
            formerly a respiratory therapist in Walla Walla. Upon
            graduation, both PAs chose to practice at the farmworker
            clinic.
        Without Title VII funding, many of these special PA training
    initiatives would not be possible. Institutional budgets and student
    tuition fees simply do not provide sufficient funding to meet the
    special, unmet needs of medically underserved areas or disadvantaged
    students. Nevertheless, the need is very real, and Title VII is
    critical in meeting it.
    Need for Increased Title VII Support for PA Education Programs
        Increased Title VII support for educating PAs to practice in
    underserved communities is particularly important given the market
    demand for physician assistants. Without the Title VII funding to
    expose students to underserved sites during their training, PA students
    are far more likely to practice in the communities where they were
    raised or the communities in which they attended school. Title VII
    funding is a critical link in addressing the natural geographic
    maldistribution of health care providers by exposing students to
    underserved sites during their training, where they frequently choose
    to practice following graduation.
        The supply of physician assistants is inadequate to meet the needs
    of society, and the demand for PAs is expected to increase. A 1994
    report of a workgroup of the Council on Graduate Medical Education
    (COGME), ``Physician Assistants in the Health Workforce,'' estimated
    that the anticipated medical market demand and the estimated workforce
    requirements for PAs would exceed demand. Additionally, the Bureau of
    Labor Statistics projects that the number of available PA jobs will
    increase 47 percent between 1996 and 2002.
        Despite the increased demand for PAs, funding has not
    proportionately increased for the Title VII programs that are designed
    to educate and place physician assistants in underserved communities.
    Between fiscal year 1994 and fiscal year 1997, PA program funding went
    from $6.5 million down to $5.9 million and, as of fiscal year 1997 was
    restored to $6.376 million. PA program funding was slightly increased
    again for fiscal year 1998 at $6.398 million. In 1992-1993,
    approximately 64 percent of 55 PA programs received federal support, at
    an average of $143,500 per grant. In 1996-1997, less than half of 77 PA
    programs reported receiving federal support, at an average of $152,300
    per grant.
    Recommendations on Fiscal Year 1999 Funding
        The American Academy of Physician Assistants urges members of the
    Appropriations Committee to consider the inter-dependency of all the
    public health agencies and programs when determining funding for fiscal
    year 1999. For instance, while it is important to fund clinical
    research at the National Institutes of Health (NIH) and to have an
    infrastructure at the Centers for Disease Control (CDC) that ensures a
    prompt response to an infectious disease outbreak, the good work of
    both of these agencies will go unrealized if the Health Resources and
    Services Administration (HRSA) is inadequately funded. HRSA administers
    the ``people'' programs, such as Title VII, that bring the cutting edge
    research discovered at NIH to the patients--through providers such as
    PAs who have been educated in Title VII-funded programs. Likewise, CDC
    is heavily dependent upon an adequate supply of health care providers
    to be sure that disease outbreaks are reported, tracked, and contained.
        The critically important programs administered by NIH, HRSA, and
    CDC are integral components within the nation's public health
    continuum. One component is not more important than another, and no one
    component can succeed without adequate support from each of the other
    elements. The Academy is particularly concerned that any increase for
    the NIH not be made at the expense of the health professions education
    program or other public health programs, as recommended this year by
    the Senate Budget Committee.
        The American Academy of Physician Assistants is particularly
    appreciative of the increases in funding for PA education programs that
    were appropriated during the 104th Congress and the 1st Session of the
    105th Congress. However, these increases have not been sufficient to
    meet the increasing demand for PA graduates in the growing number of
    medically underserved communities. Accordingly, the Academy
    respectfully requests that PA programs be funded in fiscal year 1999 at
    their current authorized level of $9 million.
        Thank you for the opportunity to present the American Academy of
    Physician Assistants' views on fiscal year 1999 appropriations.
                                     ______

             Prepared Statement of the American Dental Association
        Mr. Chairman and Members of the Subcommittee: The American Dental
    Association (ADA) is submitting this testimony on behalf of its 140,000
    members. With passage of the State Children's Health Insurance Program
    (CHIP), and reforms of the Medicaid program, which for some time has
    included a comprehensive children's oral health benefits program, last
    year was truly the year of the child. This subcommittee contributed
    significantly to the efforts to address the health needs of children
    through its continued support of dental education, research, and
    disease prevention.
        The ADA believes this year offers new opportunities for this
    subcommittee to target funding for programs designed to address the
    continuing oral health care needs of the children in this nation,
    especially those in the underserved populations. While almost half of
    the children entering school in this country are free of tooth decay
    and fillings, we recognize these gains have not been realized equally
    by all Americans. Among school age children, 25 percent suffer 75
    percent of the tooth decay. That 25 percent typically represent
    children who are from low income or socially disadvantaged families or
    live in non-fluoridated states. For example, in Hawaii, which has a
    fluoridation rate of only 13 percent, 80 percent of the children under
    the age of 6 suffer from tooth decay.
                   maternal child health--fluoridation grants
        The Association would like to thank the subcommittee for its
    support last year for funding SPRANS activities within the Maternal
    Child Health block grant that enhanced community water fluoridation
    efforts. This grant money will be used by states with less than 25
    percent community water fluoridation to help those states develop plans
    for expanding their level of participation. For example, the city of
    Los Angeles receives water from 40 different systems. A great deal of
    planning must take place before fluoridation can begin.
        The American Dental Association recommends that the subcommittee
    continue to fund these efforts for the third and final year of the
    grants at the current level of $500,000.
                            division of oral health
        As the federal agency with primary responsibility for community-
    based programs designed to prevent oral disease and promote oral
    health, the Division of Oral Health (DOH) within the Centers for
    Disease Control and Prevention (CDC) works closely with state and local
    governments to develop and implement prevention and control efforts,
    including water fluoridation and dental sealant initiatives. The
    reduction of severe tooth decay (caries) is a major priority for the
    DOH as 53 percent of children ages 6-8 and 78 percent of 15-year-olds
    have experienced dental caries, and more than 100 million Americans
    lack the benefits of fluoridated water despite its proven effectiveness
    in fighting dental decay.
        Once the seven states that qualified for SPRANS grants determine
    how to increase their fluoridation rates, they will look to the DOH
    within the CDC for assistance to implement those plans. CDC issues
    grants to states for preventive health services. The Association
    believes that providing funding for fluoridation efforts should be a
    high priority for CDC. The demand for fluoridation funding will be
    driven by not only the states receiving SPRANS grant money, but also by
    states that need to replace worn equipment or expand access for new
    communities due to growth and development.
        Another effective preventive strategy commonly used for protecting
    permanent molars in children is the application of dental sealants.
    Healthy People 2000 calls for 50 percent of the children to have these
    protective barriers against dental decay. A recent national study found
    that children with sealants had significantly less untreated dental
    decay than children without sealants. However, despite their
    effectiveness, less than 30 percent of U.S. children have received
    dental sealants and only half the states have school-based programs to
    extend this important preventive intervention to the neediest youth.
    The DOH will examine which states provide the best model programs and
    then will encourage others to adopt them.
        The Association recommends that $6 million be appropriated for the
    DOH to increase and expand community-based and school-based efforts to
    improve the oral health of children.
                     national institute of dental research
        The Association also recognizes the need for increased research by
    the National Institute of Dental Research (NIDR) to better understand
    the various oral diseases that afflict children, including disorders,
    diseases, and to study normal development that affects tissues of the
    craniofacial-oral-dental complex.
        Last year the NIDR held a conference on ``Early Childhood Caries.''
    The NIDR conference concluded that the prevalence of early childhood
    caries continues to be a significant societal problem and federal
    agencies must work together to address this important public health
    issue. Oral diseases can cause serious illness, debilitation,
    significant pain, interference with eating, poor self-image, over use
    of emergency rooms and valuable time lost from school. In fact, in 1989
    over 51 million school hours were lost due to dental-related illness.
        These diseases and disorders cause untold pain and suffering for
    those afflicted, but they also adversely affect our society as a whole,
    reflected in increased health care costs and loss of productivity. For
    example--one in every 33 babies born in 1995 had at least one
    anatomical birth defect, three-fourths of which affected the head,
    face, and neck. The most common craniofacial defect is cleft lip,
    affecting one in 500 births. Lifetime costs for the treatment of clefts
    and associated speech, hearing and other problems are estimated to be
    $100,000 per patient.
        Genetic research being carried out by the NIDR, including that to
    determine the causes of craniofacial birth defects, is fundamental for
    identifying which gene(s) cause(s) these conditions. Furthermore,
    additional research being done by NIDR scientists is focusing on how to
    correct these conditions through the growth of new bone and soft
    tissue--a process called biomimetics.
        Periodontal disease may be one of the contributing factors
    resulting in the approximately 250,000 low birth weight (LBW) babies
    born each year. In fact, it has been established that women with
    periodontal disease are seven times more likely to have LBW babies.
    Other studies show that there may be an association between periodontal
    disease and cardiovascular diseases.
        NIDR has long been a leader in pain research. The NIH Pain Research
    Consortium encourages information sharing and collaborative research
    efforts within NIH, and it sponsored a major symposium in November
    1997, fostering new ideas and collaborative studies on pain research.
    Some diseases or disease treatments cause chronic pain at an estimated
    cost of $100 billion a year according to pain specialists, so the
    benefits emanating from the agency's efforts in this arena should reach
    far beyond oral health care concerns.
        The Association recommends a funding level of $240.8 million for
    NIDR so that it can expand its research and help reduce oral diseases
    that afflict children.
                   agency for health care policy and research
        The Agency for Health Care Policy and Research (AHCPR) is working
    to facilitate the introduction of advances in biomedical research into
    the dental practice setting, improving the quality and cost-
    effectiveness of oral health care.
        It is important to provide sufficient funds for continuation and
    enhancement of the Medical Expenditure Panel Survey (MEPS), which began
    in 1997. However, the dental care component of this survey must be
    improved, to provide more accurate estimates of utilization patterns,
    composition of services, and costs of care and how these are influenced
    by characteristics of patients, providers, and insurance plans.
        The findings from research supported by NIH and AHCPR are openly
    shared within the scientific and professional communities to maximize
    the benefits to the public of this investment. There must be support
    for a continuum of research--from basic, biomedical (bench), and
    clinical research, through controlled clinical trials, outcomes
    research, and cost-effectiveness trials.
        We must understand not only what causes diseases and how they can
    be prevented or treated, but also what works in dental practice and how
    much it costs. Research supported by AHCPR will assist dental
    practitioners by providing the evidence base for selecting among
    alternative dental treatments. AHCPR's research is also needed to
    improve the system providing health care, so that the fruits of
    biomedical research are readily available to all citizens.
        The Association supports the expansion of AHCPR's outcomes and
    effectiveness research program, which has the potential to improve the
    evidence base for selecting among alternative diagnostic and dental
    treatments. Advances in this program, for example, would enable AHCPR
    to improve the treatment of musculoskeletal disorders, including
    temporomandibular disorders (TMD), improving the science base for both
    medical and dental practitioners and providing information needed to
    establish reimbursement policies that would enable patients to receive
    the treatment most appropriate for their needs.
        The Association recommends a funding level of $175 million.
                                dental education
        General Dentistry Residencies Program.--The General Dentistry
    Residencies program furnishes young dentists with valuable clinical
    experience, while offering care to underserved populations. The
    training is similar to that experienced by primary care physicians in
    their internships. Most graduates of the program remain in primary care
    with many establishing practices in underserved areas. This helps to
    meet the federal goal of increasing access to primary care.
        The Association would also like to bring to the subcommittee's
    attention the increasing need for more pediatric dentists. Between 1993
    and 2020 the number of children under the age of 15 will increase by
    8.1 million. However, we are not training enough pediatric dentists to
    replace those who retire or have the bad judgment to die. Today there
    are fewer than 4,000 pediatric dentists in the nation. This is a
    critical shortage because pediatric dentists treat approximately 42
    percent of Medicaid children and 57 percent of medically compromised
    children. Therefore, the Association is supporting authorizing language
    to include pediatric residencies in the health professions program.
        The Association recommends that $4 million be appropriated for
    fiscal year 1999 for the General Dentistry Program, which is $200,000
    above the current funding level. If Congress should approve an
    authorization for pediatric dental residencies, the ADA will provide
    the subcommittee with a more accurate funding request.
        The General Dentistry program is part of the Health Professions
    Training and Nursing Education Program. The ADA also endorses a request
    from the Health Professions and Nursing Education Coalition for a
    funding level of $306 million for all of the programs.
        Ryan White HIV/AIDS Dental Reimbursement Program.--The Ryan White
    HIV/AIDS Dental Reimbursement program helps fund oral health care
    services for people living with HIV/AIDS. Dental students and residents
    also benefit as they gain extensive experience in caring for patients
    with special dental needs. In fiscal year 1997, 104 institutions
    participated, serving over 70,000 patients.
        By covering the costs of providing quality care to people living
    with HIV/AIDS, this program can prevent much more serious and expensive
    health complications. Oral disease left untreated can lead to
    significant pain, oral infections, and fevers; difficulty in eating,
    speaking or taking medication; and medically dangerous weight loss.
    Furthermore, dental services under Medicare and Medicaid coverage for
    adults is often inadequate, so receiving a prompt diagnosis and
    appropriate treatment for these oral conditions is often difficult for
    uninsured poor individuals.
        The Association requests $9 million for the Ryan White HIV/AIDS
    Dental Reimbursement program, an increase of $1.2 million over the
    current funding level.
        National Health Service Corps Scholarship and Loan Forgiveness
    Programs.--We strongly support the NHSC Scholarship and Loan
    Forgiveness Programs, which assist students with the rising costs of
    financing their health professions education while promoting primary
    care access to underserved areas.
        Over the last several years, and most recently in fiscal year 1998
    appropriations report language, Congress has instructed the NHSC to
    increase dental participation in the loan repayment and scholarship
    awards programs. However, the number of dental loan repayment awards
    has increased slowly in recent years. According to a Department of
    Health and Human Services survey, currently 3,032 dentists are needed
    to service 957 designated dental Health Professions Shortage Areas
    (HPSAs), as compared to 1,400 dentists needed for 792 HPSAs prior to
    1993.
        We ask the subcommittee to further pursue the need for increased
    dental participation in both the NHSC scholarship and loan repayment
    programs.
        Health Professions Education and Training Programs for Minority and
    Disadvantaged Students.--We request funding increases for the minority
    and disadvantaged assistance programs that are proportional to current
    funding levels within the context of the fiscal year 1999 budget
    request of $306 million for all of Title VII and Title VIII of the
    Health Professions programs recommended by the Health Professions and
    Nursing Education Coalition (HPNEC).
        Other Programs Under Title VII of the Public Health Service Act.--
    We also urge the subcommittee to fund the following programs at the
    levels advocated by the HPNEC Coalition because of their importance in
    promoting access to healthcare for special populations: Rural Health
    Training and the Health Education and Training Centers programs,
    Geriatric Initiatives, Area Health Education Centers, and Allied Health
    Special Projects.
        Student Loan Programs.--The ADA is concerned about the ability of
    students pursuing a health professions education to access affordable
    federal financial aid due to the phase-out of the Health Education
    Assistance Loan (HEAL) program. We welcomed the Secretary of
    Education's earlier action raising the annual and aggregate
    unsubsidized Stafford Loan limits; however, this action does not meet
    the full need of the health professions community due to the
    limitations accompanying the new policy. The ADA is urging the
    Department of Education to broaden the pool of students eligible for
    the increased annual and aggregate Stafford loan limits to accommodate
    all health professions students seeking assistance. We urge the
    subcommittee to support this effort.
        We also request the subcommittee's continued support for the Health
    Professions Student Loan (HPSL) program, which could provide additional
    low cost student loan funds to meet the financial needs of health
    professions students previously served by the HEAL program. HPSL funds
    should be used to assist institutions in developing and maintaining a
    sufficient revolving fund.
        Thank you, Mr. Chairman and members of the subcommittee, for your
    thoughtful consideration of the ADA's recommendation.
                                     ______

       Prepared Statement of the American Association of Retired Persons
        The American Association of Retired Persons (AARP) appreciates this
    opportunity to comment on appropriations for various programs which
    benefit older Americans, especially the low-income and minority
    elderly. Our recommendations are summarized as follows:
      --At a minimum, maintain Older Americans Act programs at current
            services levels;
      --Provide no less than $1.215 billion in regular funds for the Low
            Income Home Energy Assistance Program;
      --Make available sufficient resources for: Medicare+Choice
            Provisions; the Agency for Health Care Policy and Research; the
            Inspector General's Office, Department of Health and Human
            Services; State Survey and Certification activities; the Social
            Security Administration; and the National Senior Service Corps.
    Older Americans Act (OAA)
        Since its enactment over thirty years ago, the Older Americans Act
    has enabled millions of older citizens--especially those with
    disabilities--to remain independent and productive. Many of these
    individuals would have been institutionalized, were it not for the home
    and community-based services provided by this landmark legislation.
    AARP urges at least an inflation adjustment for these vital programs
    next year, an amount that is roughly $29 million over the existing
    $1.305 billion appropriation. The Administration proposes no increases.
        To the extent additional resources are available, we recommend
    increases above inflation in all OAA programs. This is particularly
    critical for Title IV Training, Research and Discretionary Projects,
    which were substantially reduced in 1996. These activities are
    necessary if we are to expand our knowledge about the needs of an aging
    society.
        We applaud Congress for providing modest increases this year in
    many OAA activities. Among other things, the extra funds mean
    nutritional meals for more seniors, particularly those who are isolated
    and frail. OAA's Home-Delivered Meals Program is very often the only
    human contact some of these persons have in a given day. And their
    lives are enriched by these visits in ways which cannot always be
    measured. Over 240 million congregate and home-delivered meals are
    delivered annually. The increases will also provide additional
    supportive services--services which include more than 40 million rides
    for doctor and pharmacy visits, nearly ten million personal care visits
    to those in need, and roughly one million legal counseling sessions.
        As one of the national sponsors of OAA's Senior Community Service
    Employment Program (SCSEP), the Association has first-hand knowledge
    regarding its effectiveness. SCSEP has made a real difference in the
    lives of many unemployed, low-income older Americans by providing part-
    time employment in useful community service activities. Many of the
    nutrition programs and other services for seniors, as well as important
    programs serving the broader community, such as library services and
    day care centers, are dependent on work provided by older persons
    through the Senior Community Service Employment Program. Compared with
    younger workers, older workers--once unemployed--tend to be jobless
    longer and are likely to earn less when--and if--hired. More than
    94,600 older Americans were SCSEP participants in the 1996/97 program
    year.
    Low Income Home Energy Assistance Program (LIHEAP)
        The Association strongly urges at least $1.215 billion in regular
    funds next year for this critical program, an amount equal to the total
    spending level in fiscal year 1997. Because this program is advance
    funded, Congress provided $1.1 billion for fiscal year 1999 in the
    fiscal year 1998 appropriation. We are recommending an increase of $115
    million over that level for the coming fiscal year. We also recommend
    the same amount for the fiscal year 2000 advance appropriation. The
    Administration is proposing $1.1 billion for this purpose. LIHEAP is
    important to all of its beneficiaries, but none more so than low income
    older persons. Housing, health care, energy costs--all of these factors
    add to the stress of living on a tight budget. For some, the question
    of how to heat their homes is actually a matter of life or death.
        Some LIHEAP recipients are `working poor' or elderly who do not
    receive any other public assistance through welfare, food stamps, SSI,
    or subsidized housing. LIHEAP is a vital measure of last resort for
    these individuals. Because they are more likely to live in older,
    poorly insulated homes, older persons--particularly the elderly
    minority poor--also have a heightened risk of hypothermia. Among low
    income households, the proportion of income expended for energy
    consistently amounts to 3-4 times the proportion spent by households
    across the board. Based on the latest available data, of the 29 million
    households eligible for LIHEAP assistance in 1995, roughly 41 percent
    had at least one person over the age of 60. Only 13 percent of these
    eligible elderly households actually received heating assistance.
    Program funding reached its peak in 1985 when Congress appropriated
    $2.1 billion. By 1996, funding had dropped to $1 billion, and the
    number of participating households declined that year from 5.8 million
    to 4.4 million.
    Implementation of Medicare+Choice
        The new Medicare+Choice program in the Balanced Budget Act of 1997
    (BBA) established a number of new Medicare delivery system options. By
    the end of 1998 the new law anticipates that the Health Care Financing
    Administration (HCFA) will conduct a major public education campaign to
    provide Medicare's 38 million beneficiaries with the information they
    need to make educated choices about their Medicare coverage. The
    success of Congress' effort in the BBA to expand the choices available
    to Medicare beneficiaries will depend heavily on whether HCFA has the
    resources and staffing needed to implement the specific and extensive
    requirements of the law. The Association recommends appropriate funding
    next year to implement the Medicare+Choice program. Currently, HCFA's
    funding for implementation of the BBA is only about $2.40 per
    beneficiary. This will not be adequate to ensure that beneficiaries
    have the information they need to make informed choices about their
    health care.
    Agency for Health Care Policy and Research
        The Association urges adequate funding for the Agency for Health
    Care Policy and Research, and in particular the Medical Treatment
    Effectiveness Program (MEDTEP). If we are to find ways to lower the
    growth in the cost of health care without jeopardizing quality of care,
    the outcomes research undertaken by this Agency will be critical.
    Office of Inspector General--Department of Health & Human Services
        AARP urges adequate funding for the Department of Health and Human
    Services' Office of Inspector General. In order for fraud and abuse in
    the Medicare and Medicaid programs to be reduced, adequate resources
    must be available to detect, investigate and prosecute unscrupulous
    providers. This should include appropriate funding for maintaining and
    expanding the Inspector General's fraud hotline, an integral part of
    the effort to reduce fraud.
    Medicare Contractor Funding
        Medicare contractors are a source for information about changes in
    the Medicare program. Currently, most contractors have outreach
    programs for the physicians in their region. Given the magnitude of
    changes in the program required by the Balanced Budget Act of 1997,
    outreach by contractors to address beneficiaries' questions and provide
    clear and accurate information will be critical. We urge the
    Subcommittee to provide adequate funding for Medicare contractors that
    takes into account the need for beneficiary outreach activities. This
    funding should not substitute for the resources needed by the Health
    Care Financing Administration to implement the new Medicare+Choice
    program.
    Survey and Enforcement
        The Association supports sufficient funding to provide adequate
    levels of survey and enforcement activities to assure that home health
    agencies and skilled nursing facilities deliver quality care to
    Medicare and Medicaid beneficiaries. Currently, inadequate funding has
    meant that nursing homes cited for deficiencies during the survey
    process do not receive follow-up visits to guarantee that they have
    come into compliance. As a result of limited funding to make the
    revisits, the appropriate sanctions cannot be imposed. Any additional
    reduction in funding could have a significant adverse effect on the
    quality of care, particularly given the added responsibilities placed
    on HCFA and the states in the Balanced Budget Act of 1997.
    Displaced Homemaker Program
        AARP supports providing sufficient funds to begin implementing the
    Displaced Homemakers Self-Sufficiency Assistance Act. For many older
    women who have been outside the workforce for decades, workforce re-
    entry is extremely difficult. As the workforce ages, and the older
    workforce becomes increasingly female, the services provided by the Act
    and similar programs will assume correspondingly greater importance.
    Social Security Administration (SSA) Staffing Levels
        We remain concerned that inadequate funds for SSA could hamper the
    agency's ability to deliver quality service. The most noticeable
    evidence of deteriorating service is the ongoing backlog of disability
    applications, which continue despite agency initiatives. AARP urges the
    Subcommittee to provide sufficient resources next year to address this
    backlog and for other critical activities, such as implementing the
    congressional mandate for electronic transfer of all federal payments.
    National Senior Service Corps (NSSC)
        The NSSC programs--namely, Foster Grandparents, Senior Companions,
    and Retired Senior Volunteers--have been successfully matching skilled
    older Americans with unmet community needs since 1973. We appreciate
    the additional funds provided by Congress this year and urge at least
    an inflation adjustment for these critical activities.
        Thank you again for this opportunity to comment on programs which
    benefit older Americans.
                                     ______

           Prepared Statement of the American Psychiatric Association
    Introduction and background
        Chairman Porter and members of the Subcommittee, the American
    Psychiatric Association would like to present recommendations regarding
    the fiscal year 1999 appropriations for the National Institute of
    Mental Health (NIMH), National Institute on Drug Abuse (NIDA), the
    National Institute on Alcohol Abuse and Alcoholism (NIAAA), and the
    Center for Mental Health Services (CMHS) at the Substance Abuse and
    Mental Health Services Administration (SAMHSA). The APA wishes to
    associate this statement with the statement of the Ad Hoc Group for
    Medical Research Funding, which calls for a 15-percent increase in NIH
    funding for fiscal year 1999, as a first step toward doubling the NIH
    budget over five years.
        The prevalence and impact of mental illness and addictive disorders
    is generally underestimated, but the magnitude of the problem is
    expressed in the ``1997 Update on Progress in Brain Research''
    published by the Dana Alliance. When one considers the toll in medical
    morbidity and mortality, lost productivity, along with the costs of law
    enforcement and treatment, the aggregate burden of severe mental
    illness in our society exceed $300 billion annually. These illnesses
    and their associated costs include:

                            [In billions of dollars]

    Depression/manic depressive illness...............................    30
    Schizophrenia.....................................................    30
    Drug addiction....................................................   160
    Alcoholism........................................................   100

        However, thanks to the research advances of the last two decades,
    we now know that severe mental illness and addictive disorders are not
    a consequence of inadequate parenting, lack of will power, poor self-
    control, or moral failure. They are diseases of the brain whose
    development is influenced by a host of genetic biological and
    psychological factors that are just beginning to be understood. More
    importantly, we now know these disorders are treatable and that the
    results of treatment are equal, if not better than, in patients with
    illnesses like heart disease or diabetes. The personal and societal
    costs of mental illness and addictive disorders are high, but advances
    in research and treatment will help save lives, strengthen families,
    and save taxpayer dollars.
    NIMH Research and Mental Illness
        In the past five decades, research supported by the National
    Institute of Mental Health has defined the core symptoms of the severe
    mental illnesses, including schizophrenia, manic depressive illness,
    and major depression. Research has shown that these and other mental
    illnesses involve specific brain dysfunctions and research has
    contributed directly to developing an array of effective treatments,
    including both medications and specific psychotherapies. The
    development of new major classes of psychotropic drugs--antipsychotics,
    antidepressants (including lithium), and anti-anxiety medications--have
    profoundly altered the lives of mentally ill people. Through long-term
    treatment with appropriate medications, many patients now can
    effectively control their illnesses and lead stable, essentially normal
    lives. In addition, the discovery that psychotropic medications are
    effective provided proof that mental illnesses are biologically based--
    not a consequence of moral failure--and greatly lessened the stigma
    associated with these conditions.
        NIMH research has contributed significantly to the discovery,
    development, improvement and clinical use of psychotherapeutic drugs.
    The knowledge developed through this research has, in turn, provided a
    greater understanding of the causes of mental illness. Collaboration
    between NIMH researchers and the pharmaceutical industry often resulted
    in a discovery that a drug developed by industry for another use had
    unsuspected efficacy against a mental disorder. For example, a drug
    developed in the 1950's as an antihistamine (chlorpromazine) was found
    to be the first effective antipsychotic; another compound synthesized,
    but not used, by a drug company was found to be valuable as an
    antidepressant (imipramine). Such early discoveries by psychiatric
    researchers stimulated the pharmaceutical industry to search for other
    psychotherapeutic drugs.
        One of the many NIMH ``success stories'' involving medications
    development is the development of Lithium treatment. Lithium has freed
    many individuals with manic-depressive illness from months or years of
    hospitalization. Before the introduction of lithium, people with manic
    depressive illness experienced severe disruptions of their lives and
    marked losses of productive capacity. They, in many cases committed
    suicide. Although many people with this illness remain untreated today,
    those patients treated with lithium usually respond well and live
    greatly improved lives. And the benefits to society have been enormous.
    For example, lithium therapy has saved the U.S. economy more than $145
    billion since 1970. NIMH clinical research played a large role in
    establishing the effectiveness and treatment conditions for lithium
    therapy; this role was particularly important because lithium is an
    inexpensive, non-patentable medication--hence not commercially
    attractive.
        This example and other NIMH sponsored research make major
    differences in the lives of thousands of Americans and their families.
    Kathleen who suffered from schizophrenia explains ``Today I am happy to
    be alive. Taking a new anti-psychotic drug [olanzapine] has changed my
    life and my attitude.'' NIMH researchers helped build the groundwork
    for development of this new generation of atypical anti-psychotic
    medications, including olanzapine.
        Kathleen says ``the fifteen years before I found this medication
    were not easy,'' At age 31 Kathleen started to have schizophrenic
    episodes. ``My husband divorced me . . . my children became ashamed of
    me,'' Kathleen explains, ``I lost my family, my home and nearly my
    life.''
        In 1993, Kathleen started taking a new medication called
    olanzapine. She no longer suffers from symptoms of schizophrenia. Her
    family is together again and proud of her recovery. ``I am ever so
    thankful for my success in overcoming my mental illness with this
    drug.'' (Quotation Courtesy of National Mental Health Association).
        But much more needs to be done. APA particularly supports NIMH's
    commitment to expand scientific knowledge and research on mental
    illness among our children. An estimated 20 percent of American youth,
    11 million in all, have serious emotional or behavioral disorders and
    an estimated two-thirds of all youth are not receiving the mental
    health treatment they need. The effects of these illnesses on the lives
    of our children and their families are enormous. Children with
    untreated cognitive or emotional disorders cannot learn adequately or
    benefit from the kind of peer and family relationships essential to
    becoming a healthy and productive adult. These children are also at
    increased risk of alcohol and drug abuse, criminal behavior, and
    suicide. We urge continued support for the child health initiatives
    currently underway at the NIMH.
    NIDA: Drug Addiction Research
        Drug addiction is one of the most serious public health problems
    that our Nation faces. Drug addiction takes a tremendous toll on both
    the individual and on society as a whole. Not only are the economic
    costs associated with drug use staggering, but illicit drug use is
    inextricably linked to the spread of infectious diseases like AIDS,
    hepatitis, and tuberculosis, and is also associated with family
    violence, child abuse, violent crimes and suicide.
        As we move into the 21st century, ever changing drug use patterns,
    the continuing transmission of HIV infection among drug abusers, and
    the need to develop effective treatment and prevention interventions
    underscore the importance of research in finding new and better ways to
    alleviate the pain and devastation of addiction. Because drug addiction
    is such an enormous and complex problem, the National Institute on Drug
    Abuse (NIDA) has a broad research portfolio that addresses the most
    fundamental questions about drug abuse, ranging from the molecule to
    managed care and from DNA research to community outreach.
        Besides a better understanding of addiction, we now have the
    research to show in detail what drugs are actually doing to, and in,
    the brain. Scientists have identified and cloned receptors in the brain
    for every major drug of abuse. Researchers have discovered not only the
    specific brain circuits involved in drug experiences, but are starting
    to uncover the changes in activity patterns in these brain circuits
    over time, during the processes of addiction and during drug
    withdrawal. Research also shows that addiction occurs as a result of
    the prolonged effects of abusable drugs on the brain. In fact, just a
    few weeks ago NIDA-supported researchers found a critical link between
    nicotine addiction and the feeling of pleasure nicotine use can
    produce. This discovery brings researchers closer to the development of
    an effective treatment for nicotine addiction including the possible
    development of anti-nicotine medications targeting this site in the
    brain.
        APA strongly supports NIDA's strong research effort to combat drug
    abuse among children and adolescents. NIDA's efforts focus on the
    prevention of initial drug use and prevention of the health
    consequences of drug abuse for the individual, his/her children, and
    society. As part of this effort NIDA will support basic cognitive and
    behavioral research on processes like behavior change to better inform
    prevention approaches. Specifically, NIDA will enhance its efforts to
    look at the role of risk and protective factors including peer pressure
    in increasing or decreasing the probability that a child will become
    addicted to drugs. Other critical NIDA work in this area includes a
    study of children exposed to drugs prenatally in order to clarify the
    long term effects of such exposure, and a study of the differential
    effects of drugs on the brain and behavior of children at different
    ages.
    NIAAA: Research on Alcohol Abuse and Alcoholism
        As a substance that is both legal and culturally accepted in our
    society, the health, behavioral, and social problems that are
    associated with misuse of alcohol are markedly different from those
    associated with illicit drugs. Alcohol dependence, characterized by
    chronic and heavy drinking, produces such medical consequences as liver
    disease and pancreatitis and contributes to cardiovascular disorders,
    certain cancers, immune, and endocrine system illness. Alcohol can also
    induce congenital defects, growth retardation, learning disabilities,
    and other disorders.
        One major NIAAA success is research which helped demonstrate the
    effectiveness of a new medication to treat alcoholism, naltrexone,
    which blocks both the craving for alcohol and the pleasure of getting
    high. Studies show that when combined with behavioral interventions
    naltrexone allows as many as 75 percent percent of those being treated
    to avoid relapse, compared with fewer than 50 percent of those who
    receive counseling alone.
        One mother who was an alcoholic reported that when taking
    naltrexone, ``I just didn't seem to have the desire to drink even
    though there were lots of stresses at the time. Ultimately, my self-
    esteem improved, and I have not had a drink in over eight months.
    Because I wasn't drinking I had the courage and insight to make the
    changes that I needed to . . . Life is 100 times better now for my
    children and myself. I feel like my old self. As I look back, I'm so
    glad I [took the medication and started the counseling] and my children
    are delighted.'' Indeed we can be very proud of the many thousands of
    individuals whose lives have been transformed, if not saved, by NIAAA-
    funded research.
        The American Psychiatric Association strongly supports the high
    priority NIAAA places on researching genetics of alcoholism. Research
    has shown that a significant portion of the susceptibility of
    alcoholism is inherited. Investigators sponsored by the National
    Institute on Alcohol Abuse and Alcoholism are searching the entire
    human genome for genetic markers which are linked with alcoholism. In
    the process of this search, they will be able to test rigorously the
    involvement of a number of genes hypothesized to contribute to the
    susceptibility to alcoholism and perhaps discover contributions from
    other genes not yet suspected of involvement with alcoholism. Further
    research is critical to identify the genes located within certain
    specific chromosomal locations.
        The APA proposes that the research budgets for the NIMH, NIDA, and
    NIAAA be increased to a level minimally appropriate to the quality of
    the science which merits support, as follows: $970 million (20 percent)
    for NIMH; $658 million (25 percent) for NIDA; and $262 million (15
    percent) for NIAAA. These recommendations include critical research
    training and research management and support activities, as well as
    support for AIDS research. These recommendations are based upon expert
    analysis of the scientific opportunities which could be capitalized on
    at each Institute to ensure further research breakthroughs in mental
    illness and addictive disorders.
    SAMHSA and CMHS Treatment for Mental Illness
        As we all know, all the medical knowledge in the world will not
    help unless patients who are ill receive medically appropriate
    treatment. APA recognizes the great importance of the work of the
    Substance Abuse and Mental Health Services Administration (SAMHSA) and
    calls for an increase for SAMHSA significantly above that proposed by
    the President. Mental health services programs are now administered by
    the Center for Mental Health Services (CMHS) at SAMHSA. Congress has
    called on CMHS for a vigorous federal leadership role in mental health
    services delivery and policy development. In some states, SAMHSA-funded
    services constitute up to 39 percent of all non-institutional mental
    health services.
        The Committee has made known its interest in changing the current
    Community Mental Health Block Grant into Performance Partnerships. The
    Association supports this and wants to recognize the efforts of the
    Substance Abuse and Mental Health Service Administration (SAMHSA) to
    move toward a more flexible but accountable system of federal support
    for community mental health services. Critical to this effort, though,
    are funds to help states to develop an infrastructure for collecting,
    analyzing and reporting on performance data. As the key priority for
    SAMHSA, we urge the Subcommittee to consider $30 million to help states
    develop the capacity they need for implementation of such a system.
        We also present for your consideration the following funding
    recommendations:
        One of the most successful programs at CMHS is the Children's
    Mental Health Services Program. As you know, the program authorizes
    grants to states and communities to stimulate the development of
    interagency systems of care for children and adolescents with mental,
    emotional or behavioral disorders. The philosophy of the program is
    child-centered, with requirements for individualized services
    (sometimes known as wrap-around services), and on services which
    support families to care for very sick youngsters at home. We recommend
    a funding level of $87 million.
        $79.9 million for the Knowledge Development and Application Program
    at the SAMHSA Center for Mental Health Services. Rather than directly
    providing services to beneficiaries, the KDA program is designed to:
    emphasize information dissemination; develop new and innovative
    approaches to service delivery, training and technical assistance; and
    assess the cost-effectiveness of model services. These functions are
    performed with an emphasis on under served populations, such as
    children, adults with severe mental illness, ethnic minority
    populations, rural populations, and the elderly. This role will take on
    critical importance as states move vulnerable populations of people
    with severe mental illness into managed care arrangements.
        $355.4 million for the Community Mental Health Block Grant program
    states are allowed to utilize block grant dollars for a range of
    critical services for people with serious mental illnesses including
    community-based treatment, case management, homeless outreach, juvenile
    services and rural mental health services. The demand for community
    based mental health services has dramatically increased in recent
    years. To help remedy this distressing situation the block grant
    program should receive a significant increase particularly since, when
    inflation is taken into account, the program's funding has declined by
    $56 million since fiscal year 1993.
        APA also recommends $33 million for the PATH Homeless State Grant
    Program; $30 million for Protection and Advocacy; and $20 million for
    Direct Operations.
        The APA applauds the subcommittee's leadership in funding support
    for research and treatment of mental illness and addictive disorders.
    These are dollars well invested which have proven to translate the
    promise of scientific discovery by NIMH, NIDA, and NIAAA into saving
    and improving the lives of millions of Americans. We will also be
    submitting to the subcommittee separately, a more detailed list of
    recommended research priorities for mental illness, drug abuse, and
    alcoholism research at NIH. Thank you for the opportunity to submit
    this statement for the record.
                                     ______

    Prepared Statement of the Council of State Administrators of Vocational
                                 Rehabilitation
        The Council of State Administrators of Vocational Rehabilitation
    (CSAVR) is comprised of the chief administrators of the public agencies
    providing rehabilitation services to persons with disabilities in the
    50 States, the District of Columbia, and the territories.
        These Agencies constitute the State partners in the State-Federal
    Program of Rehabilitation Services for persons with mental and/or
    physical disabilities, as authorized by the Rehabilitation Act of 1973,
    Public Law 93-112, as amended.
        While the Rehabilitation Act is the cornerstone of our Nation's
    commitment to assisting eligible people with disabilities to obtain
    competitive employment and to live independent and productive lives, it
    is severely underfunded.
        When one considers that a Louis Harris and Associates study
    estimates that two out of every three adults with a disability are
    unemployed, and that the Rehabilitation Program has the resources to
    provide services to only one in twenty eligible people, this
    underfunding constitutes an unacceptable tragedy for the millions of
    people with disabilities who need services in order to become employed,
    yet are unable to receive them.
        The great responsibility placed upon the Rehabilitation Program
    became even more acute, with the passage and implementation of the
    ``Americans with Disabilities Act'' (ADA). The ADA vastly expands
    opportunities for all Americans with disabilities. It is vital
    therefore that the Rehabilitation Program assist people with
    disabilities to fully realize the promise of this landmark legislation.

    Vocational rehabilitation services: basic State grants

                            [In billions of dollars]

    Fiscal year 1999 CSAVR recommendation.............................     3
    Fiscal year 1998 authorization...................................( \1\ )

    \1\ Such sums.

        Basic State Service Grants are the lifeblood of the Vocational
    Rehabilitation Program, financing the provision of vocational
    rehabilitation services to eligible individuals with mental and
    physical disabilities for placement in competitive employment.
        These Federal dollars, matched with state monies, permit State
    Rehabilitation Agencies to provide, or to contract with private
    organizations and agencies to provide individualized, comprehensive
    services to eligible persons with mental and/or physical disabilities,
    for the purpose of rendering these individuals employed and
    independent.
        Such services may include evaluation; comprehensive diagnostic
    services; counseling; physical restoration; rehabilitation engineering;
    the provision of various kinds of training and training supplies, tools
    and equipment; prosthetic devices; placement; transportation; post-
    employment services; and ``any other service'' necessary to
    rehabilitate an individual into employment.
        For fiscal year 1996, the latest year for which the Federal
    Government has statistics, the Rehabilitation Services Administration
    advises that the $2,118,834,000 appropriated for Basic State Vocational
    Rehabilitation provided services designed to lead to gainful employment
    for 1,483,073 people with disabilities of which 69.3 percent were
    severely disabled. Of this number, 184,030 were placed in competitive
    employment.
        Despite this expenditure, there still are not sufficient funds to
    serve all those eligible, disabled people who have the potential and
    desire to work and who need rehabilitation and training services to
    obtain employment and self-sufficiency.
        In carrying out the Congressional mandate to give priority of
    service to the rehabilitation of individuals who are severely disabled,
    State Agencies have found that the costs--in time, effort, and money
    for services--are much greater than the cost of rehabilitating people
    less severely disabled.
        At the same time, it is alarming to note that the purchasing power
    of the resources available has remained virtually stagnant since 1980.
        With these statistics in mind, the Council strongly urges that the
    Congress assist us in facing this challenge by providing Federal
    appropriations for Basic State Vocational Rehabilitation Services in
    the amount of $3,000,000,000 for fiscal year 1999, an increase of
    $753,112,000 over the fiscal year 1998 appropriation. With this
    increase in resources, the CSAVR estimates that nearly 270,000 more
    persons will receive services and 92,500 more will be placed in
    competitive employment.
        The justification for higher funding levels stems from the purpose
    for which the money is spent--the prevention of an incalculable waste
    of human potential, a purpose on which no price tag can be placed.
        Over the decades, Vocational Rehabilitation has more than paid for
    itself by helping persons with disabilities become gainfully employed;
    increase their earning capacity; by freeing family members to work;
    and/or by decreasing the amount of welfare payments, health services,
    and social services they might need; as well as by assisting them to
    become taxpayers.
        Appropriating additional monies for Vocational Rehabilitation
    Services reduces the Federal Deficit. Indeed, the Congressional Budget
    Office has stated that ``a reduction of funds for rehabilitation * * *
    would generate increases in other parts of the federal and state
    budgets.'' Funds appropriated for Vocational Rehabilitation are a sound
    investment of the Public's money.
    Other Programs Authorized by the Rehabilitation Act
        The Rehabilitation Act is recognized as the most complete and well-
    balanced piece of legislation in the human services field. In addition
    to the Basic State Vocational Rehabilitation Services Program, the Act
    contains provisions for (1) an innovation and expansion program; (2) a
    training program; (3) a research program; (4) a comprehensive services
    for independent living program; (5) a supported employment program;
    and, among others, (6) special projects and demonstration efforts. The
    CSAVR strongly supports adequate funding for all Sections of the Act.
                                     ______

     Prepared Statement of the Helen Keller National Center for Deaf Blind
                               Youths and Adults
                             preliminary statement
        The Helen Keller National Center (HKNC) is an unique national
    resource: It is the only entity in the world whose sole mission is to
    provide comprehensive training, independent living skills, and
    employment preparation to young people and adults who are both deaf and
    blind. Because of its unique mission HKNC must rely primarily on
    support through Federal funding. But HKNC has not received a funding
    increase above inflation for the past five years. This circumstance has
    resulted in severe constraints on HKNC's ability to cope with
    increasing demand for its services and at the same time keep its
    physical plant in adequate repair.
        On behalf of thousands of children, young people, and adults who
    are both deaf and blind, the Helen Keller National Center (HKNC) urges
    this Committee to recommend an appropriation for fiscal year 1999 at a
    level which will enable HKNC first and foremost to increase its
    capacity to provide technological training to deaf-blind individuals in
    order to enhance their employment opportunities; to address capital
    repair needs, and also to bring about the technological improvements
    and information gathering capability essential to reaching a higher
    level of efficiency and effectiveness. An appropriation of $8.55
    million would reasonably address HKNC's requirements in the next fiscal
    year.
        The Helen Keller National Center is very pleased and deeply
    grateful that the Department of Education requested, and the
    Administration agreed to, a substantial increase over the fiscal year
    1998 appropriation. The budget amount of $8.176 million includes a cost
    of living increase, and a one time infusion of funds for urgent capital
    repairs and equipment and training in computer and other technology for
    our deaf-blind students.
        While we appreciate the first real funding increase in 5 years,
    there are three areas (representing increases over the President's
    budget in the amount of $375,000), which we urge this Committee to
    recommend in its fiscal year 1999 appropriation bill for the
    Departments of Labor, Health and Human Services, and Education. The
    specific requirements for the amount over the President's budget are
    $100,000 to establish a national registry of deaf-blind individuals;
    $100,000 for the Center's endowment fund; and $175,000 for followup
    services for those deaf-blind youths and adults who have completed
    training. The total amount we are asking for--$8.55 million--is very
    small in Federal budgetary terms, but it will enable hundreds of deaf-
    blind Americans to live independently, including employment in
    productive jobs.
        Deaf-blindness is by any measure one of the most devastating and
    most severe of disabilities. The number of deaf-blind Americans is
    increasing substantially on both ends of the age spectrum: Among
    children, and also in the elderly population. The reduction of
    dependency and the huge cost burden such dependency requires, results
    in a human and financial benefit that is incalculably greater than the
    funding we request. This modest appropriation would save many times
    that amount in Federal, State, and local funds.
                                   background
        The Helen Keller National Center is established by Federal statute
    and is funded primarily through Federal appropriations, and secondarily
    through State agency fee payments and corporate and individual
    donations. Its mission and its services are unique in the Nation and in
    the world: HKNC provides diagnostic evaluation, comprehensive
    rehabilitation, training, job preparation, and placement services for
    individuals who are both deaf and blind. HKNC also conducts research,
    and provides a national program of technical assistance and training to
    States and service agencies. From its headquarters in Sands Point, Long
    Island, New York, the Helen Keller National Center administers a
    national network of 42 affiliate agencies, under which agencies are
    provided financial support and technical assistance by HKNC to serve
    deaf-blind children, youth, and adults in their own home States.
                   congressionally mandated responsibilities
        The mission and responsibilities of the Helen Keller National
    Center, established by Congress in 1967, have expanded over the years.
    In 1992 the Helen Keller National Center Act was extended and amended.
    Additional responsibilities--and additional costs--were imposed on
    HKNC. For example, the Center is now required to train family members
    of individuals who are deaf-blind. The definition of deaf-blindness was
    expanded in the 1992 amendments. The result has been the opening up of
    the rehabilitation system to serving additional deaf-blind clients.
        This year, we are seeking a further amendment to the Act which
    would enable HKNC to establish and maintain a national registry of
    deaf-blind individuals. The Rehabilitation Act reauthorization bill
    (S.1579) introduced and ordered reported by the Senate Labor and Human
    Resources Committee includes a section authorizing the registry, along
    with specific funding authority. Although this provision is not yet
    law, we urge this Committee to recommend an appropriation in an amount
    sufficient to enable HKNC to initiate this vitally important project.
        Congress also created an endowment fund for HKNC, providing for a
    federal match of money from sources other than federal appropriations.
    The endowment, if it were funded, could help defray some of the
    appropriation burden. Apart from regular and preventive maintenance,
    HKNC's physical plant has not been refurbished since its inception
    nearly a quarter century ago. It is imperative that sufficient funds be
    provided to correct the most urgent deterioration, and to bring the
    HKNC residential campus into conformity with Americans with
    Disabilities Act standards for accessibility. Over the past five years
    Congress has appropriated funds for HKNC in the amounts requested in
    the President's budget; unfortunately, however, these amounts barely
    have been sufficient to offset the costs of inflation, and certainly
    have not been enough to expand needed services or repair our
    facilities.
        specific requirements for capital repair and program improvement
        HKNC requests this Committee's assistance in its efforts to
    maintain and strengthen its capacity to serve deaf-blind youths and
    adults, to repair its deteriorating physical plant, and to establish
    and maintain a national registry of deaf-blind people. We respectfully
    ask this Committee and the Congress to accord HKNC a high priority for
    federal support for the next fiscal year. Justification for the
    increase is set forth below:
        Capital repairs.--The residential, training, and administration
    facilities comprising the Helen Keller National Center are now 22 years
    old. Because of limited funding HKNC has not been able to make
    necessary capital repairs and improvements. The most urgent of these
    are (1) removal and replacement of existing underground fuel oil tanks
    to comply with Federal, State, and local environmental requirements;
    (2) installation of underground electrical feeder lines for emergency
    power; and (3) renovation of some building interiors for additional
    accessibility, and to ensure compliance with the Americans with
    Disabilities Act. The total estimate cost for these capital repairs is
    $500,000. The President's budget would provide approximately half the
    funding needed for this purpose.
        Increased service needs and the National Registry.--Three important
    factors have emerged to create additional pressures to expand HKNC's
    services. There are more than 11,000 deaf-blind children under the age
    of 22--the greatest number in our history--who will need such services.
    The definition of deaf-blindness in HKNC's enabling legislation was
    expanded to include those with progressive vision and/or hearing loss
    leading to deaf-blindness, as well as individuals who cannot be tested
    by traditional methods, but who are functioning as deaf-blind. The
    Rehabilitation Services Administration, Council of State Administrators
    of Vocational Rehabilitation, the American Association of the Deaf-
    Blind, and HKNC, have entered into a cooperative agreement under which
    the parties agreed to a model state plan for deaf-blind services. This
    will result in a statewide approach to serving people who are deaf-
    blind.
        If these developments are to have any value or utility, HKNC must
    establish and maintain a national registry to ensure that all deaf-
    blind Americans receive the services they need. Creation of a national
    registry of deaf-blind children, youths, and adults by HKNC has been
    approved by the Rehabilitation Services Administration. Although it is
    urgently needed, however, HKNC has not had the financial resources to
    establish and maintain the nationwide listing. Establishment and
    initial operation of the registry will require an expenditure of
    $100,000. Lesser annual amounts would be necessary to acquire the data
    to maintain the registry in future years. The President's budget does
    not include any funds for the registry.
        Endowment fund.--The endowment authorized by the 1992 amendments to
    the Helen Keller National Center Act has not yet been initiated,
    because the Federal funds required to trigger its establishment have
    not been appropriated. Funding for the endowment would enable HKNC to
    reduce gradually its dependence upon Federal appropriations. HKNC is
    now in a better position to attract outside funding, and those efforts
    would benefit greatly from even a small endowment. The President's
    budget does not include funds for this purpose. We urge the Committee
    to include a modest amount--$100,000--in the fiscal year 1999
    appropriation.
        Technology training.--Within the amount we request, HKNC would
    apply $250,000 of the appropriation toward the establishment of a
    ``state of the art'' technology capability, including the purchase of
    computers and technology equipment, and providing the following
    benefits to its deaf-blind clients, enhancing their job skills and
    marketability:
        (1) Skill development, including classroom learning and on-the-job
    use of current computer hardware and software;
        (2) Training for professionals (including rehabilitation counselors
    and independent living teachers), utilizing the HKNC Training Team, in
    teaching computer skills to deaf-blind clients; and
        (3) Increasing knowledge and awareness on the part of deaf-blind
    consumers about available technology and its potential value in
    employment and home settings. The President's budget includes support
    at the amount HKNC requests, and we respectfully ask the Committee to
    provide these funds.
        Followup services.--The Helen Keller National Center has found
    that, all too often, after intensive, comprehensive, one-on-one
    training is provided to a deaf-blind youngster, upon returning home the
    individual does not have the support structure necessary to retain the
    skills for independence and employment. With followup services provided
    by specialized HKNC training teams, the training the deaf-blind
    individual received can be reinforced, and the likelihood of permanent
    stability, independence, and a steady job, will be enhanced. As part of
    its request, HKNC urges the Committee to provide $175,000 for this
    purpose for fiscal year 1999.
        Other issues.--Although HKNC's funding request for fiscal year 1999
    is limited to addressing the foregoing urgent needs, the Committee
    should be aware of some additional requirements for which funds would
    be effectively used, should the Congress be in a position to provide
    them:
        Affiliate network.--HKNC's network of 42 State and local affiliate
    agencies is extremely cost-effective, and should be expanded to enable
    400 additional deaf-blind clients to be served through at least two new
    affiliate programs.
        Family training.--Providing training and support to families is
    extremely effective in enabling them to acquire necessary services for
    the deaf-blind family member. Since the family often must serve as case
    manager, advocate, and primary care provider, such training eliminates
    the cost of supporting habilitation and rehabilitation positions in
    state agencies. Currently HKNC supports parent organizations in 28
    States and Puerto Rico, and provides a vital communications link to
    about 2,000 parents. Parent training, transportation, and coordination
    have had to be deferred because of a lack of funds.
        The aging population.--With the graying of America, the number of
    adults 55 and older with age-related hearing loss and blindness is
    increasing rapidly. This population increasingly requires services to
    maintain independence--services provided through the Helen Keller
    National Center. The ballooning caseload is imposing a tremendous
    burden, both on the rehabilitation system and on HKNC.
                                   conclusion
        Deaf-blindness is one of the most severe of all disabilities. Most
    of us cannot conceive of living and functioning in a world without
    either sight or hearing. Training for independence, and even
    employment, for people who are deaf-blind, is not only possible but is
    being accomplished, successfully, every day at HKNC. Such
    rehabilitation and training is extraordinarily difficult, time
    consuming, and labor-intensive.
        For a quarter century the Helen Keller National Center has operated
    as the only organization in the United States which provides, directly
    and indirectly, throughout the country, a comprehensive program of
    services and training for this relatively small population of our
    disabled citizens, and it does so with very modest funding from this
    Committee and the Congress. With the burgeoning population of deaf-
    blind children and older Americans, with the aging of its physical
    plant, and with more requirements it is becoming increasingly difficult
    for HKNC to adequately serve those who need our services.
        We respectfully, but urgently, request this Committee to continue
    its recognition of, and support for, the needs of children and youth
    with the most severe combination of disabilities, and their families.
    We ask that Congress preserve the Nation's modest but essential
    investment in the Center and the people it serves by appropriating
    $8.55 million for the Helen Keller National Center for fiscal year
    1999.
                                     ______

     Prepared Statement of the American Lung Association and the American
                                Thoracic Society
        The American Lung Association and its medical section, the American
    Thoracic Society, appreciate the opportunity to comment on the Senate
    Labor, Health and Human Services and Education Appropriation
    legislation for fiscal year 1999.
        We first would like to thank the Committee for its continued
    support for biomedical research and public health programs. Without the
    Committee's leadership and strong bipartisan support many of the recent
    research and public health advances would not have been possible. For
    the Committee's support, we are deeply grateful.
        We are also grateful for the support and leadership that the
    National Heart, Lung, and Blood Institute has provided over the past 50
    years. As you may know, the NHLBI is celebrating its 50th anniversary.
    In those 50 years, the advances in research and public health have been
    phenomenal. In the 1940s, children with asthma sat on the sidelines
    while other children played sports. Today, athletes within asthma win
    Olympic gold medals. In the 1950s, premature babies with respiratory
    distress syndrome (RDS) died with hours of delivery. Today, not only
    can doctors successfully treat RDS babies, in many cases they can
    prevent RDS with drug treatments in the pregnant mother. In each of
    these advances, NHLBI was leading the way. Truly the 50th anniversary
    of NHLBI is a cause for celebration.
        Although our comments will focus on lung-related research, the
    American Lung Association and American Thoracic Society feel that
    research into all health conditions is a valuable investment. We also
    recognize that biomedical and behavioral research are only part of a
    continuum of public health endeavors that include health services
    research, targeted health care delivery, health professions training,
    and prevention activities. We encourage this Committee to support the
    entire public health community.
        There has been a great deal of excitement and anticipation about
    windfall revenues from the budget surplus and the proposed tobacco
    deal. Plans have been made by the Administration and leaders in
    Congress based on expected tobacco deal revenues. We strongly urge
    Congress and the Administration to make funding decisions based on the
    regular appropriations process. Enactment of the proposed tobacco deal
    is neither eminent nor necessarily in the best interest of America.

                        Summary: Funding recommendations

                            [In millions of dollars]

    National Institutes of Health.................................  15,696.0
        National Heart, Lung, and Blood Institute.................   1,825.7
        National Institute of Allergy and Infectious Diseases.....   1,554.4
        National Institute for Environmental Health Sciences......     379.6
        National Institute of Nursing Research....................      73.1
    Centers for Disease Control and Prevention....................   2,800.0
        National Institute for Occupational Safety and Health.....     208.8
        Tuberculosis Control Programs.............................     220.0
        Office on Smoking and Health..............................      70.0
    Magnitude of Lung Disease
        Every year 335,000 Americans die of lung disease. Lung disease is
    third leading cause of death in the U.S., responsible for one in every
    seven deaths. More than 30 million Americans suffer from a chronic lung
    disease. Lung diseases cost the U.S. economy an estimated $85 billion
    annually.
        Lung diseases represent a spectrum of chronic and acute conditions
    that interfere with the lungs ability to extract oxygen from the
    atmosphere, protect against environmental or biological challenges and
    regulate a number of metabolic processes. Lung diseases include;
    chronic obstructive pulmonary disease, lung cancers, tuberculosis,
    pneumonia, influenza, sleep disordered breathing, pediatric lung
    disorders, occupational lung disease, sarcoidosis, and a problem of
    growing concern in the U.S.--asthma.
    Asthma
        Asthma is a chronic lung disease where the bronchial tubes of the
    lungs become swollen and constrict, preventing air from getting into or
    out of the lung. These obstructive spasms of the bronchi are caused by
    a broad range of environmental triggers that vary from one asthma
    sufferer to another.
        Asthma is on the rise. An estimated 14.6 million Americans have
    asthma; 4.8 million are under the age of 18. Since 1984, the prevalence
    of pediatric asthma has risen 72 percent. Rates are increasing for all
    ethnic groups and especially for African American and Hispanic
    children. While some children appear to ``out grow'' their asthma when
    they reach adulthood, most, 75 percent will require life-long treatment
    and monitoring of their asthma condition.
        Asthma is expensive. The growth in the prevalence of asthma will
    have significant impact on our nation's health expenditures, especially
    Medicaid. Currently, asthma costs the U.S. over $12 billion a year.
    Asthma attacks bring 1.6 million people to the emergency room each
    year. According to recent studies, asthma accounts for 17 percent of
    all pediatric emergency room visits.
    Asthma kills
        In 1994 5,487 children died as a result of an asthma attack. That
    is a 6 percent increase from 1993 and over a 100 percent increase from
    1979. A disproportionate share of these death were in African American
    families. In 1994, the age-adjusted death rate for blacks was three
    times high than that of whites.
    Asthma Research Advances
        The good news on asthma is that research is beginning to bring
    answers, and with answers come hope for new treatments and a cure. NIH-
    supported research has provided greater understanding of what is
    actually going wrong in a person suffering from asthma; why exposure to
    airborne substances cause bronchial inflammation, why the immune system
    hyper-responds and what kinds of cell-to-cell communication mediate
    this response. Even more promising is that NIH-sponsored researchers
    are beginning to establish linkages between candidate genes and asthma.
    In the near future, we expect that this research will identify the
    genes that cause asthma.
        Researchers are also developing better ways to treat and manage
    chronic asthma. NHLBI-supported research has shown that regularly
    scheduled use of beta-agonists, though safe, provides no additional
    benefit over their use only as needed in patients with mild asthma.
    Based on this research, patients with mild asthma need not take
    regularly scheduled doses of a beta-agonist. Because over half of all
    asthma patients have mild asthma, this finding is expected to result in
    large reductions in the cost of asthma care.
        Researchers supported by NHLBI have developed better animal models
    to allow expression of selected asthmatic genetic traits. This will
    allow researchers to develop a greater understanding of how genes and
    environmental triggers influence the onset, severity and long-term
    consequences.
        Population-based research is also leading to improvements in the
    management of asthma. NIAID's National Cooperative Inner-City Asthma
    Study is designed to identify and mediate those factors in the
    patient's home that lead to increased morbidity and mortality in the
    inner-city minority population. Data from NIAID's Inner-City Asthma
    Study show that by combining medical treatment and asthma case
    management with a reduced exposure to these triggers can lead to a
    significant reduction in hospital costs for study populations.
        NIEHS-supported research is providing greater insight on the
    potential interactive and independent effects that exposure to
    areoallergens, like ozone and fungal molds, have on asthma symptoms.
        NINR-supported research has shown a correlation between biological
    markers of airway inflammation and symptoms in adults with asthma.
    Further NINR studies are investigating whether Asthma Education
    Intervention impacts both clinical markers of asthma and biological
    marker of airway inflammation.
    Research advances and opportunities
        NHLBI funded researchers have localized the gene defect that causes
    primary pulmonary hypertension (PPH)--a rare disease that kills nearly
    half of its victims within four years. While inherited PPH is uncommon,
    PPH due to interaction with drugs and other diseases is far more
    common. Understanding the mechanism of inherited PPH will lead to
    better treatments to prevent PPH or stop its fatal outcome.
        Eighty to 90 percent of all chronic obstructive pulmonary disease
    (COPD), which includes emphysema and chronic bronchitis, is caused by
    smoking. However, only 15 percent of smokers develop COPD. Non-smoker
    also can develop COPD. These facts taken together strongly suggest a
    genetic link in the development of COPD. With appropriate resources,
    NHLBI researchers can develop a greater understanding of the genetic
    component of COPD and how genetics interact with other components like
    smoking, environmental exposures, diet and exercise.
        NHLBI-supported researchers have found that retinoic acid can
    reverse the effects of emphysema in laboratory rats. Further research
    is needed to explore the role retinoic acid plays in lung tissue
    rejuvenation. Such research may lead to better treatment for emphysema
    and other degenerative lung diseases.
        Scientists supported by NHLBI have discovered a new family of
    chemical in the lung--beta-defensins--that kill disease-causing
    bacteria. Other researchers have begun to describe the role surfactant
    proteins play in the lung defense. A fuller understanding of the role
    these natural chemical play in the lung's immune system may greatly
    improve treatment for a number of diseases--ranging from cystic
    fibrosis to prevention of lung-related infection in AIDS patients.
        Vaccine researchers supported by NIAID have developed a pediatric
    acellular pertussis vaccine for ``whooping cough'' that is safer and
    more effective than the previous whole cell vaccine. Further research
    may soon yield an adult pertussis vaccine and a pediatric vaccine that
    requires a single dose, rather than the current multiple injections.
        Researchers at NINR are looking at end-of-life issues. Many
    terminally ill patients suffer from dyspnea--troubled breathing.
    Current treatment of dyspnea is often ineffective and cause side
    effects that diminish the ``quality of life'' of dying patients. NINR
    research well help finds better ways to care for those who are dying.
        Job-related illness and injuries cost the U.S. economy over $121
    billion year. With proper research, we believe many occupational
    illnesses are preventable. We would like to bring to your attention the
    National Occupational Research Agenda (NORA) at the National Institutes
    of Occupational Safety and Health (NIOSH) at CDC. In 1996, NIOSH
    convened a panel of experts from the scientific, labor and corporate
    communities to layout a plan for occupational health research. The goal
    of this research plan is to collect sound scientific data to document
    and develop strategies to prevent job-related illness. We strongly
    recommend the committee provide $15 million to support the National
    Occupational Research Agenda at NOISH.
    Responding to crisis
        The public health community watch with great interest and more than
    a little bit of anxiety, the recent a outbreak of avian flu in Hong
    Kong. The threat of a new viral pathogen poses to an unprotected human
    population is sincere and severe.
        The response of CDC and NIAID to this crisis was swift and
    decisive. Both CDC and NIAID sent experts to Hong Kong. NIAID also sent
    reagents and assisted in typing the avian flu virus. A potential
    vaccine was developed. Additionally, a tour of South China was
    organized to see if there were other cases of avian flu in humans. No
    cases outside of Hong Kong have been documented. So far, it appears as
    though a public health crisis has been avoided, thanks in part to
    expertise and materials contributed by CDC and NIAID. It is important
    to ensure we maintain the ability to respond to infectious disease
    threats around the globe, much like was done in Hong Kong.
    RMS
        We are concerned that while the NIH research budget has increased,
    the administrative budget or research management and support (RMS)
    function has remained flat. Administrative functions of the NIH play a
    vital role in the advancement of science. Awarding and monitoring
    grants, ensuring scientific and ethical standards in the research
    community, developing and disseminating patient and provider education
    materials, and convening state of the art scientific meetings are just
    of few of the functions that NIH conducts with its administrative
    budget. If the administrative budget of NIH continues to shrink
    relative to other NIH activities, the eventual result will be a
    reduction in the quality of NIH-supported science.
    Education
        Closely linked to the research management and support (RMS) budget
    issue is the funding for NIH Public and Professional Education
    Programs. NIH education programs are vital for improving patient care
    and education. The NHLBI has been a leader in producing patient and
    provider education materials. The NHLBI initiated the National Asthma
    Education and Prevention Program (NAEPP) in 1989 to raise awareness
    that asthma is a serious chronic disease and to promote more effective
    management of asthma through patient and professional education. NAEPP
    at NHLBI recently revised the Guidelines for the Diagnosis and
    Treatment of Asthma and has also published Asthma Management in
    Minority Children to provide information to health care providers
    serving minority children with asthma. We are pleased that the
    Committee included report language in last year's appropriation bill to
    exempt these kinds of important educational activities from
    restrictions on the RMS budget. We encourage you to continue this
    exemption.
    Critical care medicine
        Critical care medicine is a multi-disciplinary treatment approach
    that involves such specialities as anesthesiology, internal medicine,
    pediatrics and surgery and is usually practiced in the hospital
    intensive care unit (ICU). Noting that critical care medicine accounted
    for 28 percent of total acute care hospital costs, in 1993 this
    committee directed the NHLBI to support research to enhance effective
    practices and treatments in critical care medicine. In 1994 the NHLBI
    Task Force on Research in Cardiopulmonary Dysfunction and Critical Care
    Medicine released a report on critical care medicine, including
    recommendations on training and basic, clinical, and epidemiological
    research on critical care medicine. The American Lung Association and
    the American Thoracic Society urge the committee to continue its
    support for research in critical care medicine.
    Tuberculosis research and control initiatives
        Although tuberculosis is a preventable and curable disease, it
    still persists as a public health problem in the United States. As a
    direct result of increased federal investment in TB control programs at
    CDC, TB case rates have begun declining nationally. However, TB cases
    continued to increase in some areas. Twenty of the 50 states and the
    District of Columbia reported either no change or an increase in TB
    cases. 1996 was marked by sporadic outbreaks of MDR-TB. Sporadic cases
    of ``Strain W,'' a deadly TB strain resistant to the best anti-TB
    drugs, originally reported in New York, New Jersey and Florida have now
    been found in South Carolina, North Carolina, Colorado, Ohio,
    Pennsylvania, Georgia, Nevada, California and Puerto Rico.
        Recent investment in TB control programs are beginning to pay off.
    National TB case rates have declined for 4 consecutive years. Although
    data is still preliminary, we expect that CDC will soon announce a
    fifth straight year of decline in domestic TB rates. This good news is
    a direct result of efforts by the CDC and public health officials. It
    is important to continue this area of support throughout the period it
    takes to control TB. Preventive Health Projects for Tuberculosis
    administered by CDC should be continued in fiscal year 1999 and funded
    at the recommended level of $220 million.
        There are several steps that should be taken to maintain the
    current decline in TB rates. The first step must be the expansion of
    existing prevention and control methods. Tuberculosis is successfully
    prevented and controlled by a variety of public health methods. The
    American Thoracic Society and the CDC revised a joint statement, The
    Control of Tuberculosis in the United States, that provides guidance
    for establishing tuberculosis control activity. It is intended for use
    by persons working in tuberculosis control programs and related
    programs in such sites as correctional facilities and homeless
    shelters.
        To combat TB in the U.S. and eliminate tuberculosis worldwide will
    require far more than just intensified and widespread use of existing
    prevention and control methods. Combating TB will also require the
    development of new drugs to treat MDR-TB. The last new drug developed
    to treat TB became available in 1972. Today, the fight against TB
    requires new diagnostic and prevention technologies, and the rapid
    transmission of newly developed technologies to the field.
        Progress is being made on TB. In fiscal year 1998, the Foreign
    Operations Appropriation Subcommittee provided USAID's with funds for
    international infectious disease control, including TB. USAID, NIH and
    CDC, have begun a cooperative dialogue to decide how best to use these
    international TB funds. We are pleased that the American Lung
    Association and the American Thoracic Society has been invited to
    participate in many of these discussions. To ensure appropriate
    coordination between U.S. domestic TB control, research, and
    international efforts we strongly encourage CDC, NIH and USAID to enter
    a formal interagency cooperative agreement regarding US TB control
    activities. We also recommend that USAID, in conjunction with CDC, NIH,
    the World Health Organization and volunteer and professional
    organizations like the American Lung Association and American Thoracic
    Society develop an international plan to eliminate TB.
        Federal support for tuberculosis research is concentrated within
    the National Institute for Allergy and Infectious Diseases. The overall
    support within this Institute for research specific to M. tuberculosis
    has increased from $323,000 in fiscal year 1979 to $37.6 million in
    fiscal year 1998. NIAID has developed an agenda to intensify
    tuberculosis research efforts including improvement of existing
    diagnostic tests which are not sensitive enough to detect TB reliably
    and early in individuals with HIV infection, development of an
    effective vaccine to protect those at risk of infection and
    identification of more effective treatments for those already infected.
        In conclusion, lung disease is a growing problem in the United
    States. It is America's number three killer, responsible for one in
    seven deaths. The lung disease death rate continues to climb while
    rates for America's first- and second-ranked causes of death--heart
    disease and cancer--are dropping. Overall, lung disease and breathing
    problems constitute the number one killer of babies under the age of
    one year. Worldwide, TB kills 3 million people each year, more people
    than any other single infectious agent. The level of support this
    committee approves for lung disease programs should reflect the urgency
    illustrated by these numbers.
        Thank you.
                                     ______

    Prepared Statement of Terry-Jo Myers, Interstitial Cystitis Association
        Honorable Chairman and Members of the Committee: Thank you for
    giving me the opportunity to present written testimony. I would like to
    tell you about interstitial cystitis and ask for continued funding of
    research to find a cure for this painful, debilitating disease. My name
    is Terry-Jo Myers and I am a professional golfer completing my 13th
    year on the LPGA tour. I also have interstitial cystitis, or IC. While
    I appear healthy to anyone who meets me, that is because the effects of
    interstitial cystitis are not visible to others. I can, however, assure
    you that my work, my family and social life, and my pursuit of many
    dreams have all been dramatically affected by my experience with IC.
    Many of you may already know that my IC story has had a happy ending,
    for have been able to find relief.
        Interstitial cystitis is a chronic inflammatory bladder condition.
    Its cause is unknown and there is no uniformly reliable treatment. The
    symptoms, which can be severe and unrelenting, include urgency and
    frequency of urination--up to 60 or more times in 24 hours--and pain in
    the bladder which IC patients have described as burning, like
    ``electric shocks,'' or like ``razor blades in the bladder.''
        I was diagnosed with IC shortly after I developed symptoms at the
    age of 21, and I was told that nothing could be done. Doctors said I
    would just have to live with the pain--a prescription that far too many
    IC patients still receive. Every step I took was painful, and for a
    tour player it was torture. Often I could not even bend down to line up
    a putt. I had to urinate about 50 times a day, including 10 to 20 times
    at night. I played in non-stop pain and had constant anxiety about
    being able to make it to the next bathroom.
        Because travel is especially difficult for many people with IC, I
    arrived at tournaments exhausted. While my fellow players were
    practicing, I was often forced to remain in the locker room.
        Saddest of all for me personally, IC affected my golf game. As a
    junior athlete, I won many tournaments. As a professional with IC, my
    performance was terribly hindered by the disease. Because LPGA rules
    prohibit players from leaving the course for any reason, I had to
    withdraw from tournaments in the middle of a round because I needed to
    go to the bathroom. In 1988, I won the Mayflower Classic, but I
    attribute much of that win to the fact that there were two rain delays
    that allowed me to go to the bathroom and keep playing.
        For the last three years, I have been able to complete a full
    schedule in relative comfort, and look forward to continuing to do so.
    I am very happy to report that last season I won the Los Angeles
    Women's Championship, as well as the Sara Lee Classic, finishing the
    year with a career high $313,000 in earnings. I attribute much of my
    success to the oral drug Elmiron, which was recently approved by the
    FDA for marketing. Unfortunately, Elmiron provides relief in only about
    one third of the IC sufferers who try it.
        For me, last year was a dream come true. My story appeared in
    newspapers and magazines all across the nation. I was featured in
    People magazine. I appeared on countless television talk shows to share
    my story of success. The most gratifying result of all this publicity,
    beyond my own sense of achievement, was the fact that the Interstitial
    Cystitis Association, the ICA, was able to reach out to more IC
    sufferers than ever before.
        In mid-December, I received the Heather Farr Award at the LPGA 1997
    Awards Luncheon. This award, voted on by Tour players, recognizes a
    player who demonstrates determination, dedication, and spirit through
    the game of golf. Heather Farr, who was a close friend of mine, died of
    breast cancer in 1993. As I told the New York Times, I never told
    Heather that I had IC, but watching her fight cancer helped me continue
    my fight against IC. She fought her battle in public, and she was never
    angry or bitter. I guess I just borrowed some of her strength. For that
    reason, this award is especially meaningful to me.
        As if that were not enough gratification for any athlete, earlier
    this month I received a letter from the Golf Writers Association of
    America indicating that I had been voted the Ben Hogan Award, presented
    annually to someone who has continued to be active in golf despite a
    physical handicap or serious illness. This beautiful bronze statuette
    of Ben Hogan has been awarded to such golf heroes as Ken Venturi, Lee
    Trevino and President Eisenhower! I will be attending the awards dinner
    in Augusta on the eve of The Masters Tournament in April.
        Although I am immensely grateful for my reclaimed success, there
    are many many others who have not been as fortunate. I have had IC for
    fourteen years. It has been only 6 years since I was able to find a
    doctor to help me. This doctor put me in touch with the ICA and
    motivated me to take steps to begin to cope with my illness. This
    doctor was also aware of Elmiron and made sure that I was able to take
    it as soon as the FDA approved its distribution here. Not all IC
    patients can say this. Many can't travel, work, or meet their family
    obligations. Many become financially destitute as they lose their
    health insurance coverage and try to keep up with their IC treatments.
    Some have their bladders removed, only to encounter a whole new array
    of medical problems. My success story is not one that all IC patients
    can claim.
        Because it is a comparatively rare disease that affects mostly
    women, and historically, urology and urological research have focused
    primarily on male urological problems, interstitial cystitis is a
    disease that continues to be ignored by many members of the medical
    community. It is serious and it can be costly. An epidemiological study
    sponsored by the Urban Institute found that an estimated 450,000 people
    in the U.S.--men and women both--may suffer from IC, with an economic
    impact as high as $1.7 billion per annum.
        Fortunately, there is hope. Thanks to previous Congressional
    funding, the NIDDK built the IC Database, an extensive pool of IC
    patient information collected at nine sites around the U.S., and stored
    and analyzed at the Pennsylvania State University, Hershey Medical
    Center. Researchers have already begun to publish reports analyzing
    data obtained from this study, with the expectation that the Database
    will provide clues as to how IC develops, how to diagnose and
    categorize patients, and how to treat the disease more effectively. In
    short, the Database has provided the first systematic long-term look at
    a large number of IC sufferers. Thanks to your support the IC Database
    is now moving into Phase 2, which will test and study new treatments
    for IC.
        The Interstitial Cystitis Association and all IC patients are so
    grateful to all Members of this Subcommittee, and in particular, to
    Chairman Spector and Senator Reid for their ongoing support of research
    on IC and other urological diseases. Without your help, we would be
    nowhere in our struggle. Because of your commitment, we are beginning
    to see some progress. In conclusion:
        To continue this research initiative, we request that the Committee
    provide additional funds to the Urology Program of the NIDDK in fiscal
    year 1999 to be used for expanding the cadre of investigators doing
    research on IC. These funds should be used to support further research
    specifically into IC. Proposals should be solicited through a series of
    Request for Applications (RFAs) for individual research grants and
    pilot studies which would look into: (1) new strategies for IC symptom
    relief; (2) epidemiology; (3) further understanding the basic science
    of IC. The Committee requests that the NIDDK prepare a report of
    ongoing research studies and areas for research solicitations,
    demonstrating where advances can be made in the effective treatment and
    prevention of IC.
        We still have far to go. Yet we are confident that with your help
    and with adequate, continued funding for IC research through the NIDDK,
    results will be no less than miraculous. As a victim of IC, I know what
    it is like to endure chronic, unrelenting pain. Please help us to end
    our suffering. Help us find a cure for interstitial cystitis. Thank
    you.
                                     ______

      Prepared Statement of Father William L. George, S.J., and Father T.
    Byron Collins, S.J., Special Assistants to the President of Georgetown
                                   University
        In the current fee-for-service Medicare program, 10 percent of
    Medicare patients use 70 percent of Medicare services. Therefore, any
    desire to optimize the quality of care delivery and improve the
    efficiency of service delivery for Medicare patients must begin by
    addressing the issues related to care delivery for this segment of high
    utilization Medicare patients. The health Care Financing Administration
    has begun an initiative to address the needs of Medicare fee-for-
    service patients with chronic medical illness. In response to this need
    for increased cost-effective service delivery Congress authorized, in
    Section 4016 of Public Law 105-33, the implementation of nine Medicare
    Coordinated Care Demonstration Projects intended to: improve the
    quality of items and services provided to target individuals; and
    reduce expenditures under the medicare program under title XVIII of the
    Social Security Act (42 U.S.C. 1395 et seq.) for items and services
    provided to target individuals. (SEC. 4016 (a)(1))
        Among these programs is ``1 project within the District of Columbia
    which is operated by a nonprofit academic medical center that maintains
    a National Cancer Institute certified comprehensive cancer center''
    (SEC. 4016 (b)(C). In response to Public Law 105-33, Georgetown
    University proposes to undertake a program combining clinical pathways
    and case management strategies to more effectively manage the care of
    these chronically ill patients. The goal is to improve quality of care
    and cost-effectiveness of service for the chronically ill.
        In order to attract program participants, $3 million dollars was
    appropriated to the Georgetown demonstration through District of
    Columbia Appropriations in Public Law 105-100. This $3 million will,
    for the most part, cover copayments and deductibles that would normally
    be paid by Medicare fee-for-service beneficiaries when they receive
    care. Coverage of these patient out-of-pocket expenses will encourage
    Medicare beneficiaries to participate in the program. Coverage of
    copayments and deductibles will be arranged, in part, with the help of
    religious ministers in the District of Columbia. It is essential that
    these funds be used for this purpose. These funds were appropriated by
    the District of Columbia Appropriations Subcommittee because of
    language contained within Public Law 105-33, SEC. 4016 (e)(1)(A)(ii):
      --Cancer hospital.--In the case of the project described in
            subsection (b)(2)(C), amounts shall be available only as
            provided in any Federal law making appropriations to the
            District of Columbia.
        This language is misleading and is currently being amended in the
    form of a technical correction. The $3 million received from District
    of Columbia Appropriations in Public Law 105-100 was a one-time fund
    disbursement. In the future, funding for patient out-of-pocket costs
    must be received through other Federal sources.
        We request that future funding for planning and ancillary funds of
    the Georgetown University Medical Center Medicare Coordinated Care
    Demonstration Program be appropriated to The Department of Health and
    Human Services for distribution to Georgetown. In fiscal year 1999 we
    request a total of $5 million. This request consists of $3 million for
    previously explained coverage of copayments and deductibles as well as
    $2 million to cover administration and infrastructure costs necessary
    for successful program implementation. This $2 million will cover the
    cost of critical pathway design, patient recruitment, education/
    wellness programs, and other necessary administrative costs.
        We request that this $5 million be accompanied by an additional $15
    million appropriation to the Department of Health and Human Services.
    This funding, along with the $5 million to the Georgetown
    demonstration, will amount to $20 million in additional funding to the
    Health Care Financing Administration for ``Research, demonstrations,
    and evaluation projects'' (Budget of the United States Government,
    Appendix, fiscal year 1999). In fiscal year 1998, the Health Care
    Financing Administration requested $50 million for research,
    demonstrations, and evaluation projects but was appropriated $53
    million by the Senate. We wish to have additional funds appropriated to
    this line item again in fiscal year 1999.
        Appropriation of the above funds to the Health Care Financing
    Administration will allow for the successful exploration of new and
    innovative modes of delivering quality care to chronically-ill, high
    risk individuals in a cost-effective manner.
                                     ______

    Prepared Statement of Antonio De La Cruz, MD, FACS, President, American
             Academy of Otolaryngology-Head and Neck Surgery, Inc.
        Members of the subcommittee, ladies and gentlemen, I am Dr. Antonio
    De la Cruz, President of the American Academy of Otolaryngology-Head
    and Neck Surgery, Inc. (AAO-HNS), the world's largest organization of
    otolaryngologists and head and neck surgeons. There are more than
    10,000 members, including 97 percent of all Board-certified otolaryn-
    gologists.
        Mr. Chairman, I and the members of the AAO-HNS and the patients
    that they are privileged to care for all owe an immense debt of
    gratitude to you and your colleagues on this subcommittee for your hard
    work in providing greatly increased funding for the National Institutes
    of Health (NIH) for fiscal year 1998 and particularly for the
    National Institute on Deafness and Other Communication Disorders
            (NIDCD)
        National Institute on Deafness and Other Communication Disorders
    (NIDCD) The NIDCD has a mission of unique importance to the nation's
    health and to its economic and social well being--including insuring
    the optimization of communication skills regarding hearing, voice,
    speech and language.
        NIDCD-supported scientists have made extraordinary strides in the
    understanding of and the basic processes which underlie the many
    diseases and disorders of hearing, balance, taste, smell, voice, speech
    and language.
        These advances have come from the many different fields of science.
      --The genetic bases of deafness is being unraveled.
      --Promising studies in animal models indicate that it is possible to
            protect the inner ear through the use of growth factors or the
            introduction of viruses whose DNA has been altered so that
            appropriate protective substances are produced and released in
            the inner ear.
      --Further work along the same lines is being undertaken to repair the
            damage which has occurred and to replenish the cells of the
            inner ear which have been destroyed.
        All of these studies will soon be tested in patients.
      -- Further advances have been made in the prostheses for the hearing
            impaired, including hearing aids and the cochlear implant. Many
            of these advances have been directly applied to patients
            enabling them to communicate with others and contribute to the
            economic and social well being of our society.
      --Advances in our basic understanding of the human voice have
            resulted in surgical procedures which have restored voice to
            those who could only speak in a whisper.
      --Linguistic studies are one of the most important areas of the NIDCD
            mission. NIDCD-sponsored scientists are defining the biological
            bases of language. This work is being accomplished through the
            observation of infants, the use of human electro-physiology and
            the utilization of the advances of brain imaging. The 2
            information gained from these studies will enable physicians to
            diagnose and treat the many language disorders which put so
            many at disadvantage in our communication-based society.
        The NIDCD, one of the newest institutes at NIH, has made rapid
    progress and is at a point in which there are more needs than
    resources. This is especially true in two areas: translational
    research--applying the fruits of basic research to the patients and
    clinical trials, and evaluation of the effectiveness of different
    therapies.
        The science which is required in these areas is expensive but
    necessary and the NIDCD needs to have the additional resources so that
    it can continue to take advantage of all of the advances in the various
    forms of basic research but also to carry out needed translational and
    clinical studies. The investment in the NIDCD will have substantial
    economic as well as health advances for it insures optimal economic
    productivity through improved communication abilities for our citizens.
        Dr. Ruben and I, along with colleagues from our Academy and others
    attended a conference recently called by the NIDCD on Economic and
    Social Realities of Communication Differences and Disorders. This
    conference was called for in bill report language last year, urged by
    Dr. Ruben. The conference dealt with issues of diagnosed and
    undiagnosed childhood communication disorders, including learning
    disabilities and dyslexia, deafness, specific language impairment, and
    stuttering, as well as the impact of such diseases and disorders on
    crime and incarceration.
        The conference revealed that the economic bases of our society--the
    way in which people make their livelihoods--has undergone fundamental
    change during the last half of the 20th century. In the past, we
    depended largely on manual labor. Today we depend upon communication
    skills. This, in turn, has a profound effect on definitions of illness,
    and on society's expectations and demands of the medical profession.
        This revolutionary change in ``making a living'' is reflected in
    the labor statistics for New York City. In 1900, manual labor accounted
    for 94 percent of the 149,000 jobs in the city. By the middle of the
    century, in 1950, only 31 percent of the 3.5 million jobs were in
    manual labor; the other 69 percent (2.6 million) were based primarily
    upon the communications skills of the workers. The trend has
    continued--in 1996, 88 percent of the 3.2 million jobs in New York City
    were dependent upon communication skills. In real numbers, from 1950 to
    1996 the number of manual labor jobs was reduced by 66 percent from
    1,163,000 in 1950 to 392,024 jobs in 1996. At the same time, the number
    of workers who rely on communication skills increased by 9 percent from
    2,588,700 in 1950 to 2,832,000 in 1996; 771,676 manual jobs no longer
    exist: these have been replaced by communication-based employments.
    Bureau of Labor projections for the United States as a whole indicate
    that by the year 2005 employment will increase by 17.7 million jobs of
    which at least 92 percent (16.2 million) of these new jobs will be
    based on communication skills.
        The NIDCD mission is to provide the knowledge which is needed to
    prevent, cure and care for all of the diseases of communication so that
    this country may have a communicatively healthy and competitive
    population.
    National Institute of Environmental Health Sciences (NIEHS)
        Our Academy has long been interested in issues affecting
    environmental health of humans, and the health of the environment
    generally. In several instances, we have cooperated with the National
    Institute of Environmental Health Sciences (NIEHS) in conferences and
    meetings dealing with air pollution, water pollution and soon,
    hopefully, on the issue of environmental noise and its impact on
    hearing and upon the environmental well being of people generally.
        For example, the Academy participated as a founding organization of
    the National Association of Physicians for the Environment, at its
    founding conference in 1993, supported by the NIEHS. Also, we played a
    major role in the ``National Conference on Air Pollution Impacts on
    Body Organs and Systems'' and the recent ``International Conference on
    Water Pollution and Health,'' both supported in part by the NIEHS.
        Michael D. Maves, MD, MBA, now serves as Chairman of the National
    Council on Healthcare Energy Efficiency and ``Greening'' of Healthcare
    of the National Association of Physicians for the Environment, working
    to improve energy efficiency in healthcare and medical research
    facilities. The National Institutes of Health has won several energy
    efficiency awards for its work at the Bethesda campus; the NIEHS has
    worked to improve energy efficiency at the North Carolina campus and is
    now considering how to assist extramural researchers to do the same in
    their facilities.
        We believe that human health is inseparable from a healthy
    environment.
        We have watched as the NIEHS has worked hard in recent years to
    reach out to all the constituencies which affect or are affected by a
    polluted environment. We believe major strides have been made in this
    regard.
        We therefore urge a significant increase for the NIEHS of at least
    15 percent.
        Mr. Chairman, we fully support the request of the Ad Hoc Group for
    Medical Research Funding, of which we are members, for a 15 percent
    increase overall for the NIH. Because of the special importance and the
    extraordinary demands of outstanding science upon the NIDCD we request
    an 18 percent increase for NIDCD. We also urge an increase of 15
    percent for the NIEHS.
        Mr. Chairman, thank you for the opportunity to testify and I will
    be pleased to answer any questions which you may have.
                                     ______

      Prepared Statement of Arthur L. Day, M.D., American Association of
                             Neurological Surgeons
        Mr. Chairman and Members of the Subcommittee, My name is Arthur L.
    Day, M.D. I am a professor of Neurological Surgery at the University of
    Florida in Gainesville, Florida, and I appear here today on behalf of
    the American Association of Neurological Surgeons (AANS) and the
    Congress of Neurological Surgeons (CNS), which represent over 4,000
    practicing neurosurgeons in the United States. The AANS and CNS thank
    you for the opportunity to comment on the fiscal year 1999 neuroscience
    agenda for the National Institutes of Health (particularly the National
    Institute of Neurological Disorders and Stroke) and the Agency for
    Health Care Policy and Research.
    Past funding requests
        Before presenting our recommendations and justifications for
    program support in fiscal year 1999, we wish to briefly outline our
    previous funding requests during the Decade of the Brain. Spinal
    disorders, vascular diseases of the brain, and genetic disorders
    (including brain tumors) represent the three most common afflictions of
    the nervous system impacting the health of the American public. In the
    past, we have focused on these three areas and have requested funding
    for biomedical research for: (1) brain tumor research centers, (2)
    stroke and cerebrovascular disorders, (3) gene therapy for brain tumors
    and other diseases of the nervous system, (4) basic research on spinal
    cord injury, spinal degenerative diseases, and the biomechanics of
    spinal instability, and (5) stereotactic surgery of the brain and
    spine. The Committee has been very receptive to these requests, and we
    urge the Committee to continue to intensify its efforts in these areas
    to build on the foundation of prior Decade of the Brain initiatives.
    Fiscal year 1999 funding requests
        For fiscal year 1999, we urge the Subcommittee to direct its
    funding attention to five areas of research: (1) head and spinal cord
    injury, (2) stroke and cerebrovascular disease, (3) molecular biology
    as it applies to tumors and other nervous system disorders, (4) spinal
    disorders and pain, and (5) outcomes research into the effectiveness of
    new therapies for neurological disorders.
        Treatment of head and spinal cord injuries.--Trauma to the brain
    and spinal cord remains a major public health issue in the United
    States, and is a leading cause of death and disability among children
    and young adults. Head injuries are present in 75 percent of fatal
    automobile accidents. The direct and indirect costs of traumatic spinal
    cord injuries are estimated to be over $7 billion annually. New
    pharmacologic protection agents can now be shown to decrease the amount
    of brain and spinal cord damage produced in experimental animals
    subjected to vascular or traumatic injury. In a recent NIH-funded
    study, the early administration of methylprednisolone improved the
    neurologic recovery of patients with spinal cord injuries. Functional
    recovery can also be improved by prompt treatment. Thus, head and
    spinal cord injury patients should be promptly evacuated to centers
    ready to treat them with effective surgical and chemical support.
        A number of important treatment questions about such injuries
    remain that should be the subject of carefully designed clinical trials
    to determine the optimal treatment paradigm. The value of early versus
    delayed decompression of spinal fractures with spinal cord injury
    represent one such issue. Ultimately, of course, the ability to restore
    function of injured brain and spinal cord tissues is the key to central
    nervous system injuries and treatment, and we believe that basic
    research targeted at this goal should be a major priority of this
    Committee.
        Stroke and cerebrovascular disease research.--The term ``stroke''
    is often applied to capture a number of conditions in which the brain's
    blood vessels either rupture or become blocked, resulting in some
    degree of neurologic injury. Stroke is the third leading cause of death
    in the United States, and between 1992 and 1995, stroke deaths have
    increased by ten percent. Stroke is also a leading cause of long term
    disability. Each year, 500,000 new cases are diagnosed, at an estimated
    annual cost of $30 billion. More than half of this total is attributed
    to acute, rehabilitative and nursing home care, while the remaining
    costs are due to lost productivity, alteration in lifestyle, and the
    economic burden assumed by family members and other care-givers.
        In recent years, the catastrophic consequences of stroke have
    diminished, in part through better understanding of the basic chemical
    and physiological processes that result in brain cell death. Aggressive
    medical treatments before or early after the onset of stroke symptoms
    can now significantly improve outcomes by enhancing the recovery of
    function, results of surgery, and the outcome of rehabilitation. For
    example, the intraoperative administration of barbiturates to certain
    patients undergoing carotid artery surgery or certain intracranial
    vascular procedures can significantly reduce the stroke risks inherent
    in such operations.
        Recently, the concept of ``Brain Attack,'' similar in its
    implications to a heart attack, has gained the support of the National
    Stroke Association, American Heart Association, and many neurologists
    and neurosurgeons across the country. The major thrust of the Brain
    Attack initiative is early diagnosis and administration of therapeutic
    agents and operations, in the hope of limiting or reversing the damage
    produced by the stroke. The immediate goals of stroke treatment include
    the rapid restoration of blood flow to areas of the brain lacking
    circulation, protection of brain cells (neurons) from irreversible
    damage, and rescue of those cells that have undergone molecular and
    biomechanical changes from lack of nutrients and oxygen. Restoration of
    the circulation and delivery of drugs must be rapidly carried out
    within a ``window of opportunity'' before irreversible brain damage
    occurs. The acute treatment of these disorders has only recently become
    feasible and models the demonstrated medical and economic successes of
    heart attack treatment though early recognition, resuscitation and
    organ protection. Prototypical agents for decreasing brain damage and
    increasing efficiency of restored blood flow already exist. We are
    convinced that your continued support will lead to substantial life-
    saving and function saving progress.
        Molecular approach to treatment of brain tumors and other
    disorders.--Brain tumors represent the third leading cause of cancer
    deaths in middle-aged males and tumors of the nervous system are the
    second leading cause of cancer deaths among children. Each year more
    than 10 percent of the 400,000 new patients with other types of cancer
    eventually see their disease spread to the brain and spinal cord. In
    many such patients, the nervous system tumor constitutes the single
    most immediate threat to their life and function.
        The recent application of molecular biologic techniques to the
    central nervous system has revolutionized our understanding of how
    brain tumors grow and spread. For example, we now know that the absence
    of some genes, which normally act as ``brakes'' on tumor development,
    can cause diseases such as neurofibromatosis, a condition associated
    with multiple nervous system tumors.
        Neurosurgeons have been leaders in the development of new methods
    of drug delivery into the nervous system, and these techniques can be
    used to deliver genes and hormones. Therapeutic agents can be directly
    injected into the brain by modern image-based stereotactic techniques,
    while cells in other parts of the body are shielded from potential
    injury. Genetic material can be linked to immunological agents and
    other chemicals to cause the death of tumor cells, and insertion of
    normal genes into the brain may help control the expression of brain
    cancer. Similar research in such disorders as Parkinson's disease, Tay-
    Sach's, Huntington's disease and Alzheimer's dementia is already
    underway, and may reduce the $100 billion annual burden faced by the
    American public. Your continued support can lead to the discovery of
    the full range of genetic abnormalities that underlie the development
    of brain tumors and degenerative diseases. Once these ``targets'' are
    identified, new molecular bullets can be designed and directly entered
    into the nervous system to fight these deadly and costly diseases.
        Research into spinal disorders.--Disorders of the spinal cord, the
    spinal nerve roots and the bony spine are some of the leading causes of
    pain and disability in the United States today. Each year 15-20 percent
    of the population will have an episode of back pain, and during their
    lifetime, about 70 percent of U.S. citizens have an episode of serious
    back and/or leg pain caused by diseases of the spine. Currently, back
    and leg pain are the second most common reason for physician visits in
    the United States.
        Recent progress in basic neuroscience research has markedly
    enhanced our understanding of basic mechanisms of pain, and has allowed
    us to have a much better understanding of how the spinal cord controls
    movement and integrates sensation. Further basic research is needed to
    investigate and identify mechanisms that underlie the loss of function
    and production of pain whenever the spinal cord or nerve roots are
    compressed by discs or bone spurs into the spinal canal, thus allowing
    more effective pharmacological and less invasive treatment modalities
    to be developed to improve the lives of so many people who suffer from
    degenerative diseases of the spine.
        Clinical and outcomes research is also needed to help us to
    understand the optimal utilization of both non-surgical and surgical
    treatments of spinal diseases. It is clear that some patients with
    serious spinal disorders can only be helped by surgery. Clinical
    research in this area would help physicians more expeditiously evaluate
    patients with spinal disease and more appropriately select patients for
    operative treatment, thus limiting the patient's time of anguish before
    definitive and pain-relieving surgical intervention is performed.
        Outcomes research.--Technology is now driving the contemporary
    treatment of neurologic disorders at an unprecedented degree. New drugs
    to treat stroke, genetic agents to treat brain tumors, and
    radiosurgical devices and spinal instrumentation all represent
    significant financial investments. Pallidotomy, a highly technical
    surgical disconnection of the malfunctioning areas of the basal
    ganglia, is very successful in halting tremors and other symptoms for
    Parkinson's disease patients. The costs of these therapies are easily
    justified if the benefits of decreased suffering and additional years
    of useful survival outweigh the amortized costs of therapy. Outcomes
    research can do much to guide patients, their physicians and policy
    makers in therapeutic decision making and resource allocation. We urge
    you to provide funds to the Agency for Health Care Policy and Research
    to: (1) improve the methodology of outcomes research in neurological
    disorders, and (2) support pilot studies in the treatment of stroke,
    brain tumors, degenerative diseases and spinal disorders.
        These funding priorities will be costly, but can have a major
    impact on the quality of life for our citizens. The brain does not lend
    itself to surgery in the way that other organs do. It cannot be cut and
    stitched back together. It does not naturally heal and regain function.
    More research is therefore needed to discover new treatments and
    therapies for neurological disorders.
        Mr. Chairman, and members of the Subcommittee, as we approach the
    final year of the Decade of the Brain and the new millennium, the AANS
    and CNS hope that Congress will continue its commitment to biomedical
    research for nervous system disorders. These funding priorities are
    costly, but can have a major impact on the quality of life for our
    citizens.
        Thank you for your consideration.
                                     ______

      Prepared Statement of the American Association of Nurse Anesthetists
        The American Association of Nurse Anesthetists is the professional
    association that represents over 27,000 certified registered nurse
    anesthetists (CRNAs) in the United States. AANA appreciates the
    opportunity to provide our experience regarding federal funding for
    nurse anesthesia educational programs under Title VIII, the Nurse
    Education Act (NEA). Many members of our association have benefited
    greatly over the years from the Title VIII programs, which in turn has
    benefited the health care system by assisting in the maintenance of a
    stable supply and adequate number of anesthesia providers.
    Background information about CRNA's
        In the administration of anesthesia, CRNAs perform many of the same
    functions as physician anesthetists (anesthesiologists) and work in
    every setting in which anesthesia is delivered including hospital
    surgical suites and obstetrical delivery rooms, ambulatory surgical
    centers, health maintenance organizations, and the offices of dentists,
    podiatrists, ophthalmologists, and plastic surgeons. Today, CRNAs
    administer more than 65 percent of the anesthetics given to patients
    each year in the United States. CRNAs are the sole anesthesia provider
    in 70 percent of rural hospitals which translates into anesthesia
    services for millions of rural Americans. CRNAs are also front line
    anesthesia providers in underserved urban areas, providing services for
    major trauma cases, for example.
        CRNAs have been a part of every surgical team since the advent of
    anesthesia in the 1800s and until the 1920s, anesthesia was almost
    exclusively administered by nurses. In addition, nurse anesthetists
    have been the principal anesthesia provider in combat areas in every
    war the United States has been engaged in since World War I. Though
    CRNAs are not medical doctors, no studies have ever found any
    difference between CRNAs and anesthesiologists in the quality of care
    provided, which is the reason no federal or state statute requires that
    CRNAs be supervised by an anesthesiologist. Anesthesia outcomes are
    affected by such factors as the provider's vigilance rather than the
    title of the provider--CRNA or an anesthesiologist. That is why the
    Harvard Medical School Standards in Anesthesia focus on monitoring the
    patient; the standards are based upon data that indicate that
    anesthesia incidents are usually caused by lack of attention to detail
    and insufficient monitoring of the patient.
        The most substantial difference between CRNAs and anesthesiologists
    is prior to anesthesia education, anesthesiologists receive medical
    education while CRNAs receive a nursing education. However, the
    anesthesia education offered is very similar for both providers and
    both professionals are educated to perform the same clinical anesthesia
    services: (1) preanesthetic preparation and evaluation; (2) anesthesia
    induction, maintenance and emergence; (3) postanesthesia care; and (4)
    peri-anesthetic and clinical support functions, such as resuscitation
    services, acute and chronic pain management, respiratory care, and the
    establishment of arterial lines.
        There are currently 85 accredited nurse anesthesia education
    programs in the United States, all of which are required to offer a
    master's degree.
    Are there enough providers to meet the goals?
        The Health Professionals Scholarship program was created to address
    certain needs of the population, including increased access to primary
    care, increased access in rural and underserved areas, and improved
    distribution of providers. But before we can begin to focus on the
    goals of the Health Professionals Scholarship Program, there must be
    assurances that our programs are producing enough graduates to serve
    the population as a whole.
        The overall number of primary care physicians providing patient
    care rose by 75 percent between 1975 and 1990; yet, the population as a
    whole rose by only 17 percent. The result has been a physician surplus.
    Yet the same is not true for other health care professions. The surplus
    of physicians does not necessarily translate to a surplus of all
    providers. Nurse anesthesia programs across the country have
    stabilized, not increased, in the number of graduates produced each
    year, averaging approximately 900-1,000 new nurse anesthetists entering
    practice annually.
        Data have shown that a continued supply of 1,000 graduates per year
    will provide the country with a stable, adequate source of anesthesia
    providers. Previous research by Michael Fallacaro, CRNA, DNS, Assistant
    Professor at the School of Nursing, State University of New York at
    Buffalo, established that the current ratio of approximately 8.5 CRNAs
    per 100,000 population is adequately meeting societal demands. In
    addition, his research showed that adding 1,000 new nurse anesthetist
    graduates into the system each year through 2020 would ultimately
    result in a similar ratio of 8.5 to 9.6 CRNAs per 100,000 population,
    depending on the average retirement age. Therefore, by continuing the
    trend of graduating approximately 1,000 students per year, nurse
    anesthesia programs appear to be producing not a surplus of providers,
    but an adequate number to meet societal needs.
        In order to maintain this number of graduates, CRNA students need
    continued federal support. Nurse anesthesia programs require a rigorous
    course of study that does not allow students the opportunity to work
    outside their educational program. Nurse anesthesia programs are
    virtually all full-time, with part-time study a rare occurrence.
    Therefore, nurse anesthesia students rely heavily on federal funding to
    assist them in meeting financial obligations during their study.
    Without this assistance, the number of nurse anesthesia graduates would
    surely decline. A decline in the number of nurse anesthetists would
    then result in a decline in the accessibility to services, primarily in
    rural areas that depend on non-MD providers for the majority of their
    care.
    The Goals of the Health Professionals Education Program
        Title VIII has supported the education of our nation's nurses since
    the 1960s. It provides programs for direct student assistance as well
    as grants to institutions for expansion or maintenance of education.
    While initially the programs focused on increasing enrollments, in the
    mid-1970s they began to shift toward increasing the number of primary
    care providers and increasing the number of professionals serving in
    rural or underserved areas.
        In the last reauthorization of Title VIII in 1992, Congress
    directed that Title VIII programs target funds to schools placing
    graduates in medically underserved communities and emphasized primary
    care. Likewise, the Health Professions Education Reauthorization Act of
    1994, which passed the Senate Labor and Human Resources Committee, also
    identified the goal of improving the distribution of health
    professionals in underserved areas. The investment in the education of
    nurse anesthetists would assist in all of these goals:
        Increased access to primary care.--CRNAs are traditionally not
    defined as primary care providers, but provide services that support
    primary care. For example, a facility or professional that provides
    obstetrical care to pregnant women is generally recognized as providing
    primary care. Offering an epidural during labor and delivery is part of
    that obstetrical care; therefore, the CRNA provides services and
    supports primary care, and is vital to the quality of primary care.
    Often the CRNA is the only provider of such services in rural areas.
    Because of the interdependence between primary care and anesthesia,
    continued federal support for nurse anesthesia education will assist in
    reaching the federal goal of increasing access to quality primary care
    across the country.
    Access and distribution in rural and underserved areas
        CRNAs are the sole providers of anesthesia in 70 percent of rural
    hospitals. Anesthesia provided by CRNAs allows these rural facilities
    to provide obstetrical, surgical, and trauma stabilization that would
    otherwise not be possible for millions of Americans in rural areas.
    Continued federal support of Title VIII programs will ensure a stable
    supply of CRNAs to rural facilities all across the country. In
    addition, many nurse anesthesia programs are located in medically
    underserved urban areas and produce graduates that eventually enter
    practice after graduation in these same communities.
        While there continues to be a stable supply of nurse anesthesia
    graduates, there remains a problem with distribution of anesthesia
    providers (both nurse anesthetists and physician anesthesiologists)
    between urban and rural areas. As is the case with many types of
    providers, there tends to be a concentration in urban settings, with
    far fewer providers located in rural areas. Taking into account that
    there are fewer people requiring services in rural areas, the
    maldistribution of providers is still evident.
        The following graph illustrates the percentage of CRNAs located in
    urban vs. non-urban areas, demonstrating clearly that urban areas
    retain far greater percentages of anesthesia providers. Keep in mind,
    however, that the data vary widely from state to state depending on its
    makeup. For example, because the state of New York is one of the most
    urban states in the country there will naturally be a greater number of
    providers in urban areas because the state is primarily composed of
    urban counties. Fallacaro's data show that 90 percent of New York CRNAs
    are located in urban areas, with the remaining 10 percent situated in
    rural New York. Compare that to a very rural state, North Carolina, in
    which only 77 percent of CRNAs are providing services in urban areas
    and 23 percent are in rural areas. The national average is 81.3 percent
    of CRNAs practicing in urban areas, compared to 18.7 percent in non-
    urban areas.

                                  [In percent]
    ------------------------------------------------------------------------
                                                Urban areas     Rural areas
    ------------------------------------------------------------------------
    Urban State--New York...................            90.0            10.0
    Rural State--North Carolina.............            77.0            23.0
    Average.................................            81.3            18.7
    ------------------------------------------------------------------------

        Generally there is a greater number of anesthesia providers per
    100,000 population in urban areas than in non-urban areas. Recent
    research by Dr. Fallacaro has revealed that, on average, there are 8.55
    nurse anesthetists per every 100,000 people, and an average of 8.22
    anesthesiologists (MDAs) per 100,000 people (see middle bar below). A
    breakdown of urban and rural areas show that there are more than
    average numbers of anesthesia providers in urban areas, and fewer than
    average in non-urban areas.

                                       [Ratio of providers per 100,000 population]
    ----------------------------------------------------------------------------------------------------------------
                                                                           Urban         Non-urban        Average
    ----------------------------------------------------------------------------------------------------------------
    CRNA's..........................................................            8.57            7.76            8.55
    MDA's...........................................................            9.42            3.14            8.22
    ----------------------------------------------------------------------------------------------------------------

        It is likely that the problem of distribution will only get worse,
    as an aging CRNA population is concentrated more in non-urban areas
    than in urban. Looking at the CRNA population as a whole, approximately
    19 percent provide services in non-urban areas. Focusing solely on the
    CRNA population aged 55 and older, approximately 29 percent provide
    services in non-urban areas. This indicates that a disproportionate
    number of CRNAs in rural areas are aged 55 or older. As these CRNAs
    retire, it remains unclear what will happen to anesthesia services in
    those areas without continued incentives such as the Health
    Professionals Scholarship Program.
    Recommendation for fiscal year 1999
        In the past, CRNAs had a $4 million authorized line-item
    appropriation within Title VIII which was divided between direct
    student support in the form of traineeships, faculty fellowships to
    increase the number of doctoral-prepared faculty, and toward the start-
    up costs and expansion for nurse anesthesia programs. This line-item
    has proven extremely successful in the past, and each year the
    appropriation for nurse anesthetists has been totally expended. AANA
    would like to see it continue in the future. However, we realize this
    Congress has moved in the direction of a consolidated appropriation.
    AANA understands the need for increased streamlining and administrative
    reductions, and supports the Committee's efforts in this regard.
        AANA would appreciate and certainly utilize a substantial increase
    in funding, but recognizing the budgetary constraints faced by this
    Committee we would recommend continued federal funding for all nursing
    education at the level of $64.738 million, including a $2.833 million
    set-aside for nurse anesthetists in fiscal year 1999. This is
    equivalent to the House-passed level in fiscal year 1998.
        Thank you for your consideration of our concerns.
                                     ______

    Prepared Statement of Marianne Puckett, Associate Professor of Medical
     Library Science, Louisiana State University Medical Center Library on
       Behalf of the, Medical Library Association and the Association of
                       Academic Health Sciences Libraries
        Mr. Chairman and members of the subcommittee, I am Marianne
    Puckett, associate professor of medical library science at the
    Louisiana State University Medical Center Library in Shreveport, La.
    Thank you for the opportunity to provide written testimony on behalf of
    the Medical Library Association (MLA) and the Association of Academic
    Health Sciences Libraries (AAHSL) regarding the fiscal year 1999 budget
    for the National Library of Medicine (NLM).
        As you may know, MLA is a professional organization representing
    over 4,000 individuals and 1,200 institutions involved in the
    management and dissemination of biomedical information to support
    patient care, education and research. I might add Mr. Chairman, that
    MLA's headquarters are located in your home town of Chicago. In
    addition, we are very proud this year to be celebrating our centennial
    anniversary.
        AAHSL, is comprised of the directors of libraries of 142 accredited
    U.S. and Canadian medical schools belonging to the Association of
    American Medical Colleges. Together, MLA and AAHSL address health
    information issues and legislative matters of importance to the medical
    library community through a joint legislative task force which I
    currently have the honor of chairing.
        Mr. Chairman, first let me thank you and the members of the
    subcommittee for your leadership in securing a 7.2 percent increase for
    the National Library of Medicine in fiscal year 1998. With respect to
    NLM's budget for the coming fiscal year, I would like to touch briefly
    on the following three issues; (1) basic services and personnel, (2)
    outreach activities, and (3) access to health care information.
    NLM basic services and personnel
        As we approach the next century, the medical library community
    believes that basic library services must still be the foundation for
    NLM's long-term success as a service agency. Unfortunately, the level
    of demand for basic NLM services and the rate of increase in the cost
    of medical journals and books have both been in the 10 to 15 percent
    range in recent years, far outstripping the Library's budget increases.
    Moreover, the level of staffing at the Library has been held level over
    the past several years. Maintaining the current standard of
    acquisitions, indexing, cataloging, database searching, and lending
    will become more and more difficult, if not impossible, unless NLM's
    budget and level of staffing are increased to reflect these rising
    workloads and costs. As a result, we urge the subcommittee to consider
    the need for increasing support, in both budget and staff positions, so
    that NLM can meet its increasing service needs and insure that the
    quality of its programs is not compromised.
    Outreach programs
        NLM's outreach programs are of particular interest to both MLA and
    AAHSL. These activities, designed to educate medical librarians and
    other health care professionals about NLM and the information services
    it provides have proven to be extremely successful in improving the
    quality of our nation's health care.
        Although NLM has been able to educate a significant number of
    health care professionals through its outreach initiatives in the
    1990's, more work needs to be done in this area. There are still far
    too many health care workers in all parts of the country who are
    unaware that NLM and the National Network of Libraries of Medicine even
    exist. The need for a vigorous outreach program is now more important
    than ever. In 1997, NLM's databases became available free over the
    Internet and World Wide Web, opening them up to the general public and
    health professionals alike. Mr. Chairman, NLM's outreach mission will
    not be complete until all who need access to science-based health
    knowledge are familiar with NLM and the information resources it
    provides.
    Access to quality health care information
        Mr. Chairman, the National Library of Medicine, continues to be the
    critical investment agency for increasing the public's access to health
    care information. This is especially true for people living in
    medically underserved areas. For example, my institution maintains
    several telemedicine and distance learning sites throughout rural
    Louisiana. With the support of NLM technology we provide access to
    health information and education resources to some of our state's most
    at-risk citizens. In addition to its support of telemedicine, NLM's
    High-Performance Computing and Communications initiative and free
    Internet MEDLINE information service have empowered Americans with the
    ability to access the world's most extensive library of medical data
    directly from their personal computer.
        We in the health sciences library community applaud the Congress
    for having the foresight to provide NLM with the necessary resources to
    develop these programs. There is no question that these technologies
    are having a profound influence on the delivery of health care across
    the country. In order to realize the full potential of these programs
    it is crucial that Congress continue to provide NLM with adequate
    funding in fiscal year 1999.
    Fiscal year 1999 recommendation
        Mr. Chairman, as we celebrate the 200th anniversary of the Public
    Health Service this year it is important that we continue to prepare
    for the future. With the seemingly endless advances of the information
    age it is obvious that the National Library of Medicine will play a
    major role in the delivering health care in the 21st Century.
        Therefore, the Medical Library Association and the Association of
    Academic Health Sciences Libraries recommend a 15 percent increase in
    funding for NLM in fiscal year 1999. This figure represents a $24
    million increase over fiscal year 1998 and would bring the Library's
    total fiscal year 1999 appropriation to $185,362,750.
        In closing, I would like to make clear that although the medical
    library community strongly supports the concept of doubling NIH's
    overall budget in the next five years, we do not believe that these
    increases should come at the expense of other important Public Health
    Service programs.
        Once again, Mr. Chairman, thank you very much for the opportunity
    to present the views of the medical library community. If you have any
    questions please do not hesitate to contact me.
                                     ______

          Prepared Statement of Walter Digiusto, President, ESA, Inc.
        Mr. Chairman, thank you very much for the opportunity to submit
    written testimony regarding fiscal year 1999 appropriations for the
    National Institutes of Health (NIH), and the Centers for Disease
    Control and Prevention (CDC). I am Walter DiGiusto, President of ESA,
    Inc. of Chelmsford, MA.
        ESA is a biomedical research and technology development firm
    dedicated to improving the quality of our nation's health care through
    innovative instrumentation and services. In my testimony, I will
    discuss four issues of specific interest to our company and millions of
    Americans; (1) Lead Poisoning Prevention (2) Neurodegenerative
    Disorders, (3) the Small Business Innovative Research Program, and (4)
    Alternative Medicine.
    Lead poisoning prevention
        For over 25 years, ESA has focused on developing electrochemical
    sensors for the early detection and treatment of several chronic,
    environmentally induced disorders. These abnormalities include; lead
    poisoning, cancer in young children, brain injuries, metabolic
    disorders, and Alzheimer's and Parkinson's diseases. We began in 1970
    with the development of an instrument which allowed for the measurement
    of lead levels in children at the part per million level. This was done
    at the request of the Centers for Disease Control and Prevention which
    had been given the task of determining the degree of childhood lead
    poisoning in the United States.
        With the support of this subcommittee and CDC, we have recently
    developed a new hand-held, portable lead screening instrument. I very
    am pleased to inform the subcommittee that last September, Secretary of
    Health and Human Services Donna Shalala announced that the Food and
    Drug Administration (FDA) had given final approval to ESA's LeadCare
    System for use as a medical device.
        Mr. Chairman, the availability of the LeadCare System is truly a
    major step forward in the fight against childhood lead poisoning.
    Currently, blood samples from children tested for exposure to lead must
    be sent to a laboratory for clinical evaluation. With the LeadCare
    System, a sample of a patient's blood obtained by a finger stick can be
    analyzed by the System within 3 minutes, and the results are instantly
    displayed. Moreover, clinical studies conducted by ESA indicate that
    the new test is as reliable as established laboratory screening
    methods. Both ESA and the Department of Health and Human Services
    believe that the expediency of the LeadCare System will allow health
    care professionals practicing in urban, underserved areas to screen
    more high-risk children in transient inner-city communities.
        Finally, Mr. Chairman, I would like to state for the record ESA's
    strong support of the Centers for Disease Control and Prevention's
    Childhood Lead Poisoning Prevention Program. This program, funded at a
    level of $38 million last year, has played an effective role in
    increasing public awareness regarding childhood lead poisoning and the
    need for early detection. I encourage the subcommittee to continue its
    support of this important public health campaign.
                          neurodegenerative disorders
        In addition to our lead screening devices, ESA has developed
    several sophisticated analytical instruments which measure a broad
    range of neurochemicals. As a result, we have become extremely active
    in research related to neurodegenerative disorders like Alzheimer's and
    Parkinson's diseases. In studies conducted with NIH support, we have
    shown that it is possible to separate neurodegenerative diseases by
    their biochemistry patterns. When considered as a whole, the pattern of
    hundreds of compounds in an individual with Alzheimer's is uniquely
    different from those in a healthy individual or a person afflicted with
    Huntington's or Parkinson's. In addition to these findings, we have
    been encouraged by follow-up studies suggesting promising preventive
    therapies for neurodegenerative diseases, including the use vitamin E
    and other anti-oxidants.
        Mr. Chairman, ESA is committed to continuing to develop
    technologies that will assist the scientific community in the fight
    against neurodegenerative disorders. We are very pleased that in fiscal
    year 1998, the NIH Office of the Director received $22 million dollars
    for the study of these devastating diseases. We encourage the
    subcommittee to continue to emphasize the importance of brain disorders
    research as we approach the next millennium.
                   small business innovative research program
        Mr. Chairman, I am aware that questions have been raised regarding
    the merit of SBIR research projects funded by the National Institutes
    of Health. I would like to make it clear that the SBIR program is
    critical to the success of biotechnology firms like ESA. Throughout our
    existence, ESA has worked on several joint initiatives with NIH and CDC
    under the SBIR program. As a result of these collaborations, we have
    seen a positive return on the public's investment in the areas of job
    creation, balance of trade, reduction of health care costs, and the
    alleviation of suffering. Simply stated, the SBIR program has allowed
    ESA to successfully pursue research projects that we would have
    otherwise had to forego.
        ESA strongly supports President Clinton's fiscal year 1999 budget
    request of $289 million (an increase of $27 million over fiscal year
    1998), for NIH SBIR/STTR grants. We urge the subcommittee to support
    this vital program in fiscal year 1999.
                              alternative medicine
        Mr. Chairman, as you know, there has been an explosion in this
    country during the past decade in the field of alternative medicine.
    Public interest in the use of dietary and herbal supplements, vitamins,
    hormones, and other ``natural'' products for the purpose of disease
    prevention has spawned tremendous concern about safety and truth-in
    advertising. As a result, ESA has embarked on a analytical program
    aimed at identifying compounds and anti-oxidants found in vitamins,
    health foods, natural products, and cereals. Our goal in this endeavor
    is two-fold; (1) assist researchers and manufacturers of dietary
    supplements in the development of quality products, and (2) provide
    consumers with piece of mind in knowing that the products they use are
    safe.
        As the alternative medicine industry continues to expand, we look
    forward to increasing our role as one of the few firms in the country
    able to provide this type of sophisticated service. It is clear that
    the federal government will also play an enhanced oversight role in the
    years to come. Specifically, ESA views the Office of Alternative
    Medicine (OAM), and the Office of Dietary Supplements (ODS) at NIH as
    critical to insuring the integrity of the alternative medicine
    industry. We urge the subcommittee to provide adequate funding to both
    OAM and ODS in fiscal year 1999.
        Mr. Chairman, once again thank you very much for the opportunity to
    present our views. In closing, I would like to associate ESA with the
    Ad Hoc Group for Biomedical Research's recommendation of a 15 percent
    overall increase for the National Institutes of Health in fiscal year
    1999. We look forward to continuing to work with the subcommittee to
    improve the quality of health care for all Americans. If you have any
    questions please do not hesitate to contact me.
                                     ______

    Prepared Statement of Joanne Bakken Pease, Immune Deficiency Foundation
        Mr. Chairman, thank you very much for the opportunity to submit
    written testimony on behalf of the Immune Deficiency Foundation (IDF)
    regarding fiscal year 1999 appropriations for programs under the
    jurisdiction of the Subcommittee. My name is Joanne Bakken Pease, I am
    a volunteer with IDF's Washington State Chapter and I would like to
    tell you the story of my family's struggle with primary
    immunodeficiency diseases.
        My three sons and nephew have all been diagnosed with primary
    immunodeficiency diseases, which means that they were born with
    incomplete immune systems. In November 1985, my eldest son Curtis
    received his vaccine for measles, mumps and rubella. Curtis got the
    mumps from the vaccination in February 1986, and the doctor told me
    simply--these things happen. After three years of constant colds and
    pneumonia--Curtis was diagnosed with X-linked Agammaglobulinanemia. I
    was thankful when I learned there was treatment available for him.
    However, the treatment consisted of a very painful injection
    administered intramuscularly every ten days. This treatment, a pooled
    plasma derivative, replaced portions of his incomplete immune system.
    However, the pain involved caused this therapy to be a source of terror
    in our household, requiring four adults for administration.
        When my second son Jeff was ten months old we learned that he had
    contracted polio from the oral vaccine, signaling the presence of the
    same immunodeficiency. He was left with a withered right leg and a
    terribly deformed foot. Now both my beautiful boys received these
    painful shots. Three years later they both started getting their
    vaccine intravenously. Intravenous immune globulin was less painful and
    more effective, it reduced our infusions to once a month.
        Jeff has had six very painful orthopedic surgeries including,
    tendon transfers and releases, hip reconstruction, leg rotations and
    ankle repositioning. He is now ready for his seventh and eighth
    operations which will be complicated leg lengthenings. In addition, my
    nephew Joshua (born in 1988) and my third son Mitchell (born in 1990),
    were both born with XLA and have begun their treatments.
        Mr. Chairman, my children's lives are not what I had envisioned for
    them. Although we have learned to cope with the care necessary to keep
    them alive, the pain that I feel for the loss of my dream will never go
    away. We need to continue to focus on medical research so perhaps
    future generations will have the option of gene therapy and not have to
    suffer years of chronic care. In addition, we must continue to do
    everything we can to protect the nation's blood supply. To give you an
    indication of how important this is, our four boys receive a total of
    70 infusion per year!
        For fiscal year 1999, the Immune Deficiency Foundation recommends
    that the National Institute of Allergy and Infectious Diseases (NIAID)
    receive a 15 percent increase over last year. This percentage
    translates into $202.7 million over fiscal year 1998 and would bring
    NIAID's total appropriation to $1.55 billion. In addition, Mr.
    Chairman, I would like to make clear that although IDF strongly
    supports the concept of doubling NIH's overall budget in the next five
    years, we do not believe that these increases should come at the
    expense of other important Public Health Service programs.
        Finally Mr. Chairman, I would like to mention the important work
    being done at the Immune Deficiency Foundation on behalf of the
    approximately 40,000 people suffering from primary immune deficiency
    diseases. The Foundation, through a grant from NIAID, is developing a
    national registry of U.S. patients suffering from the most common
    immunodeficiencies. The registry is providing an important resource to
    physicians and investigators by giving them access to a more complete
    clinical understanding of these diseases. The clinical information
    contained in these registries will help determine the frequency of
    complications, long tem prognosis, and possibly open the gateway for
    gene therapy. I am very proud of the work of the Foundation, and I
    would like to express the need for these important initiatives to
    continue.
        Mr. Chairman, once again, thank you very much for the opportunity
    to submit written testimony on behalf of IDF. As you make your funding
    decisions regarding the fiscal year 1999 budget for NIAID I would ask
    that you please remember my boys.
                                     ______

                         National Institutes of Health
     Prepared Statement of Francis T. Ventre, President, Montgomery County
                                [MD] Stroke Club
        My name is Francis T. Ventre. I am president of the Montgomery
    County [MD] Stroke Club, a nonprofit organization for stroke survivors
    and caregivers, mostly family members. This club consists of some 425
    members as well as 100 professionals--physicians, therapists,
    hospitals, retirement homes, units of government and other caregivers.
        Our members range in age from the twenties to the eighties. Some
    manifest little visible signs of stroke. Others either have lost the
    ability to speak or need assistance to walk, dress, bathe, and eat.
    More than 1 million in this land have disabilities from stroke.
        Let me tell you about my stroke. I was professor of architecture
    and city planning at Virginia Tech since 1983. In 1988, Macmillan
    signed me up to write on the subject of ``building regulation'' for The
    Dictionary of Art, the 34-volume exposition with 6,700 contributors it
    was planning to publish.
        In February 1990, when I was swimming at Virginia Tech's War
    Memorial pool, I was struck with a transient ischemic attack [TIA], or
    a mini-stroke. Two days later, at North Carolina Baptist/Bowman-Gray
    Hospital in Winston-Salem, I suffered a major stroke, a ``left cerebral
    infarct in the middle cerebral artery distribution following the
    spontaneous dissection of the right internal carotid artery during an
    angiogram.'' I was left with an ``mild Broca's aphasia with verbal
    aphasia: [or a ``language problem'' and a ``residual right
    hemiparesis,'' [or my right arm didn't work]. There was my stroke.
        I was home when I thought of the ``building regulations'' article I
    had to writes, so I resumed. The Dictionary of Art came out in October
    1996, and the New York Times Book Review came out in August 24, 1997.
    My ``building regulations''--along with two others--as cited as ``those
    sections among the most memorable precisely because they're
    unconventional, hence thought-provoking.'' That's my story.
        Stroke, the third leading cause of death in the United States,
    strikes 600,000 Americans each year, killing more than 157,900. Stroke
    is the leading cause of permanent disability in the United States.
    Thanks to medical research, today, there are about 4 million stroke
    survivors in the United States and I am one of them.
        What do stroke survivors face? They face years of severe physical
    and mental impairment, loss of memory, cognitive skills, personality
    disorders, emotional distress and overwhelming medical expenses. Stroke
    will cost this nation an estimated $43 billion in medical expenses and
    lost productivity in 1998. My own expenses were $18,000 at the Bowman
    Gray Hospital in Winston-Salem plus many more thousands of dollars at
    rehabilitation, including physical therapy, occupational therapy and
    speech-language pathology and many more thousands of dollars at the
    National Rehabilitation Hospital in Washington, DC, and the Treatment
    and Learning Center in Rockville, MD.
        There is one thing that I want you to know about National Institute
    of Neurological Disorders and Stroke researcher John Marler, M.D. It
    came from the November 24, 1997 copy of USA TODAY, headlined ``Overhaul
    Urged for Handling of Strokes,'' upgrading stroke to a ``time-
    dependent, urgent medical emergency.'' The report, ``Rapid
    Identification and Treatment of Acute Stroke,'' describes how
    physicians, emergency care personnel and the public should respond to
    the finding that a drug called tissue plasminogen activator or t-PA,
    destroys the clots that dam up arteries, restoring blood flow to the
    brain. The drug t-PA, to be effective, must be given within 3 hours of
    the initial symptoms. Given in time, the drug improves the patient's
    chances of having minimal or no disability by 33 percent three months
    after surviving a stroke.
        I wish that the t-PA were available in 1990.
                                     ______

     Prepared Statement of Erin Bosch, on Behalf of the National Coalition
                         for Heart and Stroke Research
        Mr. Chairman, honorable members of the Committee, I am honored to
    have the opportunity to speak to you today. My name is Erin Bosch. Some
    of you may recall that last year I addressed this Committee on behalf
    of the National Coalition for Heart and Stroke Research. Today, I am
    here to represent not only myself, but also, the 32,000 children in the
    United States who are born with congenital heart defects each year.
        Most of us are aware that heart disease is the No. 1 killer and a
    leading cause of disability in adults in this nation. But few recognize
    that heart defects are the most common birth defect of the newborn. Of
    the 32,000 children born each year with heart defects, about 2,300 die
    before their first birthday. The rest of us live with the consequences
    of heart disease, and many have their lives cut short from heart
    failure.
        Thanks to the past funding for heart research about 1 million
    Americans born with heart defects are alive today. While we are
    grateful for each day to be alive, we unlike other healthy children,
    have not been able to experience what it is like to run the length of
    the soccer field without struggling for our next breath, nor have we
    experienced the thrill of scoring the winning basket for our school
    basketball team.
        I was born with a genetic heart disease called Hypertrophic
    Obstructive Cardiomyopathy. This disease has caused the heart muscle to
    overgrow and block the blood flow in and out of my heart. It also
    effects the valves of my heart causing the blood to back up in the
    wrong direction. This disease causes high risk for heart attack and
    sudden death from dangerous heart rhythms.
        One year ago in October, I was at the Mayo Clinic having open heart
    surgery. The procedure, called a septal myectomy, is designed to shave
    away a portion of the heart muscle that causes the obstruction. This
    procedure was originally pioneered at the National Institutes of
    Health's National Heart, Lung, and Blood Institute and was my last
    resort aside from transplant.
        It is funding that this Committee has provided that has allowed
    this type of successful research. Without this funding the option of a
    healthier lifestyle would not have been possible for me. I am one of
    the lucky ones. My surgery was successful and after one month at the
    Mayo Clinic I was able to return home. There have been some advances
    for children like me, although many still die prematurely.
        Most people think heart disease is a problem that only affects
    older people. But, I am living proof they are wrong. According to
    recent studies, 36 percent of young athletes who die suddenly have
    undiagnosed Hypertrophic Cardiomyopathy. Presently, there are at least
    35 different types of recognized congenital heart defects effecting the
    newborn population. Some can be corrected surgically--others cannot yet
    be repaired and these children die. One of these children might one day
    be your child or grandchild.
        I have great faith in the determination of our scientific
    researchers who work day and night to find new treatment methods for
    those who suffer with illness and disease. I also have great faith in
    you as the doorkeepers of governmental funding for the National Heart,
    Lung, and Blood Institute to provide the necessary funds for children,
    who through no fault of their own, have been born with heart defects.
        Thank you for the opportunity to speak to you today. I am confident
    that you will not forget me and the other young people like me who
    depend on you for this funding and subsequent research. We, too, desire
    to live long, productive lives.
                                     ______

      Prepared Statement of Jack Lavery, Chairman of the Board, the Lupus
                             Foundation of America
        My name is Jack Lavery, and while my full-time job is that of
    Senior Vice President of Merrill Lynch & Company, I am here today
    representing the Lupus Foundation of America as its Chairman of the
    Board. I am also representing the nearly 1.4 to 2 million Americans
    living with lupus. One of those people is my daughter.
        The Lupus Foundation of America is a national advocacy organization
    dedicated to finding the cause and cure for systemic lupus
    erythematosus, a chronic inflammatory disease in which the body's
    immune system fails to serve its normal protective functions and
    instead forms antibodies that attack healthy tissues and organs. In
    layman's terms, it is the body turning against itself. Lupus is
    incurable and extremely difficult to diagnose because, generally, no
    two people with systemic lupus have exactly the same symptoms.
    Moreover, it is a devastating illness. Thousands of Americans die each
    year from lupus-related complications. For those living with the
    illness, the disease wreaks havoc on their quality of life, with the
    side-effects for current treatments of lupus-related problems often
    causing worse problems than the disease itself.
        Lupus is often called a ``woman's disease'' because 90 percent of
    lupus patients are women. The relative incidence of lupus is even
    greater among African American, Asian American, and Hispanic females
    than among Caucasian females. A market research study conducted by the
    Lupus Foundation of America in 1994 showed that as many as 1 out of
    every 102 women, as well as 1 out of every 62 women of color, may have
    lupus. Lupus can therefore be seen as a diversity issue in 1998.
        The Lupus Foundation of America wishes to thank you, Mr. Chairman,
    and the members of this committee for your leadership role in ensuring
    the continuation of research on the immune system at the National
    Institutes of Health and, in particular, the National Institute for
    Arthritis, Musculoskeletal and Skin Diseases (NIAMS). We want the
    Subcommittee to understand how important such high quality research on
    immune dysfunction is to those with lupus. I therefore urge the members
    of this committee to support funding for the NIAMS at the $315.9
    million dollar level recommended by the Ad Hoc Group for Medical
    Research Funding and supported by the NIAMS Coalition. This level of
    funding represents a fifteen percent increase over last year's funding
    and would be a significant step toward recognizing the importance of
    increasing medical research funding. This level of funding is crucial
    for three reasons.
        First, it is a pivotal time for lupus research. The outlook for
    lupus patients has improved in some respects over the last two decades,
    but the side effects of the conventional treatments can ultimately be
    as dangerous as the disease itself. Better diagnostic techniques and
    evaluation methods have given physicians the tools to manage lupus
    symptoms and complications more effectively. However, a cure is still
    not within our reach. While scientists believe there is a genetic
    predisposition to the disease, environmental factors--such as
    infections, ultraviolet light, the sun, stress, and certain drugs--are
    also thought to play an important role in triggering lupus. We must
    know what causes lupus before we can develop a cure, and this is where
    research plays a critical role.
        NIAMS funds many individual researchers across the United States
    who are studying lupus. To help scientists gain new knowledge, NIAMS
    has also established Specialized Centers of Research devoted
    specifically to lupus research. In addition, NIAMS is funding a lupus
    registry that will gather medical information as well as blood and
    tissue samples from patients and their relatives. This will give
    researchers across the country access to information and materials they
    can use to help identify genes that determine susceptibility to the
    disease. Promising areas of research include identifying the lupus
    susceptibility genes, searching for environmental agents that cause
    lupus, and developing drugs or biologic agents that cure lupus.
        Recently, researchers at the University of California at Los
    Angeles, with funding from NIAMS, the NIH Office of Research on Women's
    Health, and the Lupus Foundation of America, have identified the
    location of a gene that predisposes people to systemic lupus across
    ethnic groups. This discovery and others like it provide important new
    insights on why people get the disease and may help researchers develop
    new treatments. It is a significant and positive step toward finding a
    cause for lupus--a breakthrough where additional research is still
    critical.
        In November 1997, the National Institutes of Health, the SLE
    Foundation, and the Lupus Foundation of America were among several
    cosponsors of a historic scientific conference entitled Novel
    Perspectives on Systemic Lupus Erythematosus: From Basic Research to
    Clinical Applications. The conference represented a significant
    recognition of the importance of continuing new research which will
    hopefully lead to important clinical applications for lupus patients.
        Second, I believe lupus is the prototype for autoimmune diseases,
    as well as for the management of chronic disease more generally.
    Research on lupus, therefore, has far-reaching consequences. Any
    insight we can gain from high quality research on immune dysfunction
    could provide important information on other autoimmune diseases and
    could potentially reveal new and different ways to control other
    chronic diseases.
        Finally, LFA research indicates that as many as 2 million Americans
    report having been diagnosed with lupus. This year, we estimate that
    many thousands of people will call our organization's hotline. Most of
    the callers are individuals recently diagnosed with lupus or their
    family members who seek answers to questions about this disease. Only
    through further research will we find ways to improve both the
    prognosis and the quality of life of the many people living with lupus,
    including my own daughter, Dena.
        Dena developed lupus at the age of 13, although it was initially
    incorrectly diagnosed as juvenile rheumatoid arthritis and then as
    vasculitis, a non-specific inflammation of the blood vessels. At 19,
    she was finally correctly diagnosed with systemic lupus. She is 29 now.
    She has been close to death at least twice and has permanently lost her
    vision in one eye as a result of lupus-related optic neuritis.
        The side effects of treatments for lupus are often as devastating
    as the disease itself. As in my daughter's case, protracted use of
    steroids can cause osteonecrosis (i.e. bone death). She also has had to
    undergo multiple core decompressions in an attempt to regenerate blood
    vessel growth. These involved individual operations drilling her left
    and right knees, left and right hips, and left elbow. Though at an age
    when most of her peers do not even have to think about such operations,
    my daughter has now also had surgery for a bilateral hip replacement
    (i.e. two prosthetic hips). Lupus is active in her kidneys, and her
    treatment has involved the toxic chemotherapy drug cytoxan. The side
    effects of this drug can grow cumulatively with protracted use and can
    include sterility, bladder cancer, and lymphoma.
        I am proud to say that, despite these setbacks, my daughter has
    moved forward with her life like a true fighter and is currently a high
    school English teacher. She is an example of the courage of the many
    Americans who fight lupus everyday.
        Last year, members of the Lupus Foundation of America and its many
    chapters spent a significant amount of time raising funds which are
    used to fund our own research, education, and support programs.
    However, the amount of funds lupus patients and their families can
    raise on their own is limited and relatively small compared to what is
    needed. Federal support of medical research in general is critical if
    we are to find a cause and a cure for lupus and other autoimmune
    diseases. The Lupus Foundation is committed to developing and
    maintaining a partnership between the private and public sectors on
    lupus research. Only through such a collaboration can we ensure that
    the highest-quality research is conducted and leads to a cure for this
    devastating disease.
        In summary, funding of lupus research is critical because we are at
    a pivotal time in lupus research; research on lupus could benefit those
    suffering from other autoimmune and chronic illnesses; and, finally,
    many thousands of Americans suffer a decreased quality of life due to
    the devastating nature of this disease. The Lupus Foundation of America
    is committed to push for federally supported research dollars which
    will yield answers to this mysterious disease. I cannot stress enough
    the importance of your support so that research on autoimmune
    dysfunction continues without interruption. Thank you for your
    attention, and my daughter also thanks you, as I'm sure all lupus
    patients and their families do.
        The Lupus Foundation of America neither receives grants or
    subgrants from the Federal Government nor has any contracts or
    subcontracts with the Federal Government. Through the generosity of
    Federal employees throughout the United States and around the world, we
    receive contributions of approximately $500,000 per year through the
    Combined Federal Campaign.
                                     ______

    Prepared Statement of Lorne M. Mendell, Ph.D., on Behalf of the Society
                                for Neuroscience
        Mr. Chairman, my name is Dr. Lorne M. Mendell. I am the president
    of the Society for Neuroscience and a professor at the Department of
    Neurobiology and Behavior at the State University of New York at Stony
    Brook. I am testifying on behalf of the Society for Neuroscience, the
    largest scientific organization in the world dedicated to the study of
    the brain and spinal cord. The Society for Neuroscience consists of
    more than 28,000 basic and clinical neuroscience researchers affiliated
    with universities, hospitals and scientific institutions throughout
    North America and abroad. Mr. Chairman, we are very grateful for this
    opportunity to give our testimony, and I want to express our gratitude
    to this Subcommittee, and especially to you Mr. Chairman, for the high
    priority you have placed on continued funding for biomedical research
    at the National Institutes of Health.
        The field of neuroscience, only a quarter of a century old, has
    already made major contributions to the welfare of our nation's
    citizens. New insights and effective treatments have been developed for
    previously hopeless diseases. For example, current research has allowed
    us to understand mechanisms of pain so that various remedies may be
    developed for burn victims, arthritis sufferers, and many others to end
    unnecessary pain and suffering. Without adequate funding, our fight
    against neurological diseases and disorders such as Alzheimer's,
    Parkinson's, mental retardation, stroke, severe depression,
    schizophrenia, and spinal cord injury, to name just a few, would suffer
    a serious setback.
        We at the Society for Neuroscience are extremely grateful that this
    Subcommittee is committed to supporting our work by increasing funding
    for NIH; your efforts are truly appreciated. We were especially
    pleased, Mr. Chairman, by your efforts last year concerning fiscal year
    1998 appropriations. We know that with your leadership on this
    Subcommittee, biomedical research has a champion in the Senate and know
    that you will strongly support NIH for fiscal year 1999. We fully
    support the goal of doubling the budget of NIH over the next 5 years,
    as has been advocated by many in the Congress.
        We have at our fingertips the necessary tools and resources to make
    significant progress in our fight to cure neurological diseases and
    disorders; all we need are the necessary funds to build upon what we
    already know. Twenty years ago, the field of neuroscience was little
    known to the general public. Now, every one of us knows someone who
    suffers from some type of neurological problem. In addition to personal
    experience through our family and friends, we see everyday when we open
    up a magazine, or turn on the television, that too many people are
    suffering from neurological disorders. We at the Society have become
    more involved with our patient advocacy groups, as they are the people
    who are truly affected by our research. After hearing from them, we
    learn of their day-to-day struggles. As researchers, patient advocacy
    groups and members of Congress work together, the nation will become
    more familiar with the progress that is occurring in our labs and will
    recognize that funding is still needed to expand upon what we already
    know. If we can double the budget of NIH, we can change some of these
    sad, and all too-familiar stories, into medical success stories.
        Brain diseases affect more than 50 million Americans annually at
    costs exceeding $400 billion in direct costs for clinical care and in
    lost productivity. The more than 1,000 disorders of the brain and
    nervous system result in more hospitalizations than any other disease
    group. The prevalence of brain disorders in the United States, together
    with high annual costs for treatment, combine to make these conditions
    the number-one public health problem now confronting this nation.
        But there is good news that needs to be told, and as I've said, we
    are making progress. The cost- effectiveness of investing in biomedical
    research has been proven as there are many examples of cost savings
    from research conducted at NIH. A few examples of the estimated annual
    economic costs of several diseases include stroke ($40 billion),
    Alzheimer's disease ($90 billion) and all mental disorders ($148
    billion). In addition to improving people's lives by seeking cures for
    these and other diseases, we can also save money in the long run if we
    invest now. In the mental illness field, consider patients diagnosed
    with schizophrenia. A drug, clozapine, has enabled schizophrenic
    patients to leave hospitals earlier than in the past and in some cases
    even return to work. These cost savings total $23,000 per patient
    annually, which translates into an approximate overall savings of $1.4
    billion annually. Another example includes lithium therapy for manic-
    depressive illness, which has saved the U.S. economy more than $145
    billion since 1970, over $5 billion per year. In addition to these
    examples of mental illness, one can also look to the progress being
    made in stroke research. About 400,000 people suffer from strokes
    caused by blockage of blood flow (ischemic stroke) each year. Patients
    who endure ischemic strokes and who receive emergency treatment with
    the clot-dissolving drug t-PA within three hours of the start of their
    symptoms are 30 percent more likely to survive a stroke with little or
    no disability. A soon-to-be-published analysis of the economic benefits
    of using t-PA shows that when the drug is appropriately used, there is
    a considerable decrease in the long-term care costs of stroke,
    particularly costs of nursing home and rehabilitative care. A final,
    more general example, involves drug abuse. For every dollar spent on
    drug use prevention, communities can save $4 to $5 in costs for drug
    abuse treatment and counseling. These are just a few examples, and it
    is important to note that NIH is working on an economic analysis that
    will be available in the near future that highlights even more areas of
    cost savings.
        We at the Society for Neuroscience realize the difficulty in
    finding money for biomedical research. However, modern neuroscience is
    on the threshold of making important scientific breakthroughs in a
    number of brain diseases, which, for centuries, have perplexed
    clinicians and ravaged those affected. To lose this momentum now would
    be detrimental for the health of the nation, to say nothing of its
    economic health. This makes increased investment in neuroscience
    research not only an absolute necessity, but among the highest
    priorities for the appropriations made by this Subcommittee. We feel
    that it is vital that the necessary funds are appropriated to continue
    to achieve the tremendous advances and breakthroughs that are within
    our reach. It is our hope that funding for all biomedical research will
    be increased, as discoveries at one Institute carry over to work being
    done by other Institutes at NIH. The main goal is to increase funding
    overall, so that further progress can be made in the hopes of ending
    these debilitating disorders and diseases.
        Thanks to this Subcommittee's dedication and hard work, biomedical
    research has become a priority in this nation. When this Subcommittee
    increased funding at NIH for fiscal year 1998, you let us know that you
    were doing everything possible to see that our goals are reached. It is
    encouraging for our members to know that they have the support of the
    Senate Appropriations Subcommittee on Labor-HHS. With this in mind, the
    members of the Society for Neuroscience will continue to work
    diligently to continue making progress in research in the neurosciences
    to benefit the health and well-being of the American public.
        It is for these reasons, that we recommend a 15-percent increase
    over fiscal year 1998 for NIH. We support the proposal of the Ad Hoc
    Group for Medical Research Funding, made up of approximately 200
    patient and voluntary health groups, medical and scientific societies,
    academic and research organizations and the biotechnology industry,
    which are dedicated to the future of the nation's biomedical and
    behavioral research. Our recommendation calls for a 15-percent increase
    as a first step toward doubling the NIH budget over the next 5 years.
    We recognize the difficulty in achieving this goal under current
    spending limits, and encourage the Congress to explore all possible
    options to identify the additional resources needed to support this
    increase.
        In conclusion, the Society for Neuroscience is grateful for this
    opportunity to present testimony to this distinguished Subcommittee. We
    encourage members of the public and the Subcommittee to visit Brain
    Briefings, our monthly newsletter, on our Web site (http://www.sfn.org/
    briefings/) to learn how basic neuroscience discoveries lead to
    clinical applications. This testimony is also available on our Web site
    (http://www.sfn.org/legislative/index.html).
        Thank you again for your continued support.
                                     ______

         Prepared Statement of Tish Tanski, President, Association of
                        Independent Research Institutes
        On behalf of the Association of Independent Research Institutes, I
    am pleased to submit this statement to the Subcommittee on Labor, HHS,
    Education and Related Agencies of the Senate Committee on
    Appropriations regarding the fiscal year 1999 proposed budget for the
    National Institutes of Health.
        AIRI is an association of 85 not-for-profit, independent research
    institutes that conduct basic and clinical research in the biomedical
    and behavioral sciences. Our members receive about 10 percent of the
    extramural funds awarded by the National Institutes of Health (NIH), as
    well as a significant proportion of National Science Foundation awards.
    AIRI institutes also receive funding from other federal agencies,
    including the Centers for Disease Control, Department of Energy, and
    the Department of Defense, as well as from voluntary health agencies,
    private foundations, and corporations.
        AIRI members are distinct from other organizations involved in
    research--such as universities, hospitals, and for-profits--in their
    organization, mission, and size. They are independent; their primary
    mission is research; and their institutes tend to be relatively small
    in size--with budgets from less than $1 million to many tens of
    millions of dollars.
        Over the past few years, this subcommittee could have sacrificed
    NIH funding in the name of deficit reduction or for other subcommittee
    priorities. But instead, you stood firm in your support of NIH and its
    mission. Now, we ask you to demonstrate your support for the work of
    NIH once again--by providing a 15-percent increase in funding for
    fiscal year 1999, as called for by the Ad Hoc Group For Medical
    Research Funding. Such an increase is an essential first step in
    realizing the goal of doubling the NIH budget over the next five years.
        As a direct result of this subcommittee's support over the last
    decade, an ever-expanding base of scientific knowledge about health and
    disease is being developed, a base that has already begun to
    revolutionize both the concept of scientific inquiry and the practice
    of medicine. AIRI supports the Ad Hoc Group's position that sustained
    growth in funding for the NIH is needed to build upon past scientific
    achievements, address present medical needs, and anticipate future
    health challenges. Volatility and dramatic fluctuations in support
    levels can be as harmful to the enterprise as inadequate growth rates.
        Strong, steady growth for the NIH budget is needed not merely to
    continue at an accelerated rate the science and the tools of the past
    decade. The fundamental way science is conducted is changing at a
    revolutionary pace. It requires investment in new technologies, new
    infrastructure, and personnel with new sets of skills. The higher level
    of investment is necessary to ensure that the research community can
    maximize these fundamentally new approaches to discovery.
        AIRI institutes perform biomedical and behavioral research of the
    highest quality. Our researchers have a significantly higher than
    average success rate in competing for NIH research project grants. Our
    institutes understand what has been accomplished with NIH support, and
    we know how much more could be done with additional NIH funding.
        Here are just a few examples of the biomedical and behavioral
    sciences work in which AIRI institutes--with critical support from the
    National Institutes of Health--are taking the lead:
        At the Whitehead Institute for Biomedical Research in Cambridge,
    Massachusetts: Dr. Peter Kim and his colleagues produced the first
    high-resolution picture of the protein fragment that enables HIV (the
    AIDS virus) to invade human cells--work that has immediate implications
    for new drug design.
        At the Oklahoma Medical Research Foundation in Oklahoma City:
    Researchers have been able to establish a powerful association between
    Epstein-Barr Virus (EBV) and lupus, a serious autoimmune disorder.
        At the Neuropsychiatric Institute in Fargo, North Dakota:
    Researchers are evaluating the importance of taste preference in
    determining the vulnerability to substance abuse.
        At the John B. Pierce Laboratory in New Haven, Connecticut,
    researchers are working to determine:
      --The means by which cells lining the blood vessel walls communicate
            with each other to convey messages about blood flow control--
            thus acting to prevent blockages leading to stroke;
      --The source of production of nitric oxide in lungs during
            infection--which acts to dilate lung airways and thus act to
            prevent adult respiratory distress syndrome; and
      --The biological basis for the increased resistance to chronic
            diseases such as myocardial infarction, stroke, and diabetes
            conferred by increased physical activity in older people.
        On behalf of the AIRI membership, I want to extend our appreciation
    to you and the members of the Subcommittee for your support of NIH and
    its missions. We hope you will consider our statement in strong support
    of a 15-percent increase for NIH as you prepare the fiscal year 1999
    Labor, HHS, Education and Related Agencies appropriations bill.
        Thank you for your consideration of AIRI's views on the NIH budget.
                                     ______

       Prepared Statement of Gloria E. Reich, Ph.D., Executive Director,
                         American Tinnitus Association
        I represent the American Tinnitus Association and speak for more
    than 50 million people in this country who have tinnitus and especially
    for the 300,000 people who have contacted our organization for help.
    These people for the most part consider this hearing problem, tinnitus,
    to be a major deterrent to normal living. Imagine, if you will,
    listening to sounds like ringing, hissing, roaring or clicking within
    your head for 24 hours a day for the rest of your life.
        Tinnitus is most commonly caused by exposure to loud noise. It
    often goes along with hearing loss and thus, formerly, was thought to
    be a condition afflicting the elderly. Today's generation of hearing
    damaged people in their thirties and forties forces us to rethink that
    position and we now realize that tinnitus is a condition that can
    adversely affect the lives of people of any age.
        Every day our mail brings hundreds of requests for help. Perhaps
    this brief sampling of letters will help you understand the distress of
    this invisible condition.
        ``I received your letter concerning tinnitus and I thank you so
    much. I don't know who to turn to or what to do. I have spent almost
    all of my savings on paying doctor bills that my insurance didn't
    cover.'' I have lost friends over what I have, my family still finds it
    hard to believe I have tinnitus. I don't know anyone with tinnitus and
    my family and co-workers have never heard of it. This sizzling in my
    ears seems to be getting worse. When I couldn't work for 2\1/2\ months
    people thought I was crazy. I was scared and still am.'' (SD, female,
    age 46)
        ``I received your magazine Tinnitus Today and I look forward to
    receiving it. I have tinnitus very bad. Many times I thought of ending
    my life as sometimes it is unbearable. I've gone to so many ear, nose
    and throat doctors and spent so much money on help. They treat my
    sinuses or prescribe Niacin or other vitamins that don't help. I had
    CAT scans too. I've tried everything I can find but with no relief. I
    hope some help is on the way.'' (CN, female, age 75)
        ``I am writing to you in total desperation. My father has tinnitus
    and it has become progressively worse in the last year. We have tried
    going to ear, nose and throat specialists, numerous other doctors,
    including neurologists, but with no luck. My father's health is
    deteriorating each day as the ringing is constant. It has been loud and
    constant for him for the past 6 months. He hardly ventures out of bed
    anymore. He is also blind which makes it that much worse. Please,
    please I am begging you not to disregard this letter. You are probably
    our last attempt at some kind of help or support. I am afraid that I
    may lose my father because of this ``crazy'' problem.'' (JC, from
    Delaware; family was referred to well established tinnitus support
    group and audiologist at Greater Baltimore Medical Center)
        ``My name is Bob and on many occasions when my ears were ringing
    real bad I thought of killing myself. I didn't as somehow my conscience
    wouldn't let me. But now this ringing is in my left ear as well with a
    different sound from the right one. Most of the time these sounds are
    so loud I lose my balance and my sense of direction and forget
    everything. My doctors tell me to bear with it, don't worry, and
    everything will be alright. They can't understand what its like unless
    they have it too. Maybe then they would help!'' (RH, male, from
    Nebraska)
        ``I am 39 years old and the thought of living with this the rest of
    my life is more than I can handle. I have to deal with this ringing
    that is literally driving me insane. I can't sleep and I can hardly
    concentrate at work.'' (LP, female from Florida)
        ``My life is in shambles because of the intensity of ringing in my
    ears. It has left me without a job. I cannot study or work well at
    anything. (PT, male from Texas)
        ``I am a registered nurse and have been fired from my job and
    labeled professionally incompetent because I have tinnitus. They
    implied I was mentally ill because I described these head noises.
    Absolutely nothing was done at work to accommodate my handicap in spite
    of my good reputation as a nurse.'' (HL, 60 yr. old female from New
    Mexico)
        ``I've tried to continue my job which I have had for over twenty-
    six years, but I had to give it up after four months of overwhelming
    stress from the intense ringing in my ears. I can't sleep and my
    physical condition is weakening.'' (JD, male)
        ``In the course of the last seven years of suffering with tinnitus,
    I've lost my job of seventeen years, my automobile, life and health
    insurance, real estate, money, and a considerable portion of my sanity.
    It is with much hope that I appeal to you for help.'' (AP, male, from
    California)
        ``My life has become a horror story since I cannot find any peace
    and it has become impossible for me to function normally. I have been
    submerged into depression because my quality of life is altogether
    gone. I cannot even concentrate at work.'' (FB, 37 year old male from
    California)
        ``I am an electronics engineer and my home life and job are in
    jeopardy. I have had the ringing for some time but it has gotten worse
    to the point where I can no longer read effectively or concentrate for
    any length of time.'' (JV, male, from Connecticut)
        Many celebrities have been identified as having tinnitus but few of
    them have been willing to speak out. Tony Randall has spoken about his
    tinnitus both on television and before the Senate Appropriations
    subcommittee. William Shatner told the House subcommittee of acquiring
    tinnitus while on the set of Star Trek. ``Rock'' musicians are
    particularly susceptible to hearing loss and tinnitus; Pete Townshend
    of ``The Who'', and Mickey Hart of the ``Grateful Dead'' are just two
    who have identified themselves as having ``musical self-inflicted
    tinnitus''. Bob Hope and Al Unser have it as does Barbara Streisand and
    Lisa Minelli. Even former President Reagan and former first lady
    Rosalyn Carter experience tinnitus. Needless to say, many veterans have
    tinnitus from the loud noises of artillery fire and heavy equipment.
    The Veterans Administration spends some $90 million a year in
    compensation for tinnitus. Airplane pilots and drivers of large trucks,
    railroad workers, steelworkers, automobile body builders, miners,
    farmers who drive tractors, even housewives who run vacuum cleaners,
    lawnmowers and other household equipment have found their hearing
    damaged by loud sounds.
        ATA along with other hearing related organizations worked for the
    establishment and funding of the National Institute on Deafness and
    Other Communicative Disorders. Along with our joy at seeing the new
    institute underway came the dismay of once again seeing tinnitus take
    the hindmost with respect to research project funding even though 2\1/
    2\ times as many Americans suffer from tinnitus as have hearing loss.
    We were, however, nothing if not optimistic and hoped that research
    about tinnitus would increase. Our patience was rewarded when the NIDCD
    held a tinnitus workshop in 1995 and subsequently funded nearly $1
    million in studies. Those studies have spawned more, and this year the
    NIDCD awarded a larger grant of $1.5 million for tinnitus research.
    There'll be another workshop this year too, for refining goals and
    defining projects. We're satisfied with this good beginning, but we're
    hopeful that it is only a beginning and that more funding and more
    research will bring the cure that tinnitus sufferers want and deserve.
    ATA has done its share as well. Over the last 17 years we've given more
    than one million dollars for tinnitus research. The six latest of these
    projects have provided the pilot data required by the NIDCD for
    tinnitus studies they have been funded over the last 2 years. In spite
    of these great strides people ask us all the time why can't progress
    come more quickly.
        Allow me to cite an example. In 1937, Robert Lewy reported tinnitus
    relief for varying lengths of time and in varying types of tinnitus
    through the use of procaine hydrochloride. It took 40 years for
    researchers to stumble on a similar effect with a comparable drug,
    lidocaine. Now, it has been another 20 years and although there have
    been more than 40 studies since the late 1970's about these types of
    drugs and their effect on tinnitus, nothing clinically useful has
    emerged. The medical community generally concedes that intravenous
    lidocaine suppresses or stops tinnitus in almost all cases. In the
    early 1980's an oral analog of lidocaine called tocainide (Tonocard)
    was developed and tested with disappointing results. Since then little
    if any progress has been made toward further investigations to isolate
    the critical ingredient in lidocaine that has a positive effect on
    tinnitus. Can you see why people with tinnitus find it so frustrating
    when their problem is either ignored or trivialized by the medical
    community? Admittedly, tinnitus itself is not life threatening, in fact
    people with tinnitus may look the perfect picture of health. The
    letters and telephone calls we receive, however, confirm that a large
    number of people with tinnitus experience significant stress which
    interferes with their lives and their ability to work and to interact
    socially.
        People with tinnitus want help in their lifetime. They are
    experiencing a problem which has high social costs for our country. A
    small survey in the mid-80s revealed that about 14 percent of those
    with tinnitus had to change jobs or quit working because of it. 14
    percent of the estimated 50 million cases is 7 million people who are
    no longer productive members of our society. You, as legislators, look
    for ways to trim costs of government. Here is a classic example of how
    money spent for research and treatment development can directly effect
    the economy. If tinnitus could be alleviated, these people would be
    able to resume working, become contributing members of society, and
    experience a better life.
        The people who are suffering have told their story far better than
    I can. Hear their plea and help them by funding significant tinnitus
    research through the National Institute on Deafness and Other
    Communication Disorders.
                                     ______

         Prepared Statement of Jeffrey Kern, M.D., President, American
                        Federation for Medical Research
        Thank you for the opportunity to present formal testimony to your
    subcommittee. The American Federation for Medical Research (AFMR) is a
    national organization of 7,000 physician scientists--primarily medical
    school faculty members--engaged in basic, clinical, and health services
    research.
        The AFMR wants to express its deep appreciation for this
    Subcommittee's strong support for the National Institutes of Health. We
    are encouraged by proposals introduced in the House and Senate to
    double the NIH budget over the next five years. However, it is
    important to assure that a significant portion of these additional
    funds be allocated to much needed initiatives to strengthen NIH
    extramural clinical research programs. We commend Subcommittee Members
    Cochran and Reid for their leadership in sponsoring H.R. 3001, the
    Clinical Research Enhancement Act, authorizing additional funding for
    new clinical research career development and research project awards.
    Unfortunately, while we await enactment of this legislation, American
    clinical research continues its decline. The AFMR urges this
    Subcommittee to move forward this year and propose additional NIH
    funding to revitalize our nation's clinical research effort.
                   the problems confronting clinical research
        Through clinical research, basic science discoveries are applied to
    the study of human physiology, to research on a disease or condition,
    or to the initial study of a potential therapeutic intervention.
    Sometimes referred to as ``translational'' or ``integrative'' research,
    clinical research leads to the ultimate dividend of the NIH investment
    in basic science: improved methods of preventing, treating or curing
    disease and disability. Challenges to clinical research slow progress
    in medicine. Accordingly, it is critically important that steps be
    taken immediately to address the problems confronting clinical
    researchers and their patients. These include:
      --The loss of a generation of young clinical investigators faced with
            enormous medical school tuition debts and the absence of
            structured, well-supported training and career development
            programs;
      --The inability of academic medical centers to sustain internal
            mechanisms of support for clinical research because of cost-
            containment required by fierce competition in the health care
            marketplace; and
      --The declining infrastructure for clinical research, most notably
            the insufficient funding provided to the NIH-funded General
            Clinical Research Centers.
        It should be noted that private industry provides significant
    support for clinical research and clinical trials aimed at the
    development of new products. However, funding is extremely limited for
    clinical research that may not offer a product ``pay off.'' In the
    past, this research was subsidized internally by our nation's academic
    medical centers. However, competition and cost-containment have all but
    eliminated the ability of these institutions to continue as the
    principal funders of early-stage translational research. Today, and for
    the foreseeable future, such research requires NIH funding.
        In addition, of course, NIH funding is critically important for the
    training and career development of clinical investigators. Our major
    difficulty in mounting and continuing major studies across the nation
    is the inability to recruit and sustain a sufficient cadre of clinical
    investigators to oversee the effort and interact with the patients.
    Steps must be taken to initiate a virtual crash program for the
    training of clinical investigators.
                   solutions to the clinical research crisis
        The challenges confronting clinical researchers and their patients
    have received much attention but little action over recent decades. Of
    particular importance, in September of 1994, the Institute of Medicine
    of the National Academy of Sciences published a report on the
    opportunities and challenges confronting clinical research. The IOM
    recommendations are the foundation of the Clinical Research Enhancement
    Act (H.R. 3001). More recently, in December of 1997, the NIH Director's
    Advisory Committee on Clinical Research presented its report offering
    similar recommendations. Attachment 1 is a side-by-side analysis
    demonstrating the close concurrence between H.R. 3001 and the Advisory
    Committee's recommendations.
        The AFMR believes that this Subcommittee must take action to
    provide additional funding for the initiatives that have been
    recommended by the Institute of Medicine, the NIH Director's Advisory
    Committee, and the 140 organizations that support H.R. 3001. This would
    require an additional $60 million--less than half of a percent of the
    NIH budget--to fund these initiatives including:
      --$1 million to expand the existing NIH loan repayment program for
            intramural scientists to include physician-scientists in the
            extramural community;
      --$3 million to support grants to fund Masters' and Ph.D., programs
            in clinical investigation;
      --$3 million for the creation of a 5-year career development award
            for clinical researchers; and
      --$52.5 million to establish an ``innovative medical science awards''
            program.
        In addition, the AFMR urges this Subcommittee to take steps to
    increase substantially funding for the NIH-sponsored General Clinical
    Research Centers across the country. These ``safe havens'' for clinical
    research are vitally important. As noted in the Institute of Medicine
    report, funding for the GCRCs has not kept pace with NIH-wide budget
    growth in recent years. The importance of the GCRCs is emphasized in
    the report of the NIH Director's Advisory Committee for Clinical
    Research:
        The GCRC program has been highly successful and has contributed
    significantly to clinical research. It provides one of the few
    government mechanisms that allows for quick turn-around of small-scale
    pilot clinical studies. The Panel considers that the importance of the
    GCRCs to the national clinical research enterprise, both as
    infrastructure for the conduct of research and for the education and
    training of clinical researchers, cannot be overemphasized. It believes
    that the NIH should increase its financial support for these important
    centers.
        Last year, in the report accompanying the fiscal year 1998
    appropriations bill, this Subcommittee expressed concern about the
    reductions made in GCRC grants below advisory council-approved budgets.
    The Subcommittee requested a report from the National Center on
    Research Resources (NCRR) as to the funding necessary to bridge this
    gap. For fiscal year 1999, the AFMR recommends a budget increase for
    the GCRCs sufficient to:
      --Bridge the average 25 percent cut below Advisory Council approved
            budgets for the GCRCs (estimated $30-40 million);
      --Cover the cost of increased hospital ancillary expenses as well as
            the increased complexity of illness for patients seen in GCRCs
            ($10 million);
      --Fund three additional centers ($5 million);
      --Expand the Clinical Associate Physician and Minority Clinical
            Associate Physician training programs in the GCRCs ($2
            million); and
      --Expand the GCRC clinical scholars program ($0.5 million).
        In summary, to enable the GCRCs to maintain the vital clinical
    research programs of academic medical centers, the GCRC budget should
    be increased from $167 million to a level of at least $215 million.
        As you consider our proposal for specified additional funding for
    clinical research initiatives, please keep in mind that such funds
    would not be directed to particular diseases or investigators. These
    funds would go to peer reviewed proposals to translate basic scientific
    discovery to the study of any disease. Rather than special interest
    set-asides, these initiatives are more comparable to the Subcommittee's
    directives to fund the extramural facilities construction program and
    the new clinical research center on the NIH campus. They will advance
    the goals of the NIH as a whole, will benefit all NIH Institutes and
    Centers, and will boost existing NIH efforts focussed on women's
    health, minority health, and prevention.
        Improvements in patient care and the prevention of disease depend
    on clinical research that brings basic scientific discoveries to the
    benefit of human beings. The fruits of clinical research are often
    taken by industry and developed into new drugs, vaccines, or health
    care products. These new products boost our economy and create jobs.
    The international implications of allowing clinical research to falter
    are enormous. We are beginning to see signs that other nations are
    picking up the clinical research banner that America is dropping.
    Please do not delay further. Just as you have moved forward to rebuild
    the clinical research capacity on the NIH campus, please move forward
    this year with much-needed investment in the extramural clinical
    research capacity of our nation's academic medical centers. I would be
    happy to respond to questions.
                                     ______

    Prepared Statement of Christine Stevens, Secretary, Society for Animal
                             Protective Legislation
        The first time I heard a proposal by an NIH official for funded
    retirement of research chimpanzees was around 1980 at an NIH symposium.
    This sound, humane suggestion was slow to take root, but now the
    National Academy of Sciences has given it authoritative consideration.
    The vast majority of the NAS committee rejected euthanasia as a
    solution and advocated a sanctuary for the chimpanzees who have
    completed their research service. On behalf of the Society for Animal
    Protective Legislation, I request funding in the amount of $50 million
    to make possible the erection of a chimpanzee retirement sanctuary.
        The housing of retired chimpanzees in a sanctuary will reduce
    government expenditures for those same chimps. The reason for this is
    that a comfortable and easily maintained building with access to the
    outdoors is less costly than keeping chimpanzees singly caged in
    existing buildings which are mainly in cities where rent and
    maintenance are high. The Institute for Laboratory Animal Resources
    (ILAR) cites a per diem cost for chimp maintenance of $15 to $20. This
    can readily be reduced to $10 a day in a sanctuary setting. ILAR
    estimates that there are 1,000 chimpanzees now living in institutions
    in different parts of the country who have been retired from research.
    A capable Animal Technician familiar with the care and handling of
    chimpanzees receives on average $30,000 a year. ILAR estimates that
    such an individual can now handle the care of 10 to 12 chimpanzees. In
    a sanctuary setting where the animals would be much more at ease, a
    well-trained Animal Technician would be capable of caring for as many
    as 24. In other words, the cost to government would be cut in half.
        I would like to quote a paragraph from an article in Laboratory
    Primate Newsletter, a synopsis of an article in the Journal of Medical
    Primatology by leading experts, including Jane Goodall and Michael
    Balls. The statement reads: ``It is now generally accepted that
    chimpanzees must be retired at the end of their involvement in
    research, to live under conditions which provide for their social and
    psychological well-being, for the remainder of their 40-50 year life
    span. For this reason, no experiment should be carried out unless the
    supporting agency has guaranteed to provide the funds necessary for
    such retirement. Such funds must be kept in a secure annuity account.
    At present, approximately $30,000 to $60,000 per chimpanzee are
    standard charges for this purpose.''
        A coalition of animal protective groups are doing their best to
    raise funds for the needed sanctuary. However, the cost is such that it
    is vitally important that the government contribute substantially in
    order to make it a reality. Plans have been drawn up and are available
    from Carole Noon, Project Director of The Institute for Captive
    Chimpanzee Care and Well-Being.
        The reason why there are so many chimpanzees being held by
    scientific institutions in the United States relates to the original
    expectation that they would be important to AIDS research. That
    expectation has not developed. However, there are many chimpanzees that
    have been used for studies of hepatitis and other diseases, and also
    the Air Force chimpanzees which have been declared ``surplus'' to any
    current needs of the U.S. Air Force. A serious problem exists with
    respect to these particular animals because of potential donation of
    them to The Coulston Foundation, a New Mexico facility. The Coulston
    research laboratory has been cited repeatedly by the U.S. Department of
    Agriculture for violations of the Animal Welfare Act.
        In 1993, three chimpanzees died a grisly death after a heater
    malfunctioned, making their quarters a blistering 140 degrees,
    according to USDA's Veterinary Inspector. The USDA complaint further
    listed four monkeys found dead or dying in their cages. ``They had gone
    without water for at least three days. Although the caretakers were
    trained to test the animals' automatic waterers every day, they had in
    fact simply been checking off that task on their daily logs without
    actually performing the test,'' stated an article in U.S. News & World
    Report. On another occasion, four monkeys who had been left outside in
    100 degree heat died, apparently having choked on their own vomit.
        In each case, it took weeks for the problems to come fully to
    light, due to stonewalling and secrecy from the laboratory. Not
    reporting the first deaths to USDA was a clear violation of federal
    law, and the laboratory's Animal Care and Use Committee (of which
    Coulston himself was a voting member, and which included no one who
    actually cared for the chimpanzees) saw no reason to investigate either
    incident.
        The National Institutes of Health will not renew a $3 million
    yearly contract with the Coulston laboratory. Coulston has boasted that
    ``We are the sole source of chimpanzees for research.''
        I would like to cite the National Research Council's 1997 report,
    Chimpanzees in Research. It calls for a five-year breeding moratorium
    because increasing the number of chimpanzees would result in
    overcrowding at existing facilities. It is estimated that this
    moratorium will result in a 15-percent decrease in operating costs by
    the fifth year. Following are relevant quotations from the National
    Research Council report:
        The concept of sanctuaries capable of providing for the long-term
    care and well-being of chimpanzees that are no longer needed for
    research and breeding should become an integral component of the
    strategic plan to achieve the best and most cost-effective solutions to
    the current dilemma. [p. 3]
        [Sanctuary chimpanzees] require less intensive management than
    animals in research facilities, and therefore entail lower costs of
    daily care. [p. 23]
        Sanctuaries offer an opportunity for substantially reducing costs
    of long-term maintenance of chimpanzees without compromising high
    standards of well-being. [p. 57]
        The report also offers two citations, as follows:
        Large outdoor enclosures are relatively inexpensive to build and
    maintain, and provide natural stimulation for the chimpanzees.
        Formation of one or more retirement facilities to which animals
    from existing colonies could be transferred. It is anticipated that
    group housing and reduced handling of animals would reduce operating
    costs below those typical of research facilities.
        Chimpanzees are so closely related to us humans that they share
    98.4 percent of our DNA. Their mental capacities are becoming more and
    more understood and appreciated as studies reveal their remarkable
    capabilities. A book by Roger Fouts entitled: ``Next of Kin'' reports
    on the unusual achievements of the chimpanzee Washoe and four other
    chimpanzees that are being studied by Dr. Fouts and his team at Central
    Washington University's Psychology Department. These chimpanzees use
    American Sign Language to communicate with humans and with each other.
    Dr. Fouts describes in his book the amazement of a scientist who found
    it hard to accept the cognitive abilities of chimpanzees until, driving
    past the Fouts's home, he observed the young Washoe seated in the top
    of a large tree turning the pages of a magazine and signing to herself
    about the contents.
        Television viewers were deeply impressed by a segment on ABC in
    which Hugh Downs accompanied Roger Fouts to a laboratory to renew Dr.
    Fouts' acquaintance with a chimpanzee, Booie by name, whom he had not
    seen for 16 years. Booie was living in a small laboratory cage, and
    when Dr. Fouts came in, Booie immediately recognized him. They talked
    in sign language, and Booie signed a nickname for his old friend that
    Dr. Fouts himself had nearly forgotten. This moving meeting and sad
    parting brought a mass of letters from viewers. There is no doubt that
    the American public wants to see the laboratory chimpanzees retired
    after use as human substitutes in experimentation.
        Recent studies in the field by Sue Savage-Rumbaugh show that
    bonobos, or pygmy chimpanzees, leave messages for one another which
    scientists have been able to decipher. These small chimpanzees,
    traveling through a dense forest, leave signs of the direction they are
    traveling so the other members of their troop can follow without error.
    Sometimes the branches of saplings are bent over, indicating the
    direction; or where a trail divides, leaves are laid in the path with
    the pointed tip indicating which trail should be followed.
        On behalf of the Society for Animal Protective Legislation, I urge
    this distinguished Subcommittee to make possible retirement for
    chimpanzees who have done their stint in research laboratories for the
    benefit of human beings.
        Request for Change in NIH Policy on Acquisitions of Dogs and Cats
    Used by NIH Grantee Institutions
        The National Institutes of Health does not acquire dogs for the
    Institute's in-house research from Class B dealers. This wise policy
    should be expressed also in its funding of grants to other
    institutions. The number of Class B dealers selling dogs and cats for
    research and testing has decreased as a result of examination of their
    practices and premises by academia and commercial laboratories.
        The U.S. Department of Agriculture, which licenses dealers who sell
    purpose-bred dogs and cats (Class A) also continues to license the
    dwindling number of dealers who acquire ``random source'' dogs and cats
    (Class B). USDA has uncovered many instances in which a Class B dealer
    has reported obtaining animals from persons who, in fact, do not exist,
    did not provide the animals or, in some cases, were dead. The practice
    of shipping dogs across the country from one dealer to another makes a
    mockery of any attempt to locate an owner's lost or stolen companion.
    In one case, USDA Inspectors found that names obtained from driver's
    license applications found in a wastebasket, were presented to them as
    the source of numerous laboratory dogs.
        In Congressional testimony presented last year, Dr. Robert A.
    Whitney, former Deputy Surgeon General, U.S. Public Health Service,
    stated:
        I have an extensive background in this and other issues of public
    concern about the procurement and use of animals for biomedical
    research. Before becoming Deputy Surgeon General in 1992, I served as
    Director, National Center for Research Resources (NCRR) of the National
    Institutes of Health (NIH). In my 22 years at NIH I was responsible for
    production, procurement, and care of animals used in NIH intramural
    research. I also served as chairperson of the NIH Animal Care and Use
    Committee, Chairman of the U.S. Government Interagency Research Animal
    Committee (IRAC), and Director, NIH Office of Animal Care and Use. At
    NIH, the use of dogs from Class B dealers, otherwise known as random
    source dogs, ceased many years ago.
        Over the past 25 years I have been involved in the development and
    update of most of the federal policies and regulations governing
    appropriate care, use, and welfare of animals used in biomedical
    research. This experience has led me and many of my colleagues to
    believe that our inability to guarantee the quality of procurement and
    care of animals from Class B dealers creates many problems in public
    perception for the biomedical research community, and potentially in
    the research itself. Despite the small number of animals obtained from
    these sources, their use portends many more problems than the benefits
    which might be derived.
        We urge NIH to require grantees to certify that they will not use
    Class B random source dealers as a source for dogs and cats in their
    proposed research.
                                     ______

    Prepared Statement of Anne R. Pebley, President, Population Association
      of America [PAA], and Peter J. Donaldson, President, Association of
                            Population Centers [APC]
        Thank you, Mr. Chairman for this opportunity to present the
    position of the Population Association of America (PAA) and the
    Association of Population Centers (APC) to the Subcommittee on Labor,
    Health and Human Services and Education on fiscal year 1999 funding for
    the National Institutes of Health (NIH), specifically the National
    Institute on Aging (NIA), and the National Institute of Child and
    Maternal Health (NICHD). You are a long-standing friend of both
    organizations and we want to emphasize how grateful we are for your
    appreciation and support of demographic research.
        As you know, PAA is a scientific and educational society of
    professionals working in demographic research. APC is a consortium of
    27 leading American population research centers. In addition to their
    academic roles, members of both organizations provide federal, state
    and local government agencies, as well as private sector institutions,
    with data and research to guide decisionmaking.
        In this testimony, we wish to express our support for the National
    Institutes of Health (NIH), specifically NIH support for demographic,
    social and behavioral research, and share recent demographic trends and
    research findings of interest with Congress.
        Demographic research covers many issues important to our nation,
    such as retirement, minority health, disability and long term care,
    child care, immigration, labor force participation, worker retraining,
    family formation and dissolution and population forecasting. The United
    States is undergoing far-reaching shifts in its demographic composition
    and distribution. Such changes often are not recognized or understood
    until they confront society with new and immediate needs--often
    requiring federal and state expenditures. Incorporating demographic,
    social and behavioral research into long term policy discussions allow
    such changes to be tracked and anticipated in a manner that promotes
    more coherent and efficient planning and policy implementation.
        NIH, specifically the National Institute of Child Health and Human
    Development (NICHD) and the National Institute on Aging (NIA) provide
    primary support for demographic research. We would like to take this
    opportunity to share with you information concerning aging, trends in
    adolescent health, the incidence of teenage pregnancy and abortion
    prevalence and changes in fatherhood.
      the national institute of child health and human development (nichd)
        NICHD has a well-established, successful population research
    program. NICHD is currently funded at $674 million with $39.6 million
    of the budget for research funded through the Demographic and
    Behavioral Sciences. Among the many areas of demographic research
    supported by NICHD are families and households; marriage and family
    change; fertility and family planning; teen pregnancy; mortality; HIV
    prevention; and population movement, distribution and composition.
    NICHD also funds a highly regarded population research centers program.
    Population research centers provide a critical core of professionals
    who conduct research in a cost-effective manner. Further, the centers'
    training programs are an essential source of population scientists who
    bring fresh perspectives, ideas and improved methodologies to
    demographic research.
        As you can see from the wide range of research topics listed above,
    NICHD-supported demographic research provides important, ongoing
    information critical to policymakers. Last year's committee report for
    the fiscal year 1998 NICHD appropriation specifically mentioned the
    National Longitudinal Study of Adolescent Health, also known as the Add
    Health Survey, and this committee's interest in continued reporting on
    this study. We are pleased to provide some information in this
    testimony that focuses on Add Health, your interest in the decreasing
    rates in teen pregnancy and abortion, the Fatherhood Initiative, and
    the Family and Child Well-Being Research Network.
    Add health
        The Add Health survey is the first comprehensive national study of
    the social, psychological and environmental determinants of adolescent
    health. This study provides information that is valuable to parents,
    educators, researchers and policymakers. Although teens are generally a
    very healthy sub-group in the population, one in five has a serious
    health problem which are often costly and affect adult health. Each
    year, in the mid-1980's, the lifetime cost of injuries to young people
    15-24 years of age were estimated at $39.4 billion; public support for
    families headed by adolescents cost $16.7 billion per year; treatment
    costs for adolescents with mental health problems were estimated at
    $3.5 billion annually; and $2.0 billion or more per year was spent on
    facilities for delinquent adolescents.
        One of the key findings from the Add Health study was that ``family
    connectedness'' played a central role in protecting adolescent health:
    adolescents who felt loved and cared for by their parents and were
    satisfied with their family relationships were least likely to smoke,
    drink or use illegal drugs; least likely to become sexually active at a
    young age; least likely to be emotionally distressed or contemplate or
    attempt suicide, and least likely to engage in violence.
        Determining how to prevent and treat adolescent health problems
    will contribute to a stronger and healthier society. PAA and APC hope
    this committee will continue to support research, such as the Add
    Health study, that adds to our understanding of changes in the teenage
    and adult population.
    Teen pregnancy and teen abortion
        There are encouraging trends in teen pregnancy and the prevalence
    of abortion. The teen birth rate has been steadily decreasing in recent
    years. Since 1991 the rate has declined 12 percent to 54.7 per 1,000 in
    1996. Between 1991 and 1995, the teen birth rate dropped 17 percent
    among non-Hispanic blacks and by more than 9 percent among non-Hispanic
    whites. The teenage Hispanic population did not show a comparable
    decline in birth rates between 1991 and 1995. Another encouraging note
    is that there was a decline in the teen abortion rate in the early
    1990's. These data suggest that the decrease in the teen pregnancy rate
    is not being driven by an increase in abortion.
        Although rates of teen pregnancy are decreasing, the United States
    still has one of the highest teen pregnancy rates among industrialized
    countries. NICHD is currently supporting a study to identify key groups
    of young women who are at a higher risk of becoming a teen parent. One
    such group, younger sisters of pregnant and parenting teens, have more
    permissive childbearing attitudes than do their age and socio-economic
    status-matched peers who do not have an older sister who is a teen
    parent. Realization of this type of information will prove very
    important when creating intervention programs targeted at further
    decreasing the teenage pregnancy rate.
    Fatherhood
        The declining significance of marriage has the particular effect of
    weakening the ties of men to women and children, with a resulting
    burden to the welfare system and to women and children themselves.
    Thus, it is important to understand the conditions which help to
    sustain men's obligations to family members. NICHD, in conjunction with
    the Federal interagency Forum on Child and Family Statistics and the
    National Center on Fathers and Families, launched a Fatherhood
    Initiative to review the capacity of the federal statistical system to
    conceptualize, measure and gather information from men about their
    fertility and role as fathers. This same study identified ways to
    improve data collection and research in this area.
    Family and child well-being research network
        Finally, we wanted to bring you up-to-date on NICHD's Family and
    Child Well-Being Research Network--an interdisciplinary data system
    focusing on child- and family-related research that relies on cross-
    agency cooperation. The network is comprised of scientists from seven
    universities collaboratively working with federal officials from NICHD,
    the Office of the Assistant Secretary for Health, of the Department of
    Health and Human Services (DHHS), the Administration of Children and
    Families, of DHHS, the Census Bureau and the Department of Education.
    This network currently addresses a variety of questions about the
    interrelations between parent characteristics, family structure and
    organization, neighborhood attributes and different forms of social
    support. The network is committed to increasing the visibility of basic
    research findings to those involved in formulating public policy.
    Projects such as the Family and Child Well-Being Research Network
    perform the important task of helping synthesize research into sensible
    policy solutions.
        NICHD's Family and Child Well-Being Research Network, in
    cooperation with federal statistical agencies and the research
    community developed a comprehensive set of indicators of child well-
    being. Information from these indices are published annually by
    executive order. The first report titled, America's Children: Key
    National Indicators of Well-Being, was released in 1997. This report
    provides a much improved information base that summarizes the changes
    in the overall well-being of American children and families on an
    annual basis.
        PAA and APC enthusiastically support initiatives such as NICHD's
    Family and Child Well-Being Research Network that provide quick access
    to data and are efficient and effective resources for policy-related
    research in cross-disciplinary fields.
    The National Institute on Aging (NIA)
        The NIA also has a well established and widely respected
    demographic research program which provides crucial information on the
    implications of an aging of the American Population for our country.
    Currently, the NIA is funded at $519 million, with $38 million of that
    budget dedicated to demographic research--training, career development,
    and demographic, economic and epidemiologic research. As the US
    population ages and Congress contemplates changes in Medicare and
    Social Security, the demography of the elderly steadily become more
    important. The NIA has a strong history of supporting the collection of
    data which allows demographers to study questions of concern to
    policymakers. Chief among these are the NIA-supported studies, the
    Health and Retirement Study (HRS) and its auxiliary survey, the Asset
    and Health Dynamics of the Oldest-Old (AHEAD) study. You have been a
    solid supporter of these two studies over the years, Mr. Chairman, and
    we would like to express our gratitude for your support.
    Health and retirement study (HRS)
        As you know, the HRS focuses on retirement decisions and includes
    data on disability, work history, health and health insurance, pensions
    and retirement plans and obligations to family that may bear on
    retirement decisions. Using HRS data, researchers are able to explore
    issues related to health, disability and labor force participation;
    prospects for economic security; cognitive changes, health insurance
    coverage in the decade before Medicare eligibility.
        HRS research conducted by economists at the University of
    Pennsylvania, for example, indicated that while pre-retirement savings
    appears to be substantial ($340,000 for the median household), the
    present value of Social security wealth accounts for a large share of
    average total wealth (about $145,000). To meet a post-retirement income
    target of 70-80 percent, an average couple in their mid-1950's would
    have to save $10,700 each year until age 65. This would translate into
    a savings rate of 23 percent, far greater than typical savings rates in
    the U.S. Persons in poor health are even less well prepared for
    retirement, with only $5,000 in pension wealth and $80,000 in Social
    Security wealth.
    Asset and Health Dynamics of the Oldest-Old [AHEAD]
        The companion survey of HRS, AHEAD, provides unique information on
    the dynamics of health, economic resources and health care services.
    The study provides badly needed data on the costs and burdens of
    chronic disease and the consequences for the extended family. Over
    time, AHEAD will provide data on how families redistribute their
    resources across generations, and how these flows interact with public
    sector transfers. Such a study is needed to make informed policy
    decisions on initiatives such as Medicare/Medicaid coverage for
    community long-term care and health-care reform.
        AHEAD data and research are also providing insights into the
    complex family support system which sustains persons of all ages in
    times of need. Despite the stereotype of the ``greedy geezer'',
    analyses of AHEAD indicate that financial transfers overwhelmingly flow
    from parents to children, even when the parents are very old. These
    transfers disproportionately target adult children in the family who
    are relatively less well off than their siblings. Adult children who
    benefit from such transfers, however, are far more likely to provide
    personal care as their parents become disabled in later life.
        HRS and AHEAD data also provide opportunities to track the
    cognitive performance of older persons as they age. In the total non-
    institutionalized population age 70 and over, about 5 percent have
    severe cognitive impairment and another 48 percent score below average.
    As expected, persons of low education and limited financial resources
    are more likely to evidence cognitive deficits in middle and late life.
        Finally, PAA and APC are interested in and support the current
    efforts to strengthen the Federal Forum on Aging Related Statistics
    that coordinates data across federal agencies. The forum is an example
    of NIA's interest in supporting NIH's innovative endeavor of
    streamlining federal databases and making data accessible to
    researchers from varied fields.
        PAA and APC would like to thank you for the opportunity to present
    this information. Demographic data and research are important tools for
    policymakers that can both save public funds and promote more informed
    decision-making. If this vital research is to continue producing
    relevant and timely information, adequate funding and Congressional
    support are needed. The Population Association of America and the
    Association Population Centers support a 15-percent increase in funding
    to sustain the momentum of demographic research in the National
    Institutes of Health as part of the broadly based support to double the
    the funding for the NIH over the next 5 years.
                                     ______

    Prepared Statement of Roger P. Kingsley, and Sharon Moss, on Behalf of
                the American Speech-Language Hearing Association
        The American Speech-Language-Hearing Association (ASHA) appreciates
    the opportunity to provide testimony to the Senate Appropriations
    Subcommittee on Labor, Health and Human Services, Education and Related
    Agencies. Our statement focuses on funding needs in fiscal year 1999
    for an area that is very important to many members of this association:
    health research. Specifically, the statement will address activities,
    needs and recommendations concerning the National Institute on Deafness
    and Other Communication Disorders (NIDCD).
        ASHA is the national professional, scientific and accrediting
    association for over 93,000 speech-language pathologists, audiologists,
    and speech-language-hearing scientists serving the needs of people
    throughout the United States who have communication and related
    disorders. Speech-language-hearing scientists receive funding to
    support research activities through the National Institutes of Health.
    Research awards have enabled these scientists to conduct research that
    leads to better communication for all Americans.
        The ability to communicate effectively is fundamental to other life
    activities, i.e., learning, interpersonal relationships, and vocational
    pursuits. Any loss or limitation in communication ability can be
    detrimental to an individual's development, accomplishments, and
    overall quality of life.
        Communication impairment is the nation's most prevalent disability:
    approximately 42 million Americans have some kind of communication
    disorder. These disorders result in huge costs to the economy in lost
    productivity, special education, rehabilitation, health care
    expenditures, and lost revenues. It has been estimated that costs
    associated with hearing loss alone approximate $56 billion a year. \1\
    Costs associated with traumatic brain injury have been estimated at $25
    billion annually. \2\ These costs to society are expected to grow, due
    to several factors:
    ---------------------------------------------------------------------------
        \1\ Research in Human Communication, 1992 Annual Report of the
    National Deafness and Other Communication Disorders Advisory Board,
    U.S. Department of Health and Human Services--National Institutes of
    Health, 1993.
        \2\ Progress and Promise: In 1992-A Status Report on the NINDS
    Implementation Plan for the Decade of the Brain, the National Advisory
    Neurological Disorders and Stroke Council, Department of Health and
    Human Services--National Institutes of Health, December 1992.
    ---------------------------------------------------------------------------
        First, increasing numbers of infants and small children have or are
    at risk of developing communication disorders. As more infants survive
    because of medical technological advances, the number of children with
    severe disabilities, often including speech, language and hearing
    disabilities, necessarily increases. With higher incidence of substance
    and alcohol abuse, lead poisoning, and other human and environmental
    factors, there is a growing population of children and youth with
    disorders of communication. Accidents, particularly those involving
    motor vehicles and firearms, also have increased the number of
    communicatively impaired individuals as a result of traumatic brain
    injury--especially among teenagers and young adults.
        Noise-related hearing loss, resulting from machinery, music
    amplification, and other environmental and self-imposed factors, is
    still another increasingly prevalent phenomenon.
        Secondly, the prevalence of communication disorders will increase
    dramatically as the population ages. Impairment in the ability to
    speak, hear, or process language is often associated with diseases and
    conditions that occur as people get older: Alzheimer's Disease,
    resulting in cognitive and language dysfunction; Parkinson's Disease
    and other progressive neurological disorders resulting in oral-motor
    dysfunction; stroke, resulting in aphasia; cancer of the larynx,
    resulting in laryngectomy and voice loss; and presbycusis, or
    degeneration of auditory function resulting in hearing loss.
        Many of the costs relating to these conditions are borne by federal
    and state governments. The populations targeted by research through the
    NIDCD are many of the same populations which receive services through
    the IDEA, the Rehabilitation Act, Medicare, Medicaid, Social Security
    Disability Income and other public programs. Research that focuses on
    detection, diagnosis, treatment and prevention, should result in a
    reduction in the need for special education, rehabilitation, and health
    care services.
        The NIDCD is the major institution for coordinating and funding of
    speech, language, and hearing scientists who are engaged in intramural
    and extramural research that focuses on disorders of communication. The
    Institute's work holds forth great promise that some of the difficult
    challenges within the field of communication disorders can now be
    addressed. We strongly support many of the initiatives proposed by the
    NIDCD, particularly those addressing hearing, language, voice, and
    speech: diagnostic and intervention strategies following neonatal
    hearing screening; mechanisms of learning and relearning after brain
    damage; and communication disorders following stroke in multicultural
    and multilingual individuals. Continuing the acceleration in federal
    funding support will allow the Institute to promote research in areas
    that have the potential of improving the lives of people of all ages.
        Studies addressing the identification of hearing loss in children
    and infants are sorely needed and could lead to the development of more
    innovative, and less expensive behavioral audiometric tests, better
    speech and language materials for children, and highly sensitive parent
    inventories. Examining how language learning and relearning take place
    subsequent to brain injury is crucial to the understanding of the brain
    and behavioral mechanisms related to first language learning
    acquisition, and to maximizing and understanding the recovery processes
    of acquired language disorders.
        More research also is needed on the prevalence and incidence, long-
    term functional outcomes and post-stroke quality of life issues of
    aphasia among multilingual and multicultural populations. In addition,
    efforts should be directed toward the development of culturally
    sensitive assessment and intervention instruments for persons from
    different ethnic populations following stroke-induced aphasia. ASHA is
    also supportive of NIDCD's program initiative of research in the area
    of sickle cell anemia in children because of the communication
    disorders that result subsequent to stroke, and the high risk of stroke
    in this population.
        ASHA is supportive of many other efforts that advance the knowledge
    about mechanisms and processes of human communication, and that improve
    the approaches to prevention, diagnosis, and treatment of communication
    disorders. For example, studies that examine the human brain using
    imaging tools during various communication events; the molecular
    mechanisms that underlie hair cell regeneration in the inner ear; the
    efficacy of the cochlear implant prosthesis; and mechanisms for early
    and more precise diagnosis of specific language impairment in children.
        ASHA is supportive of a research portfolio that includes behavioral
    and clinical research, as well as basic research activities. We also
    support the continuation of efforts to fund the clinical trials program
    beyond the current levels. Members of ASHA have been able to utilize
    this program to test the efficacy of different treatment approaches,
    thereby having a significant impact on current public health and health
    care financing discussions.
        ASHA also supports research that allows for collaboration with
    other Institutes such as: the National Institute on Aging, National
    Cancer Institute, National Institute of Child Health and Human
    Development, National Institute of Mental Health, and National
    Institute of Neurological Disorders and Stroke. Research that supports
    the development of improved diagnosis and more effective intervention
    strategies for autism, velocardiofacial syndrome, and recurrent otitis
    media is greatly needed and is encouraged by ASHA.
        ASHA supports the recommendation made by some members of Congress
    and by the Ad Hoc Group for Medical Research Funding, of which we
    belong, for an increase of 15 percent overall for the NIH. As one of
    the newer institutes and having lagged behind other research institutes
    with respect to funding increases, we concur with the recommendation by
    the American Academy of Otolaryngology-Head and Neck Surgery for an
    increase of 18 percent for the NIDCD.
        Mr. Chairman, we appreciate the opportunity to provide these
    comments and recommendations to your Subcommittee. We look forward to
    working with you and your staff as well as with the other members of
    the Subcommittee and their staffs as the fiscal year 1999
    appropriations process moves forward.
                                     ______

    Prepared Statement of the Chuck Ludlam, on Behalf of the Biotechnology
                             Industry Organization
     contributions to new medicine from government-funded basic biomedical
                                    research
        The Biotechnology Industry Organization (BIO) submits this
    statement in support of substantial increases in appropriations for the
    National Institutes of Health (NIH). BIO represents over 750
    biotechnology companies, academic institutions, and state biotechnology
    centers in 46 States and more than 25 nations. BIO members are involved
    in the research and development of the life sciences including health
    care, agricultural, and environmental biotechnology products.
        BIO is a member of the Ad Hoc Group for Medical Research Funding, a
    coalition of voluntary health groups, medical and scientific societies,
    academic and research organizations and industry representatives. BIO
    supports the Ad Hoc Group for Medical Research Funding proposal which
    calls for a 15-percent increase in NIH funding for fiscal year 1999.
    This increase should be the first step towards doubling the NIH budget
    over 5 years. BIO recognizes the difficulty in achieving such a goal
    under the current spending limits, and therefore, encourages the Senate
    Appropriations Subcommittee to explore all possible options to identify
    the additional resources needed to support this increase.
        This statement outlines how society benefits from increased NIH
    funding. This statement also emphasizes and documents the vibrant
    partnership the biotechnology industry has with the NIH and its
    grantees, a partnership which helps ensure that basic biomedical
    research is developed into products for the benefit of patients.
                     nih-biotechnology industry partnership
        There is a synergy between the U.S. biotechnology industry and the
    NIH and its grantees based on technology transfer programs which are
    essential for the application of basic biomedical research to human
    needs.
        The transfer of technology is fundamental to the partnership
    between non-profit, federally-funded basic biomedical research and for-
    profit commercial firms. This partnership builds upon the strengths of
    each: government funding for NIH research (predominantly basic
    biomedical research); company funding for basic and applied biomedical
    research (which explores ways to develop basic biomedical research into
    products which treat disease). The technology transfer process provides
    a fundamental justification for continued funding increases for basic
    biomedical research.
        Unlike basic biomedical research conducted by private companies,
    federally-funded basic biomedical research must be transferred to a
    private firm to become available to patients. In the American economy
    neither the government nor government-funded laboratories commercialize
    products. This is the indispensable role of the biotechnology and
    pharmaceutical industries. To commercialize a product the biotechnology
    industry has to: raise immense amounts of capital needed to take a
    product through clinical trials and the Food and Drug Administration
    (FDA) product approval process; secure appropriate intellectual
    property protection for inventions which occur in the drug development
    process; and manufacture and distribute the final product to patients.
    It is critical to patients, therefore, that federally-funded basic
    biomedical research is transferred to biotechnology and pharmaceutical
    companies. Only then does this research lead to new medicines and
    treatments for disease. Over 100 million people have been helped by the
    60 biotechnology therapies and vaccines on the market today.
        Federally-funded basic biomedical research is extremely important
    to the biotechnology and pharmaceutical industries. In fact, the fruits
    of this research helped create the biotechnology industry with the
    discovery of recombinant DNA in 1973. Since then, what has enabled the
    biotechnology industry to grow so rapidly for so long has been the
    effective technology partnership system that developed in the 1980's.
    From the 1980's onward technology partnerships between government-
    funded researchers and the private industry have remained one of the
    driving forces for growth in the biotechnology and pharmaceutical
    industries.
        Increased funding for the NIH will generate even more basic
    biomedical research which can be transferred to the private sector for
    commercialization. From 1992 to 1996 between 68 percent and 72 percent
    of research grant applications went unfunded. \1\ This problem is only
    made worse by the fact that many of these unfunded grant applications
    are for ongoing research projects which were funded in previous years.
    From 1992 to 1996 between 51 percent and 55 percent of grant
    application renewals went unfunded. \1\ These grant applications could
    not be accepted because the NIH did not have sufficient appropriations
    to fund them. This high percentage of application rejection occurs in
    spite of the fact that in 1996 about 85 percent of the NIH budget was
    used to provide support to these extramural researchers (researchers
    that are not employees of the NIH).
    ---------------------------------------------------------------------------
        \1\ National Institutes of Health home page (http://
    www.nci.nih.gov/admin/fmb/e65.htm).
    ---------------------------------------------------------------------------
        With increased funding many more grants will be awarded and will
    lead to medical breakthroughs that can be commercialized by the
    biotechnology and pharmaceutical industries.
        The NIH and its grantees have established effective mechanisms to
    ensure that basic biomedical research breakthroughs will be transferred
    to the private sector for development into products. Technology
    partnerships take a number of forms depending on whether they involve
    the NIH or NIH-funded research. In each case the biotechnology industry
    is open to paying royalties for the patent rights to medical
    technologies. The principal technology partnership mechanisms are
    listed below:
                       technology partnership mechanisms
        Cooperative Research And Development Agreement (CRADA).--A CRADA is
    an agreement through which researchers at the NIH and private companies
    negotiate terms for cooperative research and define the rights of the
    parties to use licenses for any patents which might be created as a
    result of the research. CRADAs are the cornerstone of the basic
    biomedical research partnerships between the NIH and the biotechnology
    and pharmaceutical industries. In many cases the corporate partner
    provides funding and other resources to conduct research at the NIH.
    This corporate partner will then take the new technology and develop a
    marketable product. The figures in the chart on page six show a direct
    relationship between increases in NIH funding and increases in both
    CRADAs executed and royalty income attributed to the sale of new
    inventions. In fiscal year 1996 and fiscal year 1997 the number of
    CRADAs increased dramatically. This increase in CRADA activity also led
    to increases in patents issued to companies which, in turn, will likely
    lead to the approval of new drugs in the market place.
        Bayh-Dole Agreements.--A Bayh-Dole Agreement is the corollary to
    the CRADA for NIH grantees (universities and foundations). Bayh-Dole
    Agreements are agreements between universities or medical institutes
    and biotechnology companies or pharmaceutical companies in which the
    parties define the licensing rights to patents that might be created
    and agree on how to share funds, materials, and scientists in the
    collaborative research effort. Bayh-Dole Agreements, like CRADAs,
    generate patent income.
        The two charts below show a relationship between the amount of NIH
    funding a university receives and the amount of royalties generated on
    patented inventions attributed to the NIH-funded research.

                    TOP FIVE REVENUE GENERATING UNIVERSITIES
    ------------------------------------------------------------------------
                                               In fiscal year 1995 \1\--
                                         -----------------------------------
                                                                Research
                                                              expenditures
                                              Royalties       from Federal
                                              received         Government
                                                             sources \2\ \3\
    ------------------------------------------------------------------------
    University of California System.....       $57,272,000      $835,637,000
    Stanford University.................        38,900,000       316,000,000
    Columbia University.................        34,194,811       204,000,000
    Michigan State University...........        15,279,521       277,900,000
    W.A.R. F./University of Wisconsin-          12,380,000       197,626,417
     Madison............................
    ------------------------------------------------------------------------
    \1\ Association of University Technology Managers, AUTM Licensing Survey
      fiscal year 1991-95 (Norwalk, CT: Association of University Technology
      Managers, 1996) 76.
    \2\ This funding is predominantly from NIH.
    \3\ Association of University Technology Managers, AUTM Licensing Survey
      fiscal year 1991-95 (Norwalk, CT: Association of University Technology
      Managers, 1996) 100.

                                JOHN HOPKINS UNIVERSITY PATENT AND LICENSING ACTIVITY \1\
    ----------------------------------------------------------------------------------------------------------------
                                                                              Fiscal year--
                                                   -----------------------------------------------------------------
                                                       1991      11992       1993       1994       1995       1996
    ----------------------------------------------------------------------------------------------------------------
    NIH grants (millions of dollars)..............     $162.8     $203.9     $230.8     $258.0     $254.4     $262.7
    Inventions reported to NIH \2\................         19         32         41         44         44         58
    Patents applications filed from NIH sponsored          13         20         26         27         43         48
     inventions...................................
    Royalties received (millions of dollars)......      $1.69      $2.24      $2.29      $2.18      $1.25      $1.63
    Royalties received from NIH funded inventions          NA         NA         NA         NA   $692.835   $948.336
     (in thousands of dollars)....................
    ----------------------------------------------------------------------------------------------------------------
    \1\ Theodore O. Poehler, Vice Provost for Research, Office of the Provost, John Hopkins University, Baltimore,
      Maryland (1998).
    \2\ Includes Arts and Science, Engineering, Hygiene, and Public Health, Medicine, Nursing, Academic Centers, and
      Health Division Administration.

        Licensing of patents.--These partnerships focus on the licensing of
    patents on basic biomedical research discoveries. These licenses are
    critical to the relationship between biotechnology and pharmaceutical
    companies and the NIH and its grantees. Without patents to protect the
    taking of an invention by a competitor, a company cannot justify its
    research investment. It is crucial that the NIH and its grantees,
    therefore, secure patents on their inventions so companies that invest
    money in developing these inventions can benefit from their investment.
    The licenses require companies to make royalty payments to the
    proprietary owner of the license, or licensor, based on any sales of
    products attributed to the licensed patent.
        The biotechnology industry expects to pay royalties as a part of a
    license agreement. Companies frequently license technology from one
    another and the norm is to include royalty payments. It is important
    for the NIH and its grantees to set royalty payment that are
    competitive to those which a company would expect to pay another
    company. Otherwise, companies would tend to seek technology from
    sources other than the NIH or its grantees. The government has a
    reasonable expectation that its investment in research will be rewarded
    with royalty payments. No company would expect the government or its
    grantees to license technology without receiving a return on its
    investment. This return, in the form of royalty payments, can be used
    by the government to fund additional research.
        In 1997 the total royalty income the NIH received was $35,692,000
    or .281 percent of its budget for the same year ($12.7 billion; this
    information is available on the chart on page 6). It is clear that this
    small amount of royalty income is not likely to ever grow enough to
    support the entire NIH budget. It is unlikely, therefore, that the NIH
    will ever be able to rely on its royalty income to support its research
    budget.
        Small Business Innovative Research (SBIR) and Small Business
    Technology Transfer (STTR) programs.--The SBIR and STTR programs--
    supported by federal government funding through the NIH--provide
    funding to biotechnology and pharmaceutical companies to conduct
    research and development of new or improved technologies that have the
    potential to succeed as commercial products. For 1998 the total
    estimated funding for SBIR and STTR programs combined is $280.6
    million. These two programs are indispensable to the biotechnology
    industry as a source of seed capital for early stage biotechnology
    companies. BIO supports these programs and has worked with the NIH to
    provide recommendations on how to improve these programs and to assist
    in outreach to the biotechnology community. For specific funding levels
    for the SBIR and STTR programs see the chart on page 7.
    NIH technology transfer reform
        The effectiveness of the NIH technology transfer program has
    increased dramatically in recent years. The unconditional repeal of the
    ``reasonable price'' clause in April of 1995 has been critical to this
    success. Congress should support NIH's decision and not move to force
    it to reinstate the ill-conceived price review policy. To do so would
    jeopardize the gains we have seen in the effectiveness of its
    technology partnership program.
        The repeal of the price reviews policy was both decisive and
    justified. Among biotechnology companies it has substantially increased
    interest in collaborating with the NIH and other Public Health Service
    (PHS) agencies. It reassures companies who enter into collaborations
    with NIH and PHS grantees that their agreements will not someday be
    subject to a pricing clause. The functioning ``reasonable price''
    clause prior to April 1995 deterred companies from collaborating with
    NIH and decreased NIH's ability to transfer its basic biomedical
    research into marketable products.
        The impact of this repeal has been dramatic as shown in the figures
    in the following chart. For example, the number of CRADAs rose from a
    low of 31 in 1994 to 87 in 1996 and 153 in 1997. The number of licenses
    grew from a low of 75 in 1993 to a high of 208 in 1997. Royalties also
    grew substantially. These figures demonstrate the wisdom of the NIH
    decision to repeal the clause.

                          SUMMARY OF NIH TECHNOLOGY TRANSFER ACTIVITIES FISCAL YEAR 1993-97 \1\
    ----------------------------------------------------------------------------------------------------------------
                                                                              Fiscal year--
                                                    ----------------------------------------------------------------
                                                         1993         1994         1995         1996         1997
    ----------------------------------------------------------------------------------------------------------------
    Number of issued patents.......................           88           75           95          107          119
    Executed licenses..............................           75          125          160          184          208
    Executed CRADA's...............................           41           31           32           87          153
    Royalties (thousands of dollars)...............      $13,494      $18,487      $19,388      $26,995      $35,692
    NIH budget authority (billions of dollars) \2\.        $10.3        $10.9        $11.3        $11.9        $12.7
    ----------------------------------------------------------------------------------------------------------------
    \1\ National Institutes of Health home page (http://www.nih.gov), following this sequence of directories:
      Scientific Resources, The NIH Office of Technology Transfer, Technology Development and Licensing Programs,
      Patents and Licensing Statistics or at http://www.nih.gov:80/od/ott/nih93-97.htm. For questions contact
      MaryAnn Martinez, Secretary to the Director, Office of Technology Transfer, National Institutes of Health.
    \2\ Contact Mitchel Goldstein, Department of Health and Human Services Budget Office.

                             SUMMARY OF NIH SBIR AND STTR ACTIVITIES FISCAL YEAR 1993-97 \1\
                                                  [Dollars in millions]
    ----------------------------------------------------------------------------------------------------------------
                                                                                   Fiscal year--
                                                              ------------------------------------------------------
                                                                  1993       1994       1995       1996       1997
    ----------------------------------------------------------------------------------------------------------------
    STTR's (awards)..........................................         NA         48         90        109        111
    STTR's...................................................         NA       $4.7       $8.7      $13.9      $14.7
    SBIR's (awards)..........................................      1,011        943      1,038        967      1,251
    SBIR's...................................................       $121     $128.7     $175.1     $184.9     $246.2
    ----------------------------------------------------------------------------------------------------------------
    \1\ Contact Sonny Kreitman, Special Programs Officer, Office of Extramural Programs, National Institutes of
      Health.

        In 1995 and 1996 amendments to the NIH appropriations bill were
    offered in the House of Representatives to reinstate the ``reasonable
    price'' clause. These amendments were decisively rejected. BIO strongly
    opposed these amendments and believes the NIH's mission is research,
    not the pricing of medicines developed. Issues of pricing or access
    only should arise once a medicine has been developed and approved by
    the Food and Drug Administration (FDA). Raising issues of pricing or
    access during the research stage is premature and counter-productive.
    It undermines the ability of our companies to convince investors to
    fund a collaborative research program with the NIH. When medicines are
    developed from NIH basic biomedical research, then the NIH has
    completed its mission and deserves praise--and royalties--for its
    fundamental contribution to the health of patients and the advancement
    of science.
        A great many experts have found that pricing reviews are damaging
    to the NIH technology partnership program:
      --Reasonable price clauses ``discourage technology transfer and the
            development of new therapeutic products by imposing price
            restrictions that may limit the ability of any company to
            recover its costs of research and development. Royalty
            provisions or payments to reimburse the government laboratory
            for its costs or, in appropriate circumstances, the supply of
            clinical materials (rather than restrictions on the pricing of
            products) may be more appropriate mechanisms to fairly and
            appropriately compensate the government laboratory for the use
            of its technology in commercial development.'' Final Draft
            Report of the External Advisory Committee of the Director's
            Advisory Committee, The Intramural Research Program, National
            Institutes of Health, April 11, 1994.
      --The NIH insistence on price controls ``nearly ruined the system,''
            said Dr. Steven Paul, the former scientific director of the
            National Institute of Mental Health and a creator of the NIH
            technology transfer program. Cited by Dr. Robert Goldberg in
            ``Race Against the Cure: The Health Hazards of Pharmaceutical
            Price Controls,'' Policy Review, Spring 1994 (number 68) at 34.
      --A report by the HHS Inspector General noted that the controversy at
            NIH over CRADA pricing threatens support for the program
            (Office of Inspector General, Dept. of HHS, Technology Transfer
            and the Public Interest: Cooperative Research and Development
            Agreements at NIH (OEI-92-01100) (Nov. 93)). This report finds
            that the use of an arbitrary and unpredictable ``reasonable
            price clause'' is undermining the transfer of NIH patents to
            private companies. Many private biomedical research companies
            now refuse to participate in CRADAs. This fact undermines the
            rationale for appropriating so many billions of dollars to fund
            this basic research.
      --Dr. Bruce Chabner, Director of the National Cancer Institute's
            (NCI) Division of Cancer Treatment, in testimony at a
            congressional hearing last year discussed specific instances in
            which companies have discontinued projects or suspended CRADA
            negotiations because of concerns raised by the ``reasonable
            pricing clause.'' Chabner noted that ``Other companies have
            simply refused to become involved with the NCI in early drug
            development * * *. NCI has no doubt that companies will not
            accept the risks of investing large sums in the development of
            a government product if their freedom to realize a profit is
            restricted. These companies are not willing to put their
            corporate fate in the hands of a government-appointed committee
            of experts. There are less risky ways for companies to make a
            profit.'' Testimony of Dr. Bruce Chabner, Director of the
            Division of Cancer Treatment, National Center Institute, before
            the House Subcommittee on Regulation, Business Opportunities
            and Energy of the House Committee on Small Business (Jan. 25,
            1993).
      --The Committee to Study Medication Development at the National
            Institute on Drug Abuse states that the ``reasonable-pricing
            clause required in (DHHS CRADAs) in the last year has been
            identified by NIDA as a major deterrent to attracting private-
            sector partnerships.'' The Committee ``recommends a change in
            the reasonable pricing provisions of DHHS CRADAs so that
            licensees or manufacturers of medications know explicitly the
            ultimate pricing or pricing structure for their potential
            therapeutic agent.'' Development of Anti-Addiction Medications:
            Issues for the Government and Private Sector, Institutes of
            Medicine, 1994.
      --An article cites NIH officials attributing the price control clause
            for the precipitous decline in CRADA's. ``Many pharmaceutical
            companies are reconsidering CRADA's, and NIH officials say four
            of the largest--have told NIH that they plan to forego new
            CRADA's unless the pricing clause is removed.'' Christopher
            Anderson, ``Rocky Road for Federal Research Inc.'', Science,
            497 (October 22, 1993).
      --The Cancer Letter published a draft ``Action Plan on Breast
            Cancer'' developed from a recent NIH conference convened by
            Secretary Donna Shalala which recommends ``increase(d) efforts
            to speed the translation of basic research into clinical
            applications'' and ``review of the reasonable pricing clause in
            relation to CRADAS, as they impact of the flow of industrial
            funds into clinical research and, thus, affect
            collaborations.'' Cancer Letter, March 25, 1994.
        It is clear that the increased effectiveness of the NIH technology
    partnership program would be jeopardized if Congress moves to force NIH
    to reinstate its pricing review.
    Five reasons for supporting increases in NIH funding
        This explanation of the technology transfer reform and the
    partnership between government-funded and private-sector funded basic
    biomedical research explains why the biotechnology industry so strongly
    supports increased NIH funding. Five fundamental reasons follow for why
    it is in the national and public interest to increase the NIH fiscal
    year 1999 budget by 15 percent as the first step toward doubling its
    budget over five years.
                Reason No. 1: Better health and less suffering
        Basic biomedical research is a noble undertaking that provides
    better health and less suffering for Americans with disease. About 85
    percent of the NIH's budget is spent on the extramural program
    supporting 25,000 different research grants each year which go to more
    than 50,000 scientists, doctors, and researchers at 2,000 different
    institutions across the country. Another 10 percent of the NIH budget
    goes to the intramural program which supports research projects
    conducted by medical scientists in NIH's more than 20 institutes and
    centers. This clear commitment to research has led to strong health
    benefits for Americans.
        Within the past 25 years mortality rates related to heart disease
    and stroke have decreased by 40 percent and 60 percent, respectively. A
    vaccine for hepatitis B has been developed. Americans live free of
    diseases such as polio, tetanus, and small pox. Death rates from cancer
    have started to decline in the United States. The number of Americans
    who survive cancer for five years or longer has increased by more than
    50 percent. And yet many Americans take these medical advances for
    granted and are not aware that NIH funding helps make these medical
    advances possible.
        To focus only on past achievements would underestimate the success
    the NIH is having. To give doctors and patients more effective tools to
    combat disease, the NIH is currently directing research programs such
    as the Human Genome Project which involves constructing a human genetic
    map to aid in identifying disease genes. Some of the first
    beneficiaries of the Human Genome Project will be families with a high
    risk of colon cancer. This is because this research will make it
    possible to determine which family members carry colon cancer genes and
    enable them to obtain appropriate health care. Because of research
    conducted at the NIH and subsequently developed by companies, those
    living with Parkinson's disease, cancer, Alzheimer's disease, AIDS and
    other diseases are already living longer.
        To give an example, according to Senator Tom Harkin (D-IA), Dr.
    Steven A. Rosenberg, Chief of Surgery, Division of Clinical Sciences,
    National Cancer Institute at the NIH, has created a treatment for
    melanoma, a kind of skin cancer, which so far has had a 50-percent
    success rate.\4\
    ---------------------------------------------------------------------------
        \4\ Senator Tom Harkin (D-IA), speech on NIH funding, NIHx2 Press
    Conference, March 19, 1998, Senate Dirksen Office Building.
    ---------------------------------------------------------------------------
        In order to take full advantage of these scientific advances and
    find cures for these and other diseases, NIH Appropriations increases
    are required.
                Reason No. 2: Basic biomedical research is not self-
                        sustaining
        Basic biomedical research is not self-sustaining. The biotechnology
    and pharmaceutical industries cannot provide the funding to conduct the
    level of basic biomedical research required to keep both industries
    growing. As it is, the biotechnology and pharmaceutical industries
    already conduct billions of dollars worth of basic and applied
    biomedical research. The reason this research is so expensive is
    because biotechnology companies are advancing basic and applied science
    at the same time. In partnership with the NIH, biotechnology and
    pharmaceutical companies conduct some basic biomedical research, but
    primarily they conduct applied research, which builds upon basic
    research.
        In 1997 the NIH annual budget was $12.7 billion of which the vast
    majority was spent on basic biomedical research. This is much more than
    the $9 billion the biotechnology industry spent on all types of
    research in the same year, of which only a small portion was spent on
    basic biomedical research. Furthermore, the large research investment
    incurred by the biotechnology industry comes at a great risk. These
    risks are clearly reflected by the fact that only about one percent of
    biotechnology companies are profitable. In 1993 only 13 of America's
    1,300 biotechnology companies were profitable. In 1997, the
    biotechnology industry lost $4.1 billion which was a nine percent
    decrease in losses over the previous year ($4.5 billion in losses).\5\
    ---------------------------------------------------------------------------
        \5\ Ernst & Young, New directions: The Twelfth Biotechnology
    Industry Annual Report, 6. (1998).
    ---------------------------------------------------------------------------
        To understand why biotechnology companies are unable to pay for the
    basic biomedical research conducted at the NIH one has to look at the
    following facts about the biotechnology industry:
        In 1993, on average, biotechnology firms spent $59,000 per employee
    on research. In the same year the U.S. corporate average was $7,476.
    According to Business Week's ``1995 R&D Scoreboard'' in 1995 the five
    U.S. companies that had the highest investment in research and
    development per employee were biotechnology firms. For details turn to
    page 13.
        Because of the high research costs involved and the limited number
    of profitable biotechnology companies, the biotechnology industry can
    not ever be expected to replace the crucial role of the NIH. Therefore,
    the best funding source for basic biomedical research has been and can
    only be the Federal government.
                Reason No. 3: NIH funding saves money long term
        By investing in the NIH the Federal government saves money in the
    long term. This savings is attributed to the fact that it is much less
    expensive to invest in cures for diseases than it is to treat patients
    who already live with disease. ``The National Institutes of Health
    (NIH) plays a critical role in facilitating innovations that lead to
    significant reductions in health care costs. In a series of case
    studies published in 1993, the NIH identified 34 examples of clinical
    trials and applied research studies that have resulted in savings in
    treatment costs and reductions in lost productivity due to disease,
    disability, and premature death. Together, the examples yield an
    estimated annual potential savings ranging from $8.3 billion to $12
    billion.'' \6\
    ---------------------------------------------------------------------------
        \6\ The Ad Hoc Group for Medical Research Funding's home page
    (http://www.aamc.org/) under the heading ``Fact Sheets About NIH'' and
    subheading ``Examples of Cost Savings from NIH Research'' or directly
    located at (http://www.aamc.org/research/adhocgp/costsav.htm).
    ---------------------------------------------------------------------------
        Below are examples of cost saving cures for diseases which are a
    large economic burden to the U.S. economy:
        The NIH discovered a gene that is a major risk factor for
    Alzheimer's disease and NIH-funded research continues to explore the
    role genes play in causing this disease. With adequate funding this
    research will prevent or delay the onset of Alzheimer's. Members of
    Congress often state that doing this would save Medicare from
    bankruptcy in the 21st century. This is because the total national cost
    to care for Alzheimer's patients is more than $100 billion annually.\7\
    ---------------------------------------------------------------------------
        \7\ Speaker Newt Gingrich, ``Personal Experiences Spur Speaker of
    the House To Campaign for Increased NIH and NAS Funding,'' Roll Call
    February 23, 1998.
    ---------------------------------------------------------------------------
        A solid return from Congress's investment in the NIH can be seen in
    the development of a two-stage diagnosis-treatment of breast cancer.
    While the cost of developing this diagnosis-treatment was $14.3 million
    a year for 15 consecutive years, this technology generates an estimated
    $263 million to $526 million in annual savings in avoided medical
    costs.\8\
    ---------------------------------------------------------------------------
        \8\ Senator Barbara A. Mikulski, ``NIH Needs More Money to Continue
    Its Biomedical Legacy,''Roll Call February 23, 1998.
    ---------------------------------------------------------------------------
        NIH-funded research has already provided great benefits in the case
    of melanoma, a kind of skin cancer. According to Senator Tom Harkin (D-
    IA), Dr. Steven A. Rosenberg, Chief of Surgery, Division of Clinical
    Sciences, National Cancer Institute at the NIH, has developed a
    treatment for melanoma. Dr. Rosenberg's treatment has had a 50-percent
    success rate for patients so far. While the economic savings has not
    been calculated yet, any cure for a kind of cancer would save money and
    prevent needless suffering.\9\
    ---------------------------------------------------------------------------
        \9\ Senator Tom Harkin (D-IA), speech on NIH funding, NIHx2 Press
    Conference, March 19, 1998, Senate Dirksen Office Building.
    ---------------------------------------------------------------------------
        According to Selma J. Mushkin, author of ``Biomedical Research:
    Costs and Benefits,'' every dollar invested in biomedical research
    between 1900 and 1975 produced a $10 to $15 return in savings.\10\
    ---------------------------------------------------------------------------
        \10\ Selma J. Mushkin, Biomedical Research: Costs and Benefits
    (Cambridge: Ballinger Publishing Co. 1979).
    ---------------------------------------------------------------------------
        In conclusion, it is clear that investing in basic biomedical
    research is an effective way to find cures and therapies for disease.
    Furthermore, increasing NIH funding can bring significant savings with
    early cures and prevention that will avoid higher future health care
    costs.
                Reason No. 4: Generates jobs and secures U.S. economic
                        leadership
        NIH funding generates jobs and investment in the private sector. In
    the last 25 years biotechnology has become an expanding industry,
    employing over 140,000 people in 1997, a nineteen percent increase over
    1996 (118,000).\11\ In 1997 product sales were at $13 billion, a 20-
    percent increase over 1996 ($10.8 billion).\11\ Over the last four
    years the biotechnology industry's market capitalization (value of the
    entire capital assets) has gone from $41 billion \12\ to $93
    billion.\11\
    ---------------------------------------------------------------------------
        \11\ Ernst & Young, New directions: The Twelfth Biotechnology
    Industry Annual Report, 6. (1998).
        \12\ Ernst & Young, Biotech 95: Reform, Restructure, Renewal, The
    Industry Annual Report, 2. (1994).
    ---------------------------------------------------------------------------
        One reason why the biotechnology industry has created so much
    growth in jobs and product sales is in large part attributed to its
    high levels of investment. Business Week conducted the ``1995 R&D
    Scoreboard'' which measured the level of research and development
    investment per employee in U.S. companies. In this study, five of the
    top ten U.S. companies were biotechnology firms. The complete R&D chart
    is listed below.

    Business Week R&D Scoreboard 1995 \1\

            Rank
    Biogen \2\..............................................    ($210,653.5)
    Genetics Institute \2\..................................     (114,942.5)
    Genentech \2\...........................................     (112,029.8)
    Immunex \2\.............................................     (102,719.1)
    Amgen \2\...............................................      (91,265.8)
    S3......................................................      (82,548.3)
    Adobe systems...........................................      (70,993.0)
    Platinum technology.....................................      (69,787.3)
    Cirrus logic............................................      (68,745.6)
    Network computing devices...............................      (68,308.0)

    \1\ 1995 ``R&D Scoreboard,'' Business Week 3 July 1995.
    \2\ Biotechnology companies.
    ---------------------------------------------------------------------------
                Reason No. 5: Training of scientists
        Many of the most talented and knowledgeable scientists hired by the
    biotechnology and pharmaceutical industries are trained at the NIH or
    at affiliated universities, or they were previous recipients of NIH
    grants. In 1997 about 50 percent of biotechnology companies surveyed
    (39 of 79) had at least one NIH-trained scientist working for them;
    some companies had over 50 NIH-trained scientists.
        While it is very difficult to estimate the number of scientists
    that have been formally trained by the NIH it is accepted as fact that
    the United States has the world's leading graduate education
    institutions, of which NIH is one. Many Nobel Laureates and other
    research pioneers benefit from the NIH's state-of-the-art facilities
    and strong financial resources. For the United States to remain the
    world leader in innovative research and basic biomedical scientific
    inquiry requires increased NIH funding. Increasing funding will enable
    the NIH to provide more training for scientists who will find cures for
    diseases previously believed incurable.
                                   conclusion
        The United States is the world leader in research and development
    for health related technologies providing patients with treatments and
    therapies for disease. Basic biomedical research benefits Americans and
    all of humanity. It generates jobs and investment. It trains the
    world's best scientists. But basic biomedical research is not self-
    sustaining and depends on government funding. In order to save money in
    the long term and maximize the benefit of previous scientific
    discoveries, the Federal government needs to strengthen its commitment
    to the NIH. The Biotechnology Industry Organization believes the single
    best way to do this is to increase NIH appropriations by $2 billion for
    fiscal year 1999 and double the NIH budget over the next five years.
        We appreciate this opportunity to present this statement.
                                     ______

    Prepared Statement of Donna Meltzer, American Association of University
    Affiliated Programs for Persons With Developmental Disabilities, Chair,
                  on Behalf of the Friends of NICHD Coalition
        Mr. Chairman, I am pleased to be able to testify today on behalf of
    the Friends of NICHD, a coalition of nearly 100 organizations that
    support the extraordinary work of the National Institutes of Health
    with a special focus on the National Institute of Child Health and
    Human Development. Our coalition, which is in its 12th year, includes
    scientists, health professionals, and advocates for the health and
    welfare of women, children, families, and people with disabilities.
    Pursuant to clause 2(g)4 of House Rule XI, I would like to note for the
    record that the coalition does not receive any federal funds.
        Since its inception in 1963, the National Institute of Child Health
    and Human Development (NICHD) has compiled an impressive record of
    achievement, conducting and funding research on the prevention and
    treatment of many of the nation's most devastating health problems:
    infant mortality and low birthweight, unintended pregnancy, birth
    defects, mental retardation and other developmental disabilities, and
    pediatric AIDS.
        A recent quote I read in an article in the Washington Post said,
    ``I will protect my child from everything except a life lived
    passionately.'' I noted this quote as it seemed to summarize exactly
    the way my husband and I hope to raise our children. While I can
    encourage my young son to live passionately, the opportunity to do so
    will ultimately be his. However, as a parent, it is my job to protect
    his health and nurture his well-being in every way possible.
        Thanks to the work of the NICHD, I and many others like myself have
    been able to deliver healthy, happy babies and do a better job of
    protecting their health. With testing such as that for PKU, a test
    which was perfected in a mental retardation research center funded by
    NICHD, parents are able to prevent, to the best of our ability, the
    occurrence of mental retardation in our babies. We now know that we
    must put our babies to sleep on their backs to prevent SIDS, and we
    working moms can feel better about having our children in day care
    thanks to the information NICHD has been collecting in their ongoing
    Child Care study.
        I am especially pleased today to have the opportunity to thank you
    Mr. Chairman, and the members of this Committee for the very strong
    support you have given to NIH, its Institutes and Centers. In spite of
    the very difficult funding decisions you have had to make in recent
    years, you held fast to your belief in investing in America's health. I
    know that you personally remain committed to the NIH and you worked
    with us, the Friends of the NICHD to coordinate a visit for
    appropriations staffers to the NICHD. Last winter we were able to bring
    nearly 50 appropriations staffers to the Bethesda campus where they
    were able to see first hand what it's like to be both a patient at NIH
    as well as a lab researcher. In addition, they were able to meet with
    and ask questions of Dr. Alexander and several researchers.
        It is our hope to expand that knowledge to all Members of Congress
    and their staffs in June when the Friends of NICHD will host, as part
    of the NICHD's 35th Anniversary year, a scientific exhibition and
    reception. This event will provide researchers, scientists and Member
    of Congress an opportunity to interact and answer questions about the
    research currently being conducted across the country with NICHD
    support.
        It is unbelievable to all of us to think that just two short years
    ago we had a budget deficit of $292 billion. Now, in 1998 we are
    hearing a different and exciting word--budget surplus. If in deed such
    a surplus exists, the Friends of NICHD would like to see surplus equal
    solutions.
        For 35 years, the NICHD has been providing solutions through basic
    and applied research. The NICHD devotes its research to ensuring the
    birth of healthy babies and the opportunity for each infant to reach
    adulthood and achieve full potential, unimpaired by physical or mental
    disabilities. This critical research provides solutions for the world,
    the nation, and the families that live in your town. In order to
    continue to find solutions, the Friends of NICHD recommend that the
    NICHD receive $776 million in funding for fiscal year 1999. We also
    support an overall NIH funding increase, as recommended by the Ad Hoc
    Group for Medical Research Funding, of 15 percent for fiscal year 1999.
        Through its broad mission, the NICHD is working to find solutions.
    The NICHD is structured by an intramural program, which largely targets
    basic research related to human development, and an extramural program
    which includes the Center for Population Research, the Center for
    Research for Mothers and Children, and the National Center for Medical
    Rehabilitation Research. NICHD also supports 15 Mental Retardation and
    Developmental Disabilities Research Centers which pursue both
    biomedical and behavioral research leading to understanding the causes
    of mental retardation and other developmental disabilities. The NICHD
    has long served as a strong example of an institute that looks not only
    to the physiological factors affecting health, but recognizes that
    behavioral research is essential to this strategy. NICHD supports
    psychological research ranging from studying ways to prevent
    developmental detours to understanding more about adolescent health and
    risk-taking behavior to finding ways for children with disabilities to
    lead more independent and productive lives. As Congress seeks more
    effective, less-costly solutions to many of today's issues and
    problems, NICHD-supported research offers highly relevant insights.
        I would like to share with you today some of the newest and most
    exciting solutions being discovered through NICHD research.
        Finding Solutions for Autism through Early Intervention: Recent
    work on brain development strongly suggests that early educational
    language instruction actually re-wires the brain of the developing
    child. Research designed to better understand the processes underlying
    neuroplasticity may make it possible to increase this window of
    opportunity for early intervention which is so critically important for
    children with disabilities. The NICHD has launched a major autism
    research program at Yale University, UCLA, University of Chicago,
    University of Pittsburgh, and the University of Washington. The
    research study is designed to provide a better understanding of ways to
    prevent and treat autism, and to provide a better understanding of ways
    to provide more targeted educational services to youngsters with autism
    spectrum disorders. It appears that many children in the early stages
    of autism spectrum disorders can be spared from developing the most
    seriously debilitating symptoms through intensive early language and
    social intervention.
        Finding Solutions for Genetic Disorders: Advances in genetics
    research methods have now made it possible to explore the relationship
    between genetic errors and specific behavioral and psychological
    consequences of those defects. Projects on Fragile X Syndrome, Rett
    Syndrome, Down Syndrome and others have made substantial strides in
    recent years. NICHD research at several leading universities have
    linked specific errors on human Chromosome 15 to highly specific
    behavioral disorders of major health importance. Research has shown
    that most people with Prader Willi Syndrome, a genetic disorder which
    also causes life threatening obesity, also have Obsessive Compulsive
    Disorder (OCD), a psychiatric disorder affecting 5 million Americans.
    Researchers are homing in on the critical region of Chromosome 15 to
    identify which genes in this region are responsible for specific
    aspects of this condition. Once the gene product is identified, the
    search for a more effective treatment, or even a cure is possible.
        Finding Solutions for Increased Research in Obstetrics and
    Gynecology: In late 1997 the NICHD announced plans to establish several
    new centers to foster training of young investigators in the field of
    obstetrics and gynecology. Establishment of these centers was supported
    by Congress when the committee report accompanying the House Labor/
    Health and Human Resources/Education appropriations legislation for
    fiscal year 1998 urged NICHD to work with the NIH Office of Research on
    Women's Health to address the ongoing dearth of obstetric-gynecologic
    research. The intent, according to the report, is to offer financial
    assistance to would-be researchers to ``provide a bridge between their
    early training and their launching careers as independent
    investigators.'' NICHD believes that the approach used in these new
    ``Women's Reproductive Health Research Career Development Centers''
    will lead to an increased cadre of skilled clinicians and exciting new
    developments in obstetrical and gynecological care for women. NICHD
    plans to allocate approximately three million dollars to the new
    program, funding the first centers early this year.
        Finding Solutions for Premature Delivery: Researchers are
    identifying potential causes of premature birth which often leads to
    infant mortality or life-long disability. It increasingly appears that
    not only can a maternal infection cause amniotic infection, but that
    the actual impetus for the labor comes from the fetus itself. It
    appears that the fetus stimulates the initiation of labor as a means of
    protecting itself from a dangerous uterine environment. However, the
    resulting premature birth may pose an even greater threat to the fetus.
    NICHD research is developing a rapid method for detecting amniotic
    infection allowing clinicians to intervene with antibiotics more
    quickly to help eliminate the threatening intrauterine environment that
    triggers the labor-inducing response from the fetus.
        Finding Solutions for Sudden Infant Death Syndrome: As you well
    know, the NICHD is home to the ``Back to Sleep'' campaign. Prior to
    1994, when the campaign began, there were approximately 5,000 infant
    deaths annually due to SIDS. Through a combination of research and a
    public education campaign, the SIDS death rate has been reduced since
    1992 by 38 percent. In fact, the latest data in from the State of
    California shows a 50-percent decline in SIDS related deaths. This
    remarkable public/private information campaign has, along with other
    advances from NICHD, had a profound effect on the infant mortality rate
    of this country which dropped from 26.0 deaths per 1,000 live births in
    1960 to 7.2 deaths per 1,000 live births in 1996, the lowest rate ever
    recorded in the United States.
        Finding Solutions for Risky Adolescent Behavior: We all know that
    adolescence for many can be a healthy and exciting time of life. But
    for others, it can be a stressful, difficult time that can lead teens
    to engage in risky behaviors with possible life-long consequences.
    There is good news, however. A recent NICHD-supported study has found
    that adolescents who are emotionally connected to their families and
    schools are consistently healthier than those who are not. These
    adolescents suffer less from emotional distress, are less likely to
    smoke, drink, or use marijuana, less likely to begin having sexual
    intercourse at an early age, less likely to be involved in violence,
    and less likely to consider or attempt suicide. Emotional connectedness
    to family and school was found to be more strongly protective of health
    than specific parenting behaviors or school characteristics. The study
    also found that adolescents who had easy access to guns at home were
    more likely to be involved in violence and to consider or attempt
    suicide; and those with easy access to alcohol, tobacco, and illegal
    drugs within the home were more likely to use the substances.
        The above information was gleaned from the National Longitudinal
    Study of Adolescent Health (Add Health). This study is the first
    nationally representative and comprehensive study of the factors that
    promote health and healthy behavior among young people. NICHD funded
    the study with collaboration from 17 other NIH institutes and federal
    offices in response to a directive in the 1993 NIH Revitalization Act.
    Using a unique design, the study collected data to show the impact of
    school, family, peer group and neighborhood influences on health over a
    two-year period. Study data have been made available to researchers
    nationwide to investigate protective and risk factors in the lives of
    youth.
        Finding Solutions for Better Learning and Reading: Approximately 10
    million children have difficulty reading. In order to find the causes
    and develop solutions to this problem, the NICHD has supported research
    in neuroimaging using a variety of computerized tools and has helped to
    identify core cognitive, genetic, and neurobiological defects involved
    in reading disabilities. Over the years, NICHD-supported scientists
    have found that reading disabilities represent a disorder of language,
    and more specifically, an impairment in a child's ability to process
    phonemes, or individual bits of sound. Using this knowledge, the
    researchers have developed a number of prevention and remediation
    programs to help children at risk for reading disabilities. This
    approach is now providing the basis for reading intervention programs
    in classrooms in Houston, Texas; the District of Columbia; Atlanta,
    Georgia; Tallahassee, Florida; Boston, Massachusetts; Boulder,
    Colorado; Seattle, Washington; and throughout California.
        Finding Solutions to Prevent Osteoporosis and Bone Mass Loss:
    NICHD's Milk Matters public awareness campaign is targeting youngsters,
    with a special focus on adolescents and young women, to increase
    calcium intake to prevent against bone mass loss and osteoporosis.
    Recent NICHD studies show that a ``window of opportunity'' exists to
    add to the bone bank during the teen years. NICHD researchers have
    found that supplementing the diets of girls, ages 12 to 16, with an
    extra 350 mg. of calcium produced a 14-percent increase in their bone
    density, in comparison to unsupplemented girls. If this 14-percent
    increase in bone density could be maintained, its impact would be
    striking--for every 5 percent increase in bone density, the risk of
    later bone fracture declines by 40 percent. However, without continued
    supplementation, it appears the added bone density could be lost. The
    NICHD's campaign is educating parents and physicians about the
    importance of including the appropriate amount of calcium in the daily
    diets of young children and adolescents. Using print media, the milk
    mustache ads, NICHD is educating young people and showing them that
    it's ``cool'' to drink milk.
        Mr. Chairman, as you are well aware, the above mentioned examples
    are but a few highlights of work currently being done at the NICHD. So
    much more remains to be done. As the nation moves toward the new
    millennium, the NICHD plans to support an array of major efforts that
    not only fall into the important NIH areas of emphasis, but hold great
    promise for improving the health and the quality of life of the
    nation's children and families. With birth defects the leading cause of
    infant mortality, and contributing greatly to lifelong disabilities,
    the NICHD will expand support of grants studying the complex mechanisms
    controlling the normal and abnormal development of organs and the
    nervous system, including studies using the latest computer-assisted
    technologies. Similarly, researchers now understand that the biologic
    origins of such serious adult chronic diseases as diabetes and
    hypertension stem from multiple genetic sources. By supporting projects
    that will scan the human genome to identify and map multiple variations
    in the coding sequences and regulatory regions of the genes that might
    contribute to a chronic disease, researchers may be able to develop
    tests that can identify children at risk for the disease later in life.
        NICHD will focus significant efforts to prevent children and
    adolescents from experiencing adult diseases and disabilities. Work
    will continue to develop vaccines for tuberculosis and E. coli 0157,
    helping to improve the safety of our food supply. The number of
    research units providing the infrastructure to test a wide range of
    pediatric drugs will expand, and interventions to prevent our children
    and youth from smoking and driving recklessly are planned.
        Additionally, the NICHD is in a unique position to find innovative
    ways to improve the quality of life for persons with disabilities. One
    initiative will support full-scale clinical trials that will test
    promising new methods to improve the ability of persons with incomplete
    spinal cord injury to once again walk. Scientists will also be
    encouraged to develop novel materials that can serve as biodegradable
    scaffolding for tissue and organ regeneration, replacements for lost
    structures, novel prostheses, and even the basis to form artificial
    ones may become reality.
        President John F. Kennedy, whose efforts helped to establish the
    NICHD said, ``We have conquered the atom, but we have not yet begun to
    make a major assault on the mysteries of the human mind.'' We have come
    a phenomenally long way since President Kennedy made that statement in
    1961. But there is a long road ahead. With the continued strong support
    and leadership of this Subcommittee we can launch a major assault on
    many of the mysteries that affect our health. We thank your for your
    leadership which offers healthier futures for all of our children.
    Thank you.
                                     ______

            Prepared Statement of the American Physiological Society
        The American Physiological Society appreciates the opportunity to
    submit its views on fiscal year 1999 funding for the National
    Institutes of Health for the record. The APS appreciates the very
    strong support this Subcommittee has provided to the NIH in the past.
    Its phenomenal growth and impressive record of scientific discovery has
    been possible because of your efforts on its behalf.
        The American Physiological Society (APS) is a academic society
    comprised of scientists who study fundamental processes in cells,
    tissues, and organs as well as their integration into the whole, living
    organism. The APS was founded in 1887 and now has more than 8,700
    members. The majority of our members conduct research and educate the
    next generation of physicians and scientists at colleges, universities,
    medical schools throughout the U.S. Others are engaged in research and
    related activities in industry and government.
        The American Physiological Society (APS) supports current efforts
    to bring about a doubling of the NIH budget. Specifically, we support
    the goal of a 15-percent increase in fiscal year 1999 as recommended by
    the Federation of American Societies for Experimental Biology and by
    the Ad Hoc Group for Medical Research Funding. We believe that
    important scientific opportunities are waiting, and NIH should be given
    the means to pursue them as rapidly as possible.
        The ambitious ``Human Genome Project'' to identify the estimated
    100,000 genes that comprise the genetic map of the human being is
    nearing completion. We must begin preparations now to take the next
    step to find out what these genes do and how they affect our health.
        Research directed at determining the functions of various genes has
    already been undertaken in certain bacteria, plants, and relatively
    simple animals such as the fruit fly and zebra fish, whose genetic maps
    and genomes have been developed in parallel with the human genome.
    Thanks to these efforts we have learned that many genes operate
    similarly in different plants and animals. This means that we can use
    information about genetic function in lower organisms as a starting
    point to figure out how particular genes affect human health. In some
    cases, it is not one gene but combinations of two, three, or more genes
    that cause a health problem or determine what course it may take.
        The APS believes that NIH should lead the way in making it possible
    to use the findings of the Human Genome Project to provide tangible
    benefits for human health. At a February, 1997 meeting at the Banbury
    Conference Center at Cold Spring Harbor, NY, the American Physiological
    Society brought together a group of internationally renowned. academic
    and industry scientists with expertise in molecular genetics,
    physiology, and pharmacology to discuss what needs to be done now to
    translate what we know about human genes into medical knowledge.
        The participants at the Banbury Conference identified the need for
    a ``Genes to Health Initiative'' to lay the groundwork. This initiative
    would bring together scientists representing disciplines such as
    molecular genetics (to identify genes and determine their molecular
    function); physiology (to discover how genes function in living
    organisms); pharmacology (to understand how and why certain drugs work
    differently depending upon what genes or combination of genes are
    causing a disease); medical informatics (to develop ways to use
    advanced computer technology to collect and share this mass of
    information); and clinical scientists (to identify and address the
    manifestations of complex hereditary diseases).
        This is a new area of medical science, and many gaps in our
    knowledge must be filled before we can proceed to commercial
    development of the next generation of diagnostics, preventatives, and
    therapies. The APS believes that the health interests of the American
    people will be best served if the NIH leads the way in this important
    next step in the Human Genome Project. NIH's guiding principle is
    scientific excellence in service to public health. The NIH's
    involvement at this stage will provide assurance that public health
    concerns are given priority.
        The Genes to Health Initiative represents an important area with
    implications for understanding and treating many different diseases and
    health problems. The APS respectfully urges you to provide the NIH with
    new funding in fiscal year 1999 and to encourage it to undertake new
    initiatives such as this one and once again thanks this Subcommittee
    for its strong support of the NIH.
                                     ______

           Prepared Statement of the American Optometric Association
        The American Optometric Association represents over 33,000
    practicing Doctors of Optometry across the Nation. As a profession
    devoted to improving the vision care and health of the public, doctors
    of optometry provide preventive and remedial services for diseases and
    disorders of the vision system, the eye and associated structures as
    well as the diagnosis of related systemic conditions.
        The American Optometric Association supports the goal of NEI
    conducting research for new treatment and cures for eye diseases,
    visual disorders, and the preservation of sight. Since the NEI was
    founded in 1968, optometrists have been active participants in projects
    managed by the Institute, the results of which have improved the
    quality of life for American citizens.
        We applaud the research achievements of NEI over the past 30 years
    and support efforts to double the NIH budget over the next 5 years. We
    urge you to provide a 15-percent increase in fiscal year 1999 for the
    NIH as the first step toward doubling the budget. Furthermore, we urge
    you to provide $408.6 million, a 15-percent increase, for NEI in fiscal
    year 1998 as requested by the National Advisory Eye Council in its
    ``Citizens Budget Proposal''.
        Vision and eye health problems are the second most prevalent,
    chronic, health care problem in the U.S. population, affecting more
    than 120 million people. Visual disorders reduce the educability of the
    child and hasten the loss of independence in the elderly. Visual
    disorders and disabilities impose billions in direct and indirect costs
    on our society each year.
        Finding a cure for vision disorders and eye diseases is essential
    to prevent consequent handicaps. The two age groups at highest risk for
    vision problems are children and the elderly.
        Fear of blindness is second only to fear of cancer among our
    nation's elderly. Vision and eye health problems increase significantly
    in frequency and severity with age and are more prevalent in those over
    60. Vision problems among the elderly are often a key reason for the
    abandonment of independent living and frequently require rehabilitative
    services. Over 1.1 million Americans are legally blind; over 12 million
    Americans suffer from some form of irreversible visual impairment. No
    part of an individual's life is free from some risk to their vision.
        The annual cost of eye and vision disorders is $38.4 billion.
    Adequate visual rehabilitation can reduce the costs to individuals and
    society for lost wages and welfare payments. While research support by
    NEI has made advances in developing effective optical aids to maximize
    remaining vision, there is much research that still needs to be done.
        The NEI has conducted and supported research which has resulted in
    the early diagnosis and prompt treatment of eye diseases. Age related
    macular degeneration (AMD) is the most common cause of severe visual
    impairment in older Americans. Approximately 1.7 million have decreased
    vision and 100,000 are blind from the disease. While there is currently
    no cure for AMD, NEI is conducting research to test new treatments
    including the effects of antioxidants on the progression of AMD.
        A related area of concern is low vision which is broadly defined as
    any chronic visual condition that is not correctable by glasses or
    contact lenses that impairs everyday functioning. The leading causes of
    low vision are diseases that are common among older adults: age-related
    macular degeneration (AMD), cataracts, glaucoma and diabetic
    retinopathy.
        There are many areas in low vision in which further research is
    merited. One which deserves particular mention is the advancement of
    technology and assistive devices to help those with visual impairments
    to carry out everyday functions as independently as possible. Issues to
    explore include providing sufficient training in the use of these
    devices, reducing their cost, and improving the functionability and
    appearance of these devices if they are to be accepted by users.
    Researchers remain frustrated because advances in low vision devices
    seem not to be reaching the people with impairments, in part because of
    a lack of insurance coverage for evaluations and devices. Scientists
    are researching better ways of presenting hard to read computer graphic
    user interfaces, and developing telescoping and other optical devices
    to improve intermediate distance tasks and peripheral vision.
        Most people with chronic eye conditions have residual vision and
    with the aid of devices and rehabilitation, can maintain an
    independent, productive way of life. While low vision rehabilitation
    services and devices are available, most people with low vision do not
    appear to be aware of their availability or use them. To address this
    problem, NEI, under the auspices of the National Eye Health Education
    Program (NEHEP), is working on a national program directed at low
    vision in order to increase public awareness about visual impairment
    and the impact it has on the quality of life. The program will provide
    information about low vision services and the devices available to
    assist those with visual impairment. As a partner organization with
    NEHEP, the American Optometric Association supports this public
    education program and encourages the committee to support it as well.
        The NEI has funded a clinical trial planning grant to study
    screening tests to identify 3 year old children in need of vision care
    for amblyopia (``lazy'' eyes), strabismus (crossed eyes) and
    significant refractive errors. The NEI budget should permit funding of
    grants at a high level in the areas of strabismus, amblyopia and
    refractive errors. Since more than 120 million Americans wear glasses,
    research in the cause and prevention of refractive error and visual
    function should continue.
        The value of clinical trials to the public cannot be overestimated.
    NEI has a remarkable record of scientific breakthroughs attributed to
    clinical trial research beginning with the diabetic retinopathy study
    in the 1970s. By identifying the appropriate treatment for diabetic
    retinopathy which prevents the loss of vision, enough public dollars
    are saved each year to pay many times over the cost of treatment as
    well as the cost of conducting the trial. NEI clinical trials involve
    many institutions, hundreds of health professionals and thousands of
    patients.
        We recognize the importance of research in eye conditions which
    have a greater prevalence in the elderly, but also encourage
    substantial funding to continue research progress in the area of
    children's vision. Children are at high risk because of the impact of
    uncorrected vision handicaps on their educational and developmental
    progress. Vision problems may interfere with a child's ability to
    learn. Although a number of studies have suggested a significant
    relationship between visual functioning and reading, a randomized,
    prospective, multi-center clinical trial is needed to evaluate
    treatment therapies.
        We support NEI's research of the eye complications from acquired
    immune deficiency syndrome (AIDS). The results from NEI researchers
    demonstrating the effectiveness of drug therapy against CMV retinitis
    in people with AIDS is very encouraging in the fight against this
    public health problem. It is important that research dollars continue
    to support research activities to prevent, treat and cure AIDS.
        Optometric researchers are grateful for the commitment that
    Congress has demonstrated to the NEI and its mission. The investment
    made in eye/vision research has paid great dividends to the American
    people through major breakthroughs in eye care and vision. Yet, there
    is still much more to be done to preserve and enhance vision. We
    encourage this committee to continue its commitment to NEI and eye/
    vision research by providing the $408.6 million funding level
    recommended in the citizens budget. Thank you again for the opportunity
    to present this testimony.
                                     ______

      Prepared Statement of Mary Kaye Richter, on Behalf of the National
                      Foundation for Ectodermal Dysplasias
        I greatly appreciate having the opportunity to appear before you
    this afternoon. My name is Mary Kaye Richter. I am the Executive
    Director of the National Foundation for Ectodermal Dysplasias, a former
    member of the Board of Directors of the National Organization for Rare
    Disorders and a member of the Board of the National Alliance for Oral
    Health. Today, I am appearing on behalf of one hundred thousand men,
    women and children who are affected by conditions known as ectodermal
    dysplasias and millions of children and adults affected by other rare
    disorders.
        Through this hearing process, you will listen to many individuals,
    including myself, who espouse the doubling of the budget for the
    National Institutes of Health within the next 5 years and to begin that
    process with a 15-percent increase fiscal year 1999. Sufficient funding
    of scientific and clinical research is the cornerstone upon which
    dynamic improvement in our understanding of disease and disease
    processes must be built. While some people would encourage you to
    earmark dollars for specific disease entities, I would urge you to
    leave such decisions with the National Institutes of Health leadership,
    which is in the best position to do so. It would indeed be unfortunate
    if research funding was prioritized by the effectiveness of lobbying
    rather than the effectiveness of science.
        For a moment, I would like for you to consider what it must be like
    to have an infant affected by a condition about which no one can tell
    you anything. You and everyone near you, including your physician, have
    a feeling that all is not right, but no one has an idea of what may be
    happening. There is no doctor to confirm a diagnosis, no resource to
    which you can go for information and no hint of what should or could be
    done. As frightening as such thoughts may be, thousands and thousands
    of families encounter this scenario each year.
        Such is frequently the case for families faced by the challenges of
    ectodermal dysplasia (ED). In a nutshell, the ectodermal dysplasias are
    genetic conditions that are identified by abnormalities in derivatives
    of the ectoderm. The hair, teeth, sweat glands and nails are affected
    in these conditions of which there are more than 150 variations. Some
    of the syndromes are mild in their affects and others are devastating.
    The most common form of the condition is hypohidrotic ectodermal
    dysplasia which is identified by sparseness of hair, absence of sweat
    glands and many missing teeth. While a diagnosis is relatively easy in
    families with a history of the condition, diagnosis is extremely
    difficult in families where the condition has not previously appeared.
    It is estimated that more than 100,000 people are affected by these
    conditions.
        Once the diagnosis of a rare condition has been made, families
    encounter more challenges as they search for useful treatment
    information and knowledgeable care providers. Only the savviest will
    make their way to organizations like ours. What happens to those
    families for whom no advocacy organization exists? What happens when
    there are no available clinicians to make a diagnosis? What happens
    when the effects of a condition exacerbate as a result of a lack of a
    diagnosis? What happens when there is no place to turn and you have no
    hope? How does it feel to bury a child? The answers to these questions
    are illusive-not because of a lack of concern on our parts but rather
    because we seem unwilling to do those things that must be done in order
    to give appropriate answers.
        In 1988, the National Commission on Orphan Diseases conducted a
    survey that indicated that 15 percent of the families affected by rare
    conditions endured more than five years of searching before arriving at
    a diagnosis. Another 31 percent of families indicated that their search
    for a diagnosis lasted for more than a year. Only 51 percent of such
    families, suggested that their diagnosis was received in a timely
    manner of less than a year. Just this week, I talked with a mother in
    Chicago whose daughter is experiencing problems so severe that the
    child has been removed from school. In spite of visits to several
    premiere institutions within the U.S., no one can explain what may be
    happening. Meanwhile, her symptoms exacerbate. Earlier this month, a
    seventeen-year-old from New York died as a result of complications
    associated with ectodermal dysplasia about which nothing is known.
        There is an office that is in a position to make a difference for
    families in such dilemmas, the Office of Rare Diseases (ORD) within the
    National Institutes of Health. However, funding for the office has been
    woefully inadequate, preventing the kinds of accomplishments that are
    needed. The ORD could play the critical role of pivot point for the
    operation of Diagnostic Research Centers.
        As mentioned earlier in this testimony, nearly a majority of those
    affected by rare conditions do not receive a diagnosis within a year.
    For many, a 5-year wait can be expected. Currently, there are 75
    General Clinical Research Centers, 6 Pediatric Clinical Pharmacology
    Research Centers and many special research centers as identified by
    individual Institutes across the United States. I am asking you to
    consider funding that would enable the Office of Rare Diseases to
    select a minimum of 15 Diagnostic Research Centers that would focus on
    the diagnosis and treatment of rare conditions. With such a network in
    place, real progress can begin. Families who are desperate for
    diagnosis will travel to any length to unlock the mystery of a child's
    condition. Such centers, geographically dispersed, would be a giant
    step forward. Between 20 to 25 million patients with 6,000 rare and
    genetic disorders in the United States are waiting for the hope and
    help only the Congress can provide.
        A key function of the Office of Rare Diseases is the sponsorship of
    scientific workshops. These may be done with cooperation from
    applicable research Institutes and Centers at the National Institutes
    of Health. Workshops enable the following outcomes.
      --Establish research priorities;
      --Develop research goals;
      --Establish collaborative research assignments;
      --Provide support to develop patient and tissue registries;
      --Develop plans to initiate clinical trials;
      --Create animal models for research;
      --Prepare program announcements to solicit research grant
            applications;
      --Establish criteria for diagnosing and monitoring rare diseases; and
      --Inform targeted professional and voluntary organizations through
            published proceedings.
        One workshop, held just more than one year ago, focused on the
    ectodermal dysplasias. The success of the event provides ample evidence
    of the benefits of such workshops. The ectodermal dysplasias are
    conditions of interest to several of the Institutes, namely the
    National Institute for Dental Research, the National Institute for
    Arthritis, Musculoskeletal and Skin, the National Child Health and
    Development Institute as well as to the Office of Rare Disease
    Research. In 1996, all of these groups joined together to hold the
    first ever scientific symposium to discuss ED.
        The event attracted outstanding researchers from the U.S., Canada
    and Europe. The symposium was a revelation to the attendees, as the
    overlap of key biological issues became apparent. It is clear that
    improved understanding of the developmental biology associated with ED
    will help unlock the doors of knowledge to the growth of hair, nails
    and teeth and the function of sweat and sebaceous glands. While most
    members of Congress would not clamor for research into ED, they could
    appreciate the value of science that may ultimately grow hair where
    none was present, replace teeth with human biological material rather
    than metal or plastic or find a way to maintain normal body
    temperature. Such solutions could well be the result of scientific and
    clinical research into ectodermal dysplasia.
        Not only did the meeting serve as a stimulating exercise for those
    individuals who participated, it also served as a springboard for
    scientific research. This spring, the NFED will award a minimum of
    $50,000 in grants to winners in our current competition. Our hope is
    that our grants can serve as a bridge to enable researchers to gather
    sufficient data to successfully compete for N.I.H. funding. An example
    of such success is that of Jonathan Zonana, a genetic researcher at
    Oregon Health Sciences University. With funding from the NFED, he
    secured sufficient data to obtain funding from N.I.A.M.S. and the
    N.I.D.R., which ultimately led to the identification of the gene for x-
    linked hypohidrotic ectodermal dysplasia. Currently, we are providing
    similar bridge grants, which are aimed at finding the genes for
    Clouston's ectodermal dysplasia and ectrodactyly-ectodermal dysplasia-
    clefting, an especially troublesome syndrome.
        Currently, the ORD sponsors or co-sponsors approximately 30
    workshops per year. With thousands and thousands of rare conditions,
    the number of workshops must be increased to give more of those
    individuals affected by these syndromes some hope that attention will
    be given to their disorder sometime in their life time. Increasing the
    budget of the ORD by just $500,000, for workshops, would significantly
    increase the number of rare disorders that are examined.
        The Office of Rare Diseases could also serve as a much-needed focal
    point for information relative to which doctors and researchers are
    doing work with a particular rare disease entity. Currently, families
    can only guess where they might go for help. How much better it would
    be to have a resource at hand that could elucidate critically needed
    care and research information. Currently, the ORD has a budget of $1.6
    million dollars. I implore you to make this office what it needs to be
    by increasing its budget to $4.8 million dollars-a pittance when
    compared to some amounts being spent on some individual single
    conditions.
        The operation of and funding for the Rare Disease Office is of
    importance to families affected by rare conditions but so is the
    funding for individual divisions of the National Institutes of Health.
    Both scientific and clinical research are needed to improve our
    understanding of and treatment for rare disorders. It is important to
    remember that although a condition being investigated may be rare, it
    may have tremendous impact on a large number of individuals. For
    example, several years ago, the National Institute for Dental Research
    sponsored a program in its clinical center whose researchers placed
    osseointegrated dental implants into the jaws of nearly fifty
    individuals affected by ED. Not only did the project underscore the
    value of implants in edentulous adults, it also supported the procedure
    for use in children. The procedure was found to be safe and
    efficacious. The children and teens that participated in the program
    will tell you that it also enabled them to eat any food that they chose
    instead of being limited to soft foods. It allowed them to speak with
    classmates without fear that their dentures would slip and also
    prevented them from embarrassment from things so simple as a first
    kiss. The implants gave them a freedom they had never known.
        It was your support for the National Institute for Dental Research
    that made the research possible and your support that helped improve
    our understanding of the use of implants for anyone missing a tooth. It
    is also important to note that the research at the National Institute
    for Dental Research has had an additional benefit. Now, thanks to
    cooperation from several outstanding dental schools, their staffs and
    Implant Innovations, Inc. and Nobel Biocare, both manufacturers of
    implant components, the NFED offers special implant programs at the
    dental schools associated with Southern Illinois University, the
    University of North Carolina and the University of Washington. The
    private sector has now picked up that which was begun in the public
    sector. Collaborative efforts between the public and private sectors
    can provide an increasingly exciting opportunity. However, in our case,
    the collaboration is fruitless unless the public sector plays a
    preliminary and meaningful role. Our organization would never have been
    able to put our program into place if the extraordinary work had not
    been done at the Dental Institute.
        Although the bulk of my testimony is devoted to funding for the
    National Institutes of Health, the value of the General Dentistry
    Residency program is worthy of comment. It is our hope that this
    program can be sufficiently funded to include funding for Pediatric
    Dentistry Training as the reauthorization proposal suggests. The
    program not only improves the depth of training for dentists but also
    enables individuals needing specialized care to identify practitioners
    and programs where help may be available. On nearly a daily basis, our
    office receives calls from individuals needing extraordinary oral
    health care who have difficulty in finding qualified clinicians to
    provide the care. While insurance companies may have us believe that
    teeth are only cosmetic, as their frequent denial of benefits
    indicates, nothing could be further from the truth. Diet, speech, self-
    esteem, student success and employment are all impacted by the
    condition of the mouth. When all that is present in the mouth are a
    couple of fangs, as in ectodermal dysplasia, or teeth worn down to the
    gum line, as in osteogenesis imperfecta, all of life is affected. The
    General Dentistry Residency program serves as a beacon of hope to those
    needing care. We support the position of the American Association of
    Dental Schools for funding of at least $4.0 million with the caveat
    that additional funds be added should the reauthorization include
    Pediatric Dentistry Training.
        Basic scientific research is also of great interest to us. We are
    especially concerned about funding in this area for both the National
    Institute for Dental Research and the National Institute for Arthritis,
    Musculoskeletal and Skin. I remember a time when I used to dream about
    the day when my own son could eat an apple or bite into a steak. Thanks
    to the National Institute for Dental Research and its implant research
    those dreams have come true. But I also dream of young children who
    would like to play baseball, who would love to throw their arms around
    Mickey Mouse at Disney World or play on a jungle gym with friends. When
    they are unable to perspire, such children find all of their activities
    hampered. Our families have every reason to fear the potential of heat
    stroke that accompanies their everyday activities.
        An absence of hair, most often thought of only in terms of mature
    men with male pattern baldness, is an even more significant problem for
    children. This is especially so when wearing a wig compounds the
    problems of overheating. Little girls should have ribbons and bows to
    wear in their curls, not baldheads with wisps of uncontrollable, coarse
    hair. And young boys should not have to fear taking off a cap, the
    doing of which may reveal an embarrassing lack of hair. Basic
    developmental research can help identify the mechanism that makes hair
    grow and ultimately lead to hair growth for all that desire it.
        One last concern that I would like to share with you is inadequate
    funding for investigators who begin their research careers as fellows.
    During their tenure, exciting projects may begin for which financial
    support is lost at the end of the fellowship. As a result, promising
    research comes to an end just when preliminary documentation is
    beginning to bear fruit. In the case of rare diseases, just when
    families have hope that a researcher is beginning to make strides in
    understanding of the condition, the hope diminishes when funding ends
    and the fellow must leave. There is also the question of what happens
    to the research when the fellow leaves an Institute. If there is no
    replacement to carry on the work, all can be for naught. There needs to
    be a system whereby fellowships, involving rare disorders, can be
    extended with adequate financial support when warranted. Wasted effort
    benefits no one.
        My list could go on and on. Congressman Porter, I know that you are
    well aware of the anguish of parents whose children are affected by
    rare conditions. My hope is that you and members of this committee will
    encourage your peers to support a doubling of funding for our jewel of
    government, the National Institutes of Health. My hope is that you will
    spearhead an effort to increase the role and budget of the Office of
    Rare Diseases. And my hope is that you will allow those individuals in
    a position to make sound decisions relative to the spending of research
    dollars to do so at the National Institutes of Health. Please do not
    succumb to the desires of individuals who lobby for earmarked funding
    for specific conditions. All that those of us challenged by rare
    disease want is a fair chance at a better tomorrow for our children.
                                     ______

       Prepared Statement of Michele and Ryan Licursi, on Behalf of the
         Foundation for Ichthyosis and Related Skin Types (F.I.R.S.T.)
        My name is Michele Licursi. I am testifying as a mother and a
    representative of the Foundation for Ichthyosis and Related Skin Types
    (F.I.R.S.T.). I have been a Regional Support Network (RSN) Coordinator
    with F.I.R.S.T. for 3 years.
        Testifying with me today is my son Ryan. He has a type of
    ichthyosis called Epidermolytic Hyperkeratosis (EHK).
        I wish to thank the subcommittee for this opportunity to testify
    regarding funding for skin disease research and the budget of the
    National Institute of Arthritis, Musculoskeletal and Skin Diseases
    (NIAMS).
        The Foundation for Ichthyosis and Related Skin Types (F.I.R.S.T.)
    is a voluntary organization dedicated to providing support,
    information, education and advocacy for individuals and families
    affected by ichthyosis. F.I.R.S.T. supports research into causes,
    treatment and a cure for ichthyosis.
        The Foundation receives no grants or sub-grants, and no contracts
    or sub-contracts, from the federal government. It does receive
    contributions of approximately $2600.00 per year from federal employees
    through the Combined Federal Campaign (CFC).
        Ichthyosis is a family of genetic skin diseases characterized by
    dry, thickened, scaling skin. These diseases are caused by genetic
    defects that are usually the result of genetic inheritance. Currently,
    there is no cure for ichthyosis, and there are no truly effective
    treatments.
        Epidermolytic Hyperkeratosis causes the skin to be very fragile.
    The slightest bump can cause the skin to break away. Blisters are
    common. They can be spontaneous or the result of a sleeve, a sock, or a
    collar touching the skin. Scaling and flaking are continuous. The skin
    is tight and cracks. The palms and soles are thick, making something as
    simple as holding a pencil or as natural as walking difficult and
    painful. Overheating is dangerous and infections are a constant threat.
    We are experts now, but 12 years ago, like most people, we had never
    even heard of ichthyosis.
        We learned together the hard way. We found out that diapers rubbed
    the skin off of Ryan's legs, that car seats and high chairs had to be
    lined with sheepskin, that his daily skin care routine took several
    people and a couple of hours. Relatives had to be taught how to pick
    him up and how to hold him. We no longer shopped for cute little
    outfits. We looked for any clothes that his skin would tolerate. Shoes
    were out of the question for years and still continue to be a big
    problem.
        Ryan has been hospitalized for infections. Simple medical
    procedures are complicated. Our days and activities are planned around
    his skin care. We get stares and questions from strangers. Most are
    trying to be nice, but many are rude, accusing us of all kinds of child
    abuse. While the physical aspects of ichthyosis are obvious, the blows
    to ones self esteem can be even more damaging.
        I am very thankful for the support we received from other members
    of F.I.R.S.T. We were lucky to find F.I.R.S.T. very early in Ryan's
    life and the advice and concern we received helped us find our way. As
    a coordinator for the RSN, I talk with people in different stages of
    coping with ichthyosis. I talk with new parents who are shocked to
    learn that their baby's skin could have such problems and be such a
    threat and now have to learn how to care for them. I talk with parents
    who share their child's heartbreak as they try to socialize and fit in,
    or when they refuse to socialize because of embarrassment. I talk with
    parents of teenagers who are rebelling and refuse to care for their
    skin properly, thereby making things worse. I talk with young adults
    who are experiencing difficulties in school or the workplace. I talk
    with people struggling with the cost of topical treatments not covered
    by insurance. I talk with adults who are guilt ridden because they have
    passed this condition on to their new baby. Currently ichthyosis is a
    life-long battle. Hopefully, this will change in the future.
        School has been great and Ryan has lots of good friends, but that
    is not the case with many kids with ichthyosis who are not as outgoing
    and confident as Ryan. Confident enough to tell you a little bit about
    living with Epidermolytic Hyperkeratosis (EHK).
        Ryan Licursi: Hello, I am twelve years old and in seventh grade. As
    you know, I have Epidermolytic Hyperkeratosis and it stinks. There are
    many things that other kids can do that I can't because of my skin. It
    is very dry and fragile, and I blister very easily. Any contact sport
    is out. I can't be on a basketball team because if anyone bumps into
    me, or knocks me over, my skin will rip. I can't be on a soccer team
    because if someone kicks me or I get hit with a ball, my skin will come
    off. I often have blisters on my feet. I can hit the ball in baseball,
    but getting around the bases is another story. I'm always the last one
    picked for teams in gym class. In winter, I even have trouble writing
    because the skin on my hands gets stiff and cracks.
        Another problem with having EHK is that every day I have to get up
    an hour earlier than other kids in order to soak in the tub for a half
    an hour, have cream put all over my body, and let it soak in before I
    put on my clothes. If I didn't do this each day, I would be so stiff
    and dry that I could not stand it. It hurts to do it, but it would be
    worse if I didn't.
        People in my town and my school know me and understand my physical
    condition, but when I go to the mall or any other public place, people
    stare and make comments.
        Any place I go, I leave a trail of skin. You'll know that I was
    sitting in this chair. I would really appreciate any research that can
    be done to cure this condition.
        We recognize this Subcommittee's strong history of bipartisan
    support for medical research funding and the NIH. In 1992, researchers
    identified the sites of two genetic mutations that account for 70 to 80
    percent of all cases of EHK. Since that time, genetic mutations that
    cause several other forms of ichthyosis have been identified and
    scientists and physicians have a better understanding of the disease
    process.
        We are excited about this progress, and about the current research
    into gene therapy. We are hopeful about the possibility for an
    effective treatment or cure on the horizon, but at this point it is
    still just hope. We continue to be frustrated by the lack of effective
    treatment options.
        We are also discouraged by the lack of available testing
    facilities. Genetic testing is possible today for the types of
    ichthyosis for which the specific mutations have already been
    identified. However, with the exception of one of the milder forms of
    ichthyosis, (Recessive X-linked Ichthyosis) testing is only being done
    on a limited research basis and there are no clinical laboratories that
    routinely offer these services. These tests are complex and time
    consuming (in some cases the particular genes are difficult to work
    with). However, they can provide valuable information for the purposes
    of genetic counseling (for carrier detection in certain recessive forms
    of ichthyosis and risk of recurrence) and pre-natal diagnosis. They can
    also help to plan appropriate intervention for those at risk for labor
    and delivery problems and premature birth that are common with some
    forms of ichthyosis.
        The Foundation for Ichthyosis and Related Skin Types (F.I.R.S.T.)
    urges a 15-percent increase in NIH funding in the next fiscal year,
    which would allow NIAMS to support a greater number of worthy research
    projects, conduct more clinical trials and expand it's intramural
    research program.
        F.I.R.S.T. also supports increased investment in translational
    research, which would build upon this new scientific knowledge to
    develop practical applications for those with ichthyosis and other skin
    diseases. The recent discovery of many of the genes involved in
    specific skin diseases is just the starting point for improving
    diagnosis and treatment.
        In 1992 a member of F.I.R.S.T. testified before this committee
    regarding the need for a national registry. Today, as a direct result
    of your interest and support, we have the National Registry for
    Ichthyosis and Related Disorders. To date, several hundred patients,
    and their physicians have participated in the detailed enrollment
    process, and enrollment is proceeding at an ever increasing rate. The
    registry helps generate researcher interest in ichthyosis, and provides
    investigators with an essential tool--a pool of affected individuals
    with a confirmed clinical diagnosis. The availability of this pool of
    information results in significant savings in research time and dollars
    which would have normally been spent identifying eligible patient
    populations.
        Current funding for the National Registry for Ichthyosis and
    Related Disorders expires in 1999, but the work of the registry must
    continue. Continued funding of the skin disease registries will ensure
    that these resources will be maintained and will continue to be a
    valuable tool for investigators.
        On behalf of our members, those with ichthyosis and their families,
    we thank this Congressional Subcommittee for their time and attention.
                                     ______

       Prepared Statement of W. Bruce Fye, M.D., M.A., F.A.C.C., Chair,
      Cardiology Department, Marshfield Clinic, on Behalf of the American
                             College of Cardiology
        The American College of Cardiology (ACC) is a professional medical
    society and educational institution whose mission is to foster optimal
    cardiovascular care and disease prevention through professional
    education, promotion of research, and leadership in the development of
    standards and guidelines and the formulation of health policy. I am W.
    Bruce Fye, M.D., M.A., chair of the cardiology department at Marshfield
    Clinic, a 525 physician multi-specialty group practice in Central
    Wisconsin. As chair of the ACC's Government Relations Committee and the
    ACC's historian, I am pleased to present to the Subcommittee the views
    of the College on behalf of its 24,000 members with respect to fiscal
    year 1999 funding for the National Heart, Lung, and Blood Institute
    (NHLBI).
        This year the NHLBI celebrates 50 years of accomplishments in the
    prevention, diagnosis, and treatment of cardiovascular disease. The
    first congressional appropriation to the NHLBI was less than $1
    million. Since then, the NHLBI's budget has grown to $1.51 billion
    thanks to the Subcommittee's long-standing support. Again this year,
    the ACC asks the Subcommittee to maintain that commitment.
        Our nation's citizens, many of them potential cardiac patients, do
    not want us to become complacent as we celebrate the successes of the
    past 50 years that have resulted from our nation's pioneering research
    and educational programs. The unsettling reality is the staggering
    number of deaths attributable annually to cardiovascular disease. Since
    1910, with the exception of the great influenza epidemic, heart disease
    has and continues to claim more lives each year than any other disease.
    This year alone, one million Americans will die as a result of
    cardiovascular disease.
        More than 50 million Americans, about one-fifth of the population,
    are living with some type of cardiovascular disease. Fortunately, most
    of them are living better and more productive lives as a result of new
    drug and device therapies, surgical innovations, enhanced emphasis on
    prevention, and innovative educational programs--all made possible
    through NHLBI-sponsored research. For example, last year an important
    discovery was made as a result of the Antiarrhythmics vs. Implantable
    Defibrillators Trial. This trial proved that implantable cardiac
    defibrillators improve overall survival in patients with serious
    ventricular arrhythmias. What researchers have learned throughout the
    20th century about cardiovascular disease has saved millions of lives
    and has improved the quality of tens of millions more.
        Regardless of these advances, however, heart disease continues to
    greatly affect the lives and productivity of too many people.
    Fortunately, the prospects for progress in the 21st century are vastly
    greater than scientists could have ever foreseen in 1948. Now more than
    ever it is critical that the Subcommittee renew its long-standing
    support for the NHLBI.
                   medical research funding and cost savings
        In 1998, the total economic impact of heart disease in the United
    States is projected to reach $175.3 billion, of which about $98 will be
    directly attributable to the costs of providers, hospital and nursing
    home services, medications, and home health. The remaining $77 billion
    will come from lost productivity. Think of the impact that research had
    on tuberculosis and polio--major public health programs just a few
    decades ago. In this extraordinary era of molecular biology, NHLBI-
    funded researchers are on the brink of making major discoveries that
    should yield significant benefit in the area of cardiovascular disease.
      --Nearly 14 million Americans alive today have a history of heart
            attack, heart-related chest pain or both. Researchers may be
            close to being able to predict through a simple blood test
            whether some individuals, who are otherwise apparently healthy,
            may be at risk of a first heart attack years before symptoms
            appear. The results of this research could offer opportunity to
            develop potential new avenues for prevention and treatment.
      --Congestive heart failure is projected in 1998 to cost nearly $19
            billion in medical expenses and lost productivity and is the
            leading cause of hospitalization for people age 65 and older.
            New findings from the NHLBI's Systolic Hypertension in the
            Elderly Program have revealed that treatment with a low-dose
            diuretic antihypertensive drug reduces the risk of heart
            failure by 50 percent in older persons with isolated high
            systolic blood pressure, and by 80 percent among individuals
            who have already suffered a heart attack. Heart failure is a
            common and very serious problem that we must work hard to
            prevent. Because there are more than 400,000 new cases of heart
            failure annually in this country, the potential benefit from
            this type of research could be enormous.
      --Heart deformities are the number one birth defect in the United
            States, affecting 32,000 newborns each year and killing more
            than 2,500 babies before age one. NHLBI scientists have created
            two mouse models with a specific gene defect to replicate
            malformations that occur in two common human congenital heart
            diseases. Further research is under way to determine whether a
            similar gene defect exists in humans and may eventually lead to
            the development of gene-based diagnostic tests and therapies to
            prevent malformations of the heart, save infant lives, and
            reduce the need for corrective surgery after birth.
        Last year, members of Congress demonstrated their commitment to
    medical research by increasing funding to the National Institutes of
    Health (NIH) and the NHLBI for fiscal year 1998 and, also, through the
    introduction of several legislative proposals which would significantly
    increase over the next several years the financial resources dedicated
    to the NIH. The ACC applauds these efforts, especially in light of the
    constraints placed on the federal budget and the pressure of competing
    domestic spending priorities. To provide for a stable funding source
    beyond annually appropriated amounts, the ACC supports initiatives to
    establish a biomedical research trust fund.
        In his State of the Union address, the President announced that his
    fiscal year 1999 budget proposal will contain the largest funding
    increase for the NIH in the nation's history, providing $1.6 billion to
    the NHLBI for heart, lung and blood research. The College strongly
    supports the proposed $1.6 billion for the NHLBI.
                        genetics and molecular medicine
        Innovative research in human genetics and molecular biology holds
    great promise for the prevention and early diagnosis of cardiovascular
    disease. We are just beginning to realize the enormous potential of
    this fertile area of research. In the next century, it is possible that
    patients with hypertension will be distinguished by genotype, allowing
    preventive and therapeutic approaches to be tailored to meet the needs
    of specific subgroups. It has been discovered recently that people with
    certain genetic defects are more likely to develop hypertension and
    atherosclerosis if they are exposed to risk factors such as a high-salt
    or fatty diet.
        Furthermore, researchers with the NHLBI Framingham Heart Study have
    identified a genetic marker for hypertension which links a mutation in
    the gene for angiotens in converting enzyme which regulates blood
    pressure in men. Genetic research suggests that someday new treatments
    and ways to prevent or even reverse the progression of cardiovascular
    disease will be available. Early reports from NHLBI-funded researchers
    working on gene transfer techniques are very promising. Preliminary
    findings suggest that this innovative approach might slow the
    development of atherosclerosis in vascular grafts, such as those used
    in coronary artery bypass surgery. Other studies suggest that it may be
    possible to promote recovery of cardiac function after a myocardial
    infarction by introducing healthy heart cells into the weakened heart
    muscle.
                            education and prevention
        Over the last decade, much has been learned about the prevention of
    cardiovascular disease. We know that heart disease is linked
    definitively to hypertension, high cholesterol, diabetes, smoking,
    physical inactivity, and obesity. The NHLBI's public education
    programs--the National High Blood Pressure Education Program, the
    National Cholesterol Education Program, and the National Heart Attack
    Alert Program--make information readily available to patients,
    families, and health professionals.
        As physicians, educators, and public health officials, we
    acknowledge there is much to be done to ensure that the preventive
    measures that have proven to be effective are being used to fight
    cardiovascular disease. A renewed commitment, under the guidance of the
    NHLBI, is needed by physicians and patients to reduce the risk factors
    that are plaguing Americans. Just recently, the NHLBI's National High
    Blood Pressure Education Program released new physician guidelines for
    the prevention and treatment of high blood pressure. The NHLBI will
    also convene a special emphasis panel which will provide
    recommendations for dissemination research to improve treatment and
    prevention programs in clinical and community settings.
                              women and minorities
        In every year since 1984, cardiovascular disease has claimed the
    lives of more females than males. Exciting new research has found that
    estrogen deficiency may be linked to the higher prevalence of coronary
    heart disease in postmenopausal women. While estrogen replacement
    therapy has been recommended as a preventive measure against heart
    disease, the benefits are not conclusive and there are potential side
    effects. The NHLBI is pursuing research into the development of
    ``designer estrogens'' that could protect against heart disease without
    undesired effects.
        Black men and women continue to suffer disproportionately from
    cardiovascular disease and many of its related causes, particularly
    hypertension. The NHLBI continues to emphasize the importance of
    including minorities in clinical research and trials. The NHLBI has
    also started a new program that targets Latinos living in the United
    States. The ``For the Health of Your Heart'' initiative is designed to
    increase the awareness of the heart disease risk factors and promote
    lifestyle changes to reduce the chances of developing heart disease.
                                   nutrition
        The NHLBI continues to make considerable progress in understanding
    the role of nutrition in cardiovascular disease and has increased its
    involvement in this important area. The NHLBI Dietary Approaches to
    Stop Hypertension trial has shown that a diet low in fat and high in
    vegetables, fruits, and low-fat dairy foods has the similar effect of
    reducing high blood pressure as single-drug therapy. Through the
    Cardiovascular Health Promotion Project, the NHLBI is promoting the
    adoption of heart healthy behavior among children and their families
    through schools, community organizations, and recreation facilities.
                            other areas of research
        Other areas of important NHLBI research opportunities in need of
    support include the following:
      --Cell Transplantation.--Exciting new developments are occurring in
            cardiac cell transplantation. The ability to increase the
            number of functional cells in a diseased heart could ultimately
            eliminate the need for mechanical support or heart
            transplantation. Preliminary animal studies suggest that
            engrafting cells into heart tissue can replace the damaged
            tissue. Further research is needed on genetic, molecular, and
            cellular approaches to transplanted cells into heart tissue.
      --Cell Loss and Heart Failure.--Little is known about the underlying
            causes of heart muscle loss during end-stage heart failure.
            Molecular, cellular, and genetic research is needed to learn
            what role cell death has on the development of heart failure.
            If scientists can better understand cell loss, perhaps new
            interventions for the prevention and treatment of heart failure
            can be developed.
      --Cholesterol in Embryonic Development.--The role of cholesterol in
            embryonic development is just beginning to be understood.
            Genetic cholesterol-deficiency syndromes have been identified,
            and it is known that certain genetic characteristics lead to
            multiple abnormalities, including cardiovascular defects. The
            NHLBI is convening a special emphasis panel which will examine
            the role of cholesterol in embryonic development, and the
            potential effects of cholesterol lowering in pregnancy.
      --Viral Genes and Atherosclerosis.--Recent evidence suggests that
            viral agents may play a role in the initiation and progression
            of atherosclerosis, a condition in which the artery walls
            become narrowed due to the build-up of fat, cholesterol and
            other substances, thereby causing the reduction of blood flow.
            Modern methods of genetic and molecular research offer
            opportunities to explore the viral mechanisms of
            atherosclerosis and other cardiovascular diseases which could
            eventually lead to interventions that may prevent or lessen the
            consequences of heart attacks and congestive heart failure.
                                closing remarks
        Beyond better public awareness, reducing the number of
    cardiovascular-related deaths is greatly dependent upon research
    sponsored by the NHLBI. The United States must prepare itself, both
    scientifically and fiscally, for the inevitable increase in the
    incidence of cardiovascular disease that will accompany the graying of
    the so-called baby-boomer generation. I hope the Subcommittee shares my
    optimism about the unique opportunities that our scientists and
    clinical investigators now have to achieve their long-standing goal of
    conquering this nation's number one killer. In summary, the American
    College of Cardiology would like to encourage the Subcommittee to
    generously fund the NHLBI. It is a wise investment in our nation's
    future.
                                     ______

       Prepared Statement of Rev. Gary Hutcheson, Volunteer Advocate, on
                  Behalf of the National Psoriasis Foundation
        Mr. Chairman and members of the Appropriations subcommittee: My
    name is Gary Hutcheson. I am speaking to you as a volunteer advocate
    both for myself and on behalf of the 6.5 million American men, women
    and children who are battling psoriasis--a chronic, debilitating skin
    disease. It is a disease without a cure, and without universally
    effective treatments. Until a cure or more effective treatments are
    found, millions of people with psoriasis face a lifetime fighting this
    ravaging disease.
        Over three billion dollars are spent annually on treatments for
    psoriasis and each year psoriasis patients make approximately 2.4
    million visits to dermatologists.
        In fact, psoriasis is chronic, unpredictable and often unrelenting,
    and treatments may be successful for only relatively short periods of
    time for only some people. The thick, red, scaly patches on any or all
    parts of the body, and painful joints, can limit daily activities and
    interfere with physical, occupational and psychological functions. Skin
    affected by psoriasis may itch, burn, sting, and easily bleed.
    Physically, psoriasis can range in severity from mild to disabling.
        The occupational impact of the disease poses a significant economic
    burden for the nation and a financial hardship for the person with
    psoriasis. Emotionally, psoriasis can be devastating. The social
    rejection and physical suffering of psoriasis has led people to
    suicide.
        Some types of psoriasis may require hospitalization and can even be
    life-threatening. Each year approximately 400 people with psoriasis are
    granted disability by the Social Security Administration because of
    debilitating disease. Perhaps even more difficult is the fact that
    three-quarters of a million people diagnosed with psoriasis are under
    the age of 10.
        Though I do not want to sensationalize my personal situation, I
    have had psoriasis for the last 20 years. I can relate something of the
    pain and discomfort, public humiliation and embarrassment, private
    disgust, gnawing doubt and shattered self-image, that the vast majority
    of psoriasis sufferers struggle with throughout their lives.
        Twice I have been hospitalized for extended periods of time to
    treat the disease. On numerous occasions I have received multiple
    injections directly into the psoriatic patches. As many as 30
    injections have been given in a single doctor's office visit.
        Moderate-to-severe psoriasis dramatically inhibits a person's
    ability to maintain a normal, healthy, active lifestyle because so much
    time must be devoted to the ongoing, daily treatment of the disease.
    Early in my ministerial career I was compelled to change my vocational
    direction from working with troubled teenagers to a pastoral ministry
    setting due to the rapid advance of my psoriasis. More than once, while
    playing volleyball or swimming with the young people entrusted to my
    care, I was innocently asked, ``Hey Pastor Hutch, do you have some kind
    of creeping, jungle rot?''
        The severity of my condition has progressed to the extent that I
    can no longer even participate in those kinds of simple, fun, anxiety-
    relieving, stress-reducing activities.
        I have even relocated my family from one part of the country to
    another in an effort to find the most advantageous combination of
    climate, UV radiation from the sun, and specialized medical expertise,
    for treating this tenacious, debilitating malady.
        A task as simple as taking a bath has become a painful, time-
    consuming ordeal. In fact, the derogatory comments, uneasy stares of
    strangers, and subtle but evident attitude of friends who ``keep their
    distance'', are not as traumatic as the countless hours spent: soaking
    in coal tar baths; applying numerous topical steroid creams and
    ointments; wearing occlusive plastic suits to bed; administering
    various medicated oil and liquid steroid treatments to the scalp;
    undergoing regularly scheduled liver biopsies; receiving weekly UVB or
    PUVA ultraviolet light radiation treatments; and having blood drawn on
    a monthly basis.
        These treatment regimens represent only a partial list of the
    continual maintenance regimen for many, many people afflicted with
    psoriasis. Also, the frustration and demoralization of this kind of
    schedule is greatly increased when one considers the limited efficacy
    of these treatments in controlling and relieving psoriatic symptoms.
    The vast majority of psoriasis patients are all too familiar with the
    devastating emotional ``roller coaster'' ride from the ``trial and
    failure'' scenario of current treatment options. And, I've not even
    mentioned the enormous financial burden created by the very expensive
    medications, doctor's fees, and treatments.
        I know that my experience is not unique. Through my affiliation
    with the National Psoriasis Foundation I have come to understand that
    my struggle with this disease has not been nearly as devastating as
    that of hundreds of thousands of other victims.
        Like diabetes, arthritis, and heart disease, psoriasis requires
    lifelong treatment. Unlike these diseases, however, psoriasis is not,
    or should I say was not, a top priority for many researchers. However,
    thanks to focus and funding provided by NIAMS, recent research has
    identified several possible sites for the genes that may cause this
    inherited condition.
        Excellent research conducted by NIH and NIAMS has shown that
    effective treatment and a cure for psoriasis is within reach.
    Sufficient funding will enable medical science to complete the puzzle
    and find a cure for this affliction. So many pieces are in place; we
    must not hesitate now.
        This will not only benefit the 6.5 million American children and
    adults now suffering with this chronic disease, but will also help the
    over 200,000 new cases of psoriasis diagnosed every year. Better
    treatments or a cure for psoriasis will result in savings both to the
    public and the government in treatment costs, lost work days, and
    Social Security disability claims.
        Therefore, on behalf of the 40,000 members of the National
    Psoriasis Foundation, and the 6.5 million Americans with psoriasis, I
    urge you to approve an increase of 15 percent over current funding
    levels for NIAMS for fiscal year 1999. This increase will have
    significant health and socioeconomic benefits for the millions of
    Americans who are affected by psoriasis and by other diseases under the
    purview of NIAMS. Thank you for your time and your support.
                                     ______

       Prepared Statement of Warren Greenberg, Ph.D., Professor, Health
     Economics and Health Care Sciences, George Washington University, on
                         Behalf of Mended Hearts, Inc.
        My name is Warren Greenberg. I am a professor of health economics
    and of health care sciences at The George Washington University. I am
    married and have a 23-year-old daughter.
        I advocate an increased appropriation for the National Heart, Lung,
    and Blood Institute. I am a victim of heart disease and as a
    beneficiary of the efforts of medical researchers to overcome this
    disease. I might also add that I am a member of Mended Hearts, Inc., a
    support group of 24,000 members throughout the United States. I have
    been appointed lobbying and legislation chairperson of that group--a
    volunteer position.
        I am 54 years old. I was born with aortic stenosis, a narrowing of
    the heart valve. Throughout my entire life I have lived with heart
    disease, often incredibly severe.
        When I was in my early teens, my physicians did not allow me to
    play high-school inter-mural sports, although I was a fine young
    athlete. At the age of eighteen I was told not to play ball under any
    circumstances. In my early 20s I was told to climb no more than two
    flights of stairs. By my early and mid-thirties I began to climb steps
    more and more slowly, often pausing to rest. I never carried an attache
    case home from work. It was too heavy. I would often balance a large
    book on my hips, rather than carrying it outright, in order to blunt
    the weight. I would walk two or three blocks on a level street to avoid
    going up three or four steps at the end of particular blocks. I could
    barely lift my newborn child; I could not help my wife take in the
    grocery bags.
        On May 7, 1982, at the age of 39, I had open-heart surgery at the
    Cleveland Clinic to replace my diseased valve with the valve of a pig.
    After my 6-week recuperative period I was amazed to find that not only
    was I able to walk, but was also able to play tennis, to jog, and to
    exercise. I was able to live a normal life.
        By August 1988, however, my new valve had failed. On August 31, I
    again had cardiac surgery at the Cleveland Clinic to replace the failed
    pig valve with an artificial plastic valve, known as the St. Jude's
    valve. I am again able to live a relatively normal, very productive
    life. And I am deeply thankful for it.
        I still take a blood-thinning medicine, coumadin, which helps
    prevent clots on my new valve. At the same time, because of the
    medicine, I must be cognizant and careful of excessive bleeding. In
    1983 I contracted bacterial endocarditis, an infection of the heart
    valve, from dental surgery which kept me in the hospital for six weeks.
    Whenever, I have dental work, I now get intravenous penicillin to
    protect me against such infections. I realize that my valve, as a
    mechanical device, may fail at any time in the future.
        For nearly 16 years, thanks to the fruits of medical research, I
    have been able to travel abroad at least once a year, to jog in the
    park, to be a productive author of many scholarly articles and a number
    of books on the health care economy. I have been quoted often on my
    views of the U.S. health care system and have made many television
    appearances. If it were not for the advances in research leading to
    improved techniques in open-heart surgery, I would not have seen my
    fortieth birthday. I would not be able to look forward to a life of
    many rewards and enjoyments.
        As an economist. I observe continually the link between monetary
    resources and the development of innovation and technology. Health care
    research, and cardiovascular research in particular, is no exception. I
    also understand as an economist that there are always competing uses
    for appropriated monies. However, cardiovascular diseases last year
    killed more than 960,000 Americans, about 154,000 of whom are under age
    65.
        Despite advances in medical research, these diseases remain the
    number one killer in the United States and a leading cause of
    disability. From my personal perspective and for those in Mended Hearts
    Inc., and others in the United States who have heart disease or will
    get it in their lifetime, consistent with congressional resolutions for
    the NIH, I ask for a doubling of NHLBI budget in five years. To reach
    this funding goal, I advocate a fiscal year 1999 appropriation of
    $1.825 billion for the NHLBI to help reduce further the incidence and
    degree of heart disease.
                                     ______

        Prepared Statement of Alan G. Kraut, Ph.D., Executive Director,
                         American Psychological Society
        Mr. Chairman, Members of the Committee: Thank you for allowing me
    to testify on fiscal year 1999 appropriations for the National
    Institutes of Health (NIH). I am Alan Kraut, Executive Director of the
    American Psychological Society (APS), the national organization devoted
    to the science of psychology. APS members include the most
    distinguished academic researchers and leaders in scientific
    psychology. Many receive NIH funding for research in such areas as
    brain and behavior, addiction, human development, aging, mental
    illness, violence, hearing, vision, and chronic pain, to name just a
    few relevant topics in our field.
        On behalf of the 16,000 members of APS, let me begin by expressing
    sincere gratitude for your support of health research--for the
    substantial increase you appropriated to NIH for the last few years,
    and also for your consistent and visible messages about the importance
    of research in public health. We applaud your efforts to devote
    additional resources to this essential public health enterprise. We
    look forward to working with you to double the NIH budget over 5 years.
    APS is part of the Ad Hoc Group for Medical Research Funding and we
    join the Ad Hoc Group in urging a 15-percent increase for NIH in fiscal
    year 1999 as a first step toward that goal.
        But can NIH absorb this increase in so short a time? I can assure
    you that behavioral science research can. We are poised, both in terms
    of the role of behavior in causing serious health problems and in terms
    of the field's capacity, to proceed in a number of critical directions.
    As the Committee already knows, critical health concerns are reflected
    in such questions as: What goes on in the thinking of young people that
    leads them to start smoking, drinking, or taking drugs? What are the
    behavioral underpinnings of craving? When in our development do we
    acquire the behavioral patterns that may be with us for a lifetime?
    What are the connections between stress and health? What are the root
    causes of violence? What can we do to help memory as we age? And there
    are many others. But NIH's neglect of these kinds of questions
    continues despite a significant body of specific recommendations from
    Congress, from independent scientific agencies such as the National
    Academy of Sciences (NAS), and even from its own Institutes concerning
    new ways to develop behavioral approaches to health.
                                    training
        National Research Service Awards.--The clearest evidence of NIH's
    resistance to behavioral research is seen in the lack of response to
    Congressional and NAS recommendations on training young investigators
    in behavioral science. In a 1994 Congressionally-mandated report on the
    Nation's personnel needs in biomedical and behavioral sciences, NAS
    called for an increase in the size of stipends awarded under the
    National Research Service Awards (NRSAs) and for an increase in the
    number of behavioral science investigators, health services researchers
    and investigators in other areas, while holding the number of
    biomedical NRSA awards at the current level. The NAS set forth a
    specific number of NRSA awards needed in behavioral science and offered
    a compelling rationale for the increase. In 1995, this Committee began
    what turned into an annual ritual in which the Committee (and the
    Senate Committee as well) requested NIH to develop a plan and timetable
    for implementing the recommendations. NIH ignored both the NAS and
    Congress until a few months ago. In response to the fiscal year 1997
    request from this Committee, NIH issued its response that the NAS
    recommendations will be selectively implemented. Specifically, NIH will
    increase the NRSA stipends, but not the number of awards in behavioral
    science or other areas.
        It is ironic that even with the recent increases in NIH's annual
    budget and all the talk of doubling the NIH budget, NIH is citing
    budget concerns as the rationale for this selective implementation.
    They suggest that presumably neither the NAS nor this Committee ``fully
    appreciated the costs'' of increasing the number of behavioral
    trainees. And what is the cost? The behavioral science recommendation--
    to add less than 400 trainees--would add about $4 million over 3 years
    across all of NIH. Clearly, cost is not the concern here.
        To build a stronger behavioral science research infrastructure that
    will improve NIH's ability to respond to the Nation's most urgent
    health problems, we ask the Committee to direct NIH to increase the
    number of National Research Service Awards for behavioral science
    investigators, as recommended by the National Academy of Sciences.
        B/START.--Several Institutes on their own have recognized the need
    for more behavioral researchers. With encouragement from this Committee
    and from the Senate, they have developed Behavioral Science Track
    Awards for Rapid Transition (B/START), which are small grants to new
    Ph.D.'s in psychology or behavioral science. These are aimed at a
    critical juncture in a scientist's career--a time when choices are made
    about what research to pursue, a time of intense competition for entry-
    level academic research positions, and a time to develop pilot data
    before submitting a regular (R01) grant proposal. It is also a time
    when many excellent scientists drop out because of a lack of support.
    These issues are addressed by B/START, which began at the National
    Institute of Mental Health and has spread to the National Institutes on
    Drug Abuse and on Aging. We commend NIMH, NIDA, and NIA for undertaking
    this approach to training behavioral investigators, and we ask this
    Committee to encourage the use of B/START mechanisms throughout NIH.
        Office of Behavioral and Social Sciences Research (OBSSR).--Like
    clinical research, behavioral science should be supported in virtually
    every NIH Institute, Center and Division. We see the Office of
    Behavioral and Social Sciences Research, created by Congress in the
    office of the NIH Director, as taking the lead on the training
    objectives described above, and on ensuring that behavioral priorities
    are pursued aggressively throughout NIH--there is a great deal of
    catching up to do. In its short existence under Director Norman
    Anderson, OBSSR has been an effective coordinating body on a number of
    cross-NIH initiatives and has increased the visibility of behavioral
    science at NIH. But OBSSR's budget is only $2.67 million, a minute
    amount compared to the budgets of parallel units within the NIH
    Director's office. Additional funding would give OBSSR the capacity to
    develop training initiatives, requests for applications in the most
    promising areas of behavioral science, and more effective responses to
    Congressional directives, recommendations from NAS and from individual
    Institutes, and advice from the field concerning future directions for
    research and training. We are in an era of exceptional promise in
    behavioral science, but we need a more encouraging federal environment
    to realize this potential. Increasing the budget of the OBSSR would be
    a significant step in creating that environment. We recommend an
    increase in the OBSSR budget to $20 million in fiscal year 1999.
        In the rest of my testimony, I want to concentrate on examples of
    what is currently being done and what more could be done in behavioral
    science research at several individual Institutes.
        National Institute of Mental Health (NIMH).--NIMH is the leading
    supporter of behavioral science research at NIH. Last year, I told you
    about the Institute's reorganization which increased the visibility of
    behavior in its structure. In addition, NIMH Director Steven Hyman
    pledged to strengthen connections between basic behavioral research and
    clinical applications, and in connections between the brain and
    behavior. But even our friends at NIMH resist some behavioral science
    priorities. For example, NIMH has yet to implement ``Basic Behavioral
    Science Research for Mental Health,'' a 1994 plan by its own advisory
    council in the same mold as NIMH's plans for schizophrenia and
    neuroscience. This Committee circulated the NIMH report to Congress and
    has for several years urged NIMH to increase its emphasis on basic
    behavioral research by implementing the national plan. NIMH has not
    responded. Similarly, this Committee has expressed support over several
    years for the 1996 NIMH report ``Reducing Mental Disorders: A
    Behavioral Science Research Plan for Psychopathology'' which was
    compiled by outside experts with NIMH support. Again, the Institute has
    not responded. These plans document the contributions of behavioral
    research in mental health and mental illness, and they identify
    promising behavioral research opportunities. The plans on basic
    behavioral research and on psychopathology are resources that should be
    the basis for requests for applications, program announcements,
    training priorities, and other NIMH initiatives. We ask this Committee
    to encourage NIMH to report on how these two plans will lead to
    research and training in behavioral research related to mental health
    and illness.
        National Institute on Drug Abuse (NIDA).--NIDA is a model of how we
    hope every National Institute would approach its behavioral science and
    public health responsibilities. Under psychologist Alan Leshner, NIDA
    has been strengthening its behavioral science portfolio in important
    directions, bringing to bear new perspectives on treating and
    preventing drug abuse and addiction. Drug addiction is a brain disease,
    but it doesn't start out that way. Why do young people initiate drug
    use? This question requires understanding the basic mechanisms of peer
    pressure, of how attitudes develop, and of the processes involved in
    cognition. Why do some go on to addiction, while others stop? This
    question requires identifying risk and protective factors in
    individuals, families, and communities. What is the effect of drugs on
    learning and behavior? This question involves connections between the
    brain and behavior, between thinking and acting.
        Another question is: How do we treat addiction? NIDA's efforts in
    behavioral science are paying off here. We've known for some time that
    behavioral interventions are central to the treatment of addiction.
    They are the only available treatments for many drugs. Even where
    medications are available to treat addiction, the most effective
    courses of treatment have included behavioral interventions. Now, a
    NIDA-sponsored study shows that for cocaine, the effectiveness of newly
    developed medication is contingent on having a behavioral intervention
    first. In other words, medication doesn't work unless the person first
    has behavioral therapy.
        Given the central role of behavior in drug abuse and addiction, and
    given NIDA's aggressive pursuit of behavioral research, we strongly
    urge the Committee to do everything possible to ensure that NIDA
    receives the largest possible increase for fiscal year 1999.
        National Institute on Alcohol Abuse and Alcoholism (NIAAA).--
    Similar gains are being made in behavioral research at NIAAA, where
    Director Enoch Gordis is expanding behavioral science. There are new
    initiatives in the social psychology of group identification;
    behavioral genetics to understand the biological and environmental
    factors in vulnerability to alcoholism; the psychophysiology of
    alcoholism; and basic behavioral research on craving and on the effects
    of alcohol abuse on memory and cognition. NIAAA also is moving forward
    on more applied research. The Institute published an impressive plan
    for its health services research, and is about to launch an initiative
    aimed at reducing drinking at college. We ask the Committee to support
    to NIAAA's aggressive pursuit of new behavioral science research and to
    ensure that NIAAA receives the largest possible increase for fiscal
    year 1999.
        NIH Grant Review Reorganization.--When NIMH, NIDA, and NIAAA were
    transferred to NIH by Congress, their peer review systems remained
    separate from NIH. The integration of those systems which is now
    underway has triggered a reorganization of the entire NIH peer review
    system. Here is an opportunity for NIH to strengthen its behavioral
    science infrastructure. Adding these three Institutes means there will
    be considerably more behavioral science research being reviewed in the
    NIH system. NIH must take deliberate and appropriate steps to ensure
    that the new system is equipped to handle these grants. These steps
    include having the appropriate balance of expertise on review
    committees--putting the peer in peer review--and establishing a
    scientifically appropriate referral process. Because of the enormous
    budgetary and public health implications of NIH grant review, we ask
    the Committee to monitor this peer review reorganization and request
    from NIH a report on its plans for ensuring the appropriate review of
    behavioral research grants.
        National Institute on Aging.--NIA supports much research on
    behavioral and social factors in aging. I want to focus on one area:
    cognitive psychology. With links ranging from neuroscience to social
    and developmental science, there may be no more exciting and productive
    area of aging research. Anyone over 40 has experienced normal memory
    glitches. ``Where did I put those car keys?'' ``What is that person's
    name?'' But when we start forgetting what the car keys are for, or
    can't recognize a loved one, those are signs of serious problems,
    possibly Alzheimer's or some other dementia. Early identification and
    treatment of these problems is likely to come from cognitive science,
    which is allowing us to look at the aging mind and better understand
    the effects of growing older on the ability to process information and
    to make decisions. NIA is exploring ways to expand its support of this
    promising frontier in research on aging and behavior. We ask the
    Committee to support NIA in its pursuit of new directions in cognitive
    psychology.
        National Institute of Child Health and Human Development.--Together
    with the community, NICHD has begun an effort to identify areas of
    behavioral research and training that are ripe for major breakthroughs
    as well as areas of research that require further nurturing. This
    effort included a conference entitled ``Progress and Promise in the
    Behavioral Sciences,'' at which the leaders in the field recommended
    specific actions, among them: Increase pre- and post-doctoral research
    training and mentoring; support cross-disciplinary training mechanisms;
    support basic behavioral research on development to generate
    methodological and conceptual advances in research; and give priority
    to understanding the effects of poverty, different family structures,
    and technology on child physical and intellectual development.
        NICHD has just reorganized its behavioral research programs into a
    new Child Development and Behavior Branch, headed by developmental
    neuropsychologist Reid Lyon. This Branch is well suited to respond to
    these recommendations. We are urging NICHD to aggressively pursue the
    recommendations of the ``Progress and Promise'' conference, and ask the
    Committee to request that NICHD develop a plan and a timetable for
    doing so.
        National Institute of Nursing Research.--NINR has been designated
    the lead Institute in a new NIH initiative that addresses end-of-life
    issues. This is one of the least researched phases of life. The NINR
    initiative includes improved treatment for pain, but also addresses
    diagnosis and treatment of behavioral symptoms such as cognitive
    problems, delirium, and depression. With its research in symptom
    management, decision making for patients, caregiving, and optimal
    environments for critically-ill patients, NINR brings impressive
    experience to the lead role in end-of-life research. We ask that this
    Committee support NINR in this initiative.
        In the interest of brevity, I am able to describe only a few of the
    contributions and importance of behavioral research in addressing the
    Nation's health concerns. Other Institutes with behavioral science
    portfolios include the National Heart, Lung, and Blood Institute, which
    supports investigations into the links between stress and heart
    disease; the National Institute of Neurological Disorders and Stroke,
    which supports research on brain and behavior; the National Cancer
    Institute, which has just formed a new prevention branch that should
    support increased of behavioral research; and the National Institute on
    Deafness and Communication Disorders, which supports psychologists'
    research in auditory perception and language development.
        Despite all this activity, NIH still needs to recognize behavioral
    science as a core element in its dual missions in health research and
    public health. Priorities in research and training have been identified
    in numerous behavioral science areas but are not being pursued. This
    Committee has shown extraordinary largess in increasing the annual NIH
    budget and we are grateful for that support. Now, we ask you to ensure
    that the health of the Nation receives the full benefit of behavioral
    science research by encouraging NIH's leadership to take meaningful
    steps, such as those I have outlined above, to reverse the underfunding
    of behavioral science research.
                                     ______

      Prepared Statement of Martha Hill, R.N., Ph.D., President, American
                               Heart Association
    You are a target
        Chances are heart attack or stroke will be the death or disabler of
    you or someone you love. You are not alone. Heart attack, stroke and
    other cardiovascular diseases are America's No. 1 cause of death and a
    main cause of disability. Cardiovascular diseases account for nearly 1
    of every 2 deaths in the U.S. The American Heart Association is
    dedicated to reducing death and disability from heart attack, stroke
    and other cardiovascular diseases. We commend this Committee's support
    of the National Institutes of Health and the Centers for Disease
    Control and Prevention. But, we are concerned that our government is
    not devoting sufficient resources for research and prevention of
    America's No. 1 cause of death--heart disease--and to our country's No.
    3 cause of death and most disabling disease--stroke.
    How you can make a difference
        Now is the time to capitalize on progress in understanding heart
    attack, stroke and other cardiovascular diseases. Promising cost
    effective breakthroughs in research and prevention are on the horizon.
    The AHA challenges our government to significantly increase funds for
    heart and stroke research and to translate research into effective
    clinical and community interventions. These actions will help reduce
    health care costs and improve quality of life. For fiscal year 1999 we
    urge you to do the following: Appropriate a 15 percent increase over
    current funding for the overall NIH, the first increment toward the
    goal of doubling the budget in five years. This goal is echoed by
    Research!America and the Ad Hoc Group for Medical Research Funding.
        NIH research provides cutting-edge treatment and prevention
    strategies, cuts health care costs, creates jobs and maintains
    America's status as the world leader in biotechnology and
    pharmaceutical industries. Provide a 15-percent increase over fiscal
    year 1998 funding specifically for NIH heart research and stroke
    research.
        Heart and stroke researchers are on the brink of advances that
    could pave the way to prevention and even a cure so you or someone you
    love will be spared pain and suffering from heart disease and stroke.
    Allocate $21 million for the CDC Cardiovascular Health Program.
        We must make our science real and applicable through community
    interventions that encourage Americans to make heart healthy lifestyle
    choices.
    Still No. 1
        Heart attack, stroke and other cardiovascular diseases have been
    the leading cause of death since 1919. Some 58 million Americans--1 in
    5--of all ages suffer from one or more of these diseases. Millions of
    Americans have risk factors for these diseases--about 50 million have
    high blood pressure, 38 million have high blood cholesterol and 50
    million smoke. As the baby boomers age, the number of Americans
    afflicted by these disabling diseases will increase substantially.
    Cardiovascular diseases put an enormous burden on our economy.
    Americans will pay an estimated $274 billion for cardiovascular-related
    medical costs and lost productivity in 1998. These diseases constitute
    4 of the top 5 hospital costs for all payers, excluding childbirth and
    its complications, and 4 of the top 5 Medicare hospital costs.
    Heart and stroke research benefits all Americans
        Thanks to advances in addressing risk factors and in treating
    cardiovascular diseases, more Americans are surviving heart attack and
    stroke. Heart and stroke research and prevention breakthroughs are
    saving and improving lives of your friends and those you love every
    day. You and your family have benefited directly from heart and stroke
    research. Several cutting-edge examples follow.
      --Emergency Cardiac Care.--Every day more than 1,000 Americans suffer
            a sudden cardiac arrest, the unexpected, abrupt loss of heart
            function. Researchers have discovered a particular sequence of
            actions known as the ``chain of survival,'' which offers hope
            for these individuals. Early use of both breathing and chest
            compression techniques of cardiopulmonary resuscitation (CPR)
            and delivery of a powerful electrical shock to the heart are
            critical to restore life. Each minute of delay in returning the
            heart to its normal pattern decreases chance of survival by 10
            percent. An estimated 100,000 lives could be saved each year if
            automatic external defibrillators (AEDs) were widely available.
      --New Surgical Heart Techniques.--Medical research has revolutionized
            surgical techniques in the cardiovascular field. You probably
            know someone who has benefited from the research breakthroughs
            called heart bypass surgery and Percutaneous transluminal
            coronary angioplasty (PTCA). Patients who undergo conventional
            bypass surgery to improve blood flow to the heart require
            several weeks to recover. But, those who experience the new
            ``keyhole'' or ``minimally invasive heart bypass surgery'' need
            only several recovery days. Surgeons operate via a three-inch
            incision. Keyhole surgery can provide an alternative for the
            growing number of Americans who endure the traditional surgery
            to eliminate chest pain, increase ability to exercise and
            reduce fatigue and need for medicine. In 1995, an estimated
            768,000 patients benefited from bypass surgery and PTCA to
            improve blood supply to the heart.
      --Surgery to Reduce Risk for Stroke.--When the main artery to the
            brain becomes blocked, in many cases surgeons now can remove
            the buildup of plaque to prevent stroke. This procedure
            benefits not only stroke survivors, but also helps patients who
            experience stroke symptoms or even those who have no symptoms
            but a partially blocked artery.
      --State-of-the Art Life-extending drugs.--Research has produced
            amazing new drugs to help prevent and treat heart attack and
            stroke. Cutting-edge drugs to control blood pressure and
            cholesterol are more effective than ever in saving lives and
            enhancing life quality of millions of Americans. When
            prevention fails, revolutionary ``clotbuster'' drugs can reduce
            disability from heart attack and stroke by dissolving blood
            clots causing the attack. Now, use of t-PA within three hours
            of the onset of a stroke can stop progression of clot-caused
            stroke and reduce chances of permanent disability by 30
            percent. T-PA offers hope for an estimated 1.1 million
            Americans who are expected to suffer a heart attack and 450,000
            at risk of a clot-caused stroke in 1998.
        So Americans can continue to benefit from these types of
    breakthroughs, we support doubling of the NIH budget in five years. We
    recommend an fiscal year 1999 appropriation of $15.7 billion for the
    NIH as the first step toward that goal. AHA has a special interest in
    individual NIH institutes that relate directly to our mission. Our
    funding recommendations for these institutes and programs follow.
    Heart research challenges and opportunities for NHLBI
        These and other advances have been made possible by 50 years of
    AHA-sponsored research and a half-century of investment by Congress in
    the National Heart, Lung, and Blood Institute. Thanks to research, no
    longer does a heart attack or stroke necessarily mean immediate death.
    Now that more people are surviving, heart attack and stroke can mean
    permanent disability, requiring costly medical care, loss of
    productivity and quality of life.
        The AHA urges this Committee to double the NHLBI budget in five-
    years. To reach this goal, we recommend an fiscal year 1999
    appropriation of $1.825 billion for the NHLBI. A funding level of this
    amount will allow NHLBI to expand existing programs and invest in
    promising initiatives. Several challenges and research opportunities to
    advance the battle against heart disease are highlighted below.
      --Origins of atherosclerosis.--Heart attacks and nearly half of all
            strokes are the end result of atherosclerosis, the disease
            process that causes obstructed blood vessels. About 14 million
            Americans live with consequences or symptoms of coronary heart
            disease, the cause of heart attacks. An estimated 1.1 million
            Americans will suffer a heart attack and about 600,000 will
            suffer a stroke this year. Survivors often suffer permanent
            heart or brain damage and are unable to return to work or to
            their regular lifestyle. If origins of the blockages were
            understood, many heart attacks and strokes may be prevented.
            Now, researchers are examining new theories about
            atherosclerosis. They include a long-lasting, low-grade
            inflammation in blood vessels that feed the heart and brain; a
            common respiratory viral infection that has been found in the
            blood vessel walls, and defective genes inherited from parents.
            More funds are needed now; because these studies may
            revolutionize the way we prevent or treat heart attack and
            stroke.
      --Congestive heart failure.--About 5 million Americans suffer from
            congestive heart failure, the single most frequent cause of
            hospitalization for those age 65 and older. During the past 17
            years, total hospitalizations for congestive heart failure more
            than doubled. For many, relatively simple tasks like making the
            bed or preparing breakfast can be so fatiguing that the rest of
            the day has to be spent in bed. A heart transplant is the only
            way to curtail suffering or postpone death for some patients.
            More research is essential to understand how and why the
            disease occurs and how it can be treated and prevented.
            Promising areas need more study. These include surgical
            techniques to remove non-functioning heart muscle; left
            ventricle assist devices; use of animal hearts for transplant;
            transplant of healthy heart cells, and the role of programmed
            cell death in the development of congestive heart failure.
            Increased funds could lead to new methods for treatment and
            prevention.
      --Heart disease in infants and youth.--Heart defects are America's
            most common birth defect and a key cause of childhood
            disability. Heart defects strike 32,000 newborns each year in
            the United States. About 2,300 of these infants do not live to
            celebrate their first birthday. Approximately 1 million
            Americans live with the effects of these conditions. Scientists
            often do not know why these defects occur. Children may also
            develop an acquired heart illness in infancy or childhood.
            Specialized Centers of Research (SCOR) in Pediatric
            Cardiovascular Disease have made tremendous strides in rapidly
            translating basic science and clinical research findings into
            medical care for these infants and children. Resources to renew
            these SCORs will allow more progress to determine underlying
            mechanisms and will lead to better diagnosis, treatment and
            prevention of heart disease that can severely restrict quality
            of life of too many newborns, children and grandchildren.
      --A Healthful lifestyle.--Most Americans know smoking, physical
            inactivity and being overweight are unhealthful. Why then are
            people adopting unhealthful habits? Studies show that more
            teenagers than ever are smoking cigarettes. Obesity is
            increasing at an alarming rate among adults, teenagers and
            children. Obesity is a risk factor for associated disorders,
            including heart disease and stroke. Fatal heart attack, high
            blood pressure and diabetes often accompany obesity. Resources
            are urgently needed to determine the causes and develop
            effective treatments for obesity. Research is needed to develop
            effective educational and behavioral interventions and public
            health approaches that help people change their behavior and to
            maintain those healthful behaviors over time. More funds to
            study the application of current research will yield
            recommendations benefiting all Americans.
    Stroke research challenges and opportunities for NINDS
        Stroke is America's major cause of permanent disability and No. 3
    cause of death. There are an estimated 4 million stroke survivors in
    the United States. They often face debilitating physical and mental
    impairment, emotional distress and overwhelming medical costs. About 20
    percent required help walking and 71 percent had impaired capacity to
    work when examined an average of seven years later, according to the
    NHLBI-sponsored Framingham Heart Study. In 1998 an estimated 600,000
    Americans will suffer a stroke. While stroke is considered to be a
    disease that strikes our grandparents, it also afflicts newborns,
    children and young adults. More Americans are dying from stroke than
    ever before.
        We urge a doubling of the National Institute of Neurological
    Disorders and Stroke--stroke budget in five years. An fiscal year 1999
    appropriation of $94.1 million for NINDS--stroke research, the first
    step toward the goal, will allow more rapid progress in preventing
    stroke, protecting the brain during stroke and enhancing
    rehabilitation. Some challenges and opportunities follow.
      --Brain imaging.--Imaging plays a critical role in evaluating stroke
            patients, providing non-invasive diagnosis, treatment
            assessment and prediction of recovery. A wide range of imaging
            technologies are now available, each providing distinct
            information about the brain. New research is required to
            combine knowledge from diverse imaging techniques to enhance
            data on brain activity. Extra funds are needed to develop
            imaging to quickly diagnose some 450,000 patients a year who
            may benefit from t-PA. Refined imaging technology has broad
            application for other brain disorders.
      --Genetics of Stroke.--Stroke often has a genetic element. Recent
            research has identified a gene linked to stroke caused by a
            blockage. Other new studies have identified genetic risk
            factors associated with stroke. More funds to study genetics
            could lead to new methods to approach stroke.
      --Stroke Clinical Trials.--Basic research has progressed to the point
            where clinical studies are crucial in advancing the prevention
            and treatment of stroke. One fascinating trial is examining
            whether estrogen therapy reduces the risk of death or recurrent
            stroke in post-menopausal women. This study is particularly
            important because more than 60 percent of fatal stroke victims
            are women. Increased funds for clinical trials could produce
            cutting-edge stroke treatment and prevention.
      --New Stroke Drugs.--Increasingly, promising new medications to treat
            stroke will become ready for evaluation in patients. They
            include drugs to restore blood flow to the brain, protect cells
            from dying when stroke is in progress and prevent injury when
            blood flow is restored. Additional resources are critically
            needed to test the ideal combinations of these drugs in the
            treatment of stroke.
      --Public and Professional Education for Stroke Treatment.--T-PA is
            the first effective emergency treatment for clot-caused stroke.
            The AHA and eight other national organizations are working with
            NINDS to increase public awareness of stroke symptoms and the
            appropriate urgent action to take. They also are striving to
            develop systems to make t-PA readily available to appropriate
            patients. When these systems are fully implemented, stroke
            treatment will change from supportive care to early brain-
            saving intervention. More funds are urgently needed to address
            challenges in educating the public about stroke symptoms and
            the need for prompt treatment and assuring appropriate response
            systems are in place in communities. Health care professionals
            also must be educated about the new treatment and the need for
            rapid response.
    Research in other NIH Institutes and centers benefits heart and stroke
        National Institute on Aging research defines how the aging process
    contributes to cardiovascular diseases, a main cause of disability and
    No. 1 cause of death of older Americans. An fiscal year 1999
    appropriation of $38.2 million for NIA cardiovascular research will
    allow continuation of on-going studies and expansion into innovative
    promising areas.
        National Institute of Diabetes and Digestive and Kidney Diseases
    studies assist in reducing cardiovascular diseases death and
    disability. We advocate an fiscal year 1999 appropriation of $1 billion
    for NIDDK to advance research to help diabetics, 80 percent of whom
    will die from heart disease or stroke.
        National Institute of Nursing Research studies plays a key role in
    promoting self-care and patient education. NINR research is critical to
    primary and secondary prevention of heart attack, stroke and other
    cardiovascular diseases. We advocate an fiscal year 1999 appropriation
    of $73.1 million for NINR.
        Animal research is critical for heart and stroke research. AHA
    supports an fiscal year 1999 appropriation of $522 million for the
    National Center for Research Resources to help institutions and
    researchers obtain animals and provide humane care for them. Increased
    resources will fortify animal research, help correct deficiencies in
    research animal resources and strengthen nationwide Clinical Research
    Area Centers and Biomedical Technology and Infrastructure Areas.
    Agency for health care policy and research
        AHCPR plays an important role through establishment of practice
    guidelines and conduct of outcomes research. Practice guidelines and
    outcomes research help insure that high quality and cost effective
    medical services are provided. AHCPR guidelines on rehabilitation after
    stroke have received considerable attention from practitioners. The AHA
    concurs with the Friends of AHCPR's recommendation of an fiscal year
    1999 appropriation of $175 million.
    Centers for Disease Control and Prevention
        The best way to protect the health of Americans and lessen the
    enormous financial burden of disease is through prevention. Your
    commitment as elected representatives of the public cannot stop at the
    laboratory door. You must fund the work that brings research into the
    places where heart disease and stroke live--the towns and neighborhoods
    that populate America.
        The CDC builds the bridge between what we learn in the lab and how
    we live in our communities. CDC sets the pace on prevention. We
    recommend an fiscal year 1999 appropriation of $2.8 billion for CDC.
        As a result of the efforts of this Committee, CDC's Cardiovascular
    Health Program will begin this year with as many as five states
    receiving funds to implement state-based cardiovascular disease
    prevention and control programs. In 1997 CDC released a report
    outlining what the nation's priorities should be in the area of chronic
    disease prevention. The report titled, ``Unrealized Prevention
    Opportunities: Reducing the Health and Economic Burden of Chronic
    Disease'' said ``strong chronic disease prevention programs should be
    in place in every state to target the leading causes of death and
    disability in our society and their principal risk factors.'' Until the
    fiscal year 1998 appropriations for initiating a comprehensive
    Cardiovascular Health Program, the CDC-administered Preventive Health
    and Health Services Block Grant was the only source of federal funding
    to states for targeting the leading cause of death in every state in
    the nation.
        The AHA is delighted by the steps taken to create the
    Cardiovascular Health Program. We encourage the Committee to continue
    reaching out to states on heart disease and stroke prevention through
    an fiscal year 1999 appropriation of $21 million for the Cardiovascular
    Health Program.
        The Preventive Health and Health Services Block Grant has been a
    vital resource for states in their efforts to address heart disease and
    stroke. The Block Grant is vital in helping states with their role in
    preventing chronic disease. The AHA strongly recommends an fiscal year
    1999 appropriation of $255 million for the PHHSBG for fiscal year 1999.
    The AHA also urges the Committee to consider the importance of
    addressing, as the ``Unrealized Prevention Opportunities'' document
    points out, the need to target risk factors. We support CDC's effort to
    build the following:
      --A comprehensive nutrition and physical activity program with an
            fiscal year 1999 appropriation of $15 million;
      --A national program to prevent tobacco use, including a national
            public education campaign to reduce youth access to tobacco
            products, through the CDC' s Office of Smoking and Health with
            an fiscal year 1999 appropriation of $150 million; and
      --A comprehensive school health education program with an fiscal year
            1999 appropriation of $25 million.
        Coupled with a comprehensive Cardiovascular Health Program, these
    intervention efforts will significantly advance the fight against heart
    disease and stroke. We urge the Committee to make cardiovascular health
    a national priority through these initiatives.
    Action needed
        Significantly increasing resources for both research and community
    intervention programs will allow this nation to make great strides in
    the battle against heart attack, stroke and other cardiovascular
    diseases. Our government's response to this challenge will help define
    the health and well-being of our citizens--including those you love--
    into the next century.
                                     ______

     Prepared Statement of Patrice O'Toole, Assistant Director, Federation
              of Behavioral, Psychological and Cognitive Sciences
        Mr. Chairman, members of the Subcommittee, the Federation of
    Behavioral, Psychological and Cognitive Sciences is a coalition of 17
    scientific societies and 150 university graduate departments. The
    90,000 scientists represented by the Federation conduct behavioral
    research. Support for their work comes, among other sources, from the
    Office of Educational Research and Improvement (OERI) at the Department
    of Education and the National Institutes of Health. The Federation's
    testimony is directed toward the fiscal year 1999 appropriation
    requests for these two agencies.
                 office of educational research and improvement
        Any discussion of OERI funding should encompass the agency's 1995
    reauthorization. That legislation was carefully crafted over the course
    of five years, and its aim was to make OERI one of the government's
    premier supporters of research and research applications. A major
    impediment to building a solid scientific knowledge base for
    educational improvement has been that OERI and its predecessor, the
    National Institute of Education (NIE) were buffeted by the political
    winds and by passing fads regarding educational interventions. NIE and
    OERI found themselves having to change gears to fit the current desire
    of those in power. That is not the right way to build a research
    knowledge base. The right way to do this is to look at the real
    problems in education and to develop research agendas to address those
    problems, much as the National Institutes of Health does with diseases.
    And so it is no happenstance that when OERI was reauthorized, it was
    organized into a series of research institutes, each focusing on a
    major problem area in education. It is also not a happenstance that an
    outside oversight board similar to the National Science Board of NSF or
    the advisory committees of the NIH was created to keep OERI on a steady
    course rather than to allow its programs to be whipsawed by each
    passing educational fad.
        Under the 1995 reauthorization, OERI's Field Initiated Studies
    (FIS) program which supports university-based research was expanded.
    The basic research produced under the FIS program lays the foundation
    for the applied work done in the labs and centers of the institutes.
    Funding for the FIS program needs to increase. The fiscal year 1999
    request includes a plan for 35 to 50 new field initiated studies, but
    does not include a request for increased funding. Reallocation of funds
    from expiring grants would be the method to support a new grant
    competition, without an increase this year. In fiscal year 1998, the
    OERI research budget was frozen at the fiscal year 1997 level making it
    impossible to sponsor a new grant competition, though the agency did
    maintain funding for previous FIS awards.
        OERI has developed a strategic plan to assure that the elements of
    the reauthorization accomplish their intended purposes. As a result,
    the OERI has taken substantial strides toward becoming a strong
    research and research applications agency for education. This process
    is ongoing and all indications are the reinvention of OERI is going
    well. The Congress deserves to take pride in its handiwork with respect
    to the reauthorization because the reauthorization has at last
    established a strong framework for the support of educational research
    and its applications. The best framework in the world, however, cannot
    accomplish its purpose without adequate funding.
        For OERI the Administration is requesting a 28.5 percent increase
    in funding levels across research, statistics and assessment. However,
    the bulk of this increase is slated for a new Interagency Research
    Institute, which is earmarked to receive a $50 million start-up budget.
    This new interagency research initiative is meant to be a collaborative
    effort between OERI, the National Science Foundation (NSF) and the
    National Institute of Child Health and Human Development (NICHD). An
    additional $25 million is expected from NSF for this project. The
    important point to make, however, is that this $50 million allocation
    is dependent upon the unresolved tobacco settlement. Without the
    tobacco settlement, only $15 million will be available for statistics
    and assessment and no increase is requested for the core research
    programs. The President's request for level-funding of the core
    research programs in fiscal year 1999 would make this the third year of
    a frozen budget for these programs. The Federation believes that to
    continue level-funding and not provide sufficient annual increases to
    these programs makes it impossible for OERI to meet fully the mandates
    of its 1995 reauthorization.
        The Federation supports a $15 million increase for fiscal year 1999
    for the core research programs and also supports the administration's
    desire to create an interagency education research program. We believe
    that linking the work of the Department of Education with NSF and NICHD
    will facilitate the passage of new knowledge from research to
    application.
                         national institutes of health
        The Administration is requesting an unprecedented 8.4 percent
    increase--the largest ever--for the National Institutes of Health
    (NIH). This would increase NIH's budget from $13.6 billion to $14.8
    billion, an increase of $1.1 billion. The Federation is joining with
    many other scientific organizations and key members of Congress in
    asking the subcommittee to recommend an even larger increase of 15
    percent for NIH. This increase would be the first step toward the
    doubling of NIH's budget within the next five years. We base our
    request for this substantial increase on two observations.
        The first is that the pace of discovery in the full spectrum of
    health sciences is accelerating, and the country needs to keep that
    momentum going. The second is that health care costs are at crisis
    proportions in this country, and one of the most important ways to
    control those costs is to find better ways to keep people healthy. The
    ultimate purpose of health research, including health research in the
    behavioral and social sciences, is to make the citizens of this country
    healthier throughout their life span.
        Some of the most significant advances in science in recent years
    have come from research in two large fields, genetics and neuroscience.
    The work being done in these areas is a prime example of how basic
    genetic and neuroscience research is contributing to our understanding
    of a number of diseases, such as Parkinson's, Alzheimer's, drug
    addiction and diabetes. Scientific advances in the biology of brain
    disease have been possible because of new methods for the study of the
    nervous system, such as neuroimaging.
        Understanding and identifying the molecules that guide the
    formation of the brain is allowing neurobiologists to visualize how the
    developing nervous system organizes itself, to explain complex
    behaviors, and to describe neurological and psychiatric diseases with a
    new level of precision.
        The emergence of cross-disciplinary collaboration has been a major
    component in the fast paced research developments in these arenas.
    Across the NIH-supported sciences, the growing tendency for scientists
    from many disciplines to come together to solve research problems has
    shown significant results. AIDS has not been cured, but research has
    shown how a mixture of treatments can ward off the worst effects of
    AIDS, for many years. These treatments involve the use of a variety of
    drugs in combination and they involve a demanding level of discipline
    on the part of the patient to take the medications properly--a
    discipline that can be trained by application of techniques developed
    through behavioral research.
        Similarly, recent NIH-supported behavioral research has produced
    useful new knowledge, including a better understanding of basic
    behavioral and social processes and how they interact with biological
    processes. This understanding is coming from many lines of research:
    studies of lifestyle choices, dietary habits, the desire and ability to
    maintain exercise or medication regimens, psychological functioning,
    and influences of one's social and cultural environment on behavior.
    All these lines of research converge to give us a picture of the
    factors that can affect an individual's ability to remain healthy or to
    recover from disease or to function well despite a chronic condition.
    And that knowledge leads to treatments and other interventions to
    maintain health through the life span. NIH's Office of Behavioral and
    Social Sciences Research (OBSSR) has been pivotal in supporting these
    studies and translating the findings into effective prevention and
    treatment strategies.
        OBSSR, under the purview of the Office of the Director of NIH,
    coordinates all the institutes and centers in marshaling their
    individual resources to collaborate on behavioral and social sciences
    research. OBSSR, for example, is overseeing a $3.7 million trans-agency
    research project intended to encourage the development of innovative
    behavior strategies for changing risk behaviors that cut across major
    disease categories. OBSSR chose these behaviors for collaborative
    research support because the diseases whose courses the research is
    intended to modify are among the top ten causes for premature mortality
    and morbidity. Sixteen NIH offices and institutes are funding this
    project, including NIAAA, NICHD, NIMH, and the Office of Dietary
    Supplements.
        OBSSR was established in 1995 by Congress. This project
    demonstrates how OBSSR fulfills one of its primary mandates, which is
    fostering the development of cross-disciplinary communication and
    research collaboration among various behavioral and social sciences and
    between the behavioral and social sciences and biomedical sciences.
    OBSSR's efforts are assuring that development of effective behavioral
    interventions is keeping pace with technological advances.
        OBSSR has been operating for several years now with a small staff
    and a small budget. The President's budget request for OBSSR for fiscal
    year 1999 is nominal--$2.66 million. OBSSR's current budget is $2.56
    million. The Federation supports an additional $1.5 million increase
    for fiscal year 1999 for OBSSR. This increase combined with the
    President's request would bring OBSSR's total budget to $4.2 million
    and would significantly augment OBSSR's ability to coordinate research
    across institutes. This is both an efficient use of resources and a
    beneficial mode of operation, because it links areas of related
    knowledge that might otherwise remain separated.
        Another prime example of the application of behavioral intervention
    in concert with the use of medicines has to do with deadly diseases
    that are reemerging after decades of dormancy in this country.
    Tuberculosis is the example that comes most readily to mind. A serious
    challenge is faced with respect to these diseases. When medications are
    misused, the result is not only that the patient's disease fails to be
    controlled, but also the bacterium that causes the disease is able to
    develop resistance to medication making the disease much more difficult
    to treat.
        These diseases are cropping up in indigent populations such as the
    homeless--among the hardest groups in our society to treat. Research is
    still underway to determine what behavioral interventions can best
    assure that such patients will carry their treatment through to
    conclusion. But behavioral and social scientists are working with other
    scientists and with health providers to find answers to the problem.
    Our experience with collaboration to date leaves every reason to
    believe that even in this very difficult area, solutions can be found
    if support is maintained for the research teams that seek the answers.
        NIH funding has permitted us to use research wisely, that is, in
    the combinations that will be most efficient in reaching solutions to
    typically multifaceted health problems. To continue successful
    biomedical and behavioral research at this level requires a major
    commitment by Congress to find the resources for expanding NIH's
    budget. With increased support, the current pace of discovery and
    collaboration can be sustained. The largest per person expenditures for
    health care occur near the end of life. One goal of research has become
    to understand what interventions through the life span will have the
    greatest promise of assuring that the period of great illness before
    the end of life is minimized.
        Behavioral research has a large role to play here because
    controllable choices and behaviors in life have a heavy impact on the
    quality of life of the aged. Obviously, such behavioral choices as to
    smoke or not to smoke and what foods and quantities of food to consume
    are among the most important choices we make in determining our health.
    But each of us knows how difficult it is to do the right thing.
        Behavioral researchers in cooperation with nutritional researchers,
    neuroscientists, epidemiologists and a host of other specialists are
    working to find ways to make it easier for people to make the right
    choices about their health. The payoff for finding solutions to these
    problems will be not only a healthier population, but also the
    shrinkage of health care costs to a manageable size without sacrificing
    the well-being of the country's citizens. Through research it is
    becoming possible to maintain good health and keep health care costs
    down at the same time.
        We strongly urge the Subcommittee to recommend a 15-percent
    increase for NIH because the investment in knowledge will result in
    healthier citizens and health care cost savings that far exceed the
    research investment. And by the same token slighting research will
    assure that rising health care costs will remain among our most serious
    national crises.
        We thank the Subcommittee for the opportunity to present our views.
                                     ______

                            DEPARTMENT OF EDUCATION
     Prepared Statement of the American Indian Higher Education Consortium
    I. Introduction
        Mr. Chairman and Members of the Subcommittee, on behalf of this
    nation's 30 American Indian Tribal Colleges, which comprise the
    American Indian Higher Education Consortium (AIHEC), we thank you for
    the opportunity to share our funding requests for the Department of
    Education's fiscal year 1999 programs.
        We have four specific funding requests:
      --A section is now being authorized under Title III of the Higher
            Education Act specifically for Tribal Colleges, and we request
            that this section be funded at the authorized level of $10
            million.
      --Funding under section 103 of the Carl D. Perkins Vocational
            Education and Applied Technology Act (set-aside for Indian and
            Hawaiian Natives) should be at a level of $15.9 million; the
            Tribally-controlled Postsecondary Vocational Institutions
            program should be funded at no less than $3.1 million; and
            other Vocational and Adult Education programs should be funded
            at the levels requested in the President's budget.
      --Under Title IV, we have two priorities: (a) Funding for the Title
            IV campus-based assistance programs, including work-study,
            SEOG, and TRIO, should be fairly allocated to all institutions
            with documented need. (b) Funding for the Pell Grant program
            should be increased, over a period of five years, to the level
            of educational cost coverage provided in the late 1970's and
            early 1980's.
      --The new White House Initiative on Tribal Colleges, which is housed
            in the Department of Education, will need support and oversight
            by the Congress. We support the President's request of $200,000
            for this office and ask your subcommittee to build upon his
            budget to a level of $500,000.
        Mr. Chairman, this statement will cover two topics: first, it will
    provide some background on the Tribal Colleges, including information
    on the tremendous challenges we face as we cope with the effects of
    welfare reform; and second, it will provide justifications for the
    above funding requests.
    II. Background on tribal colleges
        The dismal statistics concerning the American Indian experience in
    education brought tribal leaders to the realization that only through
    local, culturally-based education could many American Indians succeed
    in higher education and help bring desperately needed economic
    development to the reservations. The most remote reservation
    communities were heavily struggling with this problem. The Tribal
    College movement began more than 25 years ago as a very sound and well
    thought-out solution to this problem. In the late 1960's and early
    1970's, the first Tribal Colleges were chartered on remote reservations
    by their respective tribal governments, to be governed by boards of
    local tribal people. These first colleges were born, with little money
    and a lot of determination, in abandoned and condemned government
    buildings and old trailers, using three-legged desks, wood crates for
    shelves and typewriters with missing keys. In 1972, the first six
    fledgling tribally-controlled institutions came together to form the
    American Indian Higher Education Consortium. Today, AIHEC is a
    cooperatively sponsored effort and integral support network for 30
    member institutions in the United States and one in Canada.
        Tribal Colleges now serve 26,700 students each year, offering
    primarily 2-year degrees, with some colleges offering 4-year and
    graduate degrees. Together, the colleges represent the most significant
    and successful development in American Indian education history,
    promoting achievement among students who may otherwise never know
    educational success. All of the Tribal Colleges are fully accredited,
    with the exception of the four newest institutions that are
    accreditation candidates.
        Despite our successes, Tribal Colleges remain the most poorly
    funded institutions of higher education in this country, and although
    conditions at some have improved substantially, many of the colleges
    still operate in trailers, cast-off buildings, and facilities with
    leaking roofs. Our core funding, which is authorized under the
    Tribally-Controlled Community Colleges Assistance Act of 1978 and
    funded through the Department of Interior appropriations bill, remains
    grossly inadequate. In fact, the Tribal Colleges' appropriation of
    $3,017 per Indian student is dramatically less than the average per
    student revenue of mainstream 2-year institutions. It is also far below
    the authorized level of funding, which is $5,820 per Indian student.
        In addition to providing academic, vocational, and technical
    programs similar to those at mainstream institutions and cultural
    language and history courses unique to American Indian tribes, Tribal
    Colleges provide services above and beyond those provided by most other
    post-secondary institutions. All Tribal Colleges provide GED, basic
    remediation, and other college preparatory courses, probably more than
    any other community colleges in this country. We have done this because
    their missions require them to help move American Indian people toward
    self-sufficiency and help make American Indians productive, tax-paying
    members of American society.
        Tribal College students are often older--the average age is 27.
    They are typically single parents, the majority of whom are mothers
    with small children, and they are extremely poor. Most are dependent on
    welfare, and with young families, they are unable or unwilling to leave
    their small reservation communities to go away to school. Yet, they
    want to get off welfare and provide for their families, so they turn to
    the Tribal Colleges.
    III. The impact of welfare reform and justifications for funding
            requests
        Fulfilling our obligation to serve Indian people will become
    increasingly more difficult over the next several years for two
    reasons: (1) federal funding resources are not keeping pace with
    expanding enrollments; and (2) as a result of welfare reform
    legislation, more and more welfare recipients are turning to Tribal
    Colleges for training and employment opportunities. Most Tribal
    Colleges are located on remote reservations in isolated communities
    that lack the support of basic public services available and supported
    by strong state and local governments with access to stable tax support
    systems. Given this reality, Tribal Colleges are obligated to offer a
    wide range of community services, such as education, job training,
    childcare, and community support services. They serve as community
    centers, providing libraries, tribal archives, career centers, economic
    development centers, and public meeting places. Over the next several
    months and years, we expect the demand for these services--along with a
    tremendously increased need for basic education and training services--
    to expand dramatically.
        In the isolated Indian communities Tribal Colleges serve, current
    welfare recipients simply have no other place to turn. They must look
    to the local Tribal College for much needed--and required--education
    and job training. But before many can even begin the course work needed
    to learn a productive skill, they first must earn a GED or learn to
    read. According to a Carnegie Foundation survey, 20 percent of the
    students questioned had completed a Tribal College GED program before
    beginning formal classes at the Tribal College. At some schools, the
    percentage is even higher. For example, Lac Courte Oreilles Ojibwa
    Community College in Wisconsin reports that nearly one-third of its
    students had earned a GED through its tutoring and testing center.
    Clearly, the need for basic educational programs is tremendous, and it
    will increase as changes in the welfare laws are implemented.
        Officials at Tribal Colleges agree that the old welfare system did
    not work. In fact, the missions of the Tribal Colleges are specifically
    targeted toward self-sufficiency and productivity. This has been the
    work of the colleges from their inception. Tribal Colleges want to
    continue to share in the responsibility of making the new welfare
    system work. The future of our people depends upon it. But Tribal
    Colleges cannot be successful if resources remain too inadequate to
    deal with the impact of the new laws. They must be fully prepared and
    given the appropriate resources to deal with the increases in
    enrollment, new program implementation, and expanded remediation
    services and programs.
                             further justifications
        (1) A new part should be established under Title III of the Higher
    Education Act (HEA) specifically for Tribal Colleges, and this section
    should be fully funded at the expected authorized level of $10 million.
    Currently, both the House and Senate HEA reauthorization bills include
    the creation of a new Tribal College section for Title III,
    Strengthening Developing Institutions. The House Workforce Committee
    has authorized a $10 million competitive program, and the Senate
    Committee has authorized $5 million. Both measures are awaiting floor
    action and conference. We are hopeful that the final authority will
    remain at a $10 million level.
        As you know, Title III of the Higher Education Act was created to
    assist institutions that historically have served minority and low-
    income students who have been denied access to postsecondary education
    because of race or national origin. According to the Act's findings,
    these institutions serve students ``whose participation in the American
    system of higher education is in the Nation's interest so that equality
    of access and quality of postsecondary education opportunities may be
    enhanced for all students.'' In 1980, a specific part was created
    within Title III to provide assistance to Historically Black Colleges
    and Universities (HBCUs), and in 1992, a new section was added to
    provide specific funding for Hispanic Serving Institutions (HSIs).
    Today, we request your support for the full funding of this new part
    within Title III for Tribal Colleges.
        A quick review of the findings of either Title III or Part B will
    make abundantly clear Title III's applicability to Tribal Colleges.
    Tribal Colleges were created specifically to serve a population that
    had been denied full access to America's higher education system. Our
    mission is to educate American Indian people and others on our
    reservations and to help prepare them to enter this nation's workforce.
    A separate section will greatly enhance the ability of Tribal Colleges
    to participate in Title III's programs. Over the past several years,
    Tribal Colleges have been nearly shut out of Title III participation.
    In 1991, fourteen Tribal Colleges received Title III grants. In 1994,
    not one Tribal Colleges received a new Title III grant. In 1995, five
    institutions received new funding, but in 1996, no new schools received
    Title III grants. Currently, only seven schools are participating in
    the program at all, half the number of seven years ago. The Tribal
    Colleges' developmental needs are overwhelming. When accessed, the
    Title III program has been extremely important in bringing support in
    areas such as faculty and curriculum development, student services, and
    critical community-building programs. We urge the Subcommittee to fully
    fund this urgently needed authority.
        (2) Under Title IV, we have two priorities: (a) Funding for the
    campus-based assistance programs, including work-study, SEOG, and TRIO,
    should be fairly allocated to all institutions with documented need.
    (b) Funding for the Pell Grant program should be increased, over a
    period of five years, to the level of educational cost coverage
    provided in the late 1970s and early 1980s. Unfortunately, Tribal
    Colleges are not able to fully participate in many of the other higher
    education programs authorized by this Subcommittee because of existing
    barriers in funding formulas, laws, regulations, and grant-making
    procedures. Newer institutions, like the Tribal Colleges, should not be
    penalized solely because they have not been in existence for more than
    25 or 30 years. Yet, this is exactly what happens with campus-based
    programs like the Supplemental Educational Opportunity Grants (SEOG)
    and work-study programs. A recent report by the Institute for Higher
    Education Policy showed that in 1994-95, students at Tribal Colleges
    received only an average SEOG of $326, significantly lower than the
    national average of $559.
        Mr. Chairman, we are simply asking for parity within these
    programs. We do not believe that our institutions should be penalized,
    when documented student need is equal or greater, simply because we
    were not in existence when a program was originally established or
    modified. One suggestion is that disbursement of funds could stipulate
    that priority for full funding be given to institutions with high rates
    (85 percent or higher) of students in financial need.
        In addition, we support the President's request for an increase of
    $100 per student award as a positive step toward this goal, and we urge
    the Subcommittee to supplement this amount. The importance of Pell
    Grants to our students cannot be overstated. Education Department
    figures show that half of all Tribal College students receive Pell
    grants, primarily because student income levels are so low, and they
    have far less access to other sources of aid than students at
    mainstream institutions. The inadequate funding Tribal Colleges receive
    from the federal government has forced most of the colleges into a
    position of increasing reliance on tuition for institutional
    sustainability. As a result, tuition levels at Tribal Colleges are as
    much as 30 percent higher than the average for mainstream public
    community colleges-in 1994-95, the average tuition at a Tribal College
    was $1,580, compared with a national average of $1,190 at community
    colleges.
        Most Tribal Colleges are too young and too poor to have established
    endowments and other scholarship programs, and our students receive
    virtually no aid from the states. Many of our students would not be
    attending college and preparing to enter the workforce today if it were
    not for Pell grants; instead, they would be counted among the ranks of
    the unemployed. Within the Tribal College system, Pell grants are doing
    exactly what they were intended to do: they are serving the needs of
    the lowest income students by helping people gain access to higher
    education and become active, productive members of the workforce. We
    urge you to support and expand upon this valuable program.
        (3) Funding under section 103 of the Carl D. Perkins Vocational
    Education and Applied Technology Act (set-aside for Indian and Hawaiian
    Natives) should be at a level of $15.9 million; the Tribally-controlled
    Postsecondary Vocational Institutions program should be funded at no
    less than $3.1 million; and other Vocational and Adult Education
    programs should be funded at the levels requested in the President's
    budget. Basic grants and school-to-work funding will be particularly
    beneficial to the Tribal Colleges as we attempt to deal with the
    challenges tribal communities face as a result of welfare reform, and
    we support adequate levels of funding for these programs. Also, it is
    important to note that the $3.1 million for Tribally-controlled
    postsecondary vocational institutions provides core funding for two of
    our members, United Tribes Technical College is Bismarck, North Dakota,
    and Crownpoint Institute of Technology in Crownpoint, New Mexico.
        (4) The new White House Initiative on Tribal Colleges, which is
    housed in the Department of Education, will need support and oversight
    by the Congress. We request appropriations of $500,000 for this
    important office. The Subcommittee needs to be aware of this new
    office, which is now housed within the Department of Education's Office
    of Adult and Vocational Education. This office will help ensure that
    Tribal Colleges are not overlooked in the creation and administration
    of federal programs. The office was mandated by the Executive Order on
    Tribal Colleges and Universities (No. 13021), which the President
    signed in 1996 after years of advocacy by the Tribal Colleges. The
    Senate heavily supported the signing of the Executive Order and
    actively sought this long-overdue recognition through Senate Res. 264,
    103rd Congress.
        One of the greatest challenges that Tribal Colleges face is
    overcoming a surprising lack of awareness among most federal
    departments and agencies. Program administrators simply do not know we
    exist. This office will help address this fundamental problem, as
    similar offices have for Historically Black Colleges and Universities
    and Hispanic-Serving Institutions for a number of years. In addition,
    the office will coordinate Departmental and agency participation in the
    mandates of the Executive Order; assist in the development of agency 5-
    year plans aimed at reducing program participation barriers; and,
    report to the President on the inclusion of the Tribal Colleges in
    various departmental programs.
    IV. Conclusion
        In light of the justifications presented in this testimony and the
    even further enrollment increases that will result from welfare reform,
    we urge the Subcommittee to increase funding for Tribal Colleges.
    Fulfillment of AIHEC's fiscal year 1999 request will strengthen the
    mission of these colleges and the enormous, positive impact they have
    on their respective communities and will help ensure that they are able
    to properly educate and prepare thousands of American Indians for the
    workforce of the 21st century. Without the Tribal Colleges to serve as
    the means for moving from welfare to work, much of the reform
    accomplished by the Congress will fail throughout Indian Country. As
    demonstrated in this testimony, Tribal Colleges have been extremely
    responsible with the federal support they have received in the last 17
    years. It is important that the Federal Government now capitalize on
    its investment. As the recent Carnegie report stated, ``Now, as
    strongly as ever, we repeat our conviction that Tribal Colleges deserve
    continued support. Their value has been proven, but their vision is not
    yet fulfilled'' (Native American Colleges: Progress and Prospects,
    Carnegie Foundation for the Advancement of Teaching, 1997). These
    institutions have proven themselves as a sound federal investment, and
    we ask for your continued support.
        Thank you again for this opportunity to present our request before
    this Subcommittee. We respectfully ask the Members of this Subcommittee
    for their continued support and full consideration of our fiscal year
    1999 appropriations request.
                                     ______

     Prepared Statement of John S. Megerson, Director of Police, on Behalf
                    of the Southwest Texas State University
        I appreciate the opportunity to present written testimony
    concerning proposed changes in the Crime Awareness and Campus Security
    Act of 1990 as offered in H.R. 715, Accuracy in Campus Crime Reporting
    Act of 1997 and request that this testimony be entered into the Record.
    I do so as Legislative Chair for the Texas-New Mexico Association of
    College and University Police Departments, as a 35-year member of the
    criminal justice community, and as Director of University Police for
    Southwest Texas State University.
        You have already received a position statement from the Texas-New
    Mexico Association of College and University Police Departments
    concerning the provisions of H.R. 715. That document deals primarily
    with specific provisions of the bill and difficulties inherent in
    compliance. I will not re-address those at this time. The purpose of my
    testimony is an effort to persuade you to recognize the direction you
    are being asked to pursue will result in the development of data which
    will not serve the interests or intent of those who promoted the
    approval of the Crime Awareness and Campus Security Act of 1990.
    However, I will offer a solution I believe may be acceptable to those
    with concerns over compliance and needed data.
        In summary, you are being asked to approve legislation that would
    force educational institutions and their law enforcement and security
    organizations to produce and publish data and statistics that are
    incongruent with one another. In many respects the proposed legislative
    amendments require us to produce not what we ``know'' to have occurred,
    but what we ``suspect'' to have occurred. Such information is not
    subject to objective analysis and interpretation.
        When the original Crime Awareness Act was passed it focused upon
    the reporting of ``campus crime'' and the publication and transmission
    of policies and services dealing with victimization and crime
    prevention. As the rules were developed, changes made and audits
    conducted, the focus began to change as well. While boundaries were
    set, those who set them are no longer comfortable and want them
    extended to streets passing through the campus, to streets patrolled by
    campus police on the perimeter of a campus, to public housing off
    campus as well as campus approved organization housing.
        The quest also includes buildings and facilities leased to private
    enterprise for public businesses not controlled by universities anymore
    so than does an owner of a property leased to a university for
    university business. Some compliance audits have extended those
    boundaries to include crime occurring in other cities while a student
    is on an educational trip approved by the university.
        The focus is no longer on crime occurring ``on'' a campus, but
    ``to'' a student associated with a campus and the pursuit is
    progressing well beyond that level of information. This is not Campus
    Crime data. This is Community and Student Victimization and Behavioral
    data. These are vastly different kinds of data and the meaning and
    interpretation draw entirely different pictures and conclusions.
    Including unsubstantiated reports of other crimes and associated
    infractions for which there is no criminal charge, but for which the
    individual might be liable (Student Justice) paints an abstract picture
    for which the interpretation is in the eye of the beholder. It is not
    objective, quantifiable or definable in any terms that are universally
    acceptable.
        Where we were once concerned with crimes as defined by the Uniform
    Crime Reporting System, we are now being asked to concern ourselves
    with behaviors and infractions not defined by the UCR, i.e., student
    disciplinary violations and code of conduct violations for which an
    individual was not criminally charged. You have heard testimony seeking
    the equivalent of background checks on prospective students and annual
    drug screening of those receiving federal student loans. That is not
    campus crime data and is not germane to an act dealing with such data.
    You have heard testimony seeking the publication of data concerning
    drug, alcohol, and weapons ``violations'' rather than arrests. Merging
    violation data with ``crime and arrest data'' will not create a report
    that is subject to objective interpretation. This attempt to identify
    every law or university rule violated by an individual in the course of
    one incident for which he/she is accountable in more than one venue
    will obscure the true picture.
        You have heard the testimony and read amendments asking for the
    publication of crimes reported to ``other campus officials'' that may,
    or may not, have been reported to law enforcement or campus security.
    You are being asked to require campus police and security departments
    to publish and ``certify'' crimes reported to others which we cannot
    investigate or verify; crimes which when reported to us do not contain
    the names of victims so that we do not record the same report several
    times, depending upon who heard it last.
        As you think about extending the boundaries of crime reporting,
    please think about New York City, Los Angeles, Miami, Baltimore, every
    major city in this country. Each is home to a number of colleges and
    universities; some within a block or so of one another. In Davie,
    Florida, there are three institutions of higher education across the
    street from one another and only a mile or so from still other
    universities. When I sent my daughter to the University of Miami I was
    not nearly as interested in the campus crime rate as I was the crime
    rate in Dade County, Florida. I was concerned about campus burglary and
    theft and the quality of the campus police. I was concerned about the
    residence hall staff and the vigor with which they enforced their
    rules. I knew my daughter would not spend her every waking moment on
    that campus. I knew she would go with friends to a number of off-campus
    establishments, events, parties, and sightseeing. It was the total
    environment that concerned me, not just the campus.
        While the University of Pennsylvania and the Department of
    Education are charged with having erred in terms of the spirit or
    intent of the law regarding what constitutes the campus, as with any
    law, the definitions prescribed are those that must be followed. To re-
    write the law and expand its prescriptions in an effort to correct this
    perceived ``flaw'' will not correct the problem. No matter what college
    or university is examined, at some point the boundary of the campus
    will end. Across the street will not be the campus and a crime
    occurring there will not be included. That is the nature of boundaries.
    However, there is a solution which should meet the intent of the
    original law, i.e., to allow students and parents to evaluate the crime
    climate of a prospective college or university.
        With that as a preface, what I suggest is that the focus of crime
    disclosure information should be on the community as a whole in which
    the college or university is located. If a parent is going to look at
    crime data as a part of the selection process of a college or
    university, that is what they need to know, not just campus crime.
    Focus on a report that includes the ``campus crime rate'' as it is
    currently defined and a section that includes the same data for the
    political subdivision in which the institution is located. Both receive
    federal funds. Both deal with the same clientele. Both have the same
    statistical resources. In the vast majority of cases I am sure one will
    see a campus crime rate substantially lower than the surrounding
    community but, as other testimony has reflected, that is not the full
    picture that needs to be available. Hold the local community as
    responsible for the accuracy and disclosure of crime information as you
    would the university for its information, but do not hold the
    university accountable for the surrounding community.
        Each affected institution is located in a police jurisdiction other
    than its own, e.g., a city, county, borough, or township which is
    broken into precincts, districts or some comparable police patrol and
    statistical area. Thus, the solution is to require those police
    jurisdictions to submit crime data to that institution (according to
    the prescriptions in the Crime Awareness Act) for their patrol area(s)
    in which the educational institution is located. Then, hold the
    educational institution responsible for publishing both the crime
    occurring on its own campus and that in the surrounding police
    jurisdiction or patrol area(s) in which it is located.
        Each of those contiguous police jurisdictions receives federal
    funds for a variety of programs. To insure compliance with this
    provision, all that need be done is require all federal funding sources
    for local police agencies to include in their award criteria a
    requirement that they will comply with the provisions of the Crime
    Awareness and Campus Security Act; a failure to do so resulting in the
    withdrawal of their federal aid.
        Use of this data would be an effective reference for major
    metropolitan areas without requiring the distribution of an entire
    city's crime rate, e.g., New York City, Miami, etc.; such data not
    being helpful to prospective students. In rural or suburban communities
    the patrol areas might be quite large and encompass a major portion of
    a community or county. In this way, you will have made the distinction
    between the ``Campus'' and the ``Campus Community,'' a clearly
    important distinction in terms of crime as evidenced by the testimony
    and concern shown over campus boundaries.
        In terms of disciplinary actions and rules violations, as
    previously stated, this is entirely different data. Many of these may
    be ``crimes'' in the technical sense, but they are normally not crimes
    for which the judicial process will take action. They are behaviors
    that violate codes of conduct for which there is an entirely different
    burden of proof for accountability and should not be included in an
    ``Annual Crime Report.'' This is information that should be included in
    Student Services materials transmitted to all students, e.g.,
    application materials and the Student Code of Conduct. This is
    information that tells the prospective students and parents the
    university has rules it enforces whether or not the student is
    accountable under criminal law.
        This development of two reports draws an important distinction and
    creates a much clearer picture of the university environment in terms
    of crime and in terms of acceptable behavior within that community.
                                     ______

        Prepared Statement of the National Indian Education Association
        The National Indian Education Association (NIEA), the oldest
    national organization representing the education concerns of over 3,000
    American Indian and Alaska Native educators, school administrators,
    teachers, parents, and students, is pleased to submit this statement on
    the President's fiscal year 1999 budget as it affects Indian education.
    NIEA has an elected national board of 12 members who represent various
    Indian education programs and constituencies. Every year, NIEA holds an
    annual convention which provides our members with an opportunity to
    network, share information, and hear from Congressional leaders and
    staff as well as federal government officials on policy and legislative
    initiatives impacting Indian education.
        We commend President Clinton for a budget that emphasizes the
    importance of education for all citizens of this country, including the
    First Americans. There are some programs such as the Office of Indian
    Education (OIE) in the Department of Education, Impact Aid and higher
    education scholarships which deserve further consideration for
    increases. Other issues which may arise this year, such as block
    granting Department of Education funding, need to be considered very
    carefully by the Congress. Funding for certain Indian education
    programs are the result of the Federal/Tribal Trust relationship and
    may not be conducive to these types of funding proposals.
        President Clinton has proposed several new education initiatives
    for fiscal year1999. Some of these depend on passage of a proposed
    Tobacco Settlement. Administration proposals like the School
    Construction Tax Credit and the Class-Size Reduction Initiative are
    desperately needed by schools operated and funded by the Bureau of
    Indian Affairs (BIA) as well as many rural public schools.
    The Federal responsibility for Indian education
        Indian education programs are not affirmative action nor race-based
    educational efforts but result from the historical and legal
    relationship between Indian nations and the Unites States. This
    government-to-government relationship is a Constitutional relationship
    whereby the U.S. officially recognizes some 557 Indian and Alaska
    Native governments as separate and distinct nations. This political
    relationship includes broad federal authority and special trust
    obligations unique only to American Indians and Alaska Natives. Tribal
    governments are independent of State governments even though tribal
    lands may lie within a state's geographic boundaries. Many federal
    statutes provide for direct funding to tribal governments so that
    tribes can design and administer their own programs. Among activities
    undertaken by tribal governments are the administration of their own
    police departments, courts, schools, health facilities, social service
    programs, the development and enforcement of environmental codes, etc.
    Many programs formerly administered by the Bureau of Indian Affairs
    (BIA) or the Indian Health Service (IHS), are now carried out by Tribes
    under authority of the Indian Self-Determination and Education
    Assistance Act (Public Law 93-638) and the Indian Education Act of 1972
    (as amended by Title IX, Public Law 103-382). Tribally chartered boards
    now administer more than 90 BIA-funded elementary and secondary schools
    and 29 tribal colleges.
    Indian education executive order
        For the past three years, NIEA has worked cooperatively with the
    National Congress of American Indians (NCAI) and the Native American
    Rights Fund (NARF) in developing an Executive Order on a Comprehensive
    Federal Indian Education Policy Statement (CFIEPS). The intent of this
    policy is to formally set national guidelines for Indian education
    programs which would be applicable to all federal agencies. The
    uniqueness of this document is that it is tribally-endorsed,
    encompasses all education levels and reflects the historical nature of
    federal education policy. These guidelines are broad enough to define
    and direct federal agency implementation of all congressional and
    executive branch level Indian education initiatives including budget
    appropriations. The CFIEPS has been forwarded to the Clinton
    Administration with several House and Senate Members endorsing the
    proposal. We urge this subcommittee's endorsement of a Presidential
    Executive Order on Indian Education. Below are our funding
    recommendations for those Indian programs under the jurisdiction of the
    Labor, HHS and Education Appropriations Subcommittee.
                            department of education
    I. Office of Indian Education (OIE)
        For fiscal year 1999, the Department of Education has requested $66
    million to fund formula grants to Local Education Agencies (LEAs),
    partially restore discretionary funding for OIE and fund certain
    National Center for Education Statistics (NCES) surveys. NIEA supports
    full funding for OIE in the amount of $83 million, $17 million more
    than the fiscal year 1999 President's Request. This amount, in addition
    to LEA grants, would permit a variety of discretionary grant programs;
    full funding for the National Advisory Council on Indian Education
    (NACIE) and partial funding for the Presidential Executive Order on
    Tribally Controlled Community Colleges (TCCC). NIEA requests partial
    funding for the TCC Executive Order since its implementation requires
    other Education Department agencies to combine resources. In 1997,
    budget authority for OIE transferred from Interior to this
    Subcommittee.
        Partial funding in the amount of $3.3 million has been restored for
    OIE's discretionary program called Special Programs for Indian
    Children. NIEA requests the Committee's support for full reinstatement
    for other discretionary programs in adult literacy and Indian
    fellowships. The Department's support for Indian students throughout
    its other programs is well established and appreciated by the Indian
    community; however, few Departmental initiatives are available for
    Indian adults and Indian students attending postsecondary institutions.
    This educational gap prevents full educational access generally assured
    other students. NIEA's fiscal year 1999 request proposes to fill this
    educational inequity. The following are NIEA's recommendations
    regarding OIE funding by category:
      --Formula Grants to LEAs.--For fiscal year 1999, the U.S. Department
            of Education has requested $62 million for its formula grant
            program to public schools. The Department estimates that this
            funding assists 405,376 Indian students attending public and
            43,089 students attending Bureau of Indian Affairs (BIA)
            schools for a total of 448,465 students. Approximately 80
            percent of BIA students receive assistance under OIE's formula
            grant program to LEA's.
      --Special Programs for Indian Children.--NIEA supports the
            Department's effort to partially restore discretionary funding
            for certain OIE programs. The request includes $3.3 million for
            the Special Programs for Indian Children. This account, if
            funded, would assist two initiatives: (1) demonstration grants
            for early childhood and preschool education and (2) preparation
            of Indians to take positions in teaching and school
            administration. The $3.3 million increase falls far short of
            the amount needed to reinstate several critically needed Indian
            Education programs such as Indian fellowships, adult education
            programs and additional demonstration grant resources.
      --National Activities.--The Administration requests $735,000 in
            fiscal year 1999 to augment the Year 2000 National Center for
            Education Statistics (NCES) Schools and Staffing Survey (SASS).
            The data collection effort would ensure that American Indian
            students are included in upcoming NCES surveys that will yield
            additional information on American Indian learners.
      --NIEA appreciates the targeted increases for Indian education, but
            continues to be concerned that studies on American Indian
            students are not already a part of the Department's data
            gathering effort. Most other ethnic populations receive
            considerable research results without having their respective
            program budgets cover the cost. A 1996 report by the United
            States Commission on Civil Rights titled the `Equal Educational
            Opportunity Project Series, Vol. 1' found that Department of
            Education data on student characteristics was lacking among
            students from American Indian, Asian and other national
            backgrounds. The report stated that ``accurate, reliable and
            complete data on these ethnic groups are vital for the efforts
            of the education community to assess the needs of all student
            sub-populations.'' The report recommended that documents from
            the Department of Education's Office of Educational Research
            and Improvement (OERI), and other federal agencies that contain
            data utilized by policy and decision makers, should include
            information on these populations. NIEA echoes this position and
            recommends that the Department of Education make a concerted
            effort to provide accurate research data on American Indians
            and Alaska Natives when conducting studies and that they do so
            with funds requested through their own research department.
      --Tribal College Executive Order.--When the President's budget was
            released, funding amounts for the Tribal Colleges Executive
            Order was not available. In fiscal year 1998 the funding
            through OIE was $200,000. NIEA has been informed by the
            Department that other agencies are expected to contribute to
            the Order's implementation. NIEA supports the tribal colleges
            in their request for full funding of this office.
      --The National Advisory Council on Indian Education (NACIE).--NACIE
            is recommended at only $50,000 the same amount as fiscal year
            1998. NIEA requests that the Committee consider full funding
            for NACIE in order for it to carry out its mandated under the
            Indian Education Act of 1972. This would require at least
            $400,000 additional in fiscal year 1999. NACIE currently has no
            permanent office and must rely on OIE staff to carry out
            minimal functions. NIEA has made every effort to involve NACIE
            in several Indian education initiatives including a proposed
            Indian Education Executive Order, which intends to utilize
            NACIE's advisory role in its implementation. NIEA also requests
            that NACIE be permitted to hold hearings on Indian Education
            issues during the 1999 reauthorization of the ``Improving
            America's Schools Act''.
      --OIE Fellowship and Adult Education Programs.--Another loss, from
            which Indian Country has yet to fully recover, is the Indian
            Fellowship and Adult Education Program. These programs were
            last funded in fiscal year 1996 and represents a broad, non-
            targeted approach, to ensuring Indian student participation in
            postsecondary education. NIEA supports a funding level of at
            least $3 million for the Indian Fellowship Program and $5.5
            million for Adult Education. At its peak, the fellowship
            program funded approximately 150 students. The adult education
            grants served more than 30 Native communities and tribal
            colleges.
    II. Other DoEd Indian Education-Related Programs
      --Goals 2000.--NIEA supports the President's request for Goals 2000
            in the fiscal year 1999 budget of $501 million. This represents
            a $10 million increase over the 1998 appropriation of $491
            million. One percent of Title III funds for Territories and
            BIA-funded schools are used to support comprehensive, systemic
            education reforms to improve teaching and learning. The fiscal
            year 1998 budget for Bureau of Indian Affairs schools was $3.8
            million with $3.6 million proposed in fiscal year 1999.
      --Safe and Drug-Free Schools.--NIEA supports the fiscal year 1999
            request for Safe and Drug-Free Schools of $606 million, or $50
            million more than in 1998. State grants under this program
            total $526 million. BIA schools receive a one percent set-
            aside, which in 1998 was $5.3 million. The fiscal year 1999
            request is expected to be the same with 40,000 Indian students
            benefitting.
      --School-To-Work.--NIEA supports the President's request for School-
            To-Work funding. The President's request cuts the School-to-
            Work vocational education program by $75 million or 37 percent
            in fiscal year 1999. The fiscal year 1999 request is $125
            million with an equal request from the Department of Labor
            bringing the total program to $250 million. This program is due
            to phase out in 2001, with States or other vocational education
            dollars continuing the program. Up to one percent of program
            funds are set-aside for programs to help Indian youth acquire
            the knowledge and skills they need to make a smooth transition
            from school to career-oriented work and further education and
            training. In fiscal year 1998 the amount available for Indian
            students would be $2 million with $2.4 million proposed for
            fiscal year 1999.
      --Title I.--Title I, Education for the Disadvantaged, covers four
            programs: Title I basic grants; Title I concentration grants;
            Title I targeted grants; and capital expenses for private
            school children. The fiscal year 1999 request for Title I Basic
            Grants is $6.270 billion, an increase of $788,000 (less than
            0.1 percent) over 1998. The BIA set-aside amount under this
            appropriation would be $47 million and serve 24,500 Indian
            students. NIEA supports the President's request.
      --Comprehensive School Reform.--This Title I initiative was funded in
            fiscal year 1998 at $120 million and funds research based
            school-wide reform. The fiscal year 1999 request is $150
            million. Under this proposal, BIA and the U.S. Territories
            would receive a 1 percent set-aside, estimated at approximately
            $2.7 million. The Department of Education notified the BIA that
            their portion of the set-aside would be $896,402. From this
            amount, $815,323 would be used for Title I comprehensive school
            grants and $81,079 would be used for Fund for the Improvement
            of Education projects. NIEA is concerned that the usual share
            for BIA and Territories combined funding from typical set-
            asides is divided according to an average 60/40 split. A ruling
            from the Department of Education recommends 33 percent instead
            of the standard 60 percent allotment. We oppose this ruling and
            support funding for BIA schools at no less than 60 percent.
      --Impact Aid.--NIEA does not support the Administration request of
            $696 million, which is $112 million less than the 1998 amount.
            Impact Aid compensates school districts in areas where large
            numbers of children live on, or are associated with, Federal
            property such as Indian reservations or military bases. In 1998
            the Department estimated that over 118,000 Indian children
            living on Indian lands would generate approximately $214.5
            million for local school districts. In fiscal year 1999,
            American Indian students will generate approximately $270
            million for local public schools. Based on 1998 funding, Impact
            Aid school districts would lose funding from approximately 2.7
            million students (based on a total 1998 enrollment of 20
            million students), should the funding not be restored. NIEA
            urges the Committee to support restoring the $112 million for
            Impact Aid school districts.
      --Education for Homeless Children and Youth.--NIEA supports the
            fiscal year 1999 request of $30 million for Education of
            Homeless Children and Youth. Under this program, the BIA
            receives a one percent set-aside for homeless students served
            by the BIA.
      --Bilingual Education.--NIEA supports the Bilingual Education request
            of $232 million. American Indians receive indirect funding for
            Bilingual Education programs in the amount of $30.2 million.
            Funding is distributed through grants to school districts to
            address the severe academic problems of school children who are
            limited English proficient. The Department estimates that
            182,000 American Indian students will receive bilingual
            education assistance in fiscal year 1999.
      --Special Education Grants to States.--NIEA does not support the
            Administration's fiscal year 1999 request for Special Education
            programs since it is only increased by $35 million to $4.8
            billion. The Individuals with Disabilities Education Act (IDEA)
            was reauthorized in 1997 as Public Law 105-17. BIA schools
            receive 1 percent for the education of children 5-21 years with
            disabilities who live on reservations. An additional .25
            percent is allocated for distribution to tribes and tribal
            organizations to provide for the coordination of assistance and
            related services for children aged 3-5 with disabilities on
            reservation schools. The set-aside amount in the fiscal year
            1999 budget request is estimated at $46.7 million.
            Approximately 7,000 Indian students with disabilities would be
            served with Special Education funding. NIEA voiced its
            opposition during the reauthorization of IDEA as bill authors
            proposed to lower the Indian set-aside amount from 1.5 to 1.25
            percent.
      --Special Education Grants for Infants and Families.--NIEA supports
            the $4.5 million request for Grants for Infants and Families
            program. BIA schools receive 1.25 percent for distribution to
            tribes and tribal organizations for the coordination of
            assistance in the provision of early intervention services to
            children aged birth to 2 years.
      --Rehabilitation Services.--NIEA supports the President's fiscal year
            1999 request of $2.6 billion for Rehabilitation Services. The
            Rehabilitation Service Grants Indians in the fiscal year 1999
            budget is $17.2 million, a $1.9 million increase over fiscal
            year 1998. Funds for this program are based on a 0.5 percent
            set-aside. These critical dollars provide vocational
            rehabilitation services to 7,000 American Indians with
            disabilities living on reservations.
      --Education Technology.--The fiscal year 1999 request is $591
            million, $50 million more than 1998 and includes a Technology
            Literacy Challenge fund, Technology Innovation Challenge
            Grants, and Leadership Activities. An additional $87 million
            goes for three new national programs: teacher training in
            technology, community-based technology centers, and technology
            leadership activities. American Indians are estimated to
            benefit with approximately $2.3 million in Technology Literacy
            Challenge funds in fiscal year 1999.
      --Alaska Native Education Equity.--NIEA supports the fiscal year 1999
            request of $8 million, the same as the previous two fiscal
            years. The Alaska Native Education Equity program funding
            request provides funding for continuation of projects that
            address the barriers preventing Alaska Native students from
            achieving to higher academic standards.
      --Vocational and Adult Education.--The fiscal year 1999 request for
            Vocational Education is $1.1 billion, a $3 million increase
            over 1998. Under this program American Indians previously
            received funding under two programs the Indian and Hawaiian
            Native set-aside and the Tribally Controlled Postsecondary
            Vocational Institutions. The fiscal year 1999 request
            eliminates funding under the Tribally Controlled Postsecondary
            Vocational Institutions program, which was funded at $3.1
            million in 1998, and moves it to the Indian and Native
            Hawaiians set-aside. Funding for the Indian and Native
            Hawaiians set-aside in the fiscal year 1999 request is $20.1
            million, $4.5 million more than in 1998 (Tribally Controlled
            Postsecondary Institutions would receive $3.1 million in the
            1999 request).
      --Reauthorization of the Higher Education Act.--The reauthorization
            of the Higher Education Act, as proposed by the Department and
            passed by the House Committee on Education and the Workforce,
            includes a new addition to Title III, Aid for Institutional
            Development called the Strengthening Tribal Colleges and
            Universities (TCU) Program. This new initiative would create an
            institutional aid program designed to improve, strengthen and
            expand the institution's capacity to serve American Indians and
            other low-income students. The fiscal year 1999 request for
            this program is $5 million which NIEA supports. The following
            are some of the proposed sections of the Higher Education Act
            reauthorization which NIEA fully supports:
        --Title IV.--Under Title IV, the TRIO program will remain virtually
                the same except for minor administrative changes. The
                fiscal year 1999 request is $583 million, $53 million more
                than in fiscal year 1998. The TRIO program benefits
                approximately 7,900 American Indian and Alaska Native
                students at an estimated $6.3 million in fiscal year 1999.
        --Title V.--Under Title V, the Administration proposes to focus
                resources on recruitment of new teachers for high poverty
                urban and rural areas, preparing them well, and supporting
                them during induction, the critical stage of a teacher's
                career. American Indian and other minority serving
                institutions with teacher training programs would be given
                priority during the application process. Title V is
                currently funded at $2.2 million while the fiscal year 1999
                request is $67 million, a substantial increase for teacher
                preparation.
                    department of health and human services
    III. Administration for Children and Families
      --Head Start.--NIEA supports the fiscal year 1999 budget request of
            $134.5 million for programs for American Indian children. This
            request is a $10 million increase over fiscal year 1998 and is
            needed in Indian Country. The Head Start Bureau estimates that
            over 21,000 American Indian children will benefit from the
            services provided by this program. Currently there are 130
            Indian Head Start programs serving Indian communities.
      --The Head Start Act is being reauthorized in 1998 and NIEA
            anticipates the need for few major changes to the program as it
            affects American Indians. NIEA is concerned, however that
            regulations regarding consultation with Indian Tribes are still
            going through the clearance process at the Department of Health
            and Human Services. The latest consultation requirement went
            into affect after the last reauthorization in 1994. NIEA
            requests that this be completed and made available to Indian
            Country as soon as possible.
    IV. Indian Health Service
      --Indian Health Professions Scholarships.--NIEA supports a funding
            level of $30 million, $1.3 million more than the $28.7 million
            requested for Indian Health Professions in fiscal year 1998.
            There has been no significant increase in this program since
            fiscal year 1996. The need for health professionals in Indian
            Country has far exceeded the available funding for American
            Indians. The Indian Health Professions is authorized by Public
            Law 94-437, the Indian Health Care Improvement Act (IHCIA).
            NIEA supports an increased appropriation to meet the rate of
            inflation and the higher costs of training for health-related
            fields that increase in cost annually.
    III. Other DHHS Indian Education-Related Programs
      --Administration for Native Americans (ANA).--NIEA requests a funding
            level of $38 million for ANA programs, an increase of $3.1
            million over fiscal year 1998. ANA provides funding for tribes
            and non-profit Indian organizations to develop economic
            development, environmental management, and language retention
            and preservations projects. NIEA anticipates approximately $2
            million going toward language preservation grants, which is
            $200,000 more than in 1998. NIEA supports the Native Language
            Act of 1992 which authorized a funding level of $2 million in
            fiscal year 1993. This provision, however, has never been
            appropriated. Funds have come instead through ANA.
      --Child Care Development Block Grant (CCDBG).--NIEA supports the
            fiscal year 1999 request of $5.1 billion for child care
            activities. Included in this request are funds for child care
            entitlements (Mandatory Funds), and Discretionary Funds (the
            former CCDBG). Tribes receive a 2 percent set-aside of these
            funds. Included in the $5.1 billion request are funds to
            implement the President's Child Care Initiative which would
            support an Early Learning Fund, a Standards Enforcement Fund, a
            Child Care Provider Scholarship Fund, and a Research and
            Evaluation Fund. In fiscal year 1998, 243 tribal grantees were
            awarded over $61 million in Child Care and Development Fund
            (CCDF) grant funds. Through consortia arrangements, CCDF tribal
            grants may serve over 500 federally-recognized Indian Tribes
            and Alaska Native Villages.
                                     ______

    Prepared Statement of Stephen A. Janger, President, Close Up Foundation
        Mr. Chairman, distinguished members of this subcommittee, my name
    is Stephen A. Janger and I am President of the Close Up Foundation. I
    appreciate the opportunity to submit this testimony in support of the
    Allen J. Ellender Fellowship Program administered by the Close Up
    Foundation. Please allow me to begin by expressing the sincere thanks
    of all of us at the Foundation for this Subcommittee's past support.
    Your support has enabled tens of thousands of participants to take part
    in our citizenship education programs.
        From most accounts, today's economy is robust, unemployment rates
    are low, interest rates are low. There is another rate that is low,
    however, that is disturbing to those of us concerned with civic
    education. Shortly, I will discuss in more detail the recently released
    UCLA survey of the values and attitudes of college freshmen, but
    suffice it to say that the survey results demonstrate that young people
    entering college today are more apathetic toward politics than anytime
    in the history of the survey. This apathy coupled with other signs of
    disengagement are some of the reasons we at Close Up believe it is a
    critical time to address and correct the ``whatever'' attitudes of
    today's youth. Our program can help. We have spent more than 27 years
    working to educate young people about their citizenship
    responsibilities. For these and other reasons, we believe there is a
    critical need for our program and we respectfully request $3.0 million
    for fiscal year 1999.
        I do not have to remind any of you that every day the news media
    are filled with stories about various reports or studies that contain
    information and statistics that are negative and troubling. In January,
    one of those studies was reported in media across the country. It
    caught our attention immediately because it is so relevant to the work
    Close Up has been doing for 27 years.
        The results of a survey conducted by the Higher Education Research
    Institute at UCLA's Graduate School of Education and Information
    Studies are contained in a book entitled The American Freshman:
    National Norms for Fall 1997. The statistically-adjusted results of the
    252,082 responses from college freshmen reveal record levels of
    academic and political disengagement. The response to the question of
    the importance of ``keeping up to date with political affairs'' was an
    all time low (26.7 percent) for the 32 year old annual survey. Upon
    reading this disturbing survey, I wrote to all of you to express my
    concern and to remind you that Close Up, with its commitment to
    educating students to be informed, responsible citizens, continues to
    be part of a solution for this problem.
        From its inception, Close Up has had as a primary focus teaching,
    in a hands-on way, that informed, active citizenship is the
    responsibility of all Americans. Citizenship participation is a
    significant part of what made America strong, and it is an essential
    part of what will help America continue and endure. The results of the
    survey hopefully should awaken the country to the need to focus on
    trying to find ways to successfully address this problem. As a nation,
    we must heed the warning, and meet the challenge because the strength
    of our democracy lies in the civic well-being of our country.
        The Close Up Foundation's programs are designed to combat the
    political apathy expressed by today's college freshmen. Obviously, we
    do not believe our program alone can correct the entire problem,
    particularly since our funding has been reduced by 64 percent since
    fiscal year 1994. We do believe, however, that our program can help to
    reverse the trends evidenced in the survey; and, that with an increase
    in Ellender Fellowship funding and a corresponding commitment to
    generate private sector support, we can reach a greater number of the
    students who need this kind of program the most.
        Close Up has participants from all 50 States, the District of
    Columbia, Puerto Rico, and the Pacific Trust Territories. We work hard
    to ensure that ``all kinds of kids'' take part in our programs. There
    are students who are academically gifted and students who struggle in
    school; there are students from urban, rural, and suburban areas, from
    large and small communities; there are students who are visually-
    impaired, hearing impaired, or orthopedically-challenged; there are
    students from all economic and cultural backgrounds. All of these
    diverse, wonderful young people are ``mixed'' together on various
    activities in Close Up's program and the results are an eye-opening
    realization that they are not as different as they thought they were at
    the beginning of the week. They also realize that they share a common
    bond, they are all citizens of the United States with the same rights
    and responsibilities. Diversity is not America's biggest problem, it is
    our strongest asset.
        The Ellender Fellowships are in large measure the vital key that
    makes this possible. With the Ellender Fellowships, Close Up can reach
    the most underserved student constituencies in America. We can provide
    fellowship assistance to economically needy students and allow them to
    work alongside their peers. We enable students who are recent
    immigrants to the United States and students whose parents are migrant
    workers to take part in our Program for New Americans. This encourages
    some of our newest citizens to work and learn with students from very
    different backgrounds.
        Although most Close Up programs are primarily focused on students,
    we also are involved with educators. The Administration and several
    Members of Congress, from both sides of the aisle, have spoken of the
    need to increase the number of teachers and the quality of teaching in
    America. A primary objective of increasing the number of teachers is to
    reduce the student teacher ratios in classrooms. We believe that the
    Close Up experience serves to stimulate young people to enter the
    teaching profession. Even more importantly, our teacher professional
    development program significantly increases teacher retention.
    According to one principal, ``Close Up is the strongest antidote to
    teacher burnout that I know.''
        Close Up is unique from other civic education organizations with
    its teacher professional development program. While the students are in
    Washington on their program, a separate program is conducted for
    teachers. This teacher program exposes educators to new teaching ideas
    and information presented by Close Up's trained professional staff.
    Teachers in this program also gain invaluable insights from their
    peers. Educators from across the country ``swap'' ideas and experiences
    building greater resources for all of the teachers benefiting from the
    program. Many veteran educators report that, ``* * * participating in
    Close Up is the most important inservice experience of my career.''
        Through this teacher program, civic educators are reinvigorated and
    return to the classroom to inspire students to be good citizens and
    exercise the responsibilities of citizenship. An enthusiastic teacher
    may be the best tool to turn around the trend toward disengagement.
    Close Up and the Ellender Fellowships can not possibly reach all of the
    students we need to, but one teacher can reach 125 students or more
    each year. With an invigorated teacher as the messenger, high school
    students can begin to learn early the lessons of the importance of
    taking responsibility for their life-long civic literacy.
        Close Up's teachers and students make other contributions to their
    communities. A significant number of reinvigorated Close Up teachers
    return to their communities and organize Close Up Local Programs. These
    local programs are civic education activities that focus on local or
    statewide governmental entities, or important policy issues facing the
    communities. Approximately 40,000 people take part annually in an
    estimated 120 local programs. All of this is done at no cost to the
    federal government. I am very proud of these activities, and I think
    they demonstrate the effectiveness of Close Up's program and message
    more than my words could ever express.
        It is disappointing that Close Up's effectiveness and uniqueness
    seem not to be understood by the Department of Education. The
    Department of Education's (DEd) fiscal year 1999 budget justification
    materials include the same erroneous rationale for eliminating the
    Ellender Fellowship program that was presented as last year's
    justification. The Congress obviously did not accept the DEd's
    rationale last year, and nothing has changed to make that rationale any
    more acceptable this year.
        As we stated in last year's testimony, Close Up and the Ellender
    Fellowship program are very distinct from other civic education
    organizations. Attempts to compare Close Up's fellowship program with
    those of other civic education organizations are not legitimate. Even
    with our drastically reduced funding, using an effective multiplier we
    have been able to provide more fellowships in any one year than some of
    these organizations have total participants.
        More importantly, Ellender and Close Up fellowships are awarded
    solely on the basis of economic need. It is my understanding that other
    civic education organizations occasionally offer fellowships but in a
    very limited number. To receive a fellowship, however, the applicants
    are required to submit a written essay and compete for the fellowship.
    This can be an intimidating task for many students, and discourages
    students from applying for fellowships, precluding the participation of
    numerous students.
        Additionally, I understand that some of the fellowships awarded by
    other organizations are designated for certain geographic areas. This
    prerequisite further limits the availability of fellowship assistance
    to students. At Close Up, we have been fortunate to receive donations
    from various private sources. Sometimes these donors place various
    restrictions on their contributions. In this vein, I can appreciate the
    limitations this imposes on an organization, and it is one of the
    reasons that the Ellender Fellowships are so critically important to
    Close Up's work. With the Ellender Fellowships, we can help students
    regardless of where a student lives or what their current abilities are
    with respect to essay writing or test taking.
        Again this year, the DEd's budget justification includes a
    reference to the Department's belief that the Foundation's development
    efforts, especially the new alumni/ae program, will enable the
    Foundation to continue the Ellender Fellowship activities without
    federal funds. At the risk of being repetitive, I will reiterate what
    we said last year. Alumni/ae development programs do not generate a
    sustainable, substantial revenue stream for major universities or other
    non-profit organizations. It is very unlikely, despite our enthusiastic
    alumni/ae, that Close Up could expect to receive major gains from its
    fledgling alumni/ae program. Furthermore, Close Up's alumni/ae are a
    very young group of individuals. Our oldest alumni/ae are just now
    reaching their late forties. The vast bulk of our alumni/ae are young
    people who are just starting out in life and have heavy demands placed
    on limited financial resources. We are committed to continuing our
    alumni/ae program. We already have enjoyed promising results from
    finding old friends and developing new friends. The results, however,
    do not support the DEd's contention that the alumni/ae program will
    produce financial support sufficient to replace federal funding.
        Close Up has worked hard to bring its citizenship lessons to young
    people. During the 1998-99 program year, Close Up will hit a noteworthy
    milestone. We will have had more than 500,000 participants in our
    programs. This is an important accomplishment, but more than the number
    of participants we are encouraged by the contributions our program and
    its participants make to the civic literacy of our country.
        We hear reports all the time about Close Up participants who become
    engaged in the processes of good government. They return to school and
    become involved there as well as in their communities. Students return
    home and speak with their parents and family members about things like
    the importance of voting, or community service. The interest does not
    stop in the schools and homes, it continues with them to all aspects of
    their lives. Former Close Up participants are in all walks of life, but
    a recent Close Up alumni/ae search found a significant number of former
    participants working on Capitol Hill, in the federal government, in
    state and local government, and in numerous social service or policy
    organizations.
        Fortunately, Close Up participants seem not to share the apathy of
    current college freshmen. Our evidence points to the fact that Close
    Up's program and its message are effective and working. This is a
    central reason why we believe Ellender Fellowship funding should be
    increased to allow more young people with limited economic means to
    have the same opportunity for civic enrichment that their more affluent
    peers enjoy. Providing equality of opportunity is one of the most
    beneficial and respected historic roles of the federal government.
    There are few more important educational areas where this needs to be
    done than in citizenship education. The Ellender Fellowships are a
    highly effective seed element creating widespread educational and
    private sector partnerships that benefit the individual, the community
    and the country.
        Mr. Chairman, I would like to conclude by again thanking you and
    the members of this Subcommittee for your past support. As I believe I
    have demonstrated, the Ellender Fellowship funding provided by this
    Subcommittee is an integral part of Close Up's success in reaching
    thousands of students who would not be able to participate without
    fellowship assistance. In this time of increasing disengagement by
    America's youth, this relatively small amount of federal funding can be
    multiplied many times over to reach students who can help to change the
    direction of political apathy.
        I will be glad to answer any questions or to provide any
    information. Thank you very much.
                                     ______

    Prepared Statement of C.M. Sgt. James E. Lokovic, USAF (Ret.) Director,
       Military and Government Relations, Air Force Sergeants Association
        Mr. Chairman and distinguished committee members, on behalf of the
    members of the Air Force Sergeants Association (AFSA), thank you for
    this opportunity to discuss the Department of Education's (DOE) fiscal
    year 1999 budget. Within the DOE appropriations is a funding item of
    critical importance to the quality of the lives of military members and
    their families. Today I ask you to once again consider and, this year,
    to fully fund Impact Aid in support of the children of the military men
    and women serving our nation. AFSA's primary mission is to promote and
    protect the quality of the lives of all active and retired enlisted Air
    Force members (active duty and reserve component) and their family
    members and survivors.
        Impact Aid is an important program for the military families we
    represent, as it ``zeroes in'' on the quality of the educational
    programs provided to their children. AFSA believes that full Impact Aid
    funding rightfully falls within the purview of this committee and the
    Department of Education. Impact Aid is not a ``defense'' program but,
    rather, a national program whereby the federal government reassigns
    these federal workers and their families from location to location
    then, rightfully, supplements local communities affected by their
    presence.
    Background
        Just how are local school districts impacted, and to whom does
    Impact Aid apply? These appropriations provide assistance to local
    school districts serving civil servants, Native American children, low
    rent housing, and, in 40 percent of the total appropriation, to school
    districts impacted by the presence of military children. It is on
    behalf of these military children that I speak today.
        Since the Truman Administration, our government has recognized that
    it alone is responsible for placing and relocating military families.
    It, therefore, has accepted an obligation to compensate local school
    districts which provide a public education to military children. In
    effect, Impact Aid compensates for an ``unfunded mandate.'' Impact Aid
    compensates for tax revenues (that fund local education) that are
    generally not paid by military members.
        For military children, funding is provided at two different levels;
    one level (3a) if the parents of a student live and work on federal
    property and another level (3b) when a parent works on federal property
    but lives in the community as a renter or homeowner. Local educational
    agencies receive $2,000 for each 3a student and $200 for each 3b
    student. Impact Aid is an excellent example of federal funds going
    directly to a program with little bureaucratic red tape. The funds go
    directly to schools to serve the education of military children, and
    local boards of education decide how it is to be spent.
        Certainly, the children of military members lead a unique life,
    fraught with challenges unlike those faced by most of the rest of this
    nation's youth. They typically change schools often, repeatedly being
    uprooted and having to readjust to new communities and friends. One
    very necessary annual budget action has been to recognize these young
    men and women by providing funding through Impact Aid to the local
    school districts which educate them. This federally funded program
    provides for the education of military children in grades K through 12.
        Interestingly, for these children, the return to our government
    goes beyond the normal focus on an educated citizenry. They are unique
    in that approximately 50 percent of current active duty personnel grew
    up in military families. In that sense, Impact Aid directly affects the
    quality of our nation's future military leaders.
        The all-volunteer force has had a dramatic impact on the new
    military and its demographics. More personnel (approximately 60
    percent) are married. Approximately 65 percent of military spouses are
    employed, especially within enlisted families. There are more single
    parents in our military today. There has been a steady increase in the
    number of military pre-school age children. Active duty personnel have
    about one million children younger than 12 years of age.
        Today, there are increasing pressures and anxieties for military
    families caused by a number of factors, including a significantly
    intensified operations tempo and the uncertainty of downsizing,
    privatization, and outsourcing. Deployment rates have been very high as
    our military's mission has transitioned to ``peacekeeping'' around the
    globe, and military parents must be prepared to deploy rapidly. With
    all of the other challenges of military life, it is important that, at
    the least, we are committed to provide a quality education for military
    children. It is a high priority for military families, and it is a
    readiness and a quality-of-life issue. As our military personnel are
    deployed, they should not have to worry about whether their children
    are receiving a quality education.
              why military children need the support of impact aid
        In recent years, some districts with a large number of military
    children have found there is inadequate educational funding, which has
    required higher property tax rates (which generally fund local school
    systems). Clearly, localities, should not be punished because of the
    location of a federal facility. The administration, which ultimately
    assigns these families, has an obligation to support them. Accordingly,
    it is gratifying that this committee has stepped up to examine Impact
    Aid as part of the ongoing congressional and administration discussions
    on nationwide educational funding and expansion. The children of our
    military members must be considered in these plans. Impact Aid is the
    most proper way to reflect the need to protect their (and local
    community) interests.
        Another potential problem would loom if Impact Aid were not fully
    funded. As this committee knows, there have been attempts in the past
    to charge``enrollment fees'' to the parents of military children.
    Military parents expect that the federal government will act in the
    best interests of their families. If any group of the nation's families
    should earn an extra measure of governmental support, it should be
    those who serve our nation and are transferred at the pleasure of the
    government. However, we fear that continued diminishment of the program
    will result in other attempts by communities to charge fees to make up
    for educational funding shortfalls. It would be wrong to penalize
    military families simply because the government stations the family at
    a particular location.
        The problem could become more severe. As the military proceeds with
    the privatization of military housing, and if that housing is not
    considered ``federal property,'' then students would be classified as
    3b students, providing only $200 per student to the local education
    authorities. This could create tensions between the residents of
    heavily affected communities and military facilities in those
    communities. Area civilians could reasonably question why their
    children's education must suffer. This is an area that requires careful
    congressional observation. The options are to fully fund and continue
    this important aid, or to underfund it (as has recently been done),
    hoping that Congress will remedy the situation.
        During each of the past few years, the administration and the
    Office of Management and Budget have recommended deep cuts in the
    Impact Aid program and substantial increases in ``nice to have''
    programs such as Goals 2000 and college incentives for ``other than
    military service.'' Why is the basic education of military children
    such a low priority? If our military children don't receive the quality
    education they need in elementary and high schools, we won't have to
    worry much about college incentives.
        As funding for school districts that serve military children has
    been reduced, one of the first areas that has been affected is new
    construction and upkeep of the school buildings. Continual cutting of
    this program has had a tremendous impact on the local schools. Also,
    due to the drawdown, some schools have experienced substantial
    increases in students and are having a difficult time accommodating the
    growth. Many of the school facilities used by military children are
    nearing a half century in use and today are in need of repair, ADA
    accessibility, asbestos removal, etc. The aging facilities and shortage
    of upkeep and maintenance has put many of the schools in dire need of
    attention.
        In light of the cost of education and the absolute propriety of
    fully funding Impact Aid, what has been our government's track record?
    During the past 17 years, while the number of students served through
    Impact Aid has remained the same and the Consumer Price Index has
    increased by 70 percent, Impact Aid funding has remained level. In
    fiscal year 1998, the program received a 10 percent increase. This was
    definitely a step in the right direction. The fiscal year 1999
    appropriation needs to continue to strive to meet the funding levels.
    Without question, full funding for Impact Aid would greatly assist in
    ensuring the children of our military personnel a quality education
    without endangering or compromising the budgets of local school
    districts.
                                  the request
        Mr. Chairman, we believe the obligation is clear: the federal
    government must pay its tax bill to school districts for the education
    of military children. Originally instituted in 1950 and fully funded
    until 1970, Impact Aid is now funded at approximately 40 percent of the
    level originally intended. As we indicated, the result of such program
    proration has resulted in school districts facing many financial crisis
    and the prospect of possible closures.
        On behalf of those that AFSA represents, I recommend a modest, 10
    percent appropriation increase over last year. Based on the past few
    years, we expect that the Department of Defense (DOD) may once again
    find itself forced to supplement the Impact Aid parsed out by the
    Department of Education for more seriously impacted, high-need
    districts. This should not be the case; but in the past DOE funding
    shortfalls have forced the issue. If you repeat 1998's 10 percent
    increase, this committee would recommend an Impact Aid appropriation of
    $889 Million. However, if this committee is prepared to embrace the
    obligation to fully fund the need with education dollars (rather than
    requiring a DOD supplement), we would request that the full
    appropriation be $939 Million. Those that have tracked Impact Aid since
    the 1950s and the escalating costs of education have indicated that
    this figure will fairly supplement local school districts for
    situations created by the federal government.
        AFSA contends that the time has come to set an automatic funding
    mechanism in place to avoid having to revisit this issue each year. A
    look at the history of Impact Aid appropriations shows a remarkable
    disparity between overall DOE spending and Impact Aid appropriations.
    Since 1950, the overall DOE budget has increased at a factor of more
    than 94 times; during the same period, Impact Aid appropriations have
    increased at a minor fraction of that. The simple, yet important,
    questions we need to consider in determining the right thing to do are
    these: ``Do we, as a nation, commit to assisting local school districts
    who educate the children of our military?'' ``If so, can we arrive at a
    level of spending that results in quality education without endangering
    local budgets?'' And finally, ``Do we accept that in stationing a
    military family there, our government also incurs an incontestable
    obligation to supplement local school districts for each student so
    educated?'' If so, we urge this Congress to arrive at an annually
    applied formula, using $939 Million as a baseline, which would become
    an automatic part of every affected appropriations budget. We urge you
    to make the education of military children a national priority.
        Mr. Chairman, we understand the difficult budget choices that you
    and this committee face. However, we believe that the education of
    military children should not suffer because their families are moved at
    the convenience and desire of the federal government. Military children
    should be held in the same high spending priority that this nation
    affords any other of its children. We urge this Congress to direct the
    Department of Education to request full funding for Impact Aid. Mr.
    Chairman, again I thank you for this opportunity to represent the views
    of enlisted members and their families on this issue. As always, the
    Air Force Sergeants Association is ready to support you in matters of
    mutual concern.
                                     ______

              Prepared Statement of American Council on Education
        Mr. Chairman and members of the subcommittee: The American Council
    on Education is the nation's principal body representing all sectors of
    postsecondary education, including 1,800 two-year and four-year member
    colleges, universities, and education associations. We share with you
    the perspectives of 27 higher education organizations on the fiscal
    year 1999 appropriations for the Departments of Labor, Health and Human
    Services, and Education. Together, these associations represent the
    3,700 colleges and universities across the nation that provide the
    teaching, research, and service essential to our economic and social
    well-being, as well as the students who attend them.
        We begin by expressing our profound appreciation for the priority
    and support that members of this Subcommittee have shown for higher
    education, and especially for your support last year. We know well the
    constraints you face in the non-defense discretionary budget this year,
    but urge you to give a high priority to expanded investment to help
    individuals develop their talents to the fullest and gain access to the
    many options available in higher education. We continue to have a
    concern for those at the lowest income levels. The support provided
    through need-based student assistance programs helps to ensure that
    higher education will remain available to all. In the world in which we
    live, learning throughout life has become the most crucial element in
    the diverse fabric of American social and economic life and in the
    advancement of hope and opportunity for all Americans.
        We especially thank this Subcommittee for last year's
    appropriations bill. You increased federal support for both student aid
    and biomedical research. The purposeful investments you made last year
    will pay dividends for decades to come. In particular, we commend the
    Subcommittee for increasing the Pell Grant maximum award to $3,000 and
    expanding access to Pell Grants for approximately 220,000 needy
    students, for increased support for the Supplemental Educational
    Opportunity Grant (SEOG) program, for maintaining support for the
    Federal Work-Study (FWS) and Perkins Loan programs, as well as
    increases in the TRIO program. At the same time, you also sharply
    increased funding for biomedical research through the National
    Institutes of Health (NIH).
        Turning to fiscal year 1999 appropriations, we will focus
    predominantly on the matter of federal student financial assistance.
    The first session of the 105th Congress was one of the most creative
    and productive legislative sessions in history with regard to higher
    education policy. The importance of postsecondary education was
    evidenced by the increase in Pell Grant funding, as well as the nearly
    $40 billion in education-related tax cuts approved by the Congress.
    This effort is expected to continue as Congress completes action to
    reauthorize the Higher Education Act of 1965.
        This Subcommittee will likely play an increasingly important and
    prominent role in developing good public policy, and ensuring that the
    interests of students and the nation are served well and effectively.
    Here are three reasons why we believe this to be the case:
        1. Without regular increases in the Pell Grant and other forms of
    student grant assistance the gap in college attendance rates between
    low-income students and other more advantaged peers will continue to
    grow and crucial talent will be lost to the nation. While federal
    student aid has boosted the attendance rate of students from the
    lowest-income quartile from 45 percent in 1979 to 58 percent in 1994,
    the college attendance rate for high-income students has grown from 67
    to 88 percent over the same period. In short, the gap has widened.
    Further steady increases in the Pell Grant maximum are necessary to
    avoid a situation in which family wealth determines who can attend
    college. We must bring the attendance rates of low-income students in
    line with those of higher-income students and remove the financial
    barriers blocking access to college. The actions taken by this
    Subcommittee are critically important.
        2. Current borrowing trends among students demonstrate clearly that
    students need to be given viable alternatives to debt financing as the
    primary means of paying for college. In 1979, Pell Grants comprised 76
    percent of all federal funding for student aid, whereas today loans
    account for 72 percent. The maximum Pell Grant has fallen 26 percent in
    constant dollars since 1978. In other words, adjusted for inflation,
    the maximum award is worth only 74 percent of what it was in 1978. To
    restore the value of the 1978 Pell Grant maximum in current dollars,
    the maximum award today would need to be set at $4,050.
        The value of the campus-based student aid programs has fared even
    worse over time. After adjusting for inflation, between fiscal year
    1980 and fiscal year 1998, funding for the SEOG declined 17 percent;
    FWS dropped 25 percent; new capital contributions in the Perkins Loan
    program fell 76 percent; and State Student Incentive Grants (SSIG)
    tumbled 88 percent.
        As the purchasing power of federal grants has declined, low- and
    middle-income students have found themselves facing an increasingly
    limited range of choices among institutions. Many low- and middle-
    income students continue to go to college, but they have had to bear
    the brunt of escalating indebtedness. Reducing the extent to which
    these students must borrow is not merely desirable education policy, it
    is sound national economic policy. It is this group of students for
    whom the highest returns on the federal dollar would be realized. The
    most effective remedy for lessening reliance on loans is a restoration
    of the value of federal grant assistance, a journey on which this
    Subcommittee began in fiscal year 1998. We urge you to continue that
    progress in fiscal year 1999.
        3. Increased federal grant assistance will also help campuses
    reduce the pressures that increase college tuition. We share the
    serious concern members of this Subcommittee have with respect to
    college costs and prices and the rise in tuition charges over the last
    decade. In recent years, the rate of increase has declined
    significantly, but reducing the strain on institutional student aid
    budgets through the provision of adequate federal student aid will help
    greatly. Every college and university president in the country is
    searching for ways to contain college costs. Federal student aid helps
    in that important task. As the National Commission on the Cost of
    Higher Education noted, abundant evidence supports the assertion that
    the availability of student aid helps hold down the cost of college.
        Data show that when federal student aid increases rapidly, tuition
    rises at a more modest rate than it does when student aid grows slowly.
    Indeed, in the 1990s, we have seen a significant moderation in the rate
    of increase in college tuition as federal student aid has grown.
        In light of these considerations, the role of the members of the
    appropriations committees is more critical than ever. The issue is not
    merely the appropriation of funds, but, more importantly, the
    attainment of effective national public policy outcomes. Toward this
    goal, the higher education community respectfully submits the following
    recommendations for your consideration:
      --We urge the Subcommittee to continue its strong support for the
            Pell Grant program. We are deeply grateful for the significant
            increase in the maximum grant in fiscal year 1998, which will
            help the neediest individuals aspiring to attend college. The
            Administration has proposed a $100 increase in the Pell Grant
            maximum in its fiscal year 1999 budget request. We urge the
            Subcommittee to take stronger measures to restore the lost
            purchasing power of the Pell Grant and provide a larger
            maximum. The current maximum award is still far below the
            authorized level, and remains insufficient to help those
            students with the greatest need, and to prevent students from
            accruing significant levels of debt.
      --We urge you to provide a $70 million increase for the SEOG program,
            which would bring about the $100 increase proposed in 1996 by
            Senators Loft and Specter. SEOG funding is directed toward the
            most financially needy students, and until last year's modest
            $30 million increase, this program had been level-funded since
            fiscal year 1992. While this program appears to Congress to be
            a small one, to the most needy students, SEOG can be highly
            significant since it carries an allowable maximum grant of
            $4,000.
      --In accordance with what was included in the President's budget
            request, we urge you to increase funding for the Federal Work-
            Study program by $70 million to a total of $900 million.
      --We urge you to continue the federal capital contribution to the
            Perkins Loan program at least at the fiscal year 1998 level of
            $135 million. By virtue of the low interest rates the Perkins
            Loan offers, this program provides less expensive loans to
            students with great levels of financial need. The
            Administration proposed a reduction in the Perkins capital
            contributions and we think this was a significant mistake.
      --We support the continuation of the institutional-state-federal
            partnership in student financial assistance. We understand that
            this Subcommittee has raised concerns with the current SSIG
            program and we have heard these concerns. The authorizing
            committees are considering a new partnership program that will
            continue to use modest federal funds to leverage additional
            state student aid dollars. We understand that their proposal
            may call for an increased effort on the part of states in order
            to receive new money and will incorporate priorities of Members
            of Congress. The state role in the shared responsibility for
            higher education is very important. We urge you to provide at
            least $50 million for this new state partnership program.
      --We urge the Subcommittee to provide sufficient funding in fiscal
            year 1999 for the Graduate Assistance in Areas of National Need
            (GAANN) and Javits fellowship programs to ensure that both new
            and continuing fellows can be supported. We appreciate the
            Subcommittee continuing to fund GAANN and Javits as distinct
            and complementary graduate programs funded within the GAANN
            account. The Title IX graduate education programs in your
            Subcommittee's jurisdiction are a critical source of federal
            financial assistance for academically superior students with
            high levels of financial need. In addition, they are the only
            significant source of graduate support in many academic
            disciplines.
      --We support an increase for each of the component parts of Title
            III, including Strengthening Historically Black Institutions,
            both for the undergraduate institutions and the graduate
            programs in Section 326, which address the underrepresentation
            of African Americans in the health, scientific, and legal
            professions; Hispanic-Serving Institutions; and Endowment
            Challenge Grants. In addition, we recommend that the
            Subcommittee increase funding for the Strengthening
            Institutions program. These funds support a highly competitive
            program of assistance that helps developing institutions with
            large populations of low-income and ethnically diverse students
            improve the quality of their programs and services.
        In conclusion, we thank the Subcommittee for your support of
    student aid and biomedical research in the past. The work of this
    Subcommittee affects the lives of all Americans, and especially those
    of low- and middle-income college students. Your support is essential
    if these students are to have the opportunity to develop their human
    potential in the years ahead and if our nation is to continue to
    prosper. We thank you for this opportunity to share the views of the
    higher education community.
                                     ______

      Prepared Statement of Crystal J. Paulk, on Behalf of the Society of
                            Professional Journalists
                              campus crime issues
        Mr. Chairman and members of the Committee, I appreciate the
    opportunity to talk with you about public access to crime records and
    campus judicial hearings. My name is Crystal Paulk. I am a recent
    graduate of the University of Georgia and worked at The Red and Black
    student newspaper when the university's judicial system was both closed
    and later opened as a result of legal action.
        In recent years, Congress has shown a willingness to protect
    students when it passed the Student Right to Know and Campus Security
    Act of 1990. Congress later amended the Higher Education Act in 1992 to
    make clear that law enforcement records on college campuses are not
    beyond public scrutiny.
        But this is not enough.
        The U.S. Department of Education continues to allow schools to use
    the Family Education Rights and Privacy Act (FERPA) and its Buckley
    Amendment to deny access to criminal information within the campus
    disciplinary system. Thorough information about crimes on campuses is
    not available at most schools. With passage of the Accuracy in Campus
    Crime Reporting Act of 1997 (H.R.715), the public will be fully
    informed about the safety records of private and public campuses across
    this country.
        The Society of Professional Journalists, represented by 14,000
    members nationwide, feels strongly that it is the public's right to
    know information about such serious crimes on campus as rape, homicide
    and arson. Government should protect and promote the free flow of
    information. Without thorough and accurate crime information and the
    ability to report on closed disciplinary hearings, we all lose.
        University communities are served by police forces and court
    systems that are not subject to public scrutiny. That's contrary to the
    way law enforcement and court systems operate. Government officials
    cannot filter or suppress documents or prohibit public access to
    criminal judicial hearings. But on campuses across the country, secret
    proceedings are the rule rather than the exception.
        Today, campuses are experiencing increased incidents of serious
    crimes.
      --Researchers at Cornell University and Southern Illinois recently
            reported that nearly one million college students may be
            carrying weapons
      --Three students at the University of Cincinnati were recently
            charged with starting a dorm fire that led to the evacuation of
            700 students. That single crime could cost the university
            $200,000.
      --The University of Pennsylvania significantly increased its security
            measures after a rash of crimes that included 24 robberies in
            one month--twice the number for that month the previous year. A
            research associate was stabbed to death and a student was shot
            and wounded as he fled a holdup. Many students complained the
            precautions came too late.
      --At Troy State University in Alabama, 13 students were arrested on
            various drug charges in April of 1996, and several of them
            lived in the same dormitory.
        Despite this climate at colleges and universities--large and small,
    rural and metropolitan, private and public--college administrators
    continue to under report crime and keep the public from accessing
    timely and accurate information. Worse yet, they hold closed hearings
    on incidents involving crimes and defend the process as ``educational''
    and necessary.
        Why?
        The main reason appears to be image and enrollment. Keeping the
    publicity at a minimum by dealing with matters internally helps
    recruiting. Meanwhile, parents and students become victims when they
    believe a campus is safe when it really isn't.
        As a student, I became a member of SPJ and served as president of
    the University of Georgia campus chapter during the 1996-1997 school
    year. SPJ's members work in all media and include educators and
    students. One of the Society's key missions is to safeguard the
    public's right to records and access to meetings.
        I worked for three years at The Red and Black, an independent daily
    newspaper. I also have been employed by the Athens Daily News and
    Athens Banner Herald and The Gainesville Times. I am currently an
    intern with Quill, the Society's national magazine. My internship is
    devoted to working on Freedom of Information issues. I am a student
    representative for the Campus Courts Task Force, a coalition of all the
    major organizations representing professional and student journalists
    and journalism educators. The Society founded the Task Force in 1993.
    Its 13 members support increased public access to crime information and
    secret campus courts.
        My specific interest in this issue began during my freshman year at
    the University of Georgia when I began working for The Red and Black.
    The newspaper was successful in two cases that went before the Georgia
    Supreme Court in 1992 and 1993. The court granted access to
    disciplinary proceedings.
        The first case involved a fraternity hazing ritual of paddling that
    left a student bleeding so badly from his rectum that he required
    hospitalization. The paper sued the school after reporters were denied
    access to the university's disciplinary hearing. In ordering that the
    records of this proceeding be made public, the Georgia Supreme Court
    aptly summarized the public's right to know:
        We are mindful that openness in sensitive proceedings is sometimes
    unpleasant, difficult, and occasionally harmful. Nevertheless, the
    policy of this state is that the public's business must be open, not
    only to protect against potential abuse, but also to maintain the
    public's confidence intheir officials.
        Jennifer Baker, another student, and I were assigned to cover the
    student judiciary beat for The Red and Black. Each week, we published a
    ``Judicial Watch'' which included information about hearings and
    decisions handed down during the week.
        Those first few months were very difficult. Fellow students serving
    as student justices and defender advocates were told to have no contact
    with me outside the hearings, making it difficult to thoroughly report
    criminal incidents.
        Posted notices of the hearings were also difficult to track because
    of a convoluted record-keeping system. On several occasions, I missed a
    class to attend a hearing only to discover the hearing had been
    canceled or moved to another room. A hearing might last 30 minutes or
    several hours. When I tried to speak to a student, that student was
    often told by a university official not to talk to me. At times, all I
    was seeking was the correct spelling of a name.
        Despite these barriers, we persisted in the pursuit of accurate
    information. Accused students understood their rights and the student
    body overall knew the university was informing the public of criminal
    activity.
        Unfortunately, our experience at the University of Georgia is
    unique. Whereas the students, faculty, staff and the general community
    at the University of Georgia could learn about the incidents of crime
    on campus--and the punishment meted out to criminal offenders--such is
    not the case throughout most of the nation. Instead, the vast majority
    of our nation's colleges and universities keep crime and its
    consequences hidden from public view. And despite previous efforts of
    the Congress to require that statistical information be publicly
    reported, the law as it currently stands falls woefully short in
    demanding that timely, thorough information about criminal information
    be made available.
        This veil of secrecy is particularly troubling with regard to
    university disciplinary proceedings of students accused of criminal
    misconduct. The primary obstacle to access to disciplinary records is
    the U.S. Department of Education's interpretation of the Buckley
    Amendment. The Department defines disciplinary records as ``education
    records'' under the Buckley Amendment. Accordingly, it has said schools
    cannot release disciplinary records even when criminal activity is
    involved. Although the Buckley Amendment does not prohibit open
    hearings, university administrators are using the Buckley Amendment to
    close records. Thus, the conflict becomes obvious.
        Frankly, the Society believes the Department of Education's
    definition of disciplinary records as ``educational records'' is wrong.
    Recognizing this problem, Secretary of Education Richard Riley wrote to
    this Committee during the 104th Congress to call attention to the fact
    that crime is an increasing problem in campuses, and stated that there
    is merit to arguments for public access for these disciplinary records.
    But Secretary Riley said that Congress, and not the Department, should
    make the necessary changes. H.R. 715 is the vehicle to make this
    change.
        The Society and the Campus Courts Task Force strongly support
    public access to a daily and thorough campus police log and access to
    campus judicial hearings and records when the incidents stem from
    criminal and other non-academic misconduct. Such records should include
    information about how students charged with criminal behavior are
    disciplined. We believe the definition of law enforcement records must
    include disciplinary records stemming from criminal activities.
        It is critical for Congress to change the definition of
    ``educational records'' to mean records only dealing with the academic
    life of a student. The Student Press Law Center, which provides free
    legal help to student journalists, offers this definition:
    ``transcripts, teacher recommendations, test scores and other academic
    or financial aid records kept by the school.''
        My experiences as a student journalist made me understand that
    public access is vital to students living in the campus community for
    three reasons: to ensure fairness, justice and public safety. Let me
    explain why.
        An accused student must be able to trust the judicial process.
        Every school handles its disciplinary procedures differently. This
    also can lead to inconsistent sanctions. At the University of Georgia,
    the hearings resemble court proceedings. A student accused of violating
    a university regulation is notified by the Student Judicial Office and
    represented in the hearing by a student defender.
        By tracking the system for The Red and Black, we discovered
    inconsistencies. The accused student had to choose between a formal
    hearing by peers or an informal hearing with an administrator. A
    student was seven times more likely to be suspended by his peers than
    by an administrator, a statistic that was reported in The Red and
    Black.
        During the next few months, the judicial process changed. All
    accused students appeared before one hearing panel of two student
    justices and an administrator. The changes were supported by faculty
    and students. This inconsistent justice could not have been documented
    without access to disciplinary hearings.
        There is no reason why campus crime and judicial proceedings should
    be treated differently than crime and courts off campus. Some recent
    examples are particularly troubling.
        The University of Maryland is fighting to keep student athlete
    parking tickets secret. The case began after the student newspaper, The
    Diamondback, heard that a university basketball player had accumulated
    more than $8,000 in unpaid parking tickets. They also heard that the
    player, in violation of National Collegiate Athletic Association rules,
    had obtained money from a former coach to pay the fines. The newspaper
    sought additional information under the state's open records law. But
    university officials turned down the request, citing FERPA. The
    Diamondback sued, and a Maryland court ordered the university to turn
    over the records. However, the case is on appeal and both the
    Department of Education and the NCAA have filed supporting briefs to
    overturn that decision.
        At Louisiana State University, a secret court was used to expel
    members of the student government who stole money from a campus book
    fair. The case was never prosecuted by the local authorities. LSU
    administrators informed the student body the book fair revenue had
    ``evaporated,'' but never specified who was responsible or how much
    money was stolen. A tenacious editor of the campus newspaper found out
    what had happened by interviewing two expelled students who felt their
    punishment was too harsh. When the editor asked LSU administrators to
    comment on the reported $2,700 theft, they refused. The student
    newspaper and the Shreveport Professional Chapter of SPJ sued for the
    documents, but were unsuccessful. The court ruled in the university's
    favor. LSU never publicly disclosed how much money was stolen, who was
    involved or what actions were taken to punish the violators.
        Contrast the LSU example with a similar case I covered in March
    1994 at the University of Georgia. During an audit of the University
    Bookstore, missing funds were traced to three student cashiers. The
    theft totaled $4,251. But in this instance, the case went to court--a
    real court--where the students were sentenced to 12 months probation,
    community service, and required to provide restitution. The students
    also were brought before the student judiciary in an open hearing and
    suspended from school for one year.
        On both the LSU and Georgia campuses, students were outraged by
    these thefts. However, at the University of Georgia, where the case was
    handled openly, the public was officially informed justice had been
    served.
        Administrators must release information for students, their parents
    and the community at large to know if their campuses are safe.
        The Ohio Supreme Court recently recognized the necessity of open
    campus judicial records. In a July 9, 1997 ruling, the Court ordered
    Miami University to release detailed disciplinary records to the campus
    newspaper, The Miami Student. In words that resonate here, the Court
    wrote:
        ``Unfortunately, at present, crimes and other student misconduct
    are escalating at campuses across the nation. For potential students,
    and their parents, it is imperative that they are made aware of all
    campus crime statistics and other types of student misconduct in order
    to make an intelligent decision of which university to attend.
    Likewise, for students already enrolled in a university, their safety
    is of utmost importance. Without full public access to disciplinary
    proceeding records, that safety may be compromised.''
        The Society and the Campus Courts Task Force believe college and
    university crime reports are an inaccurate representation of campus
    crime. A story published in The Washington Post in April this year
    cites specific instances where violent student crimes were not included
    on official reports because the incidents occurred off campus. Crimes
    against these students are seldom included in a college's overall
    statistics that are reported annually to the U.S. Department of
    Education.
        Even when the Department of Education cites a college or university
    for breaking the reporting requirement on annual crime reports--
    something it has managed to do only twice in seven years--campus
    administrators seem to view those federal citations as insignificant.
        In March 1997, the U.S. General Accounting Office reported on the
    difficulties that colleges have faced in meeting federal reporting
    requirements about campus crime. See U.S. General Accounting Office
    Report to Congressional Requesters, Campus Crime: Difficulties Meeting
    Federal Reporting Requirements, Report No. GAO/HEHS-97-52, March 1997.
    The GAO concluded that the Department of Education was ``slow'' in
    monitoring compliance with the reporting requirements and was late in
    issuing a report to Congress. The colleges faced problems as well. The
    GAO concluded that because colleges handle their data differently, it
    is difficult to compare one school to another. The GAO also noted that
    considerable confusion still exists among colleges about what and how
    they should report incidents of campus crime. For example, most of the
    colleges studied omitted hate crimes from their statistics, while
    others excluded crimes reported to local police.
        One of the most sensitive areas of concern when dealing with campus
    crime is sexual assault. Administrators say they fear victims of sexual
    assault may be reluctant to report the crime if hearings are open.
    Journalists usually do not disclose the identity of sexual assault
    victims even when covering open criminal trials. However, reporters may
    contact a victim. In those instances, a victim may choose to go public
    and deference is given to the victim to make that choice. The Society's
    Code of Ethics directs all journalists to ``show compassion for those
    who may be affected adversely by news coverage'' and to ``be cautious
    about identifying--victims of sex crimes.'' Ethical journalists treat
    sources, subjects and colleagues as human beings deserving of respect.
        While every effort should be made to ensure victims' rights, public
    safety issues cannot be ignored. If so, it will only result in more
    victims. Consider, for instance, the warm spring Sunday morning in
    1995, when a female student was jogging alone on the sidewalk behind
    the University of Georgia football stadium. Music from her portable
    stereo prevented her from hearing a man slip behind her. The woman was
    dragged into a wooded area, brutally raped and beaten with a rock. Left
    for dead, she managed to haul her battered body to the street. A
    passing motorist mistook the woman for a hit-and-run and called an
    ambulance.
        Several hours after the attack was reported, University of Georgia
    police issued a press release with specific information about the time
    and location of the assault. It also included a description of the
    woman's assailant. This immediate response most likely prevented
    another assault because the campus community was an informed community.
        There is no logical reason for officials to deny access to crime
    reports or disciplinary records. Protection of a school's reputation is
    not adequate justification. Nor is the protection of an individual
    worth endangering other lives within a college or university community.
    Only when fully informed of the nature and extent of crime on campuses
    can students, faculty and the community at large take measures to
    protect themselves and make their collegiate environment safe for all.
        On behalf of the Society of Professional Journalists, the Campus
    Courts Task Force and students throughout the nation, I thank you for
    your time.
                                     ______

                   Prepared Statement of Martha Jean Lorenzo
             re: commonwealth of massachusetts v. brendan d. garvey
        Dear Committee Members: On March 4, 1998, 18 months after Brendan
    Garvey raped our daughter, Angela M. Lorenzo, as she slept in her
    college dormitory bedroom, Garvey (age 19 and paroled on September 4)
    pled guilty to a lesser charge of sexual assault and battery on a
    person 14 years or older. While this was not the charge Angela truly
    sought (as she expressed to the judge), reasonable doubt was a serious
    factor she considered after the defense attorney portrayed Angela as an
    alcoholic and immoral young woman.
        Angela endured 2 days of painful testimony. She is one of the few
    women who decide to press charges; she flew to Massachusetts from her
    home in Florida three times, at her own expense, to seek justice.
        Angela was a freshman student at Wheaton College in Norton,
    Massachusetts. She was thrilled at having been accepted to the college
    of her choice and was to play on the softball team. But, only 14 days
    into her first semester, one of her roommates invited three ex-convicts
    to visit the campus. On the second occasion, after a few attempts to
    remove herself from a very unsafe situation, Angela and a third
    roommate fell asleep. Angela awoke to Garvey raping her.
        And so began a nightmare. Angela and her family have only begun to
    heal now following the trial and Garvey's conviction. Hearing Garvey
    admit he had touched her without her consent was music to Angela's
    ears. She felt vindicated, but only momentarily, because post-rape
    traumatic stress syndrome is now dominating her life. Her future is
    uncertain.
        As her mother, I prepared my daughter as to avoid roofies, date
    rape, and other dangerous scenarios. But the thought of a convicted
    felon, the boyfriend of a new roommate, being in her bedroom never
    entered my mind. Well, perhaps her tragic story will help others.
        Angela is here to hug and hold and talk to. She did not become a
    murder statistic; the Lorenzo family is grateful for that. But the
    system of trying to obtain justice was grueling, especially at the
    actual trial. The assistant district attorney was not impressed with
    her case. But Angela never wavered in her quest for justice. The dean
    of students at Wheaton has always been supportive of Angela's case.
    There has never been the slightest hint to hush it up.
        Our family has been turned inside-out and thus we are willing to
    share this personal, sensitive story with you to try to make our
    college campuses safer places. Our 18-year-old daughter arrived at
    college full of hope and anticipation. Now, sadly, a lot of confusion,
    fear and pain have replaced her dream.
        Thank you for accepting Angela's story. We hope you remember these
    words from a mother, from a family devoted to its daughter and sister.
                                     ______

     Prepared Statement of Stanley Herrera, President, Alamo Navajo School
                                     Board
        The Alamo reservation is a ten-square-mile non-contiguous part of
    the Navajo Nation in east-central New Mexico, about 250 miles from the
    Nation's headquarters in Window Rock, Arizona and near the small town
    of Magdalena. Because of our reservation's physical isolation from the
    ``Big Navajo'' reservation, the Alamo School Board is the primary
    source of most governmental services to our 1,800 community members.
        Since 1983, the Alamo Navajo School Board has successfully operated
    a Head Start program, first as a sub-grantee of the Navajo Nation Head
    Start program and, since 1997, as a direct grantee under the American
    Indian Programs Branch of the Head Start Bureau.
        In the fiscal year 1999 Labor, Health and Human Services, and
    Education appropriations bill and report, we urge the Subcommittee to
    take the following critical actions regarding Head Start:
      --Fully fund the Administration's fiscal year 1999 budget request of
            $4.66 billion for the Head Start program;
      --Prioritize the construction of badly-needed new Head Start
            facilities; and
      --Encourage the Department of Health and Human Services (HHS) to
            allow tribal organizations to administer Head Start programs
            under Public Law 93-638 self-determination contracts.
         budget request would improve head start access for needy kids
        Head Start works. For this simple reason, the Head Start program
    has historically enjoyed strong bipartisan support in Congress and the
    White House and from the general public. Even as pressure has mounted
    to control the federal budget deficit and cut domestic discretionary
    spending, Congress has increased Head Start appropriations
    dramatically. Unfortunately, even the current funding level of
    approximately $4.36 billion leaves far too many eligible children out
    in the cold.
        Children who live in poverty and near-poverty conditions have a
    high risk of educational failure, but studies show that such high
    quality early education programs as Head Start give these kids the lift
    they need to succeed later in life. At Alamo, we have found that our
    Head Start children enter kindergarten much more prepared to learn than
    their classmates whom our program was unable to serve.
        By fully funding the Administration's fiscal year 1999 budget
    request of $4.66 billion, you will give another 30,000 children the
    hope and opportunity Head Start provides.
                 facility construction must be a high priority
        The Administration's goal is to increase Head Start enrollment to
    one million. This will intensify what is already in many areas a
    critical facilities shortage.
        Congress has repeatedly recognized the pressing need to safe Head
    Start facilities. The House Committee on Education and Labor stated in
    H. Rept. 102-763, the report accompanying the Head Start Improvement
    Act of 1992 that ``of primary importance to the Head Start community,
    and an important focus in the attempt to serve families in need, is
    ensuring that the infrastructure for Head Start programs is in place
    before increases in funding are undertaken.''
        Because adequate facilities were still not available in many low-
    income communities when Head Start was reauthorized in 1994, the
    statute was amended to give the Secretary the authority to use funds
    for capital expenditures for Head Start construction if she determines
    that suitable facilities are not otherwise available to tribes, rural
    communities and other low-income communities, that the lack of these
    facilities will hurt program operations, and that construction is less
    expensive than purchasing or renovating an existing facility.
        We urgently request the Subcommittee to go one step further and
    designate a specific portion of the fiscal year 1999 Head Start
    appropriation for facility needs. The problems we face at the Alamo
    Navajo facility--which we are proposing to replace using a cooperative
    funding agreement using federal, state and tribal resources--illustrate
    why additional facility funding is necessary to preserving the overall
    quality of the Head Start program.
        Our current facility is a two-room school constructed in 1972.
    Settling of the foundation has created large cracks in the exterior
    block walls and the floors. The building's poor structural condition
    has been documented by the Indian Health Service Office of
    Environmental Health in its annual health and safety survey.
    Furthermore, space limitations prevent Alamo Navajo from serving all of
    our Head Start-eligible children. We can only serve 35 children at one
    time. So that we could increase the number of eligible children served,
    we applied for and received expansion funds to serve 55 children. To
    accommodate these extra kids, we have had to institute double shifts.
    Even so, we have a waiting list every year of 10 to 20 children and
    have to limit the children served to 4-year-olds.
        Our reservation birth rate continues to grow. In 1995, 52 children
    were born in our community, and nearly all of them meet Head Start
    eligibility criteria. We expect to have approximately 95 Head Start-
    eligible children in two years--but we do not have the space to provide
    them with the services they should receive.
              allow tribes to administer local head start programs
        Section 102 of the Indian Self-Determination Act (Public Law 93-
    638) directs the Secretary of Health and Human Services (HHS) to
    contract with tribes to operate federal-funded programs for their
    members.
        Administering a tribal Head Start program through a self-
    determination contract would be an attractive option for many tribes
    and tribal organizations, including the Alamo School Board. It would
    decrease the amount of federal red tape and paperwork that we must go
    through by allowing us to receive all of our funds directly from Head
    Start using one funding document, reduce micromanagement by bureaucrats
    in Washington, and--most importantly--allow us to better tailor our
    local programs to meet local needs.
        Unfortunately, HHS has discouraged tribal contracting for Head
    Start and has restricted self-determination contracts with tribes to
    Indian Health Service programs. Frankly, self-determination contracts
    for Head Start would be a ``win-win'' situation for both tribes and
    HHS.
        Therefore, we request that you include fiscal year 1999 report
    language that would encourage the Secretary to work with tribes to
    fully implement the Indian Self-Determination Act so that tribal
    organizations may contract for such HHS programs as Head Start.
                                   conclusion
        Thank you for your past support of the Head Start program. We are
    confident that you will give the same thoughtful consideration to our
    concerns and to the current needs of children in Indian country.
                                     ______

         Prepared Statement of Carol C. Henderson, Executive Director,
              Washington Office, the American Library Association
        The American Library Association appreciates the opportunity to
    provide this statement for review and inclusion in the hearing record
    for fiscal year 1999 Appropriations. The 58,000 members of ALA,
    including public, school, state, academic and special librarians,
    library supporters, trustees, and friends of libraries, thank the
    Labor, Health and Human Services and Education Subcommittee for your
    support in the past and request a funding level of $160 million for the
    second year of the Library Services and Technology Act.
        In addition, we ask that you fund the Improving America's Schools
    Act existing Title VI block grant at as high a level as possible above
    the fiscal year 1998 level of $350 million. This Title is the only
    funding possibility for school libraries and the Department of
    Education estimated last year that at least 40 percent of the funding
    goes for school library materials and resources.
    Library Services and Technology Act
        The Library Services and Technology Act was passed and signed into
    law on September 30, 1996. The purpose of the legislation is to
    consolidate Federal library programs while stimulating excellence and
    promoting access to learning and information resources in all types of
    libraries for individuals of all ages.
        The provisions of the Library Services and Technology Act promote
    library services that provide all users access to information through
    State, regional, national and international electronic networks and
    provide electronic linkages among and between libraries. The law
    promotes targeted library services to people of diverse geographic,
    cultural and socioeconomic backgrounds, to individuals with
    disabilities and to people with limited functional literacy or
    information skills.
        Most funds are allocated through state library agencies, which
    administer programs and develop cooperative plans for use of the funds;
    3\3/4\ percent of the funds are to be used for national leadership
    purposes and 1\1/2\ percent for tribal library services.
        The Library Services and Technology Act builds on the strengths of
    previous federal library programs but has some major advantages and
    differences. It retains the state-based approach, but sharpens the
    focus to two key priorities: information access through technology; and
    information empowerment through special services.
        New technology and a multitude of community needs will shape the
    way we seek and obtain information. The Library Services and Technology
    Act encourages interlibrary cooperation, emphasizes libraries as change
    agents and implementers of equity, extends libraries' reach as self-
    help institutions and community partners in lifelong learning and
    literacy, economic development, jobs information, health information,
    etc.
        Public libraries of today are vastly different from the libraries
    of thirty years ago and the libraries of the next millennium will be
    different as well. The new LSTA gives states the flexibility to
    determine state needs and shape library programs to address those
    needs.
        The following examples illustrate the kinds of innovative projects
    libraries are conducting with the use of federal funds to connect
    people to information that can help to change lives, advance education
    and contribute towards the productivity of the nation:
        Student needs.--The Houston Public Library system has established
    ASPIRE, after school programs for students which provide assistance
    from tutors with homework, a rich supply of books and other materials
    to support that homework, access and training on resources on the
    Internet, and special programs and activities along with library
    instruction. Three branch libraries have the program underway with two
    more to be implemented soon. The success stories of student improvement
    have brought rewards to librarians and volunteer tutors as well as the
    students who have made great strides academically.
        Literacy.--Springfield's Lincoln Library in Illinois has a
    collaborative family literacy project which coordinates activities at
    the library with the local literacy program. Families attend a family
    fun night at the library where library services are presented and
    reading activities occur. The librarian also visits the local school as
    part of this coordinated effort to reach low-literacy families.
        The Ela Area Public Library District in Lake Zurich, Illinois, has
    an outreach program for senior citizens in nursing homes where trained
    volunteers conduct a Read-Aloud group. The reading and discussion group
    encourages older adults to continue their love of reading and enjoyment
    of books.
        Technology.--The 1997 National Survey of U.S. Public Libraries and
    the Internet sponsored by the ALA and the U.S. National Commission on
    Libraries and Information Science found that fewer than 1 in 7 library
    branches offer World Wide Web access (see attachment for the latest
    data on public library connectivity).
        States are making major strides in improving and upgrading access
    to new technology in libraries. The Library Services and Technology Act
    is critical to progress. For example, South Carolina expects all 184
    public library sites to have Internet access this year. Florida has
    used LSTA funds to enhance library connectivity to the Internet through
    its statewide FloriNet program. FloriNet has assisted public libraries
    in providing graphical Internet access to their users. More than 200
    Florida public library outlets have connected through FloriNet grants,
    and by September 1998, there will be public Internet access in at least
    one public library in every one of the state's 67 counties. Other
    states have similar initiatives underway, using LSTA and other sources
    of assistance to help with the major investment libraries must make to
    ensure that all Americans have access to advanced information
    technologies.
        The federal role in support of libraries helps to ensure that the
    existing information infrastructure of libraries is technologically
    equipped to perform governmental functions cost effectively. Examples
    include supporting literacy and lifelong learning, organizing and
    providing access to federal, state, and local government information
    and other community information, undergirding economic development by
    providing jobs information and supporting small businesses and
    providing access to consumer health information.
        Past library funding was administered by the Department of
    Education library programs through the Library Services and
    Construction Act. With the new law, the Library Services and Technology
    Act, administration of the program moved to the Institute of Museum and
    Library Services (IMLS). The new home for library programs in IMLS is
    working out well, and the IMLS leadership has established good working
    relationships with the library community. In addition, cooperative
    interaction between libraries and museums is increasing in very
    innovative ways. The Federal investment in the former Library Services
    and Construction Act and the new Library Services and Technology Act
    has acted and will act as a stimulant to local and state investment
    because of matching requirements, and because the E-rate discounts are
    requiring libraries to make the additional investment required to
    support advanced telecommunications.
        The Administration's budget requests level funding for library
    programs. In this second year of funding of the new Library Services
    and Technology Act, it is particularly important for Congress to
    continue increasing resources to improve library programs to realize
    the goals of the new legislation. For fiscal year 1999, ALA recommends
    an appropriation for LSTA of $160 million.
        A strong investment will connect more libraries to the Internet and
    support in-depth training on the nature and use of the Internet for the
    public at the one community institution available to all. It will
    continue to support literacy and education, help libraries provide job
    and consumer health information, serve small businesses, provide
    information for lifelong learning, and allow for effective leadership
    projects. (See attached examples of Internet training in libraries).
    IASA title VI
        The reauthorization of the Elementary and Secondary Education Act
    (the Improving America's Schools Act), included renewal of the Title VI
    (formerly Chapter 2) block grant. This block grant allows funding of
    school library resources and materials among its uses of funding. Our
    children deserve not only technological resources but the resources for
    in-depth research as well. We ask the Subcommittee to fund IASA Title
    VI at as high a level as possible above the fiscal year 1998 level of
    $350 million. The Administration's budget did not request funding for
    this program.
    Other initiatives
        The Administration's fiscal year 1998 budget proposed increased
    funding for IASA Title III Educational Technology. We ask the
    Subcommittee to fund IASA Title III at the requested level. We
    recommend funding of children's literacy initiatives such as the
    President's America Reads Challenge or the House-passed Reading
    Excellence Act. We also ask that you fund other programs under your
    jurisdiction that improve reading skills, literacy and lifelong
    learning, technological literacy, the National Library of Education,
    and educational research and statistics. We also urge support of the
    budget request of the U.S. National Commission on Libraries and
    Information Science.
        We thank the Subcommittee for the consideration you have shown for
    libraries in the past, and particularly for your part in accomplishing
    the reauthorization of the Library Services and Technology Act in the
    Fall of 1996.
                                     ______

    Prepared Statement of Rock Point Community School Board, Rock Point, AZ
        Mr. Chairman and Members of the Committee: The Rock Point Community
    School Board urges the Subcommittee to take the following actions
    regarding Head Start in the fiscal year 1999 Labor, Health and Human
    Services, and Education appropriations bill and report:
      --Fully fund the Administration's fiscal year 1999 budget request of
            $4.66 billion for the Head Start program;
      --Prioritize the allocation of facilities maintenance funds within
            the Head Start appropriation;
      --Prioritize the construction of badly-needed tribal Head Start
            facilities;
      --Address the transportation needs of Head Start-eligible children;
            and,
      --Encourage the Department of Health and Human Services (HHS) to
            allow tribal organizations to administer Head Start programs
            under Public Law 93-638 self- determination contracts.
                                   background
        The Rock Point community is located in an especially isolated area
    of the Navajo Nation reservation. The community's Head Start program,
    which is one of 180 Head Start centers operated by the Navajo Nation
    through a direct grant from the Head Start Bureau American Indian
    Programs Branch, serves a total of 30 children. Twenty are served at
    the Head Start center and ten who live in particularly remote areas
    receive 1.5 hours of weekly home-based instruction.
        The Rock Point Community School Board currently is in the process
    of applying for direct grantee status to operate the Head Start
    program. By becoming a direct grantee, we will be able to run a Head
    Start program which best suits the unique needs of our small community.
         budget request would allow us to serve more eligible children
        Because of its successful track record, Members of Congress from
    both sides of the aisle have supported Head Start. In fact, even while
    Congress and the Administration has worked to cut deficit spending and
    balance the budget, Head Start spending has grown.
        At the Rock Point Community School, we see that children who have
    attended Head Start are more ready to learn. Unfortunately, the current
    $4.36 billion funding level does not allow us to serve all of our Head
    Start-eligible children. The Head Start program serves 20 children ages
    three through five, four days per week for six hours per day, plus
    another ten children through extremely limited home-based instruction.
    That said, at least 50 children are eligible for comprehensive Head
    Start services, based on the kindergarten enrollment statistics for the
    Rock Point Community School--but we lack the funding to expand our
    program.
        That is why we strongly support the Administration's long-range
    goal of increasing Head Start enrollment to one million. If the
    Subcommittee fully funds the Administration's fiscal year 1999 budget
    request of $4.66 billion, another 30,000 children will reap the
    benefits of Head Start and we will be one step closer to reaching this
    important goal.
                         maintenance dollars are needed
        Our Head Start facility is a two-room building consisting of a
    kitchen area and a classroom. It was built approximately 37 years ago
    and currently has numerous health and safety deficiencies, a number of
    which were documented in a March 9, 1998 Indian Health Service/American
    Indian Programs Branch Head Start Health and Safety Report. The
    following lists some of the most frightening of 23 critical violations
    cited in the report.
      --Lead was detected at harmful levels in the drinking water.
      --On-site wastewater system was not properly operated or maintained.
            This facility experienced a back-up of sewage recently that
            resulted in a closure of school operations for a week.
      --Gas, sewer and water piping fixtures and appurtenances were not
            free of leaks or defects, namely the wall coverings above most
            all wall-mounted gas heaters were peeled.
      --Exterior gas shut-off was not accessible.
      --Fuel gas storage tanks were not properly installed or maintained.
      --The facility did not meet minimum fire safety standards for
            educational occupancies.
      --Electrical wiring did not meet the minimum safety requirements.
      --Plumbing and fixtures were not constructed or maintained in a
            sanitary manner.
      --Handwashing sinks were not provided with hot and cold running
            water, namely one bathroom lacked cold water and another lacked
            hot water.
      --The playground fence was not adequate to provide separation from
            vehicle traffic, restrict children from leaving the premises,
            or restrict animals from the play area.
      --Playground equipment was not free of sharp edges, protruding parts,
            or defects that could injure a child.
      --Excessive amounts of potentially harmful radon gas were found
            within the facility.
        Clearly, in order to protect the health of those children currently
    served through the Head Start program, we must ensure that there are
    adequate maintenance dollars to correct these grievous conditions
    immediately. If additional dollars are not provided for this critically
    needed maintenance, we will be forced to use funds that should be used
    to increase enrollment of eligible children and we will experience
    continued deterioration of our existing facility.
            replacement facility construction should be prioritized
        Without funding to build new--and safe--facilities, the goal of
    increasing Head Start enrollment to one million will be meaningless to
    Rock Point. In order to expand services to the 50 children who are
    eligible for Head Start, we will need an additional building, which we
    also would like to use as a central facility for early education
    services.
        Because adequate facilities were not available in many low-income
    communities when the Head Start program was reauthorized in 1994, the
    Secretary was authorized to use funds for capital expenditures for Head
    Start construction if she determines that suitable facilities are not
    otherwise available to tribes, rural communities and other low-income
    communities, that the lack of these facilities will hurt program
    operations, and that construction is less expensive than purchasing or
    renovating an existing facility.
        At Rock Point and in many other locations around the country, we
    are still waiting for these funds. Therefore, we ask you to allocate a
    specific portion of the fiscal year 1999 Head Start appropriation for
    facility needs.
                            children need buses, too
        Access to our community, which is scattered over a radius of 15
    miles, is primarily by dirt roads. Because these roads become extremely
    muddy and icy during the winter, extra funds are needed to maintain and
    repair our one Head Start bus, which is old and in poor condition. Even
    worse, the closest bus maintenance and service location is a 250-mile
    round trip.
        Compounding this situation is the fact that GSA rental and mileage
    rates are escalating, which means we have to pay more and more out of
    our limited transportation budget.
        We request that additional bus maintenance and replacement funds be
    provided through the Head Start appropriation.
              allow tribes to administer local head start programs
        Section 102 of the Indian Self-Determination Act (Public Law 93-
    638) directs the Secretary of Health and Human Services (HHS) to
    contract with tribes to operate federally-funded programs for their
    members.
        The Rock Point Community School Board has successfully contracted
    education programs since 1972 and has continually improved student
    services during this time period. As such, the Board believes that
    administering a tribal Head Start program through a self- determination
    contract would be beneficial. It would decrease the amount of federal
    bureaucracy that we deal with by allowing us to receive all of our
    funds directly from Head Start using one funding document and would let
    us to run our local programs to meet local needs.
        Unfortunately, HHS has discouraged tribal contracting for Head
    Start and has restricted self-determination contracts with tribes to
    Indian Health Service programs. Frankly, self- determination contracts
    for Head Start would be a ``win-win'' situation for both tribes and
    HHS.
        Therefore, we request that you include fiscal year 1999 report
    language that would encourage the Secretary to work with tribes to
    fully implement the Indian Self-Determination Act so that tribal
    organizations may contract for such HHS programs as Head Start.
                                   conclusion
        Thank you for your past support of the Head Start program. We are
    confident that you will give the same consideration to our concerns.
                                     ______

      Prepared Statement of David M. Gipp, President, and Russell Mason,
     Board President and Chairman, Three Affiliated Tribes of North Dakota
              united tribes technical college: making a difference
        Summary of Request. For thirty years United Tribes Technical
    College (UTTC) has been providing postsecondary vocational education,
    job training and family services to Indian students from the Great
    Plains and throughout the nation. An inter-tribally controlled
    educational institution,\1\ UTTC was assisting Indian people in moving
    from public assistance to economic self-sufficiency long before the
    1996 welfare reform act. Our placement rate in 1997 was 96 percent. The
    request of United Tribes Technical College for fiscal year 1999
    Department of Education funding for tribally controlled postsecondary
    vocational institutions as authorized under Title III, Part H of the
    Carl Perkins Vocational and Applied Technology Act is $4 million. This
    is $900,000 over the fiscal year 1998 enacted amount and the same as
    the authorized level.
    ---------------------------------------------------------------------------
        \1\ The college is owned and operated by five federally-recognized
    tribes situated wholly or in part in North Dakota. These Tribes are the
    Spirit Lake Sioux Tribe, the Sisseton-Wahpeton Sioux Tribe, the
    Standing Rock Sioux Tribe, the Three Affiliated Tribes of the Fort
    Berthold Reservation, and the Turtle Mountain Band of Chippewa. Control
    of the institution is vested in a ten-member board of directors
    comprised of elected Tribal Chairpersons and Tribal council members.
    ---------------------------------------------------------------------------
        This funding is essential to our survival as we receive no state-
    appropriated vocational education monies.
        The Administration's Request. Title III, Part H of the Carl Perkins
    Act currently provides support to UTTC and one other tribally
    controlled postsecondary vocational institution, the Crownpoint
    Institute of Technology. The Administration's request is for $3.1
    million, the same as the fiscal year 1998 enacted level. The Department
    of Education's budget justification is misleading, however, in that it
    states that funding for the tribally controlled postsecondary
    vocational institutions will be consolidated with the 1.25 percent
    tribal allocation under the Perkins Act. While the Administration's
    proposed vocational education reauthorization bill would have
    consolidated these programs, both the House-passed and the Senate
    committee-approved vocational education bills (H.R. 1853/S. 1186)
    maintain our program separate from the tribal allocation. We opposed
    the Administration's proposal in this regard and are pleased that the
    pending authorization bills would maintain a tribal postsecondary
    vocational education program.
        United Tribes Technical College: A Unique Inter-Tribal Educational
    Organization. United Tribes Technical College is the only inter-
    tribally controlled, campus-based, postsecondary vocational institution
    for Indian people. Our campus is the site of the Fort Lincoln Amy Post,
    an 110-acre area near Bismarck, North Dakota. We currently enroll 310
    students from 36 tribes and 17 states. In addition, we serve 110
    children in our pre-school programs and 115 children in our elementary
    school, bringing the population for whom we provide direct services to
    535. In some years our students come from as many as 45 tribes.
        Educating Students and Placing Them in Jobs. We are proud of the
    education, skills and services provided by UTTC for our students and
    their families over the past thirty years. And we are proud that this
    education is taking placing in a tribal setting, where our students and
    their families can maintain and strengthen their tribal heritage. We
    have had a placement rate exceeding 80 percent sustained over the last
    10 years, and in 1997 had a placement rate of 96 percent. This success
    is all the more gratifying in light of the background of our students,
    most of whom come from tribal areas where poverty and unemployment are
    the norm. A large proportion of our students are from the fourteen
    tribes in the Dakotas, where unemployment among Indian people is
    chronic. BIA Labor Force data reports the percentage of potential
    Indian labor force on and near reservations in the Aberdeen Area (North
    Dakota, South Dakota, Nebraska) who are jobless is 75 percent.
        UTTC Course Offerings and Coordination with Other Educational
    Institutions. UTTC offers 8 Certificate and 12 Associate of Applied
    Science degree programs.\2\ Entrepreneurship and new technology skills
    are being integrated into appropriate curricula. All programs are
    accredited through the North Central Association of Colleges and
    Schools at both the certificate and two-year degree granting levels.
    During the last re-accreditation process (1996), the NCACS authorized
    UTTC to begin developing curricula for 4-year degrees.
    ---------------------------------------------------------------------------
        \2\The following one-year certificates are offered: Office
    Technology, Automotive Service Technician; Construction Trades
    Technology with options in Carpentry, Electrical, Plumbing, and
    Welding, Early Childhood Education; Criminal Justice; Hospitality
    Management: Food & Beverage Specialization; Medical Secretary.; and
    Welding Technician.
        The following two-year Associate of Applied Science (A.A.S.)
    degrees are offered: Arts/Marketing; Automotive Service Technology;
    Construction Trades Technology with options in Carpentry, Electrical
    Plumbing and Welding; Criminal Justice; Early Childhood Education;
    Health Information Technology; Hospitality Management: Food and
    Beverage Specialization, Office Technology with emphasis in computer
    applications or accounting; Practical Nursing; Small Business
    Management; Welding Technology; and Dietetic Technician.
    ---------------------------------------------------------------------------
        UTTC has transfer and articulation agreements with other colleges
    so our graduates can transfer to four-year schools from areas including
    Licensed Practical Nursing, Criminal Justice, Business and
    Entrepreneurship and Health Instruction. We provide academic
    instruction which provides our graduates the background to pursue
    additional college work.
        UTTC has been a member of the Interactive Video Network of North
    Dakota's colleges, universities and tribal colleges since 1994. This is
    expanding the educational opportunities for our students.
        Job Training and Economic Development. UTTC is a designated Indian
    Minority Business Center serving Montana, South Dakota and North
    Dakota. We also administer a Job Training Partnership Act program and
    an internship program with private employers. And, thanks to a grant
    from the Kellogg Foundation, we are assisting tribes and tribal members
    in the Aberdeen Area with rebuilding buffalo herds.
        Coordination with State Welfare-to-Work Efforts. UTTC is working in
    cooperation with the state of North Dakota on welfare reform. We are
    serving state-referred Temporary Assistance for Need Families (TANF)
    recipients who are able to participate in our Cooperative Education
    internship program with private employers. By attending UTTC, these
    TANF recipients can meet their work, training and volunteer
    requirements. And we are providing child care for 60 children of state-
    referred TANF recipients.
        We take exception to the 12-month statutory limit on the length of
    time a TANF recipient can be enrolled in a vocational education course
    and still be eligible for TANF. This limits TANF recipients to taking
    one-year certificate courses at UTTC. Our experience shows that the
    students who graduate from a two-year, rather than a one-year, course
    have significantly higher earning power. Many of our students come to
    UTTC planning to take a one-year course, and then, finding themselves
    in a supportive environment and seeing the economic benefit of the
    longer course, decide to work for the two-year degree.
        Serving Families Contributes to Education and Job Placement. We
    believe that a primary reason for UTTC student success is that we serve
    the students' social, academic and cultural needs. Many of our students
    are the first generation in their family to attend college and for many
    it is their first experience in living away from home. Many students
    are on public assistance and many have families of their own. Some of
    our services are:
      --Early childhood services for 110 children, ages 8 weeks to five
            years;
      --The Theodore Jamerson Elementary School (grades K-8) serving 115
            Indian students;
      --A health clinic which, among others services, provides
            immunization, health education, eye and dental exams, and
            referrals to other health care providers;
      --Family housing and dormitories for solo parents and for students
            without children;
      --A local transportation system for students for school activities
            and necessary appointments e.g., (doctor appointments) outside
            the campus. Most UTTC students do not have cars.
        UTTC Seeks Other Funds. UTTC is aggressive in seeking funding
    outside the Perkins Act for special needs. For example, we combined
    Department of Agriculture, Economic Development Administration and
    state Community Development Block Grant funds and replaced our aging
    water, sewer and gas systems in 1997. However, we still need $350,000
    for replacement and repair of roads damaged as a result of this
    project.
        Our elementary school received a competitive Department of
    Education grant for computer technology, and was one five Indian
    schools to receive this funding. We also received a Kellogg Foundation
    grant to develop buffalo management skills for the tribes and their
    members throughout the Aberdeen Area, as they attempt to rebuild herds
    of buffalo decimated more than 100 years ago.
        The above mentioned grants are highly competitive, restrictive,
    one-time grants, and they cannot provide for day-to-day operations. We
    cannot survive without the basic operating funds which come through the
    Department of Education's tribally controlled postsecondary vocational
    institutions program.
        Current Needs. We certainly appreciate the $200,000 increase
    provided by Congress in fiscal year 1998 for the tribally controlled
    postsecondary vocational program (from $2.9 million to $3.1 million).
    The increase is important, not only for the unmet needs of the current
    grantees, but because other institutions may become eligible for
    funding under this program.
        The operating and purchasing strength of our budget has diminished
    by some 20 percent since 1990. Utility costs are especially difficult.
    Electricity expenses have risen about 20 percent per unit and the per
    unit gas costs have increases approximately 113 percent during this
    decade. We have been able to partially offset utility rate increases by
    implementing stringent conservation measures such as improved
    weatherization and reductions in building temperatures. However, energy
    consumption cannot be further reduced because of our location and the
    harsh winters in the northern plains.
        While even a $4 million appropriation for the Tribally Controlled
    Postsecondary Institutions program would leave us with enormous needs,
    it would allow us to make improvements in key areas including course
    offerings, student services, and technology. Below are some of our
    financial needs of which we want you to be aware:
      --Housing We need new and rehabilitated campus housing so that we can
            increase student enrollment. Many of our buildindgs are of
            historic importance. The College occupies the old Fort Lincoln
            Army Post, and many people visit our campus to see these
            buildings. Other than the more recently constructed skills
            center and the community center, UTTC's core facilities are 90
            years old. Estimates for new facilities total over $12 million,
            according to a 1993 U.S. Department of Education report to
            Congress. Continuing a course of non-repair will ultimately
            prove more costly as the repairs will be greater. Fire and
            safety reports document our repair needs.
      --Salaries. We were able to provide a cost-of-living increase for our
            employees this year. However, our faculty still receive
            salaries that are lower than in any state college system. North
            Dakota salaries for higher education faculty are the lowest in
            the nation--but the average faculty salaries at UTTC are even
            lower than those in the North Dakota state system.\3\
    ---------------------------------------------------------------------------
        \3\ Source: Integrated Postsecondary Education Data Systems (IPEDS)
    Report of the U.S. Bureau of the Census and the Department of Education
    Office of Education Statistics.
    ---------------------------------------------------------------------------
      --Emergency Repair. Our needs for emergency repair on both single and
            family student housing, instructional facilities and support
            facilities exceeds $100,000. This amount will obviously not
            cover major renovations or new facilities. Funding is also
            needed for maintenance and repair related to damaged caused by
            inclement weather, including blizzards and extremely low
            temperatures.
      --Technology. We need funding for computers and hardware to increase
            our capabilities for distance learning programs for our campus-
            based students and students at other locations. We are working
            with the Denver Indian Center to provide UTTC classes, via
            distance learning. to the Indian population in the Denver area.
            We also need to complete our local area computer network and to
            provide more staff training.
      --Course Offerings/Student Services. We would like to change some of
            our courses to better meet new market demands. For example, we
            want to expand the allied health professions program and also
            to expand the business clerical program into the business
            administration area. We also need to expand our diagnostic
            capabilities in tribal-specific areas and also in the areas of
            literacy and math-science background. This would allow us to
            improve student remediation services. Finally, we want to make
            improvements in our student follow up, career development, and
            job market research efforts.
        Thank you for your consideration of our request. We need your
    assistance to ensure that the unique educational opportunities offered
    by United Tribes Technical College will be available for what we hope
    will be an increasing number of Indian and Alaska Native students and
    their families next year and in the future.
                                     ______

       Prepared Statement of Peter Belletto, President, National Indian
     Impacted Schools Association, Ganado Unified School District, Ganado,
                                       AZ
        The National Indian Impacted Schools Association (NIISA) is an
    association of public schools in Indian country dedicated to quality
    education and assuring that the United States' obligation to provide
    resources for educating Indian and Alaska Native students is fulfilled.
    Our membership consists of public school districts which receive
    federal Impact Aid funds because of the presence of students from
    Indian trust lands and Alaska Native lands. Approximately 90 percent of
    Indian and Alaska Native students nationwide attend public schools.
        Summary of Request. We ask the Subcommittee to recommend the
    following with regard to the fiscal year 1999 Department of Education
    budget:
      --Impact Aid Basic Support Payments.--$700 million for Impact Aid
            Basic Support payments. This is the same as the request of the
            National Association of Federally Impacted Schools and is $38
            million over the fiscal year 1998 enacted level. This amount
            would allow the schools to be paid at 100 percent of LOT.
      --Impact Aid Construction.--$25 million under the authority of the
            Impact Aid statute for payments for Construction. This compares
            to the fiscal year 1998 enacted level of $7 million and the
            President's request of no funding. While this is termed a
            ``construction'' account, the funds can be used only for repair
            and renovations, not new construction.
      --Education Technology.--$475 million for million for the Technology
            Literacy Challenge Fund as requested by the Administration to
            help schools integrate technology into school curricula. This
            is $50 million over the fiscal year 1998 enacted level. We also
            support the President's request of an additional $75 million
            for technology training for new teachers.
        Importance of the Impact Aid Program to Indian Country. For Indian
    country, the Impact Aid program is a vital element of the public policy
    of providing every child a free public education. Signed into law in
    1950, the Impact Aid program is one of the oldest federal education
    programs. Simply put, it provides federal funds for public school
    operations that would have otherwise been provided by local tax
    revenues but for the presence of federal property--in our case, lands
    held in trust by the federal government for Indian tribes. The Impact
    Aid program is an example of the U.S. government carrying out its trust
    responsibility--in this case, for education--for Indian and Alaska
    Native peoples. Some facts about the importance of the Impact Aid
    Program to Indian Country:
      --There are over 600 school districts throughout the country which
            receive Impact Aid funds for Indian lands schools.
      --Funds for Indian lands students represent nearly 50 percent of the
            federal Impact Aid appropriation.
      --The Indian Country land base that generates Impact Aid funds
            consist of 53 million acres of Indian trust land in the lower
            48 states and 44 million acres included in the Alaska Native
            Claims Settlement Act.
        Additionally, the Impact Aid law provides a formal link between
    tribal governments and the public schools, providing for school
    district consultation with Indian tribes and tribal communities. This
    is especially important because public schools are State institutions,
    but located on tribal lands. School districts must consult with tribes
    and the Indian community to develop Indian Policies and Procedures
    (IPP). Tribes and parents of Indian students are able to comment on
    whether Indian students are equal participants in educational programs
    and school activities, and to request modifications in school programs
    and materials. Tribes also have administrative appeal rights under the
    statute.
        Attached is a booklet prepared by the Department of Education
    regarding the implementation of the Impact Aid program in Indian
    country.
        School Facilities.--School facilities construction and renovation,
    including making facilities ready for education technology, is a high
    priority for our organization. We are dismayed by the Administration's
    fiscal year 1999 proposal of zero funding for under section 8007 of the
    Impact Aid program--the authority for school repair and renovation. At
    the same time, the Administration requested $10 million for the school
    facilities which the Department of Education owns (section 8008). We
    support the proposed funding for maintenance of DOE-owned school
    facilities, and ask for similar consideration for our school districts.
        The Administration's budget justifies a request of zero funding for
    the section 8007 school construction account by noting that the
    President is proposing legislation which would help school districts
    build schools by paying the interest on school construction bonds. This
    is putting the cart before the horse. Even if such legislation is
    enacted, it would not be an immediately available benefit for those
    schools fortunate enough to avail themselves of the program. It
    certainly would not be available in fiscal year 1999. In the meantime,
    our schools are crumbling.
        NIISA has and will continue to work with Congress on pending school
    construction proposals to make them responsive to the needs of our
    schools--Indian lands public schools. School construction bills have
    been introduced in a steady stream during the 104th and 105th
    Congresses. We have seen in these bills a growing recognition that
    there needs to be accommodation for public school districts which have
    little, if any, bonding capacity (including those schools in the Bureau
    of Indian Affairs system). To the extent that a school district has
    limited ability to generate revenues because of a federal presence
    (e.g., the existence of Indian trust land or federal property in the
    school district), there is a clear federal responsibility toward the
    education of the children attending those schools.
        For instance, S. 12, introduced early in the 105th Congress, would
    have allowed for a waiver on amount of interest which could be paid on
    a school construction bond if ``the local area contains a significant
    percentage of Federally-owned land that is not subject to local
    taxation.'' However, S. 12 did not address the fact that due to the
    presence of federally held lands--e.g., trust lands on Indian
    reservations--there is little, and sometimes, no, bonding capacity. S.
    1705 and S. 1708, introduced on March 4, 1998, have the advantage of
    paying, via a federal tax credit, 100 percent of interest on school
    construction bonds. This credit allocation would be available to both
    local school districts and to states. Importantly, the bills would
    require the state, in order to receive a federal tax credit allocation,
    to explain how it will use its allocation to assist localities that
    lack the fiscal capacity to issue bonds on their own. Should states opt
    to issue bonds for their school districts which lack bonding capacity,
    it would benefit public school districts with large amount of Indian
    trust lands.
        The condition of public and Bureau of Indian Affairs school
    facilities has been documented in General Accounting Office (GAO)
    surveys. In October, 1996, our organization undertook a survey of
    school districts which receive Indian lands Impact Aid funding. Our
    survey went further than bricks and mortar. It also asked questions
    regarding the ability of the school district to raise revenue for
    facility construction--something not done by the GAO surveys. Finally,
    the survey contained a series of questions regarding each school
    district's readiness for computers, the internet and other education
    technology. We reported some of the findings from the survey in our
    appropriations statement last year, and repeat them here:
      --65 percent of buildings are over 20 years old, including 38.2
            percent over 30 years old;
      --$6,872,000 is the average estimated costs necessary for repairs,
            renovations, modernization and construction to put schools in
            overall good condition;
      --The average cost per student to make school buildings meet health
            and safety standards is $1,947;
      --To accommodate expected increased enrollment over the next 5 years,
            the schools responding to the survey will need 13.1 percent
            more space. Within 10 years, the space needs are expected to
            increase by 27.9 percent;
      --71 percent of school districts have had no school construction bond
            issued since 1985, and 23 percent of school districts have
            never had a bond issued;
      --Of schools with 70 percent LOT MOD and higher, the need for
            construction, renovation, and repair funding is two thirds
            higher per pupil than in the other respondents to the NIISA
            survey. (Note: LOT MOD is a Department of Education measure of
            need of school districts affected by the presence of federal
            property);
      --42 percent of respondents have unhoused students;
      --59 percent of school buildings have inadequate laboratory science
            space;
      --63 percent of schools are not well served for before/after school
            care.
        Education Technology.--NIISA thanks Congress for providing a
    significant increase in education technology in the fiscal year 1998
    Education Department budget, and supports the President's request for
    $475 million for Technology Literacy Challenge Fund to help schools
    integrate technology into the curriculum. We also support the
    Administration's request of $75 million for technology education for
    new teachers. Although there is considerable public discussion about
    linking schools to the internet, NIISA's survey results show that many,
    many schools lack the electrical, telephone and other infrastructure
    necessary to utilize modern educational technology. The NIISA survey
    responses show:
      --75 percent of school buildings need funding for infrastructure to
            support education technology--this compares to the 60 percent
            figure in the GAO surveys;
      --56 percent of school buildings have significant needs for computers
            for instructional use;
      --61 percent of school buildings have significant needs for modems;
      --81 percent of school buildings need telephone lines for instruction
            areas;
      --79 percent of school buildings need fiber optic cable; and
      --62 percent of school buildings need for electrical wiring for
            computers.
        Thank you for your interest in the need of our public schools which
    educate children from Indian country. We ask you to always keep in mind
    the trust responsibility for the education of Indian and Alaska Native
    children and the federal responsibility regarding school districts
    which contain Indian and federal property.
                                     ______

         Prepared Statement of The National Military Family Association
        The National Military Family Association (NMFA) is the only
    national organization whose sole focus is the military family and whose
    goal is to influence the development and implementation of policies
    which will improve the lives of those family members. Our mission is to
    serve the families of the Seven Uniformed Services through education,
    information and advocacy.
        Founded in 1969 as the Military Wives Association, NMFA is a non-
    profit 501 (c)(3) primarily volunteer organization. NMFA today
    represents the interests of family members and the active duty, reserve
    components and retired personnel of the seven uniformed services: Army,
    Navy, Air Force, Marine Corps, Coast Guard, Public Health Service and
    the National Oceanic and Atmospheric Administration.
        NMFA Representatives in military communities worldwide provide a
    direct link between military families and NMFA staff in the nation's
    capital. Representatives are the ``eyes and ears'' of NMFA, bringing
    shared local concerns to national attention.
        NMFA receives no federal grants and has no federal contracts.
        NMFA has been the recipient of the following awards: Military
    Impacted Schools Association ``Champions for Children'' Award (1998)
    Defense Commissary Agency Award for Outstanding Support as Customer
    Advocates (1993) Department of the Army Commander Award for Public
    Service (1988) Association of the United States Army Citation for
    Exceptional Service in Support of National Defense (1988)
        Various members of NMFA's staff have also received personal awards
    for their support of military families.
        NMFA's web site is located at: http://www.nmfa.org
        NMFA and the families we represent are grateful to this
    Subcommittee and the Senate for its efforts on behalf of military
    children and the Impact Aid Program. We commend all Congressional
    supporters of Impact Aid, including the members of the House and Senate
    Impact Aid Coalitions, for securing the fiscal year 1998 appropriation
    of $808 million--an increase of $78 million over fiscal year 1997 and
    $150 million over the Administration's proposal. We are a small, but
    wide-spread constituency and it is important that all Members of
    Congress understand the importance of the Impact Aid program to
    approximately 500,000 military children and several million of their
    civilian classmates in school districts across the country. NMFA
    appreciates this opportunity to express its views.
                         the military family and child
        NMFA presents this statement on behalf of military families, or
    more specifically on behalf of military children. These children move
    every 2 to 4 years and attend an average of five different schools.
    Since the drawdown overseas, those schools are more likely to be in
    stateside systems dependent on Impact Aid rather than in Department of
    Defense Schools. Military children bring a rich experience gained from
    travel and learning in other parts of the United States and the world
    to the schools they attend. But they also bring the apprehension and
    insecurities faced by any child who must not only adjust to a new
    teacher and new classmates each year, but to different school systems.
    They are ahead of the class in some schools or performing below grade
    level in others. They lose credits needed for graduation because of
    different course standards. They enter school too late to win a spot on
    the school paper or cheerleading squad. They must adjust to different
    curricula and standardized tests. Sometimes the military child's
    transition into a new school is further complicated by the absence of
    the military parent.
        Military families want to be involved in their children's
    education. They serve as room parents, vote for school board members,
    and raise money for playground equipment and computers that might not
    be installed until after they've moved away. Military families list
    education as one of their most important Quality of Life concerns.
    Military commanders know that worries over the education of their
    children affect the morale and retention of personnel. And, in this age
    of increased accountability, military families hold their children's
    schools to a higher standard than any state does. They insist that
    schools prepare their children to enter school at their next
    assignment, no matter where in the world that might be, with the skills
    and knowledge necessary to succeed. They expect their children's
    schools to have the necessary resources to orient families, process
    records, provide counseling, evaluate students' strengths and
    weaknesses, and place them in the right programs.
        Military families understand that the Impact Aid program supports
    basic education services provided by their local school districts. They
    hold the government, and the citizens they have sworn to serve and
    protect, accountable for living up to their promise to provide a
    quality education for their children. The districts have accepted the
    responsibility to educate our children; the Federal government must
    provide the resources it has promised to support that education.
                             federal responsibility
        The Federal Government's responsibility, originally defined in
    Public Law 81-874 in 1950 and restated in Public Law 103-382 in 1994,
    is ``to provide financial assistance for those local educational
    agencies upon which the United States has placed financial burden.''
    The original intent of Public Law 81-874 was to establish a mechanism
    for consistent funding of the Government's obligation to these
    districts and the children they serve. It provided a payment equal to
    the local per-pupil costs for students whose military parent both lived
    and worked on a federal installation (these students were designated A
    students) and one-half of the local per-pupil cost for students whose
    military parent worked on a federal installation but lived in the
    civilian community (B students). Under the current law, revenue for a B
    student is 10 percent of that for an A student. It costs roughly $6,000
    to educate a child in the United States today. But the current average
    Impact Aid payment for an A child is $2,000; the average payment for a
    B child is $200, nowhere near the original intent or the cost to
    educate a child.
        Although the Federal Government has acknowledged its responsibility
    to provide Impact Aid, the program has not been fully funded since
    1970. Even with much-appreciated Department of Defense supplemental
    funding for the most heavily-impacted districts, Impact Aid does not
    cover many districts' basic needs (A DOD Supplement of $35 million was
    authorized for fiscal year 1998, but not appropriated.). Local and
    state taxpayers continue to bear part of the burden for federal
    students. In the State of Washington, for example, Impact Aid funds
    only 23 percent of the cost of educating a federal student. The
    citizens of Washington fund the remaining 77 percent through local and
    state taxes.
        The fiscal year 1998 Impact Aid appropriation of $808 million was
    generous by the standards of previous years. We know that the increase
    will enable districts to serve military children more effectively.
    Continued consistent funding at or near the authorized level will help
    these districts wrestle with increased salaries and benefits for
    quality teachers, rising special education and transportation costs,
    and the demands of equipping schools and classrooms with the latest
    technology. Impact Aid funds help these districts approach the level of
    educational opportunity available in neighboring, non-impacted school
    districts even though they do not have access to the same kind of tax
    base.
        The Central Union School District in California, with 1,850
    students in four schools, provides a wonderful example of how districts
    use Impact Aid funds to keep pace with others in their state. The
    district earmarks its DOD Supplemental funds for technology. Internet
    access in all schools has enabled military students living on base at
    the Lemoore Naval Air Station to communicate with their parents on sea
    duty.
                      needs of heavily-impacted districts
        One of the greatest needs faced by heavily-impacted districts is
    for construction funds. The photos in Attachment A of this statement
    illustrate some typical construction needs, caused by the influx of new
    students, postponed maintenance, the demands for new technology, and
    normal wear-and-tear in buildings long-overdue for renewal and
    renovation. The reduced tax base caused by the presence of a large
    military installation often makes it difficult for these districts to
    float construction bond issues or take advantage of states' offers of
    matching funds.
        South Kitsap (WA) High School serves children of military members
    stationed at Bangor Submarine Base. Overcrowded and with the largest
    enrollment in the state, South Kitsap cannot get a bond issue for a new
    school or pass a levy to help pay for portables.
        The State of California recently allocated $1.6 million to cover
    one-half of the Central Union School District's costs of modernizing
    the two on-base schools. But how could the district ask the parents of
    the six hundred students who live off-base to pass a bond issue raising
    their own property taxes to modernize schools for children whose
    parents do not pay property tax? Central instead used its Impact Aid
    funds--"property taxes'' from the Federal government for the land it
    owns--to create a special reserve so that the district's 50 percent
    share would be available when the state funds were released.
        Routine repairs and maintenance are often deferred when districts
    need to buy textbooks or pay teachers. But safe, structurally-sound
    buildings are essential for education. Listen to a student's
    description of lunch at Vandan High School in the Travis Unified School
    District in California:
        When it rains at Vanden, the driving winds and stinging rains are
    unbearable; and I have nowhere to eat. For every student that can find
    space to sit in the cafeteria, there are three of us who must suffer
    the tumultuous elements. And because of El Nino this year the rains
    will come harder and longer; and the winds will be more fierce. I
    should like to invite you to have lunch with me on a day with
    torrential rains and 30 mile an hour winds. I guarantee that you will
    have an enlightening experience. If you can't make it for lunch,
    perhaps you'd send your 15 year old daughter. (``A Voice for the
    Unheard,'' by Trecia Pottinger, Student Board Representative, Travis
    Unified School District, speech given at meeting of National
    Association of Federally Impacted Schools, October 1997)
                       what's ahead for fiscal year 1999?
        The Administration has requested $696 million dollars for Impact
    Aid in fiscal year 1999, $112 million dollars less than Congress
    appropriated for fiscal year 1998. We are concerned that the
    Administration has not requested any money to help heavily impacted
    districts such as the Travis United School District with construction,
    repairs, and maintenance. And, once again, the Administration proposes
    to cut funding for the military B students, the children of military
    members living in the local civilian community. The authors of the
    first Impact Aid legislation recognized that the greatest burden for
    school districts serving military children would be when the military
    parent both lived and worked on a federal installation. However, they
    understood that the military B children also created costs to the
    district beyond what it would collect from the payment of some taxes.
    Local property taxes fund a declining share of a district's education
    expenses. States contribute more than ever to elementary and secondary
    education. In many states, local governments receive state allocations
    based on local property taxes, putting districts with large areas of
    nontaxable federal land at further disadvantage. Many other taxes used
    by state and local governments to support schools, such as personal
    property taxes, license fees, and state or local income taxes, are not
    paid by military members unless they happen to be residing at their
    legal domicile. Every time military families shop at exchanges and
    commissaries on the installation, states and localities lose sales tax
    revenue which could have gone to support schools.
        The notion that only children living on base pose a financial
    burden on school districts is disconcerting to NMFA and its members who
    have witnessed the impact large numbers of transient military children
    can have on a district even when their parents pay real estate taxes.
    NMFA believes that continued funding for B students is even more
    essential now that the Department of Defense is privatizing military
    family housing at many installations. As this Subcommittee considers
    the funding needs of federally-impacted school districts this year, we
    ask that you continue to recognize this Federal responsibility, as
    first articulated in P. L. 81-874, to provide funding for the military
    children living off the federal installation.
        We note that, in its fiscal year 1999 education proposals, the
    Administration is requesting several new programs to the long list of
    current federal education programs. Most of these programs target funds
    to specific needs or to supplement basic education in school districts
    which meet the eligibility requirements for that program. Impact Aid is
    different. Impact Aid dollars are targeted to districts where the
    Federal responsibility is the greatest under the law. The dollars go
    directly to school districts with no strings attached. The Newport News
    (VA) school district uses Impact Aid funds as part of its general
    operating fund. Other districts focus on reducing class size, upgrading
    technology, making building repairs, or continuing special programs. In
    each of these districts the local community, the people who have the
    greatest stake in the quality of education in their schools, decides
    how Impact Aid funds will best serve the basic education needs of all
    students.
                           serving the military child
        Until recently, local districts generally made decisions about how
    to use their Impact Aid funds and what programs and policies to adopt
    based on purely local needs. When the school officials responsible for
    educating military children got together, they talked of how to secure
    better Impact Aid or DOD funding or how to educate public officials
    about the importance of Impact Aid. Gradually, however, these educators
    began to acknowledge that educational issues affecting military
    children often transcend local needs. Military children are everybody's
    children! The quality of education a military child receives in the
    California school she attends in 1st grade, for example, will affect
    the education she and her classmates receive in the North Carolina
    school she attends in 4th grade. Children whose schools are unable to
    provide the necessary educational services could easily fall behind
    their peers in other districts. A smooth transition into their next
    school, whether across the state or across the country, benefits
    military children and their new classmates.
        In June 1997, some of the people who educate ``everybody's
    children'' participated in the First Annual Supporting the Military
    Child Conference sponsored by the Killeen (TX) Independent School
    District and Fort Hood. Participants identified critical issues
    involved in the transitioning of military students such as emotional
    and social support for the child, records transfer and proper
    placement, parental involvement, and communication. They offered
    recommendations on how districts could address these issues through
    technology, the sharing of information, the formation of partnerships
    between districts and military installations. They especially
    emphasized the need for continued communication between all school
    systems serving military children.
        To build on the foundation begun at the Killeen/Fort Hood
    conference, the Groton (CT) Public School district began plans for a
    national conference on ``Serving the Military Child'' to be held
    October 1998 in Arlington, VA. In order to involve even more districts
    educating military children, members of the planning committee for this
    conference come from several states and represent all branches of the
    Armed Services. The conference has already attracted support from the
    Departments of Defense, Education and Transportation and Members of
    Congress. General Henry H. Shelton, Chairman of the Joint Chiefs of
    Staff, has indicated that he will participate in the opening session of
    the conference.
        Organizers of the upcoming conference have agreed that one of their
    goals is to establish a new Military Child Education Coalition, whose
    mission is ``to promote partnerships and provide for networking of
    military installations and their supporting schools for the purpose of
    establishing systems and developing processes which address transition
    and other educational issues related to the military child.'' Convinced
    of the necessity for an organization focused on the educational needs
    of military children, the Killeen School Board recently voted to fund
    start- up costs for the coalition. The coalition would be open to all
    school systems serving military children, from the Department of
    Defense Schools, to the heavily impacted, to those with just a few on a
    small installation.
        To military parents, the idea of a coalition dedicated to the
    education and transition needs of military children is a wonderful
    thing. It is exciting to imagine that all the school systems which
    might ever educate our children are talking to each other about how
    they can do a better job. The educational focus of the Military Child
    conferences and Coalition demonstrates the effectiveness of the Impact
    Aid program. When the Federal government fulfills its responsibility to
    provide funding for basic education to districts serving military
    children, the districts can concentrate on creating a high-quality
    educational program for all students. They can create partnerships with
    other school systems and military commanders to look out for the
    educational needs of the military children they serve. We urge you, the
    Members of this Subcommittee, to be active partners in the education of
    military children and their civilian classmates and fully fund Impact
    Aid.
                                     ______

                                RELATED AGENCIES

    Prepared Statement of Howard K. Ammerman, Ph.D., on Behalf of the U.S.
                               Institute of Peace
        Thank you for the opportunity to present this testimony. These
    views are expressed as those of an interested citizen with a background
    in economics who has supported the United States Institute of Peace
    [USIP] since its inception and who is very apprehensive concerning the
    scourge of war.
        With a budget of slightly more than $11 million for the current
    year, the United States Institute of Peace is asking for an increase to
    $12.6 million for fiscal year 1999. To me, the total budget of the
    Institute is too small anyway, so I certainly support this increase.
    With the additional funds its present program in Bosnia could be
    pursued more intensively.
        At this point in time, perhaps we need to be reminded that the
    Institute of Peace is a unique agency with its creation being the
    culmination of about two hundred years of effort. The very persistence
    of efforts to bring this about indicates a perceived gap in our dealing
    with the matter of conflicts among nations and a belief in the
    possibility of improving our performance. One figure observed recently
    for world deaths due to wars in the present century was 110 million and
    of these figures, 2 million were children killed in the past decade.
    Another total figure cited was considerably higher, and casualties
    among children seem to have increased rapidly in recent decades. Do we
    need to be reminded that drastic changes need to be made in our
    patterns of human behavior, and in this case, particularly in
    international relations or domestic conflicts that threaten to spill
    over into the international realm?
        In Bosnia at the present time the Peace Institute finds itself
    involved in a post- conflict situation and directing its efforts toward
    helping those affected to follow through with an existing peace
    agreement. Matters of concern include such problems as transitional
    justice, political restructuring, the role of religion in conflict, and
    conflict resolution training. The work of the Institute serves to
    augment the work of other government agencies, but is some cases the
    Institute is doing work no other agency has the competency to do. This
    has been a natural extension of the work the Institute has been doing
    over the years. The Institute Board charged the staff to explore ways
    that its past work might contribute to peace building in Bosnia once
    the Dayton Accords had been signed. And it might be well to remember
    that on that Board are representatives of the Department of State and
    the Department of Defense.
        Yet it seems to me that there is still great resistance to even the
    acceptance of the idea of an Institute of Peace. It may be gaining more
    attention abroad than in the U.S. One way to give more credence to the
    Institute is to increase its appropriations. In perspective, I consider
    its budget figure to be trivial. So, let's not stop at its requested
    $12.6 million, but add at least another million, for the Institute has
    built a base on which it can expand readily into other promising
    endeavors. Personally, I am disappointed Congress did not appropriate
    funds for construction of a headquarters building for the Institute;
    however, in raising the funds by public subscription the Institute will
    become better known to the general public. But in anticipation of
    having its own home, a budget figure such as it now has to me would be
    ridiculously low.
        Because of this lack of attention to the Institute of Peace it may
    be well to consider the background for justifying the creation of such
    an agency even when this means repetition of previously submitted
    testimony. The Institute must spend at least 25 percent of its budget
    for research, but it is also greatly committed to the application of
    knowledge to specific problems of social relations and in the process
    of such applications gaining useful experience and insights
    transferable to other cases. The President of the Institute, a former
    Foreign Service Officer, pointed out the need in Bosnia to move beyond
    the research and the academic to application. In Bosnia the Institute
    may well be doing some pioneering in this complex situation.
        Recently the Hubble Space Telescope was described as, ``The most
    expensive and complex scientific instrument ever''. Without in any way
    deprecating this effort to learn more about the universe we may ask
    when are we going to make a comparable effort to learn more about the
    problems of human behavior on our planet? Rightfully, we make great
    efforts to learn more about that scourge of the human body, cancer.
    What about that cancer of the body politic, war? Perhaps the words of
    Thomas Jefferson may be of some help in this context--
        ``I am not an advocate for frequent changes in laws and
    constitutions, but laws and institutions must go hand in hand with the
    progress of the human mind. As that becomes more developed, more
    enlightened, as new discoveries are made, new truths discovered, and
    manners and opinions change, institutions must advance also to keep
    pace with the time. We might as well require a man to wear still the
    coat which fitted him as a boy as a civilized society to remain ever
    under the regimen of their barbarous ancestors.''
        Along with our ability to create, we human beings have the capacity
    to destroy, or shall we say, to engage in creativity for destructive
    purposes. Aren't there good reasons to be appalled by the danger of
    nuclear weapons and the disservice to humankind in strewing landmines
    over some 70 countries? At the same time, there are grounds for dismay
    at the comparative timidity of our efforts toward constructive
    creativity in developing a science of peach and a technology for
    achieving and maintaining such in international relations.
        Rather, we tend to underestimate the dangers of our weapons of
    violence and destruction and to belittle our potentials for, and the
    urgency to develop, effective methods of nonviolent resolution of
    conflicts. This is not to overlook the great contributions made by
    scholars in the study of the causes of war and the avenues to peace but
    to emphasize the relative efforts made as compared to that given to the
    development of instruments and tactics for war. Furthermore, there are
    estimates that the lag between the appearance of an article in a
    professional journal and the possible uses of some of the ideas
    presented in policy determination may be as long as 30-40 years. But it
    has been said that, ``The world can not long continue to wage war like
    physical giants and seek peace like intellectual pygmies''.
        On a broader basis, technological developments growing out of the
    physical and natural sciences are moving rapidly ahead and are not
    waiting for the behavioral sciences to catch up. International economic
    interdependence is also increasing. So the global village concept is
    becoming more and more of a reality. It is within this context that the
    need for peaceful resolution of conflicts become all the more
    important. And it seems to me the challenge lies in developing a
    science of peace. As remarkable as the contributions of the physical
    and natural sciences have been, and probably will be, to the betterment
    of human life, in my opinion our ultimate fate lies in the area of the
    behavioral.
        The USIP is a unique institution in our national history and
    congressionally was the outgrowth of what was intended to be a National
    Peace Academy. The commission set up to consider the possible creation
    of such an academy stated in its report, ``The Commission uses `peace'
    forthrightly in its discussion the Commission rejects emphatically any
    insinuation that peace--any more than love, church, justice, family, or
    flag--is soft or naive. The commission believes that timorous attitudes
    toward peace do not advance the national interest or reflect the
    American Character. Peace is neither utopian nor a sign of weakness or
    cowardice. Peace is not simply to be measured by an absence of tension
    or a quietude of complaint. Peace is not only a desired state; it is a
    process that is vigorous. The Commission finds that peace is a
    legitimate field of learning that encompasses rigorous
    interdisciplinary research, education, and training directed toward
    peacemaking expertise''. In pursuing such learning can we assume that
    despite our being such complex and diverse creatures we still have more
    in common than we have differences? Isn't there a contradiction in
    directing some of our best minds toward the creation of more
    ``efficient'' weapons of violence? Can we do less than give our best
    efforts to achieve more effective ways to resolve our conflicts
    peacefully?
        Psychiatrist Vamik D. Volkan, in his ``The Need to Have Enemies and
    Allies,'' sees the need for enemies as the embodiment of what we do not
    wish to become. They are standards by which we can measure our own
    ``higher level'' goals. It has been speculated that were our planet to
    be invaded from Mars, for example, we would quickly put aside our
    differences to engage the common enemy. But isn't it possible we on
    earth already have common enemies? After all, national boundaries are
    often very artificial limits. What about problems of the environment,
    greenhouse effect, poverty, and hunger? Can these be said to constitute
    common enemies? And wouldn't common efforts to ameliorate these
    conditions do much to make us allies? Without succumbing to self
    conceit can we say as human beings we have plumbed the depths of our
    combined and coordinated potentials for dealing effectively with these
    common problems?
        Looking hard for alternatives to violence in human relations at any
    level is intellectually stimulating. And all the more so because it
    involves a comprehensive effort to achieve positive and lasting
    results. In conflict resolution terms, this is a striving for ``win-
    win'' solutions. The extent of our funding for the USIP raises
    questions as to how seriously we take the efforts to achieve peace.
    There seems to be a very limited value placed on what some of the best
    minds in our country, and others, might accomplish. Isn't there a
    contradiction in directing some of our most talented toward the
    creation of ever more ``efficient'' weapons of violence? Can we do less
    than give our best efforts to achieve more effective ways to resolve
    our conflicts peacefully? Put another way, the relative amounts
    appropriated for the USIP as compared to those for instruments of
    violence tell a story. Is this a story with which we can or should be
    comfortable? To be sure, programs of research, education, training, and
    dissemination of information pertinent to peace-making can be done at
    much less cost than developing some of our most sophisticated weapons
    of violence, but can we expect sheer miracles?
        In conclusion, isn't there an element of escapism, if not
    irresponsibility, in the ``always has been and always will be''
    generalization? Would we not be in default in the application of our
    collective mental capacities if we take this view. But to avoid this
    will require much more widespread and intensive efforts on our part
    than we have made in the past. It would be shortsighted to look at the
    dangers and difficulties in human relations today without also
    recognizing the opportunities for good. The United States Institute of
    Peace, in one of its publications, has made this stimulating comment,
    ``We are not looking for a revolution in human nature, we are looking
    for an evolution in human institutions.''
                                     ______

        Prepared Statement of Harris Wofford, Chief Executive Officer,
                        Corporation for National Service
        Mr. Chairman and Members of the Subcommittee, I appreciate the
    opportunity to review the achievements of national service over the
    last year and inform you about our programs and proposed budget.
        I want to express my appreciation to the Subcommittee for the
    increases it provided last year. I know that you must sort between
    competing claims and make tough decisions with scarce resources. I
    believe that AmeriCorps*VISTA and Senior Corps have always been good
    investments, and I am firmly convinced that they merit your support
    today, more than ever. The Senior Corps and VISTA have a long tradition
    of involvement in our communities, improving education, bettering the
    health of children, promoting independent living and economic self-
    sufficiency, and harnessing the power of people in communities in every
    state in America.
        The total fiscal year 1999 budget request to the Subcommittee for
    programs authorized under the Domestic Volunteer Service Act is $278.4
    million, an increase of $21.8 million over the fiscal year 1998
    appropriated level of $256.6 million. The request for the National
    Senior Service Corps programs is $173.9 million, including $43.3
    million for the RSVP, an increase of $3 million, $94.1 million for the
    Foster Grandparent program, an increase of $6.6 million and $35.4
    million for the Senior Companion program, level funding from last year.
    The request for AmeriCorps*VISTA is $73 million, an increase of $7.8
    million.
        These funds would provide program support for 5,500
    AmeriCorps*VISTA member service years and almost 500,000 in the
    National Senior Service Corps--including approximately 462,500 in the
    Retired and Senior Volunteer Program (RSVP), 23,450 Foster
    Grandparents, and 8,600 Senior Companions. The requested budget for
    fiscal year 1999 would provide for an increase of 620 AmeriCorps*VISTA
    member service years and 8,800 Senior Corps service years. (The other
    programs of the Corporation for National Service, including AmeriCorps
    grants, the National Civilian Community Corps, and Learn and Serve
    America, and the Corporation's Office of the Inspector General are
    funded through the Subcommittee on VA, HUD, and Independent Agencies.)
                               cost effectiveness
        After three decades and the service of over 120,000 men and women
    at 15,000 local projects, VISTA (Volunteers in Service to America)
    today remains vibrant and vital. Now a part of the AmeriCorps network
    of national service programs, VISTA continues its mission of building
    community capacity, breaking the bonds of dependency, and creating
    self-reliance among low-income people.
        AmeriCorps*VISTA strengthens community-based organizations by
    expanding the capacity of local organizations to recruit, train, and
    coordinate local volunteers whose efforts continue in communities long
    after the VISTA members leave. Through these capacity-building
    partnerships, AmeriCorps*VISTA members help to expand affordable
    housing, create job opportunities, make health care more accessible,
    develop literacy activities and enable local citizens to live in safer
    neighborhoods.
        AmeriCorps*VISTA is cost-effective. The living allowance and other
    support costs provided for each AmeriCorps*VISTA member total less than
    $13,400 per year. For every appropriated dollar spent on
    AmeriCorps*VISTA, $3.33 is returned to the community in the form of
    financial and in-kind resources and local volunteers generated by
    AmeriCorps*VISTA members for their projects. According to the most
    recent accomplishments study conducted by WESTAT Inc. and completed in
    April, 1998, AmeriCorps*VISTA members raised $82 million in cash and
    in-kind resources for their projects, and recruited and coordinated
    140,600 local volunteers who provided more than four million hours of
    service. On average, each AmeriCorps*VISTA member recruited 42
    community volunteers and generated $24,350 worth of resources.
        In 1997, 25,300 Foster Grandparents served through 305 projects in
    all 50 states, the District of Columbia, Puerto Rico and the Virgin
    Islands. These Foster Grandparents served more than 175,000 children.
    Foster Grandparent projects are jointly funded by Federal, state, and
    local governments, with significant support from the private sector.
        In 1997, the 24 million hours of service provided by Foster
    Grandparents were valued at more than $315 million based on an
    assessment service conducted by the Independent Sector and the Gallup
    Organization that assumes $13.24 an hour to calculate the value of
    volunteer. This represents more than a four-fold return on the Federal
    dollars invested in these projects.
        The majority of children served by Foster Grandparents are young--
    ages birth through 12. Almost 14,000 Foster Grandparents help children
    with physical and mental impairments, about 4,000 help children who
    have been abused, abandoned, neglected, or are homeless, and some 2,000
    help juvenile offenders or children with substance abuse problems.
        RSVP volunteers provide hundreds of community services. They tutor
    at-risk youth, computerize information systems for community health
    organizations, get children immunized, teach parenting skills to teen
    parents, provide respite for caregivers of Alzheimer's victims,
    establish neighborhood watch groups, plan community gardens, and
    perform a myriad of other community services. Through such efforts,
    RSVP is meeting community needs that strained local budgets cannot
    afford to address.
        In 1997, approximately 450,000 RSVP volunteers served in 751
    projects sponsored by local public and private nonprofit agencies. RSVP
    volunteers contributed over 74 million hours of service to their
    communities in approximately 1,400 counties nationwide. These projects
    are jointly funded by the Federal Government, state and local
    governments, and the private sector. The 74 million hours of service
    provided annually by RSVP volunteers have an estimated value of over $1
    billion; approximately a 30-fold return on the Federal dollars invested
    in RSVP.
        In 1997, almost 14,000 Senior Companions served approximately
    37,000 frail adults through 191 projects sponsored by local public and
    private nonprofit agencies. These projects are jointly funded by the
    Federal Government, state and local governments, and the private
    sector.
        In 1997, the 12 million hours of service provided by Senior
    Companions were valued at $156 million; representing more than a five-
    fold return on the Federal dollars invested in Senior Companion Program
    projects.
                        getting things done in education
        Education has long been a central focus of the Senior Corps and
    AmeriCorps*VISTA programs. The challenge to have all children reading
    well and independently by the end of the third grade requires a
    mobilization of appropriately-trained reading tutors and partners from
    all walks of life, working closely with teachers and schools to enhance
    children's learning. AmeriCorps*VISTA has already begun to meet this
    challenge by committing members to recruit, screen, train, and place
    community volunteers--students, members of the business community,
    teachers, administrators, parents, PTA members--as reading tutors and
    mentors.
        RSVP and the Foster Grandparent Program have been involved in
    children's literacy efforts since their inception. In the 1980s this
    focus was solidified in a multi-year partnership with B. Dalton
    Booksellers, Laubach Literacy, and the National Association of RSVP
    Directors to fund, train, and provide the technical assistance
    necessary to establish the RSVP Literacy Network. The Network
    eventually included over 75 percent of the local RSVP projects. In
    1996, more than 35,000 RSVP volunteers provided over 1.8 million hours
    of education-related services to children and youth. By 1997, the
    Foster Grandparent Program was serving in over 3,100 schools and 1,200
    Head Start programs. RSVPs served over 5,400 schools, 2,200 libraries,
    1,100 Head Start/pre-schools, and 4,500 other educational settings. In
    1997, the Corporation funded 265 local RSVP and FGP projects to support
    an additional 3,300 volunteers providing reading assistance to children
    in Head Start, schools, out of school tutoring programs, family
    literacy programs such as Even Start.
        In 1997, the Corporation funded 25 new Foster Grandparent Program
    local projects with a strong child literacy component. These new Foster
    Grandparent projects are expected to increase the level of effort in
    child literacy by 1,055 volunteers, reaching an estimated 3,700
    children nationwide.
        In 1997, the Corporation also launched a new national demonstration
    program, Seniors for Schools, to mobilize the talent, experience, and
    resources of senior volunteers as literacy and reading resources to
    public school children in kindergarten through third grade. Two-year
    grants were awarded to projects in Florida, Massachusetts, Minnesota,
    Missouri, New York, Ohio, Oregon, Pennsylvania, and Texas. As of
    December 1997, more than 200 Seniors for Schools volunteers were
    tutoring, strengthening reading skills, increasing parental
    involvement, and planning special projects with more than 1,100
    children from 23 public schools.
        The Southeast Foster Grandparent Program of Monticello, Arkansas,
    began participating in child literacy activities with four public
    elementary schools in the fall of 1997. Sixteen Foster Grandparents
    received training as literacy tutors and were placed in the schools.
    Mid-year teacher evaluations, collected in January 1998, showed 77
    percent are making noticeable progress.
        In Durham, North Carolina, 73 RSVP volunteers served in elementary
    schools as reading tutors to 146 students who were reading below grade
    level. At the close of the 1996-1997 school year, five schools being
    served by RSVP volunteers met their reading goals, while six schools
    using RSVP volunteers exceeded their goals. An annual state reading
    test for third graders found that in 1996-1997, 65.2 percent of the
    tutored students were reading on grade level, a 33.3 percent increase
    from the previous year.
        In Laurens, South Carolina, the County Family Education Center is a
    collaborative effort of the local literacy council and the public
    schools to provide an education program for disadvantaged parents and
    their pre-school children. Parents attend classes on adult literacy and
    parenting skills, and participate in PACT (Parent and Child Together)
    time in which teachers and Foster Grandparents model positive
    discipline techniques, language enrichment, and appropriate feeding/
    diapering techniques to the parents. Three Foster Grandparents are
    assigned to assist two preschool teachers using developmentally and age
    appropriate materials and practices for nurturing growth and
    development of 23 individual children. The Foster Grandparents served
    the children and their parents 20 hours per week for a total of 1980
    hours of direct service. The Center staff indicated that objectives of
    the Center were met in that 91 percent (goal 80 percent) of the
    children assessed have indicated growth in age-appropriate development
    tasks and 82 percent (goal 75 percent) attended parenting sessions.
        In Buhl, Idaho, Foster Grandparents provide literacy services to
    the children of Popplewell Elementary School where 40 percent of the
    students read below their grade level. Foster Grandparents help
    kindergarten and first grade students with word recognition and
    writing; serve in the library, assisting students of all grades to read
    aloud; help fifth graders whose first language is not English with
    reading comprehension; and engage students in all grades in creative
    writing and storytelling.
        Foster Grandparents served 16 River Valley School, Iowa students
    with disabilities. As part of a summer reading program, Foster
    Grandparents and students were paired for 30 minutes and took turns
    reading aloud to each other. The group cumulatively read 112 books over
    the course of the summer. Students were assessed at the beginning of
    the summer to determine their abilities and interests, then weekly
    records monitored their attentiveness, enjoyment and attitude during
    the reading program. The weekly assessments demonstrated that 79
    percent of the students rated excellent in attentiveness; 84 percent
    rated excellent in attitude and behavior; and 100 percent wanted to
    continue in the summer reading program next year.
        In Springfield, Missouri, 90 percent of students at Fairbanks
    Elementary School are eligible for free or reduced lunches. Students'
    scores on standardized tests and attendance are consistently below the
    district average. The school also has one of the highest percentages of
    single parent families, with very low parental involvement. Twenty-one
    RSVP volunteers were recruited to work one-on-one with a specific child
    in first or second grade for approximately 45 minutes per week at
    breakfast or lunch for the entire school year. The reading teacher
    prepares packets with suggested books and activities specific for each
    child each week. According to reading teachers and the principal,
    children served by volunteers are already beginning to showing improved
    reading skills and attitudes towards reading.
        In 1997, AmeriCorps*VISTA members serving in more than 300
    education projects established or expanded adult and child literacy
    programs; conducted outreach campaigns to enroll individuals in GED or
    high school diploma equivalency programs; recruited, trained, and
    coordinated volunteer tutors; gathered books, supplies, and cash
    donations to sustain programs; and built school and community
    partnerships that will continue long after the VISTA members leave.
    Over the past two decades, AmeriCorps*VISTA has provided support for
    adult, family, and child literacy programs conducted by organizations
    such as the Literacy Volunteers of America, Laubach Literacy Action,
    and Communities in Schools. In all of these cases, VISTA members
    provide support to enable these organizations to more effectively carry
    out their education model.
        In Pennsylvania, AmeriCorps*VISTA members recruited volunteers and
    raised the funds necessary to allow the Adams County Literacy Council
    to survive financially and provide effective one-to-one tutoring to
    adult nonreaders. VISTA members have established interactive programs
    with local school districts, Harrisburg Area Community college, and
    Gettysburg College. One VISTA member single-handedly conducted the
    first ``Buck a Book'' campaign in which area children enlisted sponsors
    for each book they read in a one week period. The campaign brought in
    $19,500 to the program.
        The Oregon Children's Foundation's SMART programs encourage and
    support reading among children in kindergarten through second grade.
    Thirty-two AmeriCorps*VISTA members have recruited and trained more
    than 4,000 local volunteers in 78 schools to read to children, educate
    the public about volunteering, develop public-private partnerships and
    mobilize community resources. Private sector support comes from over
    350 companies including Nike, Intel Corporation, Smith Barney and Wal-
    Mart.
        In Kentucky, the Laurel County Literacy Council expanded its VISTA
    project activities to include five nearby counties. Since then, VISTA
    members have concentrated their efforts on resource mobilization. For
    example, the counties received a $17,500 grant from the KY Department
    of Adult Education and Literacy to purchase laptop computers in each of
    the five counties. A VISTA member in Bell County created ``Little
    Bird'', a new program that will distribute books to each parent of a
    newborn upon their release from the local hospital. As a result of the
    VISTA members, the Literacy Council received a $10,000 grant from NY
    Life Foundation to support student transportation and an additional
    instructor.
                         improving health and nutrition
        Senior Corps and AmeriCorps*VISTA programs also focus heavily on
    the health and nutrition needs of Americans of all ages.
    AmeriCorps*VISTA members assigned to nearly 150 projects have
    established or expanded 170 immunization programs which have immunized
    more than 47,000 children and adults, provided 155,000 individuals or
    families with health information or educational materials, and
    established or expanded 90 food banks. The Senior Companion program
    focuses on the needs of the frail elderly, while Foster Grandparents
    work with children who have physical, educational, or emotional
    disabilities.
        In 1996, almost 300,000 families and 108,000 individuals received
    health care services from RSVP volunteers. RSVP volunteers assisted in
    serving more than 23 million meals. In 1997, Foster Grandparents
    provided service to 5,600 children with developmental disabilities,
    2,700 children with emotional impairments and 4,500 children with a
    variety of physical disabilities. RSVP serves 4,300 hospitals and
    clinics, 6,000 nursing homes, 2,500 other long-term care facilities,
    and 900 home health care agencies.
        In Pennsylvania, AmeriCorps*VISTA members serving the Greater
    Philadelphia Food Bank, raised over $150,000 through the Check Out
    Hunger Program. VISTA members also helped establish ``The Greater
    Philadelphia Anti-Hunger Coalition,'' a self-sustaining network of
    agencies to enable feeding charities to function more efficiently. As a
    result of VISTA efforts, over 500,000 pounds of food annually is made
    available to those in need. By helping to develop the resources to
    obtain a delivery vehicle, VISTA members have enabled the Food Bank to
    extend its delivery to include a 150 mile radius of the city.
        The Northwest Arkansas Free Health and Dental Clinic in
    Fayetteville serves the needs of a low-income population.
    AmeriCorps*VISTA members designed and implemented a dental education
    program for children. Members recruited six dentists to work in the
    dental clinic, implemented an appointment system, secured donations of
    supplies and pharmaceuticals and recruited community volunteers to
    assist in the dental clinic's operations. One member secured a $40,000
    grant from the Foundation of the Mid South that will sustain the
    operations of the children's dental program.
        According to statistics from the Alzheimer's Association, an
    estimated 1 in 10 persons over 65 and nearly one-half of those over 85
    have Alzheimer's disease. Most of those people live at home. Almost 75
    percent of the home care is provided by family and friends; however,
    the remainder is paid care costing an average of $12,500 per year--to
    many, a prohibitively expensive amount. To help meet these care giver
    needs, volunteers from the Senior Companion Program of Harrison County
    provided almost 10,000 hours of in- home services to Alzheimer's
    patients in Ellisville, MS. Senior Companions assist with daily living
    activities, provide companionship to their client, and respite
    assistance to the caregiver. By helping people to live independently,
    Senior Companions help seniors avoid the $38,000 average annual nursing
    home costs.
        In Hawaii, the Senior Companion Program expanded to Oahu's Leeward
    Coast to address the health needs of the homebound elderly. This remote
    area of the island is economically depressed and public transportation
    is poor. Senior Companions were assigned to a health care agency to
    provide personal care, home management, and social support for in-home
    caregivers. Five Senior Companions provided over 3,000 hours of service
    to 10 clients. As a result, the State has saved a minimum of $16,800 in
    nursing care for one year for each of the ten clients.
                         creating economic opportunity
        AmeriCorps*VISTA is helping to move people from welfare to work.
    VISTA members assigned to 200 community economic development projects
    are providing training for many welfare recipients. In 1997,
    AmeriCorps*VISTA members identified more than 150 businesses across the
    country which agreed to hire welfare recipients and other unemployed
    people. AmeriCorps*VISTA members are also expanding microenterprise
    opportunities for aspiring entrepreneurs in low-income communities. In
    1997, members helped 430 individuals or businesses obtain development
    capital and helped establish or expand nearly 800 microenterprises.
        In Seattle, Washington, an AmeriCorps*VISTA member is assisting
    ``Washington Works,'' an organization which places welfare recipients
    in paid employment. The VISTA member is assisting women who have
    succeeded initially confront child-care and transportation needs, skill
    training, and other potential obstacles which often prevent them from
    achieving long-term success on the job. Other AmeriCorps*VISTA members
    in Washington are working with the International Association of
    Machinists-CARES program to launch an employment program for people
    with AIDS.
        AmeriCorps*VISTA members serving with Working Capital--a community
    based organization in Massachusetts--are assisting micro and small
    business development in 20 economically distressed communities
    throughout the State. The project utilizes a unique peer lending model
    to provide loans, training, and support to microentrepreneurs.
        Through the work of the VISTAs in 1997, more than 1,000 businesses
    participated in and invested over $1 million dollars in the peer
    lending process. More than 200 microbusinesses have been created. The
    VISTAs play a vital role in recruiting potential business owners and
    assisting in the development of marketing strategies for Working
    Capital.
        In New Haven, Connecticut, two AmeriCorps*VISTA members with the
    Greater New Haven Opportunities Industrialization Center assisted in
    the creation of a ``Youth Mall'' to give young adults the experience of
    entrepreneurship and to create jobs for young people moving from school
    to work. At-risk youth participated in the training program in order to
    establish, own, operate, and manage a snack shop and clothing store.
    The snack shop is now fully operational with program participants
    running the shop. The initial phase of developing the clothing store is
    also underway.
        In Beloit, Wisconsin, AmeriCorps*VISTA members working for the
    Neighborhood Housing Services helped develop Homebuyers Clubs,
    developing a manual, creating and implementing working, and recruiting
    participants for this program to assist families in buying homes.
    Because of the VISTA members' help, the Housing Services has been able
    to continue and maintain this program. Currently, the Clubs meet on a
    monthly basis to work through the process of becoming homeowners.
        Thirty-two AmeriCorps*VISTA members are serving with 28 credit
    unions throughout the country through National Federation of Community
    Development Credit Unions. Members are developing Individual
    Development Account (IDA) programs, providing home ownership counseling
    and small and micro-business training. In the past 6 months, VISTA
    members have recruited 2,500 new credit union members and established
    eight youth credit union programs. Members have also helped to market,
    design, and implement 27 new programs or products to expand financial
    services to low income people such as IDAs, mortgage loans, small
    business lending, direct deposit, share accounts, and financial
    education seminars.
        RSVP has a long history of providing assistance to older people,
    and low income families and individuals. In 1996, almost 270,000
    volunteers contributed 9.8 million hours of professional or technical
    support services such as tax preparation or retirement planning.
    Approximately 528,000 families received assistance to alleviate
    problems related to homelessness.
        In St. Louis, Missouri, Senior Companions team with younger home
    care workers who are welfare-to-work transition single mothers placed
    through the Near South Side Empowerment Coalition to provide services
    to Medicaid recipients. The young workers allow the Senior Companions
    to better attend to the emotional and relationship needs of the
    isolated and elderly clients, while the young workers handle chore
    services and other needs.
                   expanding effective and efficient service
        A major goal of both the Senior Corps and AmeriCorps*VISTA is to
    expand service opportunities while maintaining high-quality. We are
    achieving this goal through Programming for Impact, cost-share
    agreements, public/private partnerships, serving in Enterprise and
    Empowerment zones, and helping community-based organizations obtain the
    resources they need to sustain their operations after Federal support
    has ended.
    Programming for impact
        After three decades of service, the Senior Corps is bringing a new
    vision into focus, shifting from a single focus on creating volunteer
    opportunities to a two dimensional approach of Senior and Service. This
    dual approach, which we call Programming for Impact, will position us
    to meet the challenges of the future and to establish existing programs
    as vehicles to harness the tremendous resource that the growing
    population of older persons can bring to addressing critical community
    needs. Senior Corps programs have proved that older volunteers are
    interested in serving and willing to serve, and that they do so
    impressively. We are now exercising leadership focusing on measurable
    benefits and outcomes realized from the efforts of the volunteers. This
    approach allows us to retain the best of the past while meeting the
    needs of the future.
        Programming for Impact is the implementation vehicle to help change
    the way the Senior Corps does business. It was developed to enhance the
    ``service'' side of ``senior service'' by allowing projects to
    effectively assess community needs, engage volunteers in activities
    that relate directly to meeting the need, identify inputs and resources
    necessary, and set a basis for measuring accomplishments and changes
    that occur in the community as a result of the efforts of the
    volunteers.
        The Senior Corps is engaged in a thoughtful, deliberate and
    incremental implementation of Programming for Impact. The impact goals
    are reflected in the Corporation's Government Performance and Results
    Act plan, budget request, and program evaluation plan.
        In July 1996, the Senior Corps held a national conference,
    ``Renewing America Through Senior Service,'' attended by all project
    directors who manage the more than 1,200 local Senior Corps projects.
    The directors were introduced to the nuts and bolts and rationale for
    these changes.
        From July 1996 through 1997, the Senior Corps developed pilot test
    sites, and held state impact training conferences as incremental steps
    to reinforce Programming for Impact, to experiment with implementation,
    and to develop state-specific State Programming for Impact
    Implementation Plans. These locally-driven plans, designed to engage a
    wide base of Senior Corps stakeholders, defined how states will phase
    in the application of Programming for Impact to all projects over a 15
    month period, during the period from July 1, 1997 through September 30,
    1998.
        In 1998, the Corporation worked to modify tools and systems needed
    to manage and guide Programming for Impact including the Senior Corps
    Grant Application and the Project Progress Report (to include reporting
    on Government Performance and Review Act). We are currently field
    testing a set of Accomplishment Surveys that will capture both the
    ``inputs'' and ``accomplishments'' of Senior Corps projects in fiscal
    year 1999. As of July 1, 1998, Programming for Impact becomes the
    official approach for all Senior Corps projects with renewal dates of
    July 1, 1998, or later using the revised Grant Application.
                                 sustainability
        A recent evaluation conducted by People Works, Inc. found that
    nearly 73 percent of AmeriCorps*VISTA supported programs continued to
    operate years after the VISTAs had completed their assignments. This
    reflects the self-help philosophy of AmeriCorps*VISTA whose goal is to
    increase the capacity of the communities to solve their own problems.
    Each sponsoring organization plans from the beginning to phase out
    AmeriCorps*VISTA resources after three to five years and to have the
    community take over and sustain those activities. AmeriCorps*VISTA has
    proven that it works.
        AmeriCorps*VISTA members who served with the Southern Development
    Foundation in Opelousas, Louisiana, introduced 75 farmers to sequential
    vegetable farming techniques and goat production. With the VISTAs'
    assistance, the farmers were able to realize a $3,000 to $5,000 per
    year increase in income with no significant increases in investment.
    The members established a Farmer's Market for the sale of participating
    farmers' produce which remains operational after AmeriCorps*VISTA
    resources have been removed.
        AmeriCorps*VISTA members who served with the Arkansas Disability
    Coalition organized 20 parent support groups in rural areas with high
    levels of poverty throughout Southeast and Northeast Arkansas. These
    groups advocate on behalf of children with disabilities to ensure that
    they get the services and support they need. VISTAs developed and
    institutionalized the ``Arkansas Meeting Plan,'' a listserve with over
    100 members ranging from individuals with disabilities and their family
    members to professionals in the disability field. This listserve
    provides information on changes in special education policy, notices
    for opportunities to participate in social activities, information on
    the changes to Medicaid, and other important issues. VISTAs were also
    able to secure computers for 40 families and ongoing training for
    interested persons.
        When Project VIDA AmeriCorps*VISTA in El Paso, TX, ended in 1996,
    it left a strong VISTA legacy in the community. Members developed an
    institutionalized reading development project as a piece of the after-
    school component that has succeeded in increasing standardized reading
    scores in each of its last three years. The VISTA health education
    component spun out into a community health clinic with a thousand
    visits a year. The housing component continues to conduct the
    environmental clean sweeps, graffiti suppression, and a tenant rights
    education program. According to the program director, ``If it were not
    for the VISTA members, there would be no after school programs.* * * In
    housing, maybe the community would have been served another way, but we
    would be at least three years behind where we are today.''
    Cost-share programming
        The AmeriCorps*VISTA program model has proven so successful that
    demand for AmeriCorps*VISTA members around the country exceeds the
    ability of federally appropriated dollars to provide them. However, as
    sponsoring organizations recognize the value of the VISTA resource they
    use their own resources on a cost-share basis to pay for basic member
    support costs while the Corporation provides the education award,
    training, and recruitment support. The number of members funded in this
    manner has risen from 560 in 1994 to more than 1,300 in fiscal year
    1998. More than 200 sponsoring organizations contribute $13 million to
    this effort.
        One example of a cost-share project making a difference is the
    State of Oregon's Health Division which has agreed to pay the basic
    expenses for 45 AmeriCorps*VISTA members. The members are located in
    almost every county in the state referring WIC and immunization clients
    to the Oregon Health Plan and publicizing the need for complete
    immunization. Because of the program, immunization rates in Lake County
    have increased from 57 percent in 1995 to 87 percent today; Lincoln
    County now has a new immunization clinic that is open in the evenings;
    the AmeriCorps*VISTA in Waso-Sherman County has regular monthly WIC/
    Immunization features on local radio stations and monthly spots in
    local newspapers; and, in Baker County, there are only 22 children
    under age two with incomplete immunizations.
        Non-Federal funds also provide critical support to Senior Corps
    programs. In fiscal year 1997, the non-Federal local contribution to
    Foster Grandparent programs exceeded $32 million or 42 cents for every
    Federal dollar invested--well above the 10 percent matching share
    required by law. The non-Federal local contribution to RSVP projects of
    over $42 million, exceeding the Federal contribution, demonstrates
    broad support for RSVP across the country. For Senior Companion
    programs, the non-Federal local contribution was over $19 million. This
    non-Federal contribution represented a match of 61 percent, well above
    the 10-percent matching share required by law.
    Public/private partnerships
      --AmeriCorps*VISTA is partnering with over twenty national
            organizations including Big Brothers/Big Sisters, Communities
            in Schools, Habitat for Humanity, Save the Children, Literacy
            Volunteers of America, Laubach Literacy Action, National
            Alliance to End Homelessness, and United Way of America to make
            an impact on communities in the areas of adult and children's
            literacy, education, technology, housing and homelessness,
            among other issues.
        AmeriCorps*VISTA has a long history of service with Habitat for
    Humanity which shares VISTA's mission to help low-income individuals
    help themselves. There are more than 200 AmeriCorps*VISTA members
    throughout the country recruiting volunteers and garnering donations at
    40 Habitat for Humanity project sites. In Phelps, Kentucky, three
    AmeriCorps*VISTA members working with Phelps Habitat for Humanity
    mobilized tens of thousands of dollars in land, labor, and machinery.
    Members also recruited local volunteers and assisted the local
    communities in site plan development and family selection. Because of
    VISTA's involvement, Phelps Area Habitat now starts to build a new home
    every 6 weeks.
        AmeriCorps*VISTA has collaborated with IBM and United Way of
    America to create Team TECH. Through this partnership 55
    AmeriCorps*VISTA members are placed in 11 communities throughout the
    country to develop strong leadership and technological skills among
    nonprofit organizations serving the poor. They provide technology
    planning assistance, obtain funding for hardware and software, and
    provide computer training. During the past eight months, the Team TECH
    project has affected nearly 300,000 children providing $1.8 million in
    technology and technical services in the 11 communities served. These
    services provide children with direct access to new computers and
    software through after-school programs, daycare programs, education
    workshops, and mentoring programs.
        In Burlington, Vermont, AmeriCorps*VISTA members serving with Team
    TECH have brought technology and technology assistance to more than 650
    children in the Burlington Boys and Girls Club. The computers allowed
    the Vermont Job Bank to install education software, access to the
    Internet, and educational software, and set up a database of employment
    opportunities.
        AmeriCorps*VISTA has also partnered with Rural LISC (Local
    Initiative Support Corporation), an organization which provides support
    and easier access to technology services in rural America. Eight
    members are serving with four community development corporations in New
    York, Wisconsin, California, and Oklahoma. The purpose of the project
    is to develop websites to provide low-income individuals in rural areas
    access to public and private support in order to obtain decent housing
    and a range of services intended to help them remain in housing. Thanks
    to the Internet, more than 60 community development corporations
    affiliated with Rural LISC will ultimately benefit from this project.
    Rural communities will have a significant new tool to prevent
    homelessness and improve services to the rural homeless.
                               management issues
    Program administration
        Program administration is authorized under Title IV of the Domestic
    Volunteer Service Act of 1973, as amended. For fiscal year 1999, the
    Corporation is requesting $31,512,000 for Program Administration. The
    requested funding will maintain necessary staffing for effective
    program oversight and to improve our financial control and reporting.
    Of the total, $22,231,000 will fully support 332 full-time equivalent
    workyears by staff providing direction, oversight, technical assistance
    and administrative services to programs nationwide. The remaining
    $9,281,000 will cover the cost of rents, supplies, communications,
    printing, contractual services, travel, transportation, and equipment.
    Auditability
        Last year, I indicated that we expected to have 97 of the 99 items
    cited in the Corporation's 1996 auditability study completed and
    appropriately addressed by the time the Inspector General conducted her
    review during the spring and early summer of 1997. That auditability
    review showed that the Corporation had fully addressed 72 items.
    However, we fell short of the goal I stated last year. The auditability
    review found 21 material weaknesses and reportable conditions that had
    not been fully cleared. Since that report, we have successfully
    addressed 10 of these 21, have made significant and sustained progress
    on seven others, and have begun to address the remaining four. In the
    review, both the Office of the Inspector General and Arthur Andersen
    stated that the Corporation had demonstrated a commitment to correct
    the deficiencies and weaknesses.
        Our efforts on these auditability issues and our activities to
    establish strong financial management focus on five areas: (1) the
    maintenance of the growing number of paper records related to
    enrollments in the National Service Trust; (2) the timely
    reconciliation of cash; (3) improvement of controls over grants
    management; (4) improvement of budget and funds control; and (5)
    improvement of general financial control. We have had much success in
    each area. With important assistance from the Office of Management and
    Budget (OMB), we have developed a specific action plan with a timeline
    to remedy the remaining weaknesses identified in the July, 1997, review
    and to provide the basis for obtaining an unqualified opinion on the
    Corporation's Financial Statements for fiscal year 1998.
        The first area is the maintenance of the growing number of paper
    records related to enrollments in the National Service Trust. We will
    use digital imaging technology, which we expect to have in place in the
    current fiscal year, to enter new enrollments and aid in the resolution
    of any historical problems related to older records. This use of
    imaging technology will ensure the accuracy of AmeriCorps members'
    records for the future and facilitate the prompt correction of past
    errors.
        The second area of major effort is the timely reconciliation of
    cash. In our plan, remaining auditability items related to cash
    reconciliation will be successfully addressed by the end of August of
    this year. Interagency charges represent a special challenge. The
    timely posting of interagency charges is being addressed by OMB as part
    of a government-wide solution to the problem of an antiquated system
    for such charges. We will be among the first agencies to take advantage
    of new capabilities when OMB and the Department of the Treasury bring
    on-line the new capacity to identify sub-elements of interagency
    transfers.
        In the third area, grants management, we are improving the accuracy
    of Trust records by enhancing our oversight program. In addition, we
    are establishing practices to strengthen our record-keeping regarding
    grant receivables and payables, such as better recording and tracking
    of funds owed the Corporation following audits.
        With regard to the fourth area, budget and funds control, we will
    purchase and implement a new financial management system that will
    provide the capability to record commitments and obligations, thereby
    substantially increasing the effectiveness of controls. Meanwhile, we
    have adopted new procedures that protect against the over-obligation of
    grant funds.
        Improvement of other financial controls is the fifth element in our
    plan. This includes, among other things, strengthening procedures for
    ensuring the accuracy of VISTA stipend payments and improving financial
    reporting.
        While we continue to address these items, we have also made other
    important changes. Enhancements to our accounting and Trust systems
    have improved system security and data. We have issued policies and
    procedures for various financial management activities. New job
    descriptions have been written. Job duties have been segregated across
    our major financial functions. The staff supporting the operational
    activities of the National Service Trust have been consolidated into a
    single organization to improve management control.
    The Government Performance and Results Act
        The Corporation is complying with the requirement of the Government
    Performance and Results Act (GPRA). We have met, and are meeting, all
    of the requirements of GPRA. Our strategic plan was submitted on time
    and in full compliance with the Act. We have distributed copies of the
    plan widely, throughout the national service community, and it is
    available on our Internet website at www.nationalservice.org. Our
    fiscal 1999 performance plan was sent to the Congress on February 20
    and soon it will be available through the Internet.
        The strategic plan and the performance plan lay out in clear terms
    our vision and goals, and the practical steps we will follow to get
    there.
        In addition, standards of program quality will be set for every
    area of national service. We will be creating indexes that can be used
    to rate objectively the quality of our programs. These indexes will
    combine data from many sources, including customer satisfaction and
    community impact ratings, into an overall assessment of quality. Every
    program area will be subject to what we call community impact ratings.
    In a national survey, we will be asking key community representatives,
    who are expected to have first-hand knowledge of national service
    programs, to rate the impact and quality of the services provided by
    our programs.
        Every program area sponsored by the Corporation will have some form
    of customer satisfaction survey. We intend to know and report how well
    national service participants are addressing the unmet needs of the
    American people.
        To implement the plan and measure our performance against its
    goals, we have in place, or are in the process of establishing, the
    systems needed to get the job done. We are on schedule to implement
    fully the data collection and analysis plans needed so that we can
    report to the Congress and the public in March 2000 how well we have
    done in meeting our goals.
    Reauthorization
        After two years of work with national service sponsors, partners
    and participants, as well as Governors, Mayors, and other local elected
    officials, the Corporation for National Service's reauthorization
    proposal has been transmitted by the President to the Congress, and
    introduced in the House on March 26. The bill, entitled the ``National
    and Community Service Amendments Act of 1998,'' was introduced with
    bipartisan co-sponsorship. The legislation proposes significant steps
    to improve national service, based on the lessons learned over the last
    several years and the careful analysis the programs have received from
    within and outside of the Corporation. Specifically, the proposed
    legislation:
      --Strengthens partnerships with traditional volunteer organizations;
      --Codifies agreements with Congress and others to reduce costs and
            streamline national service;
      --Provides States additional flexibility to administer national
            service programs; and
      --Expands opportunities for Americans to serve.
        I want to emphasize that the Administration's proposal is a
    starting point for--not the end of--discussions on what a
    reauthorization bill should include. I look forward to working with the
    Members of the Subcommittee on this important matter.
                                   conclusion
        This is an exciting time to be engaged in service. The activities
    of millions of Americans on Dr. Martin Luther King, Jr., Day and in the
    wake of Presidents' Summit for America's Future evidence the growing
    awareness in this country of the importance of community service.
    The Martin Luther King Day of Service
        Pursuant to the 1994 Act of Congress, the Corporation works in
    partnership with the Martin Luther King Center for Non-Violent Social
    Change to make the national holiday in honor of Martin Luther King,
    Jr., a ``Day On, Not a Day Off'' in which Americans, across the lines
    that divide us, join in service to their communities. In this, the
    third year of promoting this observance of Dr. King's birthday in a way
    that reflects his life and teachings, we had a breakthrough in focusing
    national attention on this day as a day of service. Our other national
    partners included the United Way of America, the Points of Light
    Foundation and Do Something--a youth service organization. With
    national media attention in almost every major media market and almost
    300 local projects reported in 48 States, the District of Columbia,
    Puerto Rico and the Virgin Islands, we gained significant momentum
    toward our goal and legislative responsibility to promote service in
    honor of Dr. King.
    Follow-up to the Presidents' Summit For America's Future
        The Presidents' Summit For America's Future held last April in
    Philadelphia was an opportunity for the public sector to join with the
    private sector and the nonprofit sector to focus attention on the need
    for a new level of concerted citizen action to turn the tide for
    millions of young people. The goal of the Summit and of America's
    Promise, the post-Summit campaign led by General Colin Powell, is to
    mobilize millions of citizens and thousands of organizations--including
    Government, corporations, foundations, faith-based and community
    service organizations--to help children who lack the conditions for
    success in life.
        At the Summit, the Presidents signed a declaration setting five
    goals--five fundamental resources for a young person's success:
      --An ongoing relationship with a caring adult--as a mentor, tutor, or
            coach;
      --Safe places with structured activities to learn and grow during
            non-school hours;
      --A healthy start and a healthy future;
      --An effective education providing a marketable skill, including the
            ability to read well; and
      --An opportunity to serve, not just be served.
        National service is already playing an active role in achieving
    each of these goals. The fifth goal--service by young people--is at the
    heart of our mission. Goal Five seeks a large-scale expansion of youth
    service and service-learning opportunities. The Corporation is helping
    to shape and promote Goal Five in collaboration with a growing alliance
    of organizations committed to that effort, including the nation's great
    civic and youth service organizations such as the Y.M.C.A, Boys and
    Girls Clubs, the Lions Clubs, and Big Brothers Big Sisters of America;
    philanthropic organizations such as the W.K. Kellogg Foundation and the
    James Irvine Foundation; corporations with an interest in youth such as
    Viacom's MTV Networks; and faith-based organizations such as the
    Council of Religious Volunteer Agencies.
        Since last April, scores of States and communities have held their
    own follow-up summits to gather local partners and secure local
    commitments to pursue the summit goals. The national service network is
    actively assisting America's Promise in planning and carrying out these
    follow-up summits along with our original Summit partners--the Points
    of Light Foundation's Volunteer Centers and the United Way of America.
    State Commissions, Corporation State Offices, national service
    sponsors, and national service participants have worked with Governors,
    Mayors, corporate leaders, and nonprofit organizations to develop their
    own plans of action.
        Consistent with the activities of the Summit, on January 1, 1998,
    President Clinton and former President Bush reintroduced the Daily
    Points of Light. Initially awarded during the Bush Administration, the
    Daily Points of Light are designed to honor volunteers and volunteer
    organizations that demonstrate unique and innovative approaches to
    community volunteering and citizen action, with a strong emphasis on
    service focused on the goals for children and young people set by the
    Presidents' Summit for America's Future. The Daily Points of Light
    program is co-sponsored by the Points of Light Foundation, the
    Corporation for National Service, and the Knights of Columbus. The
    Knights of Columbus Supreme Council provides full funding for the
    awards.
        While the examples and initiatives described above represent only a
    fraction of the overall activities and accomplishments of the national
    service programs authorized by the Domestic Volunteer Service Act, they
    provide a glimpse into the remarkable diversity, ingenuity and cost-
    effectiveness of national service. These programs share a proud
    history, a long tradition of success, and have evolved to meet our
    nation's challenges. As we move into the next century, AmeriCorps*VISTA
    and the National Senior Service Corps will continue to help local
    communities develop and implement solutions to their problems. The
    programs have thrived through seven administrations, Democratic and
    Republican alike, with strong bipartisan support along the way.
        I look forward to working with the Subcommittee to continue this
    tradition.
                                     ______

     Prepared Statement of the Association of America's Public Television
                                    Stations
                                    overview
        The Association of America's Public Television Stations (APTS)
    submits this testimony to the Senate Appropriations Subcommittee for
    Labor, Health and Human Services, Education and Related Agencies on
    behalf of the nation's 179 local public television licensees. America's
    public television stations reach 99 percent of television households
    through a public broadcasting system that is in place and working now.
        APTS is requesting that the subcommittee provide the Corporation
    for Public Broadcasting (CPB) $340 million in annual appropriations for
    fiscal year 2001. This is the same amount requested by the
    Administration in its fiscal year 1999 budget. In addition, APTS is
    requesting an appropriation of $75 million for CPB in fiscal year 1999
    to establish a matching grant program that will assist public
    broadcasting stations in the conversion to digital broadcasting.
        We are pleased that the Administration has established a Public
    Broadcasting Digital Transition Fund in the fiscal year 1999 budget
    request to Congress. That request is for $450 million over 5 years to
    be administered by CPB and the Public Telecommunications Facilities
    Program (PTFP) at the Department of Commerce.
        Public broadcasters estimate that the costs to convert public radio
    and television to digital technology will be $1.7 billion. Unlike
    commercial broadcasters, public broadcasters are nonprofit or state and
    local government entities that rely on a grassroots funding structure.
    Public broadcasting's support comes from a combination of Federal and
    non-Federal sources, including individual viewers and listeners,
    foundations and businesses, colleges and universities and State and
    local governments.
    Unfunded Federal mandate
        Public broadcasting is asking the Federal Government for a total of
    $600 million over 4 years for digital transition. America's public
    television stations concur with the Administration's support of $375
    million for the CPB portion of the fund. Public television stations
    cannot wait, however, until 2003 for the final payout as proposed by
    the Administration. The FCC has mandated that all public television
    stations be on the air with a digital signal by May 2003. Public
    television stations support the division of the CPB portion of the fund
    in an equitable manner among all stations, similar to the community
    services grant (CSG) process currently in place, beginning with $75
    million in fiscal year 1999.
        The remainder of the funds-$225 million over four years, $56.25
    million per year-would be administered by PTFP to meet the needs of
    rural or hardship sole-service stations and to meet the continuing
    analog equipment needs of public television and radio stations.
    Stations' fundraising abilities
        Because of their nonprofit status and grassroots funding structure,
    stations are constrained in their ability to finance major capital
    expenditures such as the digital investment. Unlike their commercial
    counterparts, public stations are unable to pass along their costs to
    their customers. Most public broadcast stations cannot take out capital
    loans, and many, by law, must have balanced budgets on an annual basis
    and may not maintain cash reserves. Given these constraints, stations
    cannot use the typical mechanisms available to commercial entities to
    fund a major capital expenditure.
        An additional Federal investment is critical to ensure that all
    citizens of the United States have access to public telecommunications
    services through digital technology. The clarity of high definition and
    the multicasting capability of digital technology will allow public
    television to enhance the educational value of its programming and to
    multiply educational services. With digital, public television can
    serve more diverse, unserved and underserved audiences on a single
    channel.
        Public broadcasting will raise the rest of the necessary funds,
    roughly $1 billion, from other sources: individual contributions,
    corporate underwriting, State funding, foundation grants, and through
    new efficiencies and cost savings. The noncommercial nature of public
    broadcasting makes raising these funds from private sources even more
    challenging than for the commercial networks, and thus requires a
    public investment to meet the new technological standard.
    Critical Federal participation
        Since 1968, the Federal Government has provided financial support
    to the public broadcasting system through an annual appropriation. CPB
    will continue to need an annual Federal appropriation in order to
    distribute funds (75 percent) to local public television and radio
    stations for station operations and programming. These community
    service grants (CSGs) provide, on average, one sixth of the revenue for
    a public television station. This figure varies widely, however. Many
    small rural stations depend on Federal support for 30 percent of their
    operating budgets.
        This Federal support will enable public broadcasting to continue to
    serve the nation and maintain its core principles. These principles
    are:
      --Noncommercial character with an educational mission;
      --Creation and delivery of programming of unequaled quality and
            excellence;
      --Editorial integrity and independence;
      --PTV's adaptation of new technologies to educational and public
            service purposes;
      --Universal access to our services; and
      --Local ownership, control and focus of public television stations.
    With, by and for local constituents
        The goal of each local station is to serve its community. Stations
    are governed by boards composed of people who live and have a personal
    investment in their community; decisions are made at the local level to
    determine the special needs of that community. Public broadcasting is
    the only broadcasting entity that is totally committed to ensuring that
    all Americans have access to free, locally based, enriching programs
    and education services in the digital age.
                              technical leadership
        Public broadcasters have always been leaders in making use of new
    technologies for public service. We developed closed captioning and
    descriptive video services and pioneered satellite delivery of
    broadcast television. Public broadcasters once again have a vision of
    what new digital technology can deliver. We look forward to developing
    further applications of new technology to educate and enlighten all
    Americans.
    Community service leadership
        We will provide the following services through these new digital
    technologies:
      --Multicasting will enable public broadcasting to extend the reach of
            its educational services by enabling stations to broadcast four
            or more separate, but simultaneous, program streams. Potential
            channels might include: a preschool Ready to Learn service; K-
            12 instructional programming; GED and college credit
            telecourses; workforce training; local public affairs; or
            popular how-to shows.
      --The DTV signal will give public television the ability to transmit
            computer information and data over-the-air, providing another
            powerful tool for public television stations to expand their
            educational missions. Stations will have the capacity to
            deliver course-related materials to teachers and students,
            program guide information, and selected portions of the World
            Wide Web over-the-air to homes and schools. End users will be
            able to download this information instantaneously, using a
            television set converter, computer or a digital television
            receiver.
      --High Definition Television (HDTV) will significantly enhance the
            beauty and detail of public broadcasting's signature
            programming in science and nature, performing arts, science,
            drama and travel.
        Highlighted below are some of our current services that can be
    enhanced in the digital age. Public television will be able to
    multicast more quality programs simultaneously with information and
    data available to download immediately. Science and technical programs,
    through high definition television, will have the same aesthetic
    quality as major motion pictures.
    Serving local schools
        Public television stations work directly with local schools. They
    broadcast an average of five and a half hours per day of instructional
    programming for classroom use, enabling 2 million teachers to use
    quality instructional programming to reach 30 million students in
    63,000 K-12 schools. Local stations broadcast overnight so that
    teachers can record and build a library of programs. Stations encourage
    this and many publish special guides for teachers as well as
    supplementary materials to facilitate the use of public television
    programs in the classroom. Public television stations work with
    teachers to enable them to use video most effectively; we also offer
    access to program information on the World Wide Web.
    Serving children
        Our educational programming remains the first choice of children,
    parents and teachers. Research does prove that children raised on
    Sesame Street and other public television programs perform better in
    school. The Ready to Learn project undertaken by public television is
    centered around a daytime block of children's programming. Local
    stations have expanded the value of these programs by providing
    outreach services to children and their parents and caregivers to help
    them use public television as an effective learning tool. Over 450
    workshops for parents and caregivers and benefiting over 70,000
    children have been sponsored by local stations.
    Serving the local economy
        GED ON TV is an excellent example of what public television does
    best. Produced by the Kentucky Network and currently offered by 54
    percent of public television stations, GED ON TV has enabled nearly 2
    million adults to acquire a high school equivalency certificate. Recent
    figures from the Bureau of Labor Statistics indicate that citizens with
    a high school diploma or equivalency contribute $4980 more per year to
    their state's economy than do high school dropouts. That's almost $10
    billion added to our nation's economy annually. Multiply that by the 30
    or more years American's spend in the workforce.
    Bringing the world into schools
        Electronic field trips, produced by Kentucky Education Television
    have allowed an average of 550 classrooms across the state to visit
    Mammoth Cave, a working horse farm, a newspaper and an underground
    Kentucky coal mine. Other electronic field trips, produced by public
    television, have taken students to such exciting locales as the South
    Pole and Colonial Williamsburg.
    Serving working adults
        Two thousand colleges and universities are using public
    television's Adult Learning Service (ALS). Local public television
    stations enable 400,000 tuition-paying students a chance to earn a
    college degree through television. In the last 15 years, over 3.5
    million adults have participated in public television's ALS. These
    generally older students often live off campus, are employed and have
    adult responsibilities. Public television helps them move ahead by
    making a college degree accessible.
    Funding the mandate
        Congress has mandated the conversion to digital and the Federal
    Communications Commission has set a deadline of 2003 for public
    television stations to broadcast in the digital format. Digital
    technology is not a frill; it's a technological imperative. Since the
    FCC is requiring all television stations to convert to digital
    programming by 2003, public broadcasters are obliged to make
    unprecedented investments in new transmission and production equipment.
        Public broadcasters simply will not be able to make the transition
    to digital without Federal support. Almost half of all public
    television licensees (86 out of 177) will incur transition costs that
    alone exceed their projected annual revenues. Federal funds provide the
    critical seed money that stimulates private contributions.
        For a one-time charge of $2.28 per American-less than the cost of a
    video rental-every viewer will gain a lifetime of unlimited access to
    public broadcasting's enriched and expanded programs and education
    services in the digital era. That's a high value for a relatively low
    cost. The alternative-a future of 500 digital channels with no safe
    harbor of noncommercial educational channels-puts this investment into
    perspective. At a time when the education needs of this nation are so
    great, it should be one of the government's highest priorities.
    A model of efficiency
        Public television stations are already exploring the challenges and
    opportunities of digital transition to achieve efficiencies and cost
    savings. Many stations are participating in CPB's Future Fund projects
    to experiment, on a micro basis, with the activities that all of public
    broadcasting may have to undertake in the digital future. The
    transition to digital gives public broadcasters an opportunity to
    undertake collaborative activities that will yield a more efficient
    broadcasting operation while reducing costs.
    Congressional leadership
        You have made a very wise investment in public broadcasting. You
    have helped us improve millions of Americans lives every day. We hope
    that you will continue this support by assisting the industry into the
    digital age.
        Thank you. On behalf of the nation's public television stations, we
    look forward to working with you to ensure that we have the financial
    resources to continue to provide the American people free access to
    quality, noncommercial educational television.
                                     ______

    Prepared Statement of the National Federation of Community Broadcasters
        Thank you for the opportunity to submit testimony on behalf of the
    National Federation of Community Broadcasters, or NFCB, which is the
    sole national organization of community oriented non-commercial radio
    stations.
        Community radio fully supports $340 million in funding for the
    Corporation for Public Broadcasting in fiscal year 2001. Federal
    support distributed through the CPB is an unreplaceable resource for
    rural stations and for those stations serving minority communities. In
    the case of the rural and minority stations, CPB support may not ever
    be replaced and the goal of universal, local, non-commercial radio
    service will never be achieved.
        In larger towns and cities, sustaining grants from CPB enable
    community radio stations to provide a reliable source of noncommercial
    programming--about the communities themselves. Local programming is an
    increasingly rare commodity in a nation that can hear and view news
    from around in the world every thirty minutes.
        The NFCB has two requests we submit to the Subcommittee. First, we
    ask that the Subcommittee recommend to the CPB to continue its funding
    priority for rural radio, especially sole service providers, stations
    with minimal donor bases or service areas with limited programming
    alternatives, and community radio stations. Second, we recommend that
    funds for the transition to digital broadcasting allocated to the CPB
    include support for both public radio and public television.
    I. Maintain funding to sole service, rural, and stations reaching
            underserved audiences
        The NFCB requests that the Subcommittee include with its fiscal
    year 2001 CPB appropriation report a recommendation that CPB give
    funding priority to public radio stations that serve rural and unserved
    areas, sole service stations and stations reaching underserved
    audiences. Our request echoes language included in reports from House
    and Senate subcommittees on CPB appropriations in recent years.
        In the Senate Report 105-58 for fiscal year 1998 Labor, Health and
    Human Services, Education and Related Agencies Appropriations, (fiscal
    year 2000 CPB funding) CPB grant programs for the stations described
    above were encouraged with the language: The Committee intends that CPB
    foster services for unserved or underserved audiences focusing on
    entities whose primary services are directed at audiences in rural
    areas and Native American audiences. The Committee is concerned about
    the erosion of grants for radio stations serving these communities.
        The Committee recognizes that stations serving rural and
    underserved audiences have limited local potential for fundraising
    because of sparse populations serviced, limited number of local
    businesses, and low-income level. In rural areas, while many stations
    receive per capita support far greater than that contributed in urban
    areas, they receive relatively few matching dollars because the
    populations served are small.
        The Committee directs CPB to explore new methodologies for
    distribution of Federal matching dollars which take into account
    measures such as per capita support and other factors that would serve
    to level the playing field between urban and rural stations in the
    distribution of matching funds.
        Similar language has been included House reports on the CPB
    appropriations for fiscal year 1998 and fiscal year 1999. We are asking
    that the Subcommittee consider including such a recommendation with the
    fiscal year 2001 appropriation report.
    II. Funds appropriated to the CPB for the transition to digital
            broadcasting should support both public radio and public
            television
        The NFCB fully supports the maximum funding for CPB to assist
    public radio and television to transition to digital broadcasting.
    While the NFCB understands that television is under a strict deadline
    for the digital conversion, and we support the greatest amount possible
    in Federal funding to assist public television, we want to advise the
    Committee that public radio is already planning for its own digital
    conversion.
        Federal funds distributed by the CPB should be available to the all
    public radio stations eligible for Federal equipment support through
    the Public Telecommunications Facilities Program (PTFP) of the National
    Telecommunications and Information Agency of the Department of
    Commerce. In previous years, Federal support for public radio and
    television equipment has been distributed through the PTFP grant
    program. The PTFP criteria for funding are exacting, but allow for
    wider participation among public broadcasters. Stations eligible for
    PTFP funding and not for CPB funding include small budget, rural and
    minority controlled stations.
        Thank you for your consideration of our testimony.
        The NFCB is a twenty year old grassroots organization which was
    established by, and continues to be supported by our member stations.
    Large and small, rural and urban, the NFCB member stations are
    distinguished by their commitment to local programming and community
    participation and support. NFCB's 90 Participant members and 136
    Associates come from across the United States, from Alaska to Florida;
    from every major market to the smallest Native American reservation.
    While the urban member stations serve communities that include New
    York, Minneapolis, San Francisco and other major markets, the rural
    members are often the sole source of local and national daily news and
    information in their communities. NFCB's membership reflects the true
    diversity of the American population: 40 percent of the members serve
    rural communities and 34 percent are minority radio services.
        On community radio stations' airwaves examples of localism abound:
    on KILI in Porcupine, South Dakota you will hear morning drive programs
    in their Native Lakota language; throughout the California farming
    areas around Fresno, Radio Bilingue programs five stations targeting
    low-income farm workers; in Barrow Alaska, on KBRW you will hear the
    local news and fishing reports in English, and Yupik Eskimo; in
    Dunmore, West Virginia, you will hear coverage of the local school
    board and county commission meetings; KABR in Alamo, New Mexico serves
    its small isolated Native American population with programming almost
    exclusively in Navajo; and on WWOZ you can hear the sounds and culture
    of New Orleans throughout the day.
        In 1949 the first community radio station went on the air. From
    that day forward, community radio stations were reliant on their local
    community for support through listener contributions. Today, many
    stations are partially funded through the Corporation for Public
    Broadcasting grant programs. CPB funds represent about 15 percent of
    the larger stations' budgets, but often can represent up to 40 percent
    of the budget of the smallest rural stations.
                                     ______

      Prepared Statement of Delano E. Lewis, President and CEO, National
                                  Public Radio
        On behalf of National Public Radio (NPR) and the more than 590
    public radio stations it represents, I respectfully submit this
    statement for the hearing record. For 30 years, the public broadcasting
    system has provided a noncommercial, educational programming
    alternative for parents, children and others. The Senate Labor/HHS
    Appropriations Subcommittee has made a commitment to helping public
    broadcasting fulfill this public service mission. Your efforts are
    greatly appreciated. Looking ahead, public broadcasting plans to better
    serve Americans through new technology. I urge members of the
    Subcommittee to reinvest the resources necessary to revolutionize the
    way public broadcasting delivers its unique programming and services.
        Public broadcasters are seeking two appropriations for the
    Corporation for Public Broadcasting (CPB). The first funding request is
    for a $340 million appropriation for the traditional, annual CPB
    appropriation for fiscal year 2001. As you know, CPB is forward funded
    by two years. Second, we request your support of a $375 million
    appropriation over four years for the conversion to digital
    broadcasting. For fiscal year 1999, public broadcasters urge the
    Subcommittee to appropriate $75 million for digital broadcasting.
    Annual CPB appropriation A Public/Private Partnership
        Public broadcasters support the recommended $340 million for CPB in
    fiscal year 2001. Public broadcasters are part of a successful public-
    private partnership. According to the latest CPB ``Public Broadcasting
    Revenue Report for fiscal year 1996'', Federal money accounts for 17
    percent of public broadcasting's revenue, a small but important piece
    of the funding pie. The largest single portion of public broadcasting's
    revenue is derived from listeners and viewers, accounting for 23
    percent. Business support accounts for 15 percent, universities and
    colleges 10 percent and foundations eight percent. Support also comes
    from state and local governments (15 percent and three percent,
    respectively). For public radio, every Federal dollar leverages over $5
    from non-Federal sources. That is a five to one return on the Federal
    investment in quality programs and services. Federal money is crucial
    because it helps public radio stations plan, produce and acquire
    programs that attract non-Federal funding sources.
        When Federal public broadcasting funding was challenged in 1995,
    the American public aggressively supported its continuation. In fact,
    when given a choice of 20 services, Americans judged public radio and
    television the second and third best value in return for tax dollars
    spent. Military defense ranked first. This information comes through a
    poll conducted last summer by Roper Starch Worldwide, Inc. The American
    people consider Federal funding for public broadcasting to be a wise
    use of their tax dollars because they value the programming and
    services provided by their local public station. For fiscal years 1998
    and 1999, public broadcasting cost each American 93 cents per year. For
    public radio alone, this figure is merely 23 cents per American each
    year. Currently, CPB funding is at its lowest level since 1992. This
    funding increase will help keep pace with rising programming costs. The
    majority of Federal money is directed to local stations. After CPB
    administrative costs, public radio receives 25 percent of the Federal
    appropriation and public television receives 75 percent. Of radio's
    portion, 93 percent goes directly to public radio stations. The other
    seven percent of radio funds remain at CPB to support national
    programming through a competitive grant process. CPB funding assists
    public broadcasting stations to produce local programming and to
    purchase national programs.
    Public Radio Is A Source Of Educational, Cultural and Informational
            Programming
        Americans rely on public broadcasting for diverse, long-form
    educational, cultural and informational programming. In some cases,
    these programs may not be commercially viable because they do not
    attract a mass audience. Nevertheless, these programs are intrinsically
    valuable because they examine important issues that may not otherwise
    receive necessary attention.
        Public radio stations are treasure-troves of quality local
    programming. This programming, on average, accounts for 48 percent of
    stations' formats. For instance, KUAF-FM in Fayetteville, AR is
    partnering with Washington Regional Medical Center Hospice Program
    (WRMC) to bring listeners information on life and death
    decisionmaking--a special outreach program and broadcast series
    exploring end-of-life issues. KUAF-FM and WRMC will sponsor a series of
    community forums to stimulate dialogue on these topics.
        In addition to shows featuring big band, folk and country music,
    KCMW-FM in Warrensburg, MO offers daily jazz programming which
    regularly features local jazz artists, both past and present, who have
    helped frame and define the jazz genre. In addition, KCMW-FM broadcasts
    the concerts performed at the Scott Joplin Ragtime Festival in Sedalia,
    MO each June. WRTI-FM in Philadelphia, PA produces a classical music
    program titled, Notes from Philadelphia. This program highlights local
    classical musicians and performance groups through their music and
    interviews. These artist are not as well known as some musicians in
    professional orchestras, but they are committed, talented artists who
    perform and give voice to the community. In San Antonio, TX, KSTX-FM's
    Community Forum are monthly public forums which foster lively
    discussion on topics of local interest with experts and the community.
    The April forum will focus on teenage pregnancy, a problem in San
    Antonio. In addition, KSTX-FM has received a grant from Sound Partners
    to produce a 6-month awareness series on teen pregnancy. The station is
    partnering with the Metropolitan Health District as well as co-
    sponsoring awareness projects and events with local organizations
    including local schools and a museum.
        Four times a year KPBX-FM in Spokane, WA produces free public
    forums on subjects that are important to the communities of the inland
    northwest region such as education, health care, the environment and
    timber issues. The station brings together groups of up to 250 citizens
    for moderated, face to face discussions with expert panelists. The
    meetings are later broadcast. Hawaii Public Radio produces and
    broadcasts several public affairs programs that are extremely important
    to the ethnically diverse population of Hawaii. A Second Glance is a
    weekly program about native Hawaiian issues. Pacific Island News airs
    three times daily, Monday through Saturday, and collects news from all
    of the Pacific Island communities. Asia Report airs two times daily and
    features news from China, Japan, Korea, and the Philippines. Also,
    KTEP-FM in El Paso, TX produces a senior citizens program, Senior
    Junction, which provides information to the elderly and their care
    givers.
        Public radio is a unique educational resource for local
    communities. KXCV-FM in Maryville, MO is involved in a project with
    teachers from schools in the five-county area to assist them in
    developing lesson plans for developing communication skills. KXCV-FM
    also helps coordinate an industry/education partnership where teachers
    spend a day with various businesses to learn the skills that students
    are expected to need to develop for the world of work. Music educators
    throughout Mississippi integrate Public Radio Mississippi's music and
    arts programs into their teaching plans. Each week over 100,000
    Mississippians tune into PRM. WFDD-FM in Wintson-Salem, NC produces
    Neighborhood News for the Blind. This is a one-hour weekly reading
    service program providing synopses of neighborhood news reported in
    local newspapers.
        Public radio stations also support local artists, musicians and
    cultural opportunities for children. For example, WUSF-FM in Tampa,
    Florida records and broadcasts performances by the Florida Orchestra,
    the Naples Philharmonic and the Sarasota Music Festival. Performances
    by the music faculty at the University of South Florida in Tampa are
    also recorded and aired. WJHU-FM in Baltimore, MD, produces music
    programs that prepare students to better understand and enjoy their
    first symphony concert. The station is under contract with the Chicago
    Symphony Orchestra to replicate this project in Chicago, IL.
        National programs such as All Things Considered , Performance Today
    and Marketplace help draw listeners to public radio. These national
    offerings complement local productions by providing quality
    educational, cultural and informational programs to local communities.
    For instance, in May, NPR's Talk of the Nation will broadcast a four
    part series chronicling the history of America's disabled community.
    Beyond Affliction will examine this powerful issue that other media
    often ignores. Locally, stations may develop their own programming and
    outreach activities to complement national special programs. Over 50
    disability organizations and their local chapters have agreed to
    provide NPR stations with experts for local programming and assistance
    in organizing or sponsoring community events.
        National cultural programs such as Performance Today provide
    listeners with thoughtful, helpful insights into the world of classical
    music together with great concert performances. Wynton Marsalis: Making
    the Music is a series designed to explore an American art-form, jazz.
    The program is hosted by Wynton Marsalis who engages and educates
    listeners about the history and sound of this music.
        Public radio's news programs present in-depth reports which furnish
    the full particulars of a story. For instance, Marketplace is a
    national series detailing the world's news through a business, economic
    and financial perspective. NPR's Morning Edition and All Things
    Considered are two award-winning news magazines that cover in-depth
    politics, international affairs, education, arts, sports and music.
    Stations rely on Federal funding to purchase these national treasures,
    providing public radio stations with a balance of local, national and
    international programming.
    Americans Value Public Broadcasting
        In addition to the polling results discussed earlier, there are
    other obvious ways listeners show their support. They donate their time
    and money. In 1995, people volunteered over 2.5 million hours at their
    local public radio and television stations. Nearly 7 million people
    supported public radio and television financially. \1\ Millions of
    other people who listen and view public broadcasting value the programs
    and services. For instance, WJAZ-FM and WITF-FM in the Harrisburg, PA
    area have 22,000 weekly listeners. Meanwhile, WOI-AM/FM in the Des
    Moines, IA area have 65,700 listeners weekly, and in Mississippi WMAB-
    FM and WMAE-FM in the Columbus-Tupelo area have 15,700 listeners. \2\
    ---------------------------------------------------------------------------
        \1\ CPB. ``Frequently asked questions about Public Broadcasting
    1997'', page 9.
        \2\ National Public Radio. Strategic Planning and Audience Research
    [SPAR].
    ---------------------------------------------------------------------------
        There are also many Americans abroad that listen to public radio
    through the Internet or Armed Forces Radio. U.S. Army Sergeant Tom
    Daniels had this to say about public radio while stationed in Bosnia-
    Hercegovina, ``I found Armed Forces Radio playing All Things Considered
    at 11 p.m., each night, and I was thrilled. I just wanted to say thank
    you! I listen every night, and as you are my greatest contact with
    America, I can keep that feeling of home.'' Dennis Keeton wrote, ``I am
    a soldier on active duty and have listened to NPR through Armed Forces
    Network while serving in Germany and while living in a tent in Zagreb,
    Croatia with UNPROFOR. Weekend Edition, All Things Considered, Car Talk
    and many others have all been treasured links with America and HOME.
    Thank you for all of the listening enjoyment.'' A $340 million CPB
    appropriation for fiscal year 2001 will assist public radio with
    continuing to deliver this quality, educational programming that
    Americans everywhere rely on and expect.
    Digital CPB appropriation: An investment in the future
        Reinvesting in the future of public broadcasting is an investment
    in education, culture and an informed public. Public broadcasting is
    requesting a $75 million CPB digital appropriation for fiscal year
    1999, $100 million in fiscal year 2000, $100 million in fiscal year
    2001, and $100 million in fiscal year 2002, for a grand total of $375
    million. Public broadcasters are also requesting $225 million over four
    years for the Public Telecommunications Facilities Program (PTFP), a
    matching grants program, to fund both the system's current equipment
    replacement needs and digital broadcasting. Together, the Federal
    digital funding appropriation is $600 million over four years. Public
    broadcasters estimate that the digital conversion will cost $1.7
    billion.
        There are two known scenarios where public radio stations will be
    impacted by the transition to digital television (DTV)--tower
    relocation and signal interference. Access to Federal money will be
    vital to public radio stations incurring these additional costs.
    Congress' mandate to convert television stations to DTV will result in
    many radio stations currently co-located on a television tower having
    to move from these leased towers. DTV technology requires that more
    transmission equipment be placed on towers, creating a weight and a
    load problem. Thus, these public radio stations would have to build new
    towers, an expensive prospect. Or, if space is available, a dislocated
    public radio station would have to move to another tower and may incur
    interference problems. There is also a possibility that after the DTV
    transition, public radio stations would have to move a second time.
    Forty-eight public radio stations have been identified as candidates
    for antenna or tower relocation as a result of planned installations of
    DTV facilities. NPR is working to identify other stations with
    translators that may also be affected by DTV.
        There are also other significant costs associated with the
    transition to DTV. For instance, there is a possibility of greater
    interference involving adjacent television and reserved FM band
    stations. Federal assistance can help ease the severity of these
    expensive disruptions. Public radio must be included in digital funding
    legislation. Public radio estimates that its portion of the overall
    digital transmission conversion cost is $50 million. While public
    television is operating under a mandate to convert to digital
    broadcasting by 2003, public radio has no similar directive. Currently,
    the U.S. is without a technical standard for digital radio, but one is
    expected. Conversion to digital transmission, however, is only a part
    of the imminent digital revolution. As the communications marketplace
    experiences even greater growth, public radio must be poised to take
    advantage of new and emerging digital production, transmission and
    distribution technologies that can offer programming to listeners in
    ways not imagined.
        The transmission technology currently emerging is called Digital
    Audio Broadcasting (DAB) which delivers compact disc-quality sound free
    of interference and noise to listeners. DAB will allow radio stations
    to upgrade their delivery of audio programming. For example, digital
    radio will provide more reliable AM and FM transmissions, less subject
    to the effects of geography and terrain. This is particularly important
    in rural areas, where there would be little or no broadcast service
    without public broadcasting. Digital will also permit public stations
    to transmit ``smart radio'' signals that deliver text messages along
    with the audio program. This digital text may be used to locally
    provide continuous specialized information, such as weather, traffic,
    music titles, program or emergency information on a local basis.
        Digital radio also offers spectrum efficiency. It is touted as
    being of equal or greater efficiency as its analog FM counterpart.
    Tests have shown when operating at the same transmitting frequency as
    the current FM band it can also be more power efficient than FM,
    requiring around one one-thousandths the amount of transmitted power to
    cover the same area.
        The investment in digital broadcasting will allow public
    broadcasting stations to participate in the sweeping technological
    revolution, resulting in a more dynamic and valuable public
    broadcasting system. Please support a $375 million digital CPB funding
    level over four years.
    Conclusion
        Public broadcasting is poised to deliver bold new services through
    new technologies. Public broadcasting's goals cannot be realized
    without significant funding increases. Again, public broadcasters urge
    the Subcommittee to support a $340 million annual CPB appropriation and
    a $375 million appropriation for digital over four years. With your
    help, public radio and television can better fulfill its mission to
    advance education, to support culture and to foster an active
    citizenship through an informed public.
                                     ______

        Prepared Statement of the National Minority Public Broadcasting
                                   Consortia
        The National Minority Public Broadcasting Consortia (Minority
    Consortia) submits this statement on the fiscal year 2001 appropriation
    for the Corporation for Public Broadcasting (CPB). Our primary missions
    are to bring a significant amount of programming by and about our
    communities into the mainstream of public broadcasting. And our primary
    message today is that we want to get back on course with CPB in our
    working partnership to increase the diversity of programming available
    through public broadcasting. Below are our recommendations:
      --Principles of Partnership. We requst a minimum of $5 million for
            the Principles of Partnership initiative as agreed to by CPB in
            1994 in addition to the current funding provided to the
            Minority Consortia. We request that any funding increase up to
            $5 million over the fiscal year 2000 level be provided for this
            far-sighted initiative. The House Appropriations Committee
            Report from last year (H. Rpt. 105-205) stated:
        --The committee supports the CPB's commitment to maximize resources
                with the goal of increasing multicultural programming for
                public television by formalizing partnerships among the
                Minority Consortia organizations, the CPB, the Public
                Broadcasting System, America's Public Television Stations,
                and individual television stations.
        --We ask that this Subcommittee and Congress follow through on the
                its stated support for CPB implementing the Principles of
                Partnership agreement.
      --Funding. We support $340 million in fiscal year 2001 CPB funding
            for programming and system support as requested by the
            Administration.
      --Digital Conversion. Two requests with regard to the provisoin of
            digital conversion funding for the public broadcast system: (1)
            We ask that some digital conversion funds be used to assist
            producers with the increased costs of producing programming for
            digital broadcast, and (2) We also ask for Congressional
            support for prime-time digital broadcasts of a broad range of
            programming.
      --CPB Plans for Multicultural Programming. We request Congressional
            support for the creation of a CPB draft plan regarding its
            vision for continued mission and support of the Minority
            Consortia and increased multicultural programming.
        We are operating under two handicaps in submitting this statement.
    First, we submit this statement knowing only the funding level
    recommended by the Administration for fiscal year 2001 for CPB; the
    detailed CPB budget justification is not yet available. After we have
    seen the budget justification, we may want to file supplemental
    comments to the Subcommittee. Second, CPB is in a state of flux and
    reorganization. Its policies with regard to the Minority Consortia are
    undergoing review--evidence of this is that it was nearly seven months
    into fiscal year 1998 before any of the Minority Consortia
    organizations received our fiscal year 1998 administrative contracts
    from CPB. While we appreciate that CPB is undertaking a system-wide
    review of its contracts and other financial management issues, and will
    continue to cooperate with those efforts, it has been a hardship on our
    organizations.
        A commitment of $340 million by the Federal Government to public
    television and public radio is a wholly reasonable contribution toward
    this national treasure. If there is one thing that the past few years
    debate on public broadcasting has shown is how highly people in this
    nation value it.
        Public broadcasting is particularly important for minority and
    ethnic communities. While there is a niche in the commercial broadcast
    and cable world for quality programming about our communities and our
    concerns, it is in the public broadcasting industry where minority
    communities and producers are more able to bring you quality
    programming for national audiences. In 1994, CPB initiated research
    among Asian American and Native American communities documenting that
    respondents felt their communities were negatively stereotyped on
    commercial television but that public television had more realistic
    portrayals. \1\ This survey also revealed that both groups wanted
    increased visibility in public television and further recommended that
    there be expanded promotion of public broadcast programming utilizing
    Asian-American community groups and tribal organizations. Earlier CPB
    surveys of the Latino and African American communities showed similar
    findings.
    ---------------------------------------------------------------------------
        \1\ Reaching Common Ground: Public Broadcasting's Services to
    Minorities and Other Groups, July 1, 1994, pages 41-42 of the Appendix.
    ---------------------------------------------------------------------------
        It is clear that we and our communities and CPB need each other to
    address the Congressional mandate regarding minority communities and
    multicultural programming in the CPB authorizing statute. CPB, the
    Public Broadcasting System (PBS) and America's Public Television
    Stations (APTS) and the stations want and need the culturally diverse
    programming for public broadcasting that the five Minority Consortia
    organizations can help develop, produce and distribute. We, on the
    other hand, need continued financial and in-kind resources from CPB and
    public broadcasting to increase our programming production capacity and
    to facilitate business planing toward financial self-sufficiency. We
    have had some promising negotiations with CPB, PBS and APTS over the
    past several years on both of these counts, but neither effort has yet
    carried through to fruition.
        Principles of Partnership Initiative. Below is a brief description
    of partnership effort between the Minority Consortia, CPB, APTS and PBS
    which we urge Congress to support:
        In 1994, after protracted discussions, CPB publicly announced
    funding to formalize partnerships between the Minority Consortia
    organizations with CPB, PBS, APTS and television stations to maximize
    all our resources in an effort to increase multicultural educational
    programming for television. The funding for this Principles of
    Partnership initiative, $5 million, was to begin October 1, 1995.
    Concurrent with this funding, the Minority Consortia agreed on a joint
    plan of distribution methodology, allocating funds for production,
    community capacity-building, and program support functions. This
    agreement between the Minority Consortia and CPB was announced with
    considerable fanfare in a CPB newsrelease and reported in the public
    broadcast press in June 1994. There is also a lengthy section on the
    Principles of Partnership agreement in the CPB report presented to the
    103rd Congress, Reaching Common Ground: Public Broadcasting's Services
    to Minorities and Other Groups, July 1, 1994.
        The Principles of Partnership included:
      --Establishment of an annual $5 million Minority Program Fund for
            development, production and capacity-building, including
            promotion and outreach;
      --Each Consortia organization would enter into a partnership with a
            public television station;
      --Producers of all races and backgrounds and from consortia,
            stations, and regional networks would be eligible to submit
            proposals and receive grants;
      --Grants would be available to national and regional programs as well
            as audience-building and outreach services and ``capacity
            building'' activities;
      --CPB would create system advisory panels including top CPB , PBS and
            APTS programmers, station executive and independent producers;
      --Programming supported by the Minority Program Fund would be
            available to all PTV stations;
      --After five years, the arrangement would be evaluated and changed if
            advisable.
        Unfortunately CPB, citing budget cuts, decided not to provide the
    $5 million funding for the partnership initiative. However, CPB did
    create an $11 million ``Futures Fund'' which contained no specific
    initiatives for the work of the Minority Consortia. Because the
    Principles of Partnership funding was to be in lieu of funding
    increases (as supported by Congress) for infrastructure and program
    development, we feel strongly that CPB, despite budget pressures,
    should have committed funding for the Principles of Partnership--the
    timing was optimum. By the end of 1994, we had been working with CPB,
    APTS, and PBS, and others in the public broadcast field for over a year
    to reach this agreement. Understanding and good will was at an all time
    high among the ``principals'' of this partnership.
        Digital Conversion. CPB is requesting funding for an initial
    installment of funds for the required conversion to digital broadcast.
    As you know, there are costs involved in the conversion which go beyond
    the significant equipment and hardware needs of television and radio
    stations. It will also take additional money to produce programming for
    digital broadcast. All producers will face these new, higher costs.
    Film producers will need to use equipment that is high definition
    quality, and that is an expensive proposition. For instance, producers
    will need to use 35 mm or super 16 film. Producers will need new, and
    expensive, field equipment and cameras in order to shoot in wide screen
    format. Most of the producers with whom we work do not have the
    finances for this new equipment.
        Our understanding is that public television will air prime time
    programming on digital broadcast. In non-prime time, the signal will be
    split so that four programs can be accessed at any one time. These non-
    prime time programs will be in the analog format. The National Minority
    Public Broadcasting Consortia organizations, a major producer of
    multicultural programming for public television, believes that the
    programs which are broadcast in digital format should include the whole
    range of what is available on public television. Digital broadcast
    should not be limited to big musical events or those programs which
    feature beautiful landscapes. For the full range of programming to be
    digitally broadcast, independent producers , including those who
    multicultural programming, will need to be able to meet the higher
    production costs.
        We ask that Congress, in appropriating funds for digital conversion
    for the public broadcast system: (1) provide assistance to producers
    for the conversion, and (2) support prime-time digital broadcasts of a
    broad range of programming, including multicultural programming.
        Congressional Support. Since 1988, nine House and Senate
    authorizing and appropriations reports have expressed support for CPB
    funding of the Minority Consortia \2\ and multicultural programming.
    ---------------------------------------------------------------------------
        \2\ House Report 100-825, report of the House Committee on Energy
    and Commerce on the Public Telecommunications Act of 1988.
        Senate Report 100-444, report of the Senate Commerce, Science and
    Transportation Committee, on the Public Telecommunications Act of 1988
        House Report 102-363, report of the House Committee on Energy and
    Commerce on the Public Telecommunications Act of 1991
        Senate Report 102-221, report of the Senate Commerce, Science and
    Transportation Committee report on the Public Telecommunications Act of
    1991
        House Report 102-708, report of the House Appropriations Committee
    on the fiscal year 1993 Labor, HHS, Education Appropriations Act
    (fiscal year 1995 CPB funding)
        House Report 103-156 report of the House Appropriations Committee
    on the fiscal year 1994 Labor, HHS, Education Appropriations Act
    (fiscal year 1996 CPB funding)
        House Report 103-553, report of the House Appropriations Committee
    on the fiscal year 1995 Labor, HHS, Education Appropriations Act
    (fiscal year 1997 CPB funding)
        House Report 104-659, report of the House Appropriations Committee
    on the fiscal year 1997 Labor, HHS, Education Appropriations Act
    (fiscal year 1999 CPB funding)
        House Report 105-205, report of the House Appropriations Committee
    on the fiscal year 1998 Labor, HHS, Education Appropriations Act
    (fiscal year 2000 CPB funding)
    ---------------------------------------------------------------------------
        Despite good Congressional interest, funding for the work of the
    Minority Consortia has remained extremely modest and has certainly not
    matched the overall increases for CPB since the 80's. In fiscal year
    1997 we received 1.7 percent of the CPB budget in combined
    organizational support program funds ($1.45 million in organization
    support and $3.3 million in Multicultural Program funds for the five
    organizations combined). Despite ups and downs in annual
    appropriations, funding for CPB grew 72 percent from fiscal year 1985
    through 1997. During this same time CPB funding for the minority
    consortia organizational support went from $663,500 (0.44 percent of
    the CPB budget) to $1.4 million (0.55 percent of the CPB budget).
        The Minority Consortia, along with many others who receive funding
    through CPB, expect to receive reductions in fiscal year 1998 and
    fiscal year 1999 because of the cut in Federal appropriations.
        Common Concerns. When we say that we want increased programming by
    and about our communities, we do not mean that our programming is
    limited in its value to members of our communities. Nothing could be
    further from the truth. The notion that minority producers cannot
    produce programming of interest to the general viewing audience has
    permeated the system for too long. Our concerns are common to all of
    America--crime, drugs, literacy, education, teenage pregnancy. Examples
    of minority programming well received by the general viewing audiences
    include Stand and Deliver, Maya Lin, Daughters of the Dust,
    Storytellers of the Pacific, and in the White Man's Image. The list is
    very long.
        It is true that we are extremely interested in bringing to the
    general public our histories--histories which include family
    traditions, educating our youth, the civil rights movement--which have
    for have for too long been unreported and misreported. It is in the
    national interest that the many peoples who form the mosaic of the
    United States better understand and appreciate each others history,
    culture, and contributions to today's society.
        Thank you for consideration of our requests. Congress has the power
    to help public broadcasting renew its commitment to the work of the
    Minority Consortia in expanding the diversity of public programming and
    attractingnew audiences to the public broadcasting system.
        Summary of the Work of the Minority Consortia Organizations. The
    programming one sees and hears on public television and radio are the
    end products of a long, long road. The work of the Minority Consortia
    organizations is largely on the front end of the production process,
    and thus our programming image is not always visible in national
    distribution. The Minority Consortia organizations have close ties with
    our communities and are a bridge between public broadcasters and the
    general public. We have in the last five years provided to Public
    Broadcasting's program schedule hundreds of hours of programming
    addressing the cultural, social and economic issues of the country's
    racial and ethnic communities. Additionally, each organization has been
    engaged in cultivating ongoing relationships with the independent
    minority producers community by providing program funding, programming
    support and distribution assistance. We also provide numerous hours of
    programming to individual public television and radio stations.
        Individually, each organization plays an increasingly effective
    role in interfacing with a broad spectrum of their constituent groups.
    Training projects, community outreach--including youth employment
    opportunities, school support programs, and community festivals are
    ongoing activities of each organization. Some of these projects have
    generated new, non-Federal revenue streams. We have also developed
    unique operational competencies. For example:
      --The National Asian American Telecommunications Association has an
            8-year investment in the sales of its video library, serving
            over one-thousand institutions annually, and has turned this
            endeavor into a potentially-rich source of new income.
      --Native American Public Telecommunications has gained substantial
            experience technology initiatives through its relationships
            with the American Indian Radio on Satellite (AIROS) project,
            the Tribal Infrastructure Information Highway Project (TIIP)
            and generating co-productions between national producers and
            public broadcast stations.
      --The National Black Programming Consortium's highly-successful
            ``Prized Pieces'' international film and video competition
            brings together a broad cross-section of the independent
            production community, the international film community, and
            public broadcasting. The Heritage Video and Learning Center
            provides an invaluable resource to the community with an
            extensive array of quality programming. The video and learning
            center enables our audience to access hundreds of programs
            which highlight the works of independent and commercial
            filmmakers.
      --The National Latino Communications Center has leveraged its long
            history of positive relationships within the Latino community
            at large, and with the Latino producing community to build a
            new pledge model aimed at focusing the reach of public
            television's fundraising activity into the Hispanic community.
            NLCC has leveraged its programming dollars very successfully,
            with a rate of five dollars to one.
      --Pacific Islanders in Communications, the newest Consortia member,
            is already developing a production expertise having served as
            executive producer for two national series. One of those
            series, done in conjunction with Native American Public
            Telecommunications, Storytellers of the Pacific, received the
            awards for Best Documentary, Best Global Indigenous Production,
            and Outstanding Series Award of the Dreamspeakers Film
            Festival.
                                     ______

     Prepared Statement of Ron Niesing, President, the National Council of
                 Social Security Management Associations, Inc.
        The National Council of Social Security Management Associations
    (NCSSMA), of which I am President, has for twenty-nine years been the
    voice of Social Security's field office and teleservice center
    management. Each day we directly serve the American public in person
    and over the phone. For many of those we serve, we provide the only
    face-to-face contact they have with the Federal Government. When the
    Vice President met recently with the heads of what he has named ``High
    Impact Agencies,'' including SSA, he said: ``Yours are the agencies
    that shape the public's opinion of government and can redeem the
    promise of self-government. Public cynicism about government is a
    cancer on democracy. Reinvention isn't just about fixing processes,
    it's about redefining priorities and focusing on the things that
    matter.'' The Government Performance and Results Act similarly asks
    agencies to focus on performance measures which reflect outcomes valued
    by the public.
        We who live and work in the same communities as those we serve
    across the country are the ones accountable in the eyes of the public
    for proper administration of all of SSA's programs. Our greatest
    concern is to serve the American public well by providing not only
    timely, accurate payment of their Social Security benefits but also
    dignified, courteous service. The public deserves--and has paid for--no
    less.
        NCSSMA urges Congress to provide SSA with sufficient fiscal year
    1999 funding to permit infusion of resources into community-based field
    offices and teleservice centers, including earmarked funds for an
    effective and ongoing public education effort. Following are the views
    of our members across the country on some of SSA's most serious
    resource problems and needs.
    Public education
        As this Committee begins work to determine fiscal year 1999 funding
    levels for the administration of Social Security programs, the country
    has embarked on a crucial debate about the long-term future of Social
    Security. While Congress and the President grapple with the challenges
    of Social Security reform, the question of how to quickly and
    effectively involve the public in that debate is paramount. Without
    public education and consensus-building, without public confidence and
    trust in the future of Social Security, successful reform cannot
    happen.
        Like politics, all education is ``local.'' The 3,200 members of the
    National Council of Social Security Management Associations,
    representing Social Security managers and supervisors working in SSA's
    1,300 field offices across the country have learned this through
    firsthand experience. Our experience also teaches that community-based
    service is the most effective and most trusted way to serve the public.
        Public education about Social Security--through speeches, seminars,
    workshops, local radio and television, press releases, and school
    presentations--was historically one of the cornerstone's of SSA's field
    services. Yet, as the Social Security Advisory Board points out in its
    recent report, ``Increasing Public Understanding of Social Security,''
    reduced SSA staffing since the 1980s, combined with increasing
    workloads, results in conflicting demands which significantly diminish
    critical public information activities at the local level. Reductions
    in supervisory ranks in recent years, aimed at an arbitrary
    ``supervisory ratio'' target, have even further reduced local managers'
    ability to be active in community activities outside the office.
        Community involvement and education in the past not only helped
    those who live and work in our communities but also helped the agency
    retain the trust and support of those communities. The erosion of time
    for community activities among Social Security field managers, driven
    by budget exigencies, is in part responsible for the nationwide loss of
    public faith in the future of Social Security programs and in the
    Federal Government itself.
        At the local level, we can facilitate public engagement in the
    question of how to proceed with modifications to the Social Security
    system. Our ongoing presence and involvement in communities across the
    country then must continue if Social Security is to regain and maintain
    public trust. As the Social Security Advisory Board states: ``The
    agency's many knowledgeable employees in communities throughout the
    Nation constitute a valuable resource for increasing the public's
    understanding of Social Security. The agency should make greater use of
    this resource.'' Recent SSA initiatives to train staff and managers on
    the history, philosophy, and mission of Social Security will begin to
    address this need.
    Fraud and misuse of social security numbers
        Social Security field office managers and supervisors take our
    responsibilities as stewards of the public monies very seriously. As
    SSA and its independent IG have both testified, we are well positioned
    and well qualified to identify fraud and abuse, another critical factor
    in garnering public trust and confidence. Any significant success SSA
    might have in combating fraud and abuse of Social Security numbers will
    depend on the efforts of local managers working directly with employers
    and employee groups within their respective communities.
        For example, a number of years ago, Social Security received wage
    reports for employees who were using incorrect Social Security numbers.
    Discrepancies were resolved with face-to-face contacts by local offices
    with employers and employees. Since SSA began downsizing its staff and
    management resources, these types of routine contacts were eliminated.
    It would be interesting to note any statistical differences in
    fraudulent use of Social Security numbers now compared to those times
    when the agency processed these wage reports. Proper posting of Social
    Security earnings records and frequent issuance of duplicate SSNs are
    other workloads with fraud and abuse implications confronted in the
    field.
        As long as field offices are handicapped by inadequate staff, our
    ability to focus on identification and prosecution of all types of
    fraud is compromised. Problems such as the one uncovered in Georgia,
    where 181 members of an extended family were receiving SSI benefits,
    could be avoided if sufficient management and staff were in place in
    field offices to work with local medical providers.
    Overall staffing levels
        In 1993, the National Performance Review (NPR) called upon agencies
    government to reduce the number of supervisors, headquarters staff, and
    management control positions by half. Despite the intent of these
    mandates to reshape the face of government and to put the resources on
    the front-lines, only slightly more than 50 percent of SSA's employees
    work in field office and teleservice centers to provide direct services
    to the American people. Headquarters staffing and management control
    functions have not been reduced by 50 percent, as directed by the NPR.
        Field offices are given staffing justified through the measurement
    of some of the work we produce. However, there is no justification or
    method in place to measure the work--or the value of that work to the
    mission of SSA--produced by staffing resources in headquarters and
    other components which are supposed to support the work that is done in
    the field.
        Long-range plans call for the SSA to reduce overall staffing levels
    from approximately 65,000 currently in place to 62,000 by the end of
    fiscal year 1999. It is our understanding that more than half of these
    cuts will be absorbed by the field and TSC components--the very
    facilities that are visited or called by your constituents every day.
    These cuts will be made despite the unmet directives of the NPR to
    reduce headquarters staffing; despite the increasing workloads
    processed in field offices to combat fraud and abuse, such as more
    Continuing Disability Reviews and SSI reviews; despite the
    modernization of SSA systems that will allow more work to be processed
    directly in field offices and less in program service centers; and
    despite the fact that the public has shown on numerous occasions that
    it prefers dealing with SSA on a face-to-face basis, especially in
    their initial contact with the agency when filing for benefits
    Span of supervision
        SSA has relentlessly pursued the NPR mandate to reduce the number
    of supervisors to employees to a 1:15 ratio, despite the fact that SSA,
    as an independent agency, cannot be required to do so under the
    Executive Order directive.
        Reductions in SSA's supervisory ranks are being done without any
    analysis of the impact on our ability to serve the American public.
    Every time a supervisor is cut in the field, the level and quality of
    service suffers. SSA has not recognized the unique role that managers
    and supervisors play in carrying out the mission of this agency. In
    addition to negative impacts on the working environment for employees
    and the increased demands on remaining supervisors and office managers,
    SSA suffers potentially increased costs because there are fewer quality
    reviews and declining technical support for its employees in the field
    offices and teleservice centers. There are fewer resources available to
    conduct community outreach and education on program solvency. There are
    fewer resources available to ensure that employers and employees are
    doing their part to reduce fraud and abuse in the use of Social
    Security numbers or in the initial receipt of or continuing payment of
    Social Security or SSI benefits.
        A dramatically increasing number of field offices have only one
    management person, placing an almost impossible burden on them. How
    does one individual manage a facility, supervise employees working in
    different jobs, educate the public, and combat potential fraud and
    abuse? The overall cuts in front line employees preclude the assignment
    of some of these responsibilities to non-supervisory staff.
    Local telephone service
        Probably the single biggest complaint your home offices receive
    about Social Security is the inability of your constituents to get
    their telephone calls through to their local Social Security office.
    Significant improvements have been noted in SSA's toll-free 800 number
    service, but many people still prefer to deal with the people that they
    know--their local Social Security office.
        A recent NCSSMA survey revealed that nearly all field office
    managers feel their offices provide inadequate phone service to your
    constituents. SSA has not measured the impact or volume of local
    telephone calls, but many individual field office studies of local
    telephone service have revealed busy rates of upwards of 75 percent.
    This means that three out of four callers to some Social Security
    offices are not getting through.
        To some extent, new technology, such as voice mail and automated
    attendant, has enabled local offices to offer better services to the
    calling public. However, this new technology has not allowed for
    significantly more of the public to get through on our telephone lines.
    We still have the same number of incoming lines and the same, if not a
    declining number, of individuals available to answer those calls. It is
    time for SSA's commitment to improved telephone service to be expanded
    to include the services to the millions of Americans who are calling
    their local Social Security offices each day.
    Disability workloads/disability reengineering
        SSA is moving forward with various disability initiatives. Pilot
    projects around the country are aimed at finding better ways to process
    initial disability claims. In fiscal year 1999, local offices will
    process over 2.1 million initial disability claims and will help
    process a record number of CDR's--over 1,600,000. The real problem,
    however, is not in the initial claims process, but rather in the
    appeals process. Adequate resources need to be directed toward the
    appeals process to ensure that staff have modernized, up-to-date
    equipment to handle their work. We hope this Committee will work with
    SSA to secure more accountability from the Office of Hearings and
    Appeals in reducing overall appeals times.
    Overdependence on the promise of automation
        Social Security offices have and are undergoing significant
    changes, especially as related to the continued automation of our
    programs and the installation of new computer systems or IWS/LAN. All
    of us appreciate the support and efforts of this committee, in
    particular, in getting these tools to us on the front lines. However,
    automation alone has not been the panacea for all SSA's workload
    problems.
        The agency's Strategic Plan repeatedly points to productivity gains
    from automation initiatives as solutions to workload management
    problems. This is doubly dangerous. Experience of the past teaches that
    productivity increases from automation have been attained much further
    in the future than projected. In addition, a focus on services such as
    the PEBES website and public information made available through the
    Internet ignores the demographic realities of a large portion of the
    population we serve. For example, while less than 35 percent of
    American homes currently have computers, 25 to 35 percent of the U.S.
    population is functionally illiterate. Although growing numbers of
    Americans have home computers and Internet access, the numbers of
    individuals without these tools is also growing. Many people for many
    reasons will continue to walk in the doors of Social Security offices
    and telephone our teleservice center representatives across the
    country. The ability of these facilities to handle these workloads, and
    the level of resources given to them to do the job right, will be
    crucial to the success of SSA and will influence heavily the impression
    many Americans have of their government.
    Training and development
        SSA is set to embark on one of its most ambitious training
    initiatives for managers and supervisors. It would be in the best long-
    term interest of the agency if this training were focused on management
    skills for the changing environment in today's workplace, management of
    budget and procurement processes, and public education initiatives
    related to solvency and reform of Social Security. A well-trained
    management corps ensures that we will most effectively meet the needs
    of the public we serve. SSA will be able to more effectively educate
    the public now that it is once again training employees on the history
    and mission of Social Security, but SSA must also focus its attention
    on the development of future leaders that will be necessary due to the
    retirement of many of its senior managers in the next 5 to 10 years.
    SSA recently announced a management development program, restricted to
    only 10 people, which will not begin to meet the long-term needs of
    SSA.
    Conclusion
        NCSSMA strongly advocates full funding of SSA's fiscal year 1999
    budget request and enhancement of all locally-delivered services
    nationwide to meet the variety of needs of beneficiaries, claimants and
    the general public. To maximize efficient use of taxpayer dollars,
    locally-delivered services can be effectively coordinated with services
    provided by SSA's more centralized teleservice centers. Only through a
    balanced approach to provision of all services, including re-
    invigoration of efforts to effectively educate the public about Social
    Security through community activities at the local level, can SSA
    fulfill its mandate and help restore trust in government. We recommend
    that funding be earmarked to ensure sufficient staffing resources and
    monies for public information materials in the field to facilitate a
    successful public discourse on Social Security reform.
        Focusing on provision of better public service, NCSSMA is
    developing recommendations regarding SSA's claims-taking initiatives,
    telephone service, disability process, labor-management partnership and
    performance measures. We are updating our recommendations for
    development of a comprehensive plan for efficient service-delivery
    across the entire range of services and facilities within SSA. As we
    develop these projects, we will share our ideas with the members of
    this committee in the hope of garnering your support and guidance.
        It is also our hope that any future performance commitments made by
    SSA to this Committee will better reflect the diversity and inter-
    dependence of the services we provide within the context of a balanced
    plan, rather than focus on a narrow set of measures which result in
    erosion of our ability to fulfill all of our responsibilities to the
    public. A stable Social Security Administration which delivers quality,
    community-based service throughout the country is our primary goal, and
    we urge SSA administrative funding for fiscal year 1999 which is
    supportive of that goal. Thank you for considering our views.
                                     ______

    Prepared Statement of Jane Watkins, President, National Association of
      Foster Grandparent Program Directors; Dwight Rasmussen, President,
      National Association of Senior Companion Project Directors; and Nan
     York, President, National Association of Retired and Senior Volunteer
                               Program Directors
        We are pleased to testify in support of fiscal year 1999
    appropriations for the Foster Grandparent Program (FGP), Senior
    Companion Program (SCP), and Retired and Senior Volunteer Program
    (RSVP), known collectively as the National Senior Service Corps (NSSC)
    authorized by the Domestic Volunteer Service Act and administered by
    the Corporation for National and Community Service.
        The National Directors Associations are membership-supported
    professional organizations whose rosters include the majority of more
    than 1,200 directors who administer NSSC programs across the nation, as
    well as local sponsoring agencies and others who value and support the
    work of NSSC programs.
        While we support the aggregate funding levels set forth in the
    President's fiscal year 1999 budget request for the Senior Corps, we
    request that the subcommittee approve a fiscal year 1999 allocation for
    our programs in a slightly different manner from that proposed by the
    President. Specifically, we request that the Subcommittee appropriation
    a funding level of $173.910 million for the National Senior Service
    Corps in the aggregate: $43.001 million for the Retired and Senior
    Volunteer Program (RSVP), $37.653 million for the Senior Companion
    Program (SCP), and $93.256 for the Foster Grandparent Program (FGP).
        Where the President proposes to earmark all funding increases for
    national service programs administered by the Corporation for National
    Service to the Administration's ``America Reads'' initiative, we urge
    the Subcommittee to recognize that our senior volunteer programs
    address many community needs beyond children's literacy. In fact,
    children's literacy services is not within the scope of the Senior
    Companion Program--a fact evidenced by the President's proposed freeze
    in Senior Companion simply because the program answers community needs
    other than children's literacy.
        Accordingly, we urge the Subcommittee to embrace funding priorities
    for the additional funds requested as follows:
      --Foster Grandparents and Senior Companions will receive a $.05/hour
            increase in their volunteer stipend;
      --Each senior volunteer program will receive a 3-percent increase to
            cover administrative costs, including those resulting from new
            activities under the Programming For Impact initiative;
      --Each program will receive expansion funding to support Programs of
            National Significance not limited to the America Reads
            initiative, consistent with current law; and
      --The Retired and Senior Volunteer Program will receive additional
            funding to start new programs in unserved communities.
        We believe this funding allocation plan maximizes the number of
    additional volunteers and volunteer service hours which can be
    generated for each Federal dollar invested, supports existing programs
    in maintaining their volunteer efforts, and allows for expansion of
    volunteer efforts in areas of highest community need and in areas
    currently unserved by FGP, SCP, and RSVP. All told, the funding levels
    and allocations we request would support more than 14,000 more senior
    volunteers, contributing in excess of 3 million hours annually.
        We ask that language be included in the committee report
    accompanying the fiscal year 1999 funding measure which supports and
    specifies the above allocation priorities for funds requested for
    fiscal year 1999 and directs the Corporation for National and Community
    Service to disburse funds for fiscal year 1999 in this manner.
        With Federal resources under increasing pressure as Congress moves
    toward a balanced budget by fiscal year 2002, it is critical that we
    act smart with tax dollars--drawing the best return on our investments
    in Federal programs. Since 1965, FGP, SCP, and RSVP have represented
    the best in the Federal partnership with local communities, with
    Federal dollars flowing directly to local sponsoring agencies, which in
    turn determine how the funds are used. Together, these three programs
    have proven themselves cost-effective and economical in leveraging
    Federal funds to secure a total of $93.9 million in local community
    support--an impressive $.65 for every Federal dollar invested--toward
    underwriting a total of 108 million hours of service annually in
    communities across the country. The evidence supports this claim:
      --The Foster Grandparent Program fiscal year 1997 budget of $77.812
            million was matched with $32.0 million in cash and inkind
            donations from states and local communities in which Foster
            Grandparents volunteer. This represents a non-Federal match of
            41 percent--well over the 10 percent local match required by
            law.
      --The Retired and Senior Volunteer Program saw its fiscal year 1997
            Federal budget of $35.708 million matched with $42 million in
            contributions by states and local communities, demonstrating
            broad support for RSVP across the country. This represents a
            non-Federal match of 118 percent--well over the 30 percent
            required by law.
          --And, the Senior Companion Program, with a Federal appropriation
    of $31.244 million in fiscal year 1997, was supplemented by $19.9
    million in cash and inkind contributions from states and local
    communities in which Companions volunteer. This represents a match of
    64 percent--far in excess of the 10 percent match required by law.
        Independent Sector has estimated the per hour value of volunteer
    service in 1997 to be $13.24 per hour. The 109+ million hours of
    service provided by the nearly 500,000 volunteers serving through RSVP,
    FGP, and SCP is valued at more than $1.4 billion, a 10-fold return on
    the Federal investment of $144.764 million in 1997. Obviously, however,
    the work of our senior volunteers means much more than money. The
    programs are a lifeline to communities and Americans of all ages.
        In 1997, 25,300 Foster Grandparent volunteers contributed 23.8
    million hours of service through 8,400 local agencies, working with
    children and teenagers who have special needs as well as their
    families. Every year, 80,000 children, teenagers, and their families
    are supported by the services of Foster Grandparents in all 50 states,
    the District of Columbia, Puerto Rico, and the Virgin Islands. Over
    14,000 Foster Grandparents serve 39,200 children in settings connected
    to the health care system. Foster Grandparents help young people
    achieve personal independence and self-confidence so that they can
    learn to overcome their problems and become productive members of
    society. The annual Federal cost for one Foster Grandparent is $3,761--
    less than $4.00 per hour.
        In 1997, RSVP volunteers provided over 74 million hours of service
    in a variety of settings throughout their communities across the
    country. The total cost of fielding one RSVP volunteer is 48 per hour
    of service. All told, 453,300 RSVP volunteers serve annually through
    more than 57,000 public and non-profit local volunteer stations. Sixty-
    nine percent of RSVP volunteers are over age 70. Volunteers serve
    through 758 projects sponsored and managed by local nonprofit agencies
    in all 50 States, the District of Columbia, Puerto Rico, and the Virgin
    Islands. RSVP volunteers provide services that utilize their own
    talents and interests; they present their communities with a rich array
    of options for addressing the full spectrum of community needs.
        In 1997, Senior Companion volunteers contributed 11.4 million hours
    of service to their frail older clients--giving assistance to other
    adults with physical, mental, or emotional impairments. In one year,
    13,300 Senior Companions serve nearly 48,000 clients, primarily in in-
    home settings. SCP volunteers serve through 185 programs sponsored and
    managed by local nonprofit agencies in all 50 states, the District of
    Columbia, Puerto Rico, and the Virgin Islands. Senior Companions help
    frail older people achieve and maintain the highest possible level of
    independent living and avoid institutionalization. The average annual
    cost of nursing home care in the United States exceeds $30,000. The
    annual Federal cost for one Senior Companion is $3,831--less than $4.00
    per hour.
        For more than three decades, Federally-supported senior volunteers
    have been touching lives and helping communities in a variety of ways.
        Statistics show that FGP, RSVP and SCP focus their resources where
    they will have the largest impact: FGP on early intervention and
    literacy activities, SCP on in-home assignments with frail older people
    at risk of institutionalization, and RSVP on helping their peers,
    children, and their communities in significant ways. Nationally, 82
    percent of the children served by Foster Grandparents are under the age
    of 12. Recognizing that children's needs are more effectively addressed
    as early in their lives as possible, 50 percent of these children are
    age 5 and under. Foster Grandparents work intensively with these very
    young children to address their problems at as early an age as
    possible, before they enter school. One-third of FGP volunteers serve
    over 8 million hours annually addressing literacy and pre-literacy
    problems with children who have special needs. Sixty-seven percent of
    FGP volunteers serve in public and private schools as well as sites
    which provide early childhood pre-literacy services to very young
    children, including Head Start.
        Twenty-six thousand of the clients served by SCP are 75 or older,
    and 74 percent of SCP volunteers serve in the homes of clients. It is
    the 75+ elder population which most often experiences health problems
    which require institutionalization; SCP prevents institutionalization
    for these people by focusing on providing one-to-one in-home daily
    service and companionship to this population. Thirty percent of SCP
    volunteers provide respite care to families serving as primary care-
    givers for an elder loved one. Fifty percent of volunteers address
    chronic care disabilities. Over ten percent of RSVP volunteers serve in
    sites which focus on school-age and pre-school age literacy activities,
    as well as adult literacy. Sixty-four percent of RSVP volunteers
    provide service to their fellow seniors through congregate meal
    programs, food banks and kitchens, senior centers, and long term care
    residential facilities.
        We appreciate the goals of the Subcommittee in exercising its best
    judgment to effect the best use of scarce Federal resources, and as
    American taxpayers, we endorse your efforts to ensure that tax dollars
    yield significant impact. We have much evidence that FGP, SCP, and RSVP
    produce results: numerous and anecdotal stories of lives changed,
    dollars saved, and lasting good works accomplished in communities
    across the country.
        This evidence is compelling, but we believe that much more is
    necessary to show that investing Federal dollars in FGP, SCP, and RSVP
    volunteers produces quantifiable, concrete results that significantly
    impact communities in measurable ways. That is why project directors
    nationwide, in cooperation with NSSC staff from the Corporation for
    National Service and with the wholehearted support of the three
    national Directors Associations, have begun to participate in a new
    effort, Programming for Impact (PFI).
        Through PFI, projects and sites where volunteers serve will
    cooperate to collect and report data which support the impact our
    volunteers are having in addressing pressing local community needs. We
    hope that you will agree that the impact data now coming in truly does
    document the incredible effect our volunteers are having in their
    communities, and supports your past Federal investment in our programs
    as well as our request for increased funds for fiscal year 1999.
      --In Clay County, Iowa, members of the Retired and Senior Volunteer
            Program (RSVP) spearheaded a project to protect their
            community's ground water. Working with students from Spencer
            Middle School and youth of the Iowa Rural Water Association
            (IRWA), 14 RSVP volunteers learned about groundwater and
            sources of contamination, divided into work groups and surveyed
            their community--identifying possible contaminants, collecting
            data, and putting together an education program to get the
            entire community involved in wellhead protection--thus ensuring
            for future generations that the water quality in the Clay
            County Water District remains the top quality that residents
            enjoy now. RSVP volunteers were critical to the program, not
            only for providing intergenerational mentoring guidance to
            their student partners, but also for their extensive knowledge
            of the are and its history. Their lifetime experiences have
            proven an invaluable community resource in the program.
      --The human story of the Foster Grandparent Program is about
            Pennsylvanian's like Ryan and his Foster Grandmother Ann
            Creevy. If it hadn't been for Foster Grandparent Ann Creevy,
            young Ryan might still be a statistic in a class for special
            needs children. It was Grandma Ann who first saw the cigarette
            burns on Ryan's arms and immediately took action when she
            recognized these signs of abuse. During the course of working
            with Ryan, it was Grandma Ann who identified Ryan's hearing
            loss as the reason for his inability to learn. Several years
            later Ryan is a thriving 12-year-old living on his new adoptive
            home, earning excellent grades in a regular classroom. Grandma
            Ann serves with the Union/Snyder Foster Grandparent Program in
            Central Pennsylvania. AARP, in cooperation with Centrum Silver,
            awarded her a Legacy Award in recognition of her efforts on
            behalf of Ryan, whose life she saved and changed forever, and
            the other children she serves.
      --Mr. W.H. of Belleville, Illinois, who will be 76 in May, had a
            severe stroke in 1994. It left him unable to speak other than a
            few words. His wife, who is the primary caregiver, has had a
            Senior Companion two days a week since 1995. Because of the
            Senior Companion, Mrs. H is now able to cope with the
            situation. She can leave her husband to run errands, get
            groceries, keep doctors' appointments, and more, without the
            constant worry about his well-being. The respite care provided
            by the Senior Companion allows Mrs. H. to satisfy the full time
            care giving responsibilities she has assumed for her husband of
            many years. However, there is a waiting list for this service
            and the center operates at capacity each day. Senior Companions
            allow fewer staff to serve more clients by providing one on one
            support to the clients in the most need. They assist with
            activities of daily living such as helping with clothing and
            personal tasks and assisting at meal times. Additionally, the
            Senior Companions are watchful for client concerns and safety
            issues that can be relayed to appropriate staff. This support
            for families caring for their elders helps avoid the annual
            cost of nursing home care and keeps loved one together.
        As baby boomers age, the ``graying of America'' is progressing at a
    phenomenal rate. Yet, only 5 percent of those over 65 years of age live
    in institutions, and a full 81 percent of the non-institutionalized 65+
    population has no limitation in their activities of daily living.
    According to a U.S. Administration on Aging/Marriott Senior Living
    Services volunteerism survey, over 41 percent (15.1 million) of the
    37.7 million Americans 60 years of age and older performed some sort of
    volunteer work in the previous year. An additional 37.5 percent (14
    million) indicated they would volunteer if they were asked. The message
    is clear: in spite of the general public's conception of older people
    as frail and dependent, the aging process is, for most people, a time
    of wellness when they have both the time and the desire to serve
    others.
        We need more funds to engage more seniors in meeting the pressing
    needs being expressed by our communities. Your enhanced investment in
    all three senior volunteer programs now will pay off in the short and
    long term--savings realized by the value of service rendered to
    communities across America by senior volunteers; savings realized as
    additional avenues are provided for more older Americans to be involved
    in meaningful service opportunities; and savings realized as that
    involvement keeps older people healthy and independent. Our goal is to
    expand the Foster Grandparent Program, the Senior Companion Program,
    and the Retired and Senior Volunteer Program so that they can provide
    the opportunity for one million Americans to serve by the turn of the
    century.
        Please help us to tap the nation's fastest growing natural
    resource--our seniors--by supporting a total fiscal year 1999
    appropriation of $173.910 for the programs of the National Senior
    Service Corps: $93.256 million for the Foster Grandparent Program;
    $37.653 million for the Senior Companion Program; and $43.001 million
    for the Retired and Senior Volunteer Program.

           LIST OF WITNESSES, COMMUNICATIONS, AND PREPARED STATEMENTS

                                  ----------
                                                                       Page
    Alexander, Duane, M.D., Director, National Institute of Child
      Health and Human Development, National Institutes of Health,
      Department of Health and Human Services........................   191
        Prepared statement...........................................   222
    Allen, W. Ron, president, National Congress of American Indians,
      prepared statement.............................................   331
    Allswang, Scott, chairman of the board of trustees, Crohn's and
      Colitis Foundation of America, Inc., prepared statement........   353
    American Academy of Family Physicians, prepared statement........   465
    American Academy of Pediatrics, prepared statement...............   495
    American Academy of Physician Assistants, prepared statement.....   596
    American Association for Cancer Research, prepared statement.....   537
    American Association of Blood Banks, prepared statement..........   568
    American Association of Dental Schools, prepared statement.......   589
    American Association of Health Plans, prepared statement.........   518
    American Association of Nurse Anesthetists, prepared statement...   622
    American Association of Retired Persons, prepared statement......   601
    American College of Emergency Physicians, prepared statement.....   442
    American College of Preventive Medicine and the Association of
      Teachers of Preventive Medicine, prepared statement............   525
    American College of Rheumatology, prepared statement.............   513
    American Council on Education, prepared statement................   697
    American Dental Association, prepared statement..................   598
    American Foundation for the Blind, prepared statement............   562
    American Indian Higher Education Consortium, prepared statement..   681
    American Lung Association and the American Thoracic Society,
      prepared statement.............................................   611
    American Medical Association, prepared statement.................   433
    American Nurses Association, prepared statement..................   469
    American Optometric Association, prepared statement..............   658
    American Physiological Society, prepared statement...............   657
    American Psychiatric Association, prepared statement.............   604
    American Society of Clinical Oncology, prepared statement........   527
    American Society of Tropical Medicine and Hygiene, prepared
      statement......................................................   552
    Ammerman, Howard K., Ph.D., on behalf of the U.S. Institute of
      Peace, prepared statement......................................   718
    Association for Health Services Research, prepared statement.....   502
    Association of America's Public Television Stations, prepared
      statement......................................................   730
    Association of Maternal and Child Health Programs, prepared
      statement......................................................   437

    Battey, James F., Jr., M.D., Director, National Institute on
      Deafness and Other Communication Disorders, National Institutes
      of Health, Department of Health and Human Services.............   191
        Prepared statement...........................................   236
    Beck, Deb, president, Drug and Alcohol Service Providers
      Organization of Pennsylvania, prepared statement...............   504
    Belletto, Peter, president, National Indian Impacted Schools
      Association, Ganado Unified School District, Ganado, AZ,
      prepared statement.............................................   712
    Berg, Steven R., director of program, National Alliance to End
      Homelessness, Inc., prepared statement.........................   483
    Bickers, Dr. David R., secretary-treasurer, on behalf of the
      Society for Investigative Dermatology, prepared statement......   481
    Bond, Hon. Christopher, U.S. Senator from Missouri...............   293
    Bosch, Erin, on behalf of the National Coalition for Heart and
      Stroke Research, prepared statement............................   630
    Bumpers, Hon. Dale, U.S. Senator from Arkansas...............9, 67, 140
    Bye, Dr. Raymond E., Jr., associate vice president for research,
      Florida State University, prepared statement...................   386
    Byrd, Hon. Robert C., U.S. Senator from West Virginia............     3
        Questions submitted by.....................................109, 182

    Cassman, Marvin, M.D., Director, National Institute of General
      Medical Services, National Institutes of Health, Department of
      Health and Human Services......................................   191
        Prepared statement...........................................   220
    Clapp, Katherine N., president, Fraxa Research Foundation,
      prepared statement.............................................   510
    Coalition of Northeastern Governors, prepared statement..........   355
    Cochran, Hon. Thad, U.S. Senator from Mississippi................     6
        Prepared statement...........................................   275
        Questions submitted by.....................................178, 292
    Cody, Jannine D., Ph.D., president, the Chromosome 18 Registry
      and Research Society, prepared statement.......................   446
    Cohen, Ellen Glesby, president and founder, Lymphoma Research
      Foundation of America, prepared statement......................   413
    Coling, George, executive director, on behalf of the National
      Fuel Funds Network, prepared statement.........................   476
    College on Problems of Drug Dependence, prepared statement.......   539
    Collins, Father T. Byron, S.J., special assistant to the
      president, Georgetown University, prepared statement...........   617
    Collins, Francis S., M.D., Director, National Human Genome
      Research Institute, National Institutes of Health, Department
      of Health and Human Services...................................   192
        Prepared statement...........................................   251
    Council of State Administrators of Vocational Rehabilitation,
      prepared statement.............................................   607
    Craig, Hon. Larry E., U.S. Senator from Idaho:
        Prepared statement...........................................   285
        Questions submitted by.....................................102, 316

    Day, Arthur L., M.D., on behalf of the American Association of
      Neurological Surgeons, prepared statement......................   620
    De La Cruz, Antonio, M.D., FACS, president, American Academy of
      Otolaryngology-Head and Neck Surgery, Inc., prepared statement.   618
    DeBakey, Dr. Michael E., heart surgeon, on behalf of the Friends
      of the National Library of Medicine [NLM], prepared statement..   429
    Deitch, Patricia, chief executive officer, Philadelphia Health
      Services, on behalf of the National Association of Community
      Health Centers, prepared statement.............................   377
    DeParle, Nancy-Ann, Administrator, Health Care Financing
      Administration.................................................    59
        Letter from..................................................    82
    DeRocco, Emily S., executive director, Interstate Conference of
      Employment Security Agencies, prepared statement...............   489
    Digiusto, Walter, president, ESA, Inc., prepared statement.......   626
    Donaldson, Peter J., president, Association of Population Centers
      [APC], prepared statement......................................   642
    Downing, Carole S., MSW, on behalf of the National Multiple
      Sclerosis Society, prepared statement..........................   579

    Faircloth, Hon. Lauch, U.S. Senator from North Carolina........100, 146
        Questions submitted by.......................................   309
    Fauci, Anthony S., M.D., Director, National Institute of Allergy
      and Infectious Diseases, National Institutes of Health,
      Department of Health and Human Services........................   191
        Prepared statement...........................................   216
    FDA-NIH Council, prepared statement..............................   550
    Finkelstein, Leonard H., D.O., chairman, board of governors,
      American Association of Colleges of Osteopathic Medicine,
      prepared statement.............................................   475
    Ford, Michael Q., executive director, the National Nutritional
      Foods Association, prepared statement..........................   415
    Franklin, Patricia, MSN, RN, CPNP, president, National
      Association of Pediatric Nurse Associates and Practitioners,
      prepared statement.............................................   440
    Fraser, Heather R., on behalf of the Cystic Fibrosis Foundation,
      prepared statement.............................................   543
    Furmanski, Phillip, Ph.D., dean, faculty of arts and science;
      chairman and professor of biology on behalf of a Center for
      Cognition, Learning, Emotion, and Memory at New York
      University, prepared statement.................................   349
    Fye, W. Bruce, M.D., M.A., F.A.C.C., chair, Marshfield Clinic,
      Department of Cardiology, on behalf of the American College of
      Cardiology, prepared statement.................................   665

    Geisel, Ritchie L., president, Recording for the Blind and
      Dyslexic [RFB&D], prepared statement...........................   388
    George, Father William L., S.J., special assistant to the
      president, Georgetown University, prepared statement...........   617
    Gipp, David M., president, Three Affiliated Tribes of North
      Dakota, prepared statement.....................................   709
    Gorden, Philip, M.D., Director, National Institute for Diabetes
      and Digestive and Kidney Diseases, National Institutes of
      Health, Department of Health and Human Services................   191
        Prepared statement...........................................   210
    Gordis, Enoch, M.D., Director, National Institute on Alcohol
      Abuse and Alcoholism, National Institutes of Health, Department
      of Health and Human Services...................................   192
        Prepared statement...........................................   245
    Gorosh, Kathye, project director, the Core Center, prepared
      statement......................................................   422
    Grady, Patricia A., M.D., Director, National Institute of Nursing
      Research, National Institutes of Health, Department of Health
      and Human Services.............................................   192
        Prepared statement...........................................   248
    Grant, Glenn A., Esq., business administrator, city of Newark,
      prepared statement.............................................   493
    Greenberg, Warren, Ph.D., professor, health economics and health
      care sciences, George Washington University, on behalf of
      Mended Hearts, Inc., prepared statement........................   669
    Guinane, Kay, consulting attorney, National Consumer Law Center,
      prepared statement.............................................   345
    Gustafson, John S., executive director, National Association of
      State Alcohol and Drug Abuse Directors, Inc., prepared
      statement......................................................   575

    Harkin, Hon. Tom, U.S. Senator from Iowa.........................     8
        Prepared statement...........................................   285
        Questions submitted by.....................................105, 319
    Helen Keller National Center for Deaf Blind Youths and Adults,
      prepared statement.............................................   609
    Henderson, Carol C., executive director, Washington office, the
      American Library Association, prepared statement...............   705
    Herman, Hon. Alexis, Secretary of Labor, Office of the Secretary,
      Department of Labor............................................   125
        Prepared statement...........................................   128
    Herrera, Stanley, president, Alamo Navajo School Board, prepared
      state-
      ment...........................................................   703
    Heylin, G. Brockwel, director, government affairs, the American
      Association of Colleges of Nursing, prepared statement.........   382
    Heymann, Dr. David L., on behalf of the World Health
      Organization, prepared statement...............................   400
    Hill, Martha, R.N., Ph.D., president, American Heart Association,
      prepared statement.............................................   674
    Hodes, Richard J., M.D., Director, National Institute on Aging,
      National Institutes of Health, Department of Health and Human
      Services.......................................................   191
        Prepared statement...........................................   231
    Hollings, Hon. Ernest, U.S. Senator from South Carolina..........     1
    Hutcheson, Rev. Gary, volunteer advocate, on behalf of the
      National Psoriasis Foundation, prepared statement..............   668
    Hutchison, Hon. Kay Bailey, U.S. Senator from Texas..............   104
        Questions submitted by.......................................   179
    Hyman, Steven E., M.D., Director, National Institute of Mental
      Health, National Institutes of Health, Department of Health and
      Human Services.................................................   192
        Prepared statement...........................................   240

    Jacob, Dr. Harry S., on behalf of the American Society of
      Hematology, prepared statement.................................   479
    Janger, Stephen A., president, Close Up Foundation, prepared
      statement......................................................   691
    Joint Council of Allergy, Asthma and Immunology, prepared
      statement......................................................   545
    Jollivette, Cyrus M., vice president for government relations,
      University of Miami, prepared statement........................   359
    Jones, Wanda K., Dr. P.H., on behalf of the Public Health Service
      Office on Woman's Health, Department of Health and Human
      Services, prepared statement...................................   565

    Kalabokes, Vicki, chief executive officer, National Alopecia
      Areata Foundation, prepared statement..........................   385
    Kalabokes, Vicki, co-chair, Coalition of Patient Advocates for
      Skin Disease Research [CPA-SDR], prepared statement............   432
    Karlson, David, executive director, Society of General Internal
      Medicine, prepared statement...................................   368
    Katz, Stephen I., M.D., Director, National Institute of Arthritis
      and Musculoskeletal and Skin Diseases, National Institutes of
      Health, Department of Health and Human Services................   191
        Prepared statement...........................................   233
    Kaufman, Paul L., M.D., president, Association for Research in
      Vision and Ophthalmology, prepared statement...................   524
    Kenney, K. Kimberly, executive director, Chronic Fatique Immune
      Dysfunction Syndrome [CFIDS] Association of America, prepared
      statement......................................................   571
    Kern, Jeffrey, M.D., president, American Federation for Medical
      Research, prepared statement...................................   637
    Kingsley, Roger P., on behalf of the American Speech-Language
      Hearing Association, prepared statement........................   645
    Kirschstein, Ruth, M.D., Deputy Director, National Institute of
      Health, Department of Health and Human Services................   191
    Klausner, Richard, M.D., Director, National Cancer Institute,
      National Institutes of Health, Department of Health and Human
      Services.......................................................   191
        Prepared statement...........................................   203
    Kohl, Hon. Herb, U.S. Senator from Wisconsin.....................   143
        Prepared statements.........................................72, 145
        Questions submitted by.....................................106, 187
    Kramis, Ron, Ph.D., on behalf of the Fibromyalgia Network,
      prepared statement.............................................   531
    Kraut, Alan G., Ph.D., executive director, American Psychological
      Society, prepared statement....................................   670
    Krueger, Gerald G., M.D., chairman, American Academy of
      Dermatology, prepared statement................................   585
    Kupfer, Carl, M.D., Director, National Eye Institute, National
      Institutes of Health, Department of Health and Human Services..   191
        Prepared statement...........................................   225

    Lancaster, Ronny B., M.B.A., J.D., president, Association of
      Minority Health Professions Schools, prepared statement........   443
    LaPahe, Tom, council delegate, Pinon Health Center Project,
      Pinon, Navajo Nation (Arizona), prepared statement.............   429
    Lavery, Jack, chairman of the board, the Lupus Foundation of
      America, prepared statement....................................   631
    Lenfant, Claude, M.D., Director, National Heart, Lung, and Blood
      Institute, National Institutes of Health, Department of Health
      and Human Services.............................................   191
        Prepared statement...........................................   205
    Leshner, Alan I., M.D., Director, National Institute on Drug
      Abuse, National Institutes of Health, Department of Health and
      Human Services.................................................   192
        Prepared statement...........................................   242
    Lewis, Delano E., president and CEO, National Public Radio,
      prepared statement.............................................   735
    Lewis, Rosalie, president, Dystonia Medical Research Foundation,
      prepared statement.............................................   455
    Licursi, Michele, on behalf of the Foundation for Ichthyosis and
      Related Skin Types [FIRST], prepared statement.................   663
    Licursi, Ryan, on behalf of the Foundation for Ichthyosis and
      Related Skin Types [FIRST], prepared statement.................   663
    Lindberg, Donald A.B., M.D., Director, National Library of
      Medicine, National Institutes of Health, Department of Health
      and Human Services.............................................   192
        Prepared statement...........................................   260
    Lorenzo, Martha Jean, prepared statement.........................   703
    Lokovic, C.M. Sgt. James E., USAF (Ret.) director, military and
      government relations, Air Force Sergeants Association, prepared
      statement......................................................   694
    Ludlam, Chuck, on behalf of the Biotechnology Industry
      Organization, prepared statement...............................   646

    Mahood, Dr. William H., president, Digestive Disease National
      Coalition, prepared statement..................................   392
    Markey, Patricia E., legislative consultant, United Distribution
      Companies, prepared statement..................................   336
    Mason, Russell, board president and chairman, Three Affiliated
      Tribes of North Dakota, prepared statement.....................   716
    Mauderly, Joe L., senior scientist and director of external
      affairs, Lovelace Respiratory Research Institute, prepared
      statement......................................................   581
    McAfee, Robert E., M.D., chair, on behalf of the Join Together
      National Policy Panel on Addiction Treatment and Recovery,
      prepared statement.............................................   356
    McCoy, Clyde B., professor and chair, Department of Epidemiology
      and Public Health, director, Health Services Research Center,
      prepared statement.............................................   361
    Mead, Dr. Rodney, professor of zoology, director of NIH IDeA
      Program, University of Idaho, prepared statement...............   380
    Megerson, John S., director of police, on behalf of the Southwest
      Texas State University, prepared statement.....................   684
    Meltzer, Donna, on behalf of the American Association of
      University Affiliated Programs for Persons With Developmental
      Disabilities, chair, on behalf of the Friends of NICHD
      Coalition, prepared statement..................................   654
    Mendell, Lorne M., Ph.D., on behalf of the Society for
      Neuroscience, prepared statement...............................   632
    Moore, David B., coordinator, Health Professions and Nursing
      Education Coalition, prepared statement........................   403
    Moss, Sharon, on behalf of the American Speech-Language Hearing
      Association, prepared statement................................   645
    Munro, Nancy, RN, MN, CCRN, on behalf of the American Association
      of Critical Care Nurses [AACN], prepared statement.............   412
    Murray, Karen, member, National Marfan Foundation, on behalf of
      the Coalition for Heritable Disorders of Connective Tissue,
      prepared statement.............................................   472
    Myers, Terry-Jo, Interstitial Cystitis Association, prepared
      statement......................................................   616

    National Aging and Vision Network, prepared statement............   561
    National Alliance for Eye and Vision Research, prepared statement   557
    National Association for State Community Services Programs,
      prepared statement.............................................   515
    National Association of Addiction Treatment Providers, prepared
      statement......................................................   393
    National Association of Nutrition and Aging Services Programs,
      prepared statement.............................................   375
    National Coalition for Cancer Research, prepared statement.......   547
    National Council on Rehabilitation Education, prepared statement.   395
    National Deppressive and Manic-Depressive Association, prepared
      state-
      ment...........................................................   556
    National Federation of Community Broadcasters, prepared statement   733
    National Hemophilia Foundation, prepared statement...............   366
    National Indian Education Association, prepared statement........   686
    National Job Corps Coalition, prepared statement.................   342
    National Kidney Foundation, prepared statement...................   508
    National Military Family Association, prepared statement.........   714
    National Minority Public Broadcasting Consortia, prepared
      statement......................................................   738
    National Rural Health Association, prepared statement............   389
    Neylan, Dr. John F., president-elect, American Society of
      Transplant Physicians, prepared statements...................397, 451
    Niesing, Ron, president, the National Council of Social Security
      Management Associations, Inc., prepared statement..............   742
    Nieves, Josephine, MSW, Ph.D., executive director, National
      Association of Social Workers, prepared statement..............   494

    O'Toole, Patrice, assistant director, Federation of Behavioral,
      Psychological and Cognitive Sciences, prepared statement.......   678
    Olden, Kenneth, M.D., Director, National Institute of
      Environmental Health Sciences, National Institutes of Health,
      Department of Health and Human Services........................   191
        Prepared statement...........................................   228

    Paulk, Crystal J., on behalf of the Society of Professional
      Journalists, prepared statement................................   699
    Pease, Joanne Bakke, Immune Deficiency Foundation, prepared
      statement......................................................   628
    Pebley, Anne R., president, Population Association of America
      [PAA], prepared statement......................................   642
    Penn, Audrey S., M.D., Acting Director, National Institute of
      Neurological Disorders and Stroke, National Institutes of
      Health, Department of Health and Human Services................   191
        Prepared statement...........................................   214
    Perez, Daniel Paul, president, Facioscapulohumeral Society,
      prepared statement.............................................   521
    Pings, Cornelius J., president, Association of American
      Universities, prepared statement...............................   567
    Population Association of America [PAA] and the Association of
      Population Centers [APC], prepared statement...................   534
    Priest, Roy O., president, National Congress for Community and
      Economic Development, prepared statement.......................   340
    Puckett, Marianne, associate professor of medical library
      science, Louisiana State University Medical Center Library, on
      behalf of the Medical Library Association and the Association
      of Academic Health Sciences Libraries, prepared statement......   625

    Rasmussen, Dwight, president, National Association of Senior
      Companion Project Directors, prepared statement................   745
    Reich, Gloria E., Ph.D., executive director, American Tinnitus
      Association, prepared statement................................   635
    Research Society on Alcoholism, prepared statement...............   542
    Richardson, Alan H., executive director, American Public Power
      Association, prepared statement................................   504
    Richter, Mary Kaye, on behalf of the National Foundation for
      Ectodermal Dysplasias, prepared statement......................   660
    Rider, Dr. J. Alfred, president, board of trustees, Children's
      Brain Diseases Foundation, prepared statement..................   464
    Riley, Hon. Richard W., Secretary of Education, Office of the
      Secretary of Education, Department of Education................     1
        Prepared statement...........................................    13
    Rock Point Community School Board, Rock Point, AZ, prepared
      statement......................................................   707
    Rogers, Hon. Paul G., on behalf of the Friends of the National
      Library of Medicine [NLM], prepared statement..................   429
    Rotary International, prepared statement.........................   417
    Rumery-Rhodes, Allison, on behalf of the Sudden Infant Death
      Syndrome Alliance, prepared statement..........................   457

    Saperstein, Dr. Lee W., dean, School of Mines and Metallurgy,
      University of Missouri-Rolla, prepared statement...............   529
    Schambra, Philip E., M.D., Director, Fogarty International
      Center, Department of Health and Human Services................   192
        Prepared statement...........................................   258
    Schwartz, Peter E., M.D., president, Society of Gynecologic
      Oncologists, prepared statement................................   453
    Scrimshaw, Susan, Ph.D., dean, University of Illinois School of
      Public Health, on behalf of the Association of Schools of
      Public Health, prepared statement..............................   460
    Shalala, Hon. Donna, Secretary of Health and Human Services,
      Office of the Secretary, Department of Health and Human
      Services.......................................................    59
        Letter from..................................................   108
        Prepared statement...........................................    63
    Shalita, Alan, M.D., president, Association of Professors of
      Dermatology, prepared statement................................   594
    Skelly, Thomas P., Director, Budget Service, Department of
      Education......................................................     1
    Slavkin, Harold, M.D., Director, National Institute of Dental
      Research, National Institutes of Health, Department of Health
      and Human Services.............................................   191
        Prepared statement...........................................   207
    Smith, Dr. M. Susan, on behalf of the Regional Primate Research
      Centers Program, prepared statement............................   373
    Society of Toxicology, prepared statement........................   554
    Specter, Hon. Arlen, U.S. Senator from Pennsylvania.....1, 59, 125, 192
        Prepared statements......................................2, 60, 126
    Stevens, Christine, secretary, Society for Animal Protective
      Legislation, prepared statement................................   639
    Stevens, Hon. Ted, U.S. Senator from Alaska, questions submitted
      by.............................................................    44
    Suki, Wadi N., M.D., president, American Society of Nephrology,
      prepared statement.............................................   448

    Tanski, Tish, president, Association of Independent Research
      Institutes, prepared statement.................................   634
    Tobias, Robert M., national president, National Treasury
      Employees Union, prepared statement............................   485
    Tri-Council for Nursing, prepared statement......................   426

    University of Medicine and Dentistry of New Jersey [UMDNJ],
      prepared statement.............................................   363

    Vaitukaitis, Judith L., M.D., Director, National Center for
      Research Resources, Department of Health and Human Services....   192
        Prepared statement...........................................   255
    Varmus, Harold E., M.D., Director, National Institutes of Health,
      Department of Health and Human Services........................   191
        Prepared statement...........................................   194
    Ventre, Francis T., president, Montgomery County [MD] Stroke
      Club, prepared statement.......................................   629

    Watkins, Jane, president, National Association of Foster
      Grandparent Program Directors, prepared statement..............   745
    Whitescarver, Jack, M.D., Acting Director, Office of AIDS
      Research, National Institutes of Health, Department of Health
      and Human Services.............................................   192
        Prepared statement...........................................   200
    Williams, Dennis P., Deputy Assistant Secretary for Budget,
      Department of Health and Human Services........................   192
    Wilson, Robert, on behalf of the Wilson Foundation on
      Neurofibromatosis, prepared statement..........................   420
    Wofford, Harris, chief executive officer, Corporation for
      National Service, prepared statement...........................   720
    Woolley, Mary, president, Research!America, prepared statement...   371

    York, Nan, president, National Association of Retired and Senior
      Volunteer Program Directors, prepared statement................   745
    Yount, Ralph G., president, Federation of American Societies for
      Experimental Biology, prepared statement.......................   370

                                 SUBJECT INDEX

                                  ----------

                            DEPARTMENT OF EDUCATION
                      Office of the Secretary of Education

                                                                       Page
    Additional committee questions...................................    29
    After-school programs............................................18, 28
    America Reads Challenge.......................................... 6, 21
    Bilingual and immigrant education................................    28
    Block grants and local control...................................    26
    Budget offsets--tobacco settlement and user fees.................    16
    Campus Security Act panel........................................    18
    Class size reduction--use of parochial classrooms................    17
    Closed captioning................................................24, 26
    Community learning centers, 21st century.........................    18
    Education funds going directly to students and teachers..........    22
    Federal education:
        Funding......................................................     9
        Initiatives..................................................     9
    Fiscal year 1999 education budget request........................    10
    GAO study on block grants........................................    27
    House directive on convening reading research panel..............     7
    Impact aid.......................................................    27
    Interest rate on student loans...................................    23
    Local control....................................................    25
    Math and science achievement.....................................    15
        TIMSS........................................................    19
    Mississippi Delta:
        Early childhood services project.............................    20
        Project--Easter Seals Foundation.............................    20
    National writing project.........................................    22
    NIH research on reading..........................................     6
    Parental involvement...........................................4, 5, 16
    Partnership programs designed to raise standards.................    12
    Programs:
        Mott Foundation funds for after-school.......................    18
        To reform failing schools....................................    11
        Youth violence and after-school..............................    18
    Raising expectations, standards, and teacher preparation.........    11
    ``Readline'' and ``Mathline''....................................    22
    Reading programs increases.......................................    10
    Robert C. Byrd honors scholarships...............................     3
    School uniforms..................................................    23
    Special education budget increases...............................    27
    Student financial assistance proposals...........................    12
    Teacher training:
        Model........................................................     8
        Technology initiative........................................    12
    Third international mathematics and science study................ 3, 10
    TIMSS results....................................................     4
    Title I allocation formula.......................................     7
        Revision.....................................................    22

                    DEPARTMENT OF HEALTH AND HUMAN SERVICES
                         National Institutes of Health

    Additional committee questions...................................   286
    Alternative medicine.............................................   268
        Abroad.......................................................   271
        Request for comprehensive account of Federal activities in...   270
    Alzheimer's disease..............................................   267
        Delaying.....................................................   266
        Funding for..................................................   266
    Antibiotic resistance............................................   281
    Average length of grant awards...................................   279
    Budget submission................................................   263
    Children learning to read........................................   277
    Clinical trials..................................................   272
        System.......................................................   264
    Cure for ebola...................................................   280
    Declining efficacy of antibiotics................................   280
    Diabetes research workshop.......................................   276
    Epilepsy.........................................................   273
        Access to treatment..........................................   274
        Funding......................................................   273
    Ergonomics research..............................................   283
    Grant funding..................................................264, 279
        Policy.......................................................   265
    Heart disease, status of.........................................   267
    Increase funding.................................................   193
    International collaborations on infectious disease outbreaks.....   281
    NCI bypass budget................................................   264
    New clinical investigators.......................................   272
    Office of Alternative Medicine, funding for......................   269
    Parkinson's disease..............................................   267
    Progress of HIV/AIDS research....................................   271
    Research on reading disability...................................   278
    Translation of research..........................................   275

                            Office of the Secretary

    Abuse:
        Elder........................................................    71
        Fraud and....................................................    76
    Additional committee questions...................................    92
    After-school programs............................................    71
        Federal......................................................    70
    Bill of rights, patients'........................................    73
    Child immunization...............................................    78
    Disease prevention...............................................    75
    EPO dosage, reduction in.........................................    69
    Epogen policy, revisions to......................................    80
    Home health surety bond..........................................    77
    Nurse anesthetists...............................................    74
    President's child care initiative................................    72
    Senator Bumpers, tribute to......................................    67
    Tobacco legislation..............................................    79
    Two HCFA concerns................................................    68

                      Health Care Financing Administration

    Additional committee questions...................................   112
    Class action suits...............................................    91
    EPO, overutilization of..........................................    82
    Ergonomics issue.................................................    90
    Flu outbreak.....................................................    88
    HCFA action......................................................    84
    Two HCFA concerns................................................    68
    Viruses..........................................................    87

                              DEPARTMENT OF LABOR
                            Office of the Secretary

    Additional committee questions...................................   149
    Budget request, NLRB.............................................   149
    Employee Retirement Income Security Act..........................   146
    DOL strategic goals..............................................   127
    ERISA, cost of expanding.........................................   147
    Job training programs............................................   137
    North Carolina formula grant waiver..............................   148
    OSHA inspectors, training of.....................................   141
    Pabst retiree health care coverage...............................   144
    Poultry industry, targeting of...................................   142
    Welfare to work..................................................   138
        Coordination.................................................   139
    Youth offender demonstration grants..............................   140