last 50 years. we have a representative from the census bureau. that's tomorrow morning at 7:00 a.m. eastern time. continued live coverage tomorrow and through the weekend with an eye on super tuesday. in ohio, tomorrow, mitt romney and rick santorum in the cleveland area. we will have that on c-span radio. thanks for being with us on this thursday. i hope you enjoy the rest of your evening. next, health and human secretary, kathleen sebelius testifies on the president's 2013 budget request. then we hear from interior secretary ken salazar.3ç after that a discussion on house states can encourage businesses and economic growth.

louisiana governor bobby jindal is revealing his proposal for the next fiscal budget. a budget $900 million in the red. in shreveport it is mostly cloudy and 37 degrees at the airport. 38 at barksdale. you are listening to news and weather 710. >> this weekend, book tv and american history tv explore the history of shreveport louisiana. saturday starting at noon on book tv on c-span 2 gary joiner on the failure in louisiana. from one blunder. then a look at the over 200,000 books of the collection at the lsu archives. then a walking tour with neil johnson. then on american history tv sunday at 5:00 p.m. from barksdale air force base a

look at the role on 9/11. plus the history of the b-52 bomber. then the autograph collection. then the heritage center medical treatment during the civil war. shreveport louisiana. this weekend on c-span 2 and c-span 3. health and human services secretary, kathleen sebelius testified before the house energy and commerce committee on health. the budget calls for $76.4 billion in expenses which includes a 26% increase for the center's for medicare and medicaid seriescertifyservices. this is just over two hours. >> the sub committee will come to order. as agreed earlier, with the democrat side of the aisle, each side will be recognized for one

minute for opening statements. we can move straight to secretary sebelius' testimony and questions. the chair reminds members that pursuant to the rules, opening statements will be made part of the record. i recognize myself for an opening statement. i would like to thank secretary sebelius for being here with us to discuss the fiscal year 2013 budget. one of the most striking features of the budget is just how much of it is not dependent upon congress. for example, the phrase aca mandatory funding appears through the budget tables. this designation means, of course, the affordable care act requires automatic appropriations for certain items. the phrase "prevention fund." also appears numerous times referencing the public health

fund. over which the secretary has sole discretion. beyond absence of the funds, i'm troubled by the lack of accountability and transparency practiced by the department. and i hope the secretary will be able to explain why her department is so late on so many of the rules required by it. the chair now recognizes the ranking member for one minute for an opening state. >> thank you, chairman pitts and secretary sebelius today. i know i have to limit my re remarks remarks. with the affordable care act i know we have to continue to take the steps necessary under the aca to improve our health care system. i'm a strong believer in the importance of advancing science and research. that is why i was pleased to see the president's support toward innovative bio-medical

advancements through the nih. i was pleased to see the administration is proposed an expansion of the small business health care tax credit that could benefit 4 billion workers. my new jersey has a high wage base. i would like wage base included in the calculation of the tax credit and i'm planning on introducing the legislation that would remedy the solution. thank you, madam secretary, for being here. >> our witness today will be the secretary of the department of health and human services. the honorable kathleen sebelius. secretary sebelius, we a you are recognized for five minutes for an opening >> so much mr. chairman and ranking members pallone and mr. waxman. members of the committee, i'm pleased to be with you today to discuss the president's 2013 budget for the department of health and human serv helps to create

an american economy built to last by strengthening care and support the research to tomorrow's cures and lead to american children and families so every one has a fair shot to reach his or her potential. it makes investments that we need right now while reducing the deficit in the long run to make sure that the programs that millions of americans rely on will be there for generations to come. i look forward to answering your questions, mr. chairman, about the budget but i want to just take a few minutes to share some of the highlights. over the last two years, we have worked to deliver the benefits of the affordable care act to the people. we have americans already getting coverage through their parents plans. more than 25 million seniors advantage of the free recommended services under medicare and small business owners are getting tax breaks on the health care bills to allow them to hire more

employees. we will build on that to continue to support states as they work to establish affordable exchange by 2014. once these competitive marketplaces are in place, they will ensure all americans have access to quality affordable health coverage. we know the lack of insurance is not the only obstacle to care. our budget invests in our health care work force. it supports training of primary care providers and placing them where they are needed most. it invests in the american community health work centers. our health centers provide access to quality care for 21 million americans. 300,000 more than were served last year. this budget also continues the administration's commitment to improving the quality and safety of care by spending health dollars more wisely. that means investing in health information technology.

it means funding the first of its kind, cms center which is partnering with physicians and nurses and private payers and hospitals and others who accepted the challenge to develop new methods for the health care system. in addition, the budget ensures that the 21st century america will continue to lead the world in bio-medical research. at the same time, we recognize the need to set priorities, make difficult tradeoffs and ensure we use every dollar wisely. that starts with continuing support for president obama's historic push to stamp out waste, fraud and abuse in the health care system. over the last three years, every dollar we put into health care fraud has returned more than $7. that is a pretty good investment. last year alone, those efforts recovered more than $4 billion which are in the medicare and

medicaid trust funds around the country. this week our administration arrested the alleged head of the largest individual medicare and medicaid fraud operation in history. our budget builds on those efforts giving law enforcement the technology and data to spot perpetrators early. the budget also contains more than $360 billion in health savings over the next ten years. most of which comes from reforms to medicare and medicaid. these are significant, but they are carefully crafted to protect beneficiaries. we reduced drug costs. a plan that not only reduces the costs of pharmaceuticals but puts money back in the pockets of beneficiaries. it puts us all on a path to build a stronger, healthy and more prosperous america for the

future. thank you, mr. chairman, for the invitation. i look forward to the conversation. >> the chair thanks the gentle lady. we will now begin questioning. regardless of one's opinion of the health care law i think everyone can agree there is a lot of regulatory uncertainty regarding the of the road moving ahead. states help providers and small businesses and patients have been asking hhs for final or even just proposed federal rules as it relates to the exchange. the stakes are high since taxpayers are on the hook for a new $1 trillion entitlement. with that in mind i would like to ask you about the status of the rules required by the statute. given my limited time i would respectfully ask that you answer yes or no. i have a series of questions.

first, has hhs released a final rule as it relates to the individual market exchange? >> the state based market exchange, final rule? no, sir. >> has hhs released a final rule detailing what states must do to receive federal approval for exchange? >> we have not issued a final rule. we have put out bulletins. we are preparing a final rule. we want feedback along the way. we are working with states around the country. >> a bulletin has no real guidance for the state? you have not proposed a final rule? >> we have not proposed a final rule. they have a lot of guidance and engaged in the process of helping us shape. >> thank you. has hhs released a final rule in the establishment in a federal exchange? >> again, no mr. chairman. we are in the process. i don't think you want us to do

that without actively engaging stake holders along the way. that is what we are doing. including the last weekend when the governors were in town and we spent hours with the state officials talking about -- >> the answer is no. has hhs released a final rule related to federal accreditation requirements for health plans? >> regarding? >> federal accreditation of health plans. >> no, sir. >> has hhs released a final rule related to guaranteed issue and community rating bands? >> we do not have the final rules. >> has hhs released a proposed rule for caution or federally mandates or health benefits? >> we have released guidance. we are talking to states about the interim final rule. we have given them a strategy for the bench mark plan. we are preparing the rules as we

speak. >> no final rule. the federal requirements on benefit coverage are two of the most basic and critical pieces of information needed for states. we are less than 18 months when plans are supposed to enroll customers in exchanged plans. has hhs not yet issued a proposed rule on these fundamental pieces of law, is that correct? >> mr. chairman, again, we are actively engaged in bench mark plans. we have released guidance. we are getting input on that. when we release an interim rule rules, these are workable arrangements with states and markets around the country. that guidance is very much under way. we are engaged in dialogue. >> i understand. >> they are beginning to frame their plans. we would agree -- >> let me continue. i would submit this is symbolic with the state of regulation in

washington. states, small businesses and individuals are shoved aside and told that a federal agency is needed to meddle around in their lives and then we pass a law giving washington almost universal control over 1/6 of the economy and washington writes some vague rules for some parts of the law and delays rules for other parts of the law. deadlines are not met. states and health care providers are left in the dark and washington thinks it can just dump 1,000 requirements on states and the private sector at the last minute with no consequences for patient health. i have just 35 seconds left. yesterday, i was contacted by catholic charities. i was asked if i would read into the record their position on their so-called an accommodation because they believe some miss

mischaracterize where they stand. we are hopeful this is a step in the right direction. we are committed to continuing our work to ensure our religious institutions will continue be granted the freedom to remain faithful to our beliefs and provide quality health care across the country to families. upon actually seeing what was proposed and having their position misstated as if they believed the an accommodation was sufficient they posted the following clarification. quote, in response to a great number of misstatements in the media, catholic charitiesyies wants to make two things clear. we have not come to the an --

accommodation. we wil the goal. any representation to the contrary is false. end quote. i recognize the ranking member mr. pallone for questioning. >> thank you. madam secretary, i apologize. i have two questions. the children's graduate medical education and the other is on cosmetic user fees. if i cut you short it is because i want to get to the second one. i'm pleased that the administration has come to the senses and included funding for the children's hospital medica budget. i'm dismayed that the white house only proposes $88 million. as you know, there is a serious shortage in the national specialties. shortages whic helping to address.

children's hospital in new jersey said the shortage would create barriers to access to wanted to ask you, if it is how do you expect to train these providers for the shortage in primary care, but also in the specialties if you know what this level of funding? >> well, mr. pallone we have had this discussion before. interest in training the primary care providers and there are other streams of funding available. we are trying to use what are relatively limited resources to focus on a broad array of primary care training programs a better budget time, we clearly would have proposed additional resources. this reflects tough decisions made at a difficult time. wanted to stress don't think the investments in the pediatric specialty loan repayment will be enough to compensate for the cuts. i know the budget eliminates the

costs and funds the direct medical expenses for pediatric.s and i'm very conscious and i'm not saying this to you personally. we worry about adults, particularly seniors but at the same time we are not doing what we should for kids. proposed to completely cut the ime funding for adults in the medicare population, but eliminates the funding that benefits the health of kids. it seems like the kids are always taking the backseat. this is not just here, but in so many of the aspects of the budget. i think the consequence of that is we are really going the already vulnerable pediatric health care work force. let me get to my second question on cosmetic user fees. the president's budget for the fda includes a user fee that would address cosmetic safety. that covers activities relating

to the establishment of registration fees, set cosmetic standards and sampling of domestic products. myself and mr. dingell and others are promoteing the listing of products requiring the safety of cosmetic products and adverse reporting and giving the fda to recall cosmetic products. it is obvious the administration believes the program is in need of resources because your budget includes fees for activities like registration and standard setting. if we adopt my proposal and add on more regulations, do you agree there is a greater need for additional fees? that is my question. >> mr. pallone we share your interest in this important area. i think the fees in the budget would support according to the

fda, a cosmetic program. we would be eager to work with you to look at other areas that may be appropriate. i'm reluctant to do that without additional resources to carry them out effectively. this is an area that i think needs attention, which is why the president has proposed the cosmetic registration program. it would implement and standardize and collect information that is not available right now for consumer safety. >> i appreciate want the fda to do a good job ensuring the safety of cosmetic products. it is critical we ensure they have the resources i appreciate it. >> we would be eager to work with you. >> thank you.f the committee, mr. upton, for five minutes for questions. >> welcome madam secretary. a couple of things i would like to ask this morning. i am seeing different numbers in the 2013 budget than the spending levels you provided to the i don't know if you want to

respond by letter in response back. let me walk you through a couple of things. last year, you stated that hhs was estimated to spend $400 million on exchange grants. according to the latest budget the department will have spent $900 million on the same grants. more than double your estimate from a year ago. is that correct? >> mr. chairman we have spent so far out of the allocation two years ago of $1 billion, about $475 million. 261 of that was spent by hhs. >> this is specifically the state exchange grants. >> the state exchange grants. >> you might want to come back

to us in an open letter. >> i'll be happy to get that to you. >> as a former budget official -- we'll look forward to a written response. >> sure. >> congress in the president's health care law appropriated $1 billion for implementation, yet in this year's budget, you are estimated the fund will be exhausted by the end of '12. you asked for another $1 billion is that correct? >> yes mr. chairman. that is the question i was answering. i apologize. we had an original $1 billion in the affordable care act when it was passed. >> now it is two. >> well, the cbo estimate in march of 2010 was it would cost about $1 billion a year to implement. we have well under spent that estimate. we are now in fy 2012. we have spent at hhs about $261

million. a total with our other agency partners of $475 million. we think by the end of 2012, that original $1 billion will be spent and two and a half years have been expired. we are under spending the estimates. >> let me put this in writing and point some of these out. i want to get to questions as it relates to my state and my district. this committee, we received a memo from crs, congressional research service, outlining penalties for religious employers if they fail to comply with the hhs mandate to cover drugs and services that they have a religious objection. according to crs, the penalties day could be institution for following their conscience.

we have a hospital board in my district. it is part of the extension hospital system in michigan. they employ throughout the state, 31,000 people. so according to the crs memo it is likely to be subject to fines of over $1 billion. that is "b" as in "big" because of that mandate. my question and many religious organizations, in fact, is self insured. the so-called an accommodation announced that the white house on february 10th doesn't attempt, as i understand, to address the violation of self insured employers. what are your plans for accommodating self-insured employers with conscience issues like the hospital? >> mr. chairman an accommodation that the president talked about on the 10th of february would apply to the

non-exempted employers who do not currently offer contraception because of religious objections. as you know, churches, church auxiliaries and parochial and catholic elementary schools and high schools are likely to be totally ex-hibited-empted exempted. >> schools are exempted? >> if a parochial school meets the definition in the irs where they have a majority of religious employees -- >> how would this impact this hospital? >> i'm getting to that, mr. chairman. the rule that we intend to propose is we propose a rule in the near future after reaching out and having dialogue with folks. it would require insurance companies in a directly-insured plan to provide contraception

coverage so a religious employer who had objections would not have to either pay for or provide or refer people for contraception. we are confident that similar arrangements can be made with similar institutions. there is an independent body outside the board. there are a variety of arrangements in place in the 28 states that have this law already in place and we intend to be informed by that when we impose the rules. whether it is through a third-party administrator or a side-by-side plan as operates in georgetown or many other hospital arrangements, we will offer a variety of strategies to make sure religious libertys are respected at the same time millions of women who work in the institutions and spouses of employees and daughters of employees have access to these important health.

>> i know my time has expired. i'm not sure that will work. i yield back. >> i thank you. we are voting. we are going to go one more five-minute and break and come back immediately after the vote. the chair recognizes mr. waxman for five minutes. >> thank you. madam secretary, welcome to the committee. >> thank you. >> i must say in the decadess that i have been in the congress, you are one of the finest secretaries we had in the health and human services. i'm somewhat amused at the questions you are going to get and have already gotten today. you almost can't win. if you came in with the rules that spelled out, you would be criticized without consulting. now you are consulting and you are being criticized without having the rules in place. i know there is a lot of work leading up to 2014 to create a transparent and competitive marketplace where consumers are offered a quality insurance

product to cover health care needs. states and others have been encouraging the administration to share their thoughts early to allow for maximum planning and preparation. i recognize the need to share information early and work through issues early. that is why i was pleased with the sub regulatory guidance on the issue of the health benefits package and on the value and cost sharing and qualified health plans. this starts the conversation early. allows for input before more formal and lengthy rule making is released. but you have been criticized for this position wrongly in my view. can you tell us what you see as the advantage of this approach and confirm whether you intend to continue toward formal notice and community rule making process? >> mr. waxman, i think you spelled out what has been part

of the strategy which is to actually put in place rules around framework issues we need