provision for the medicaid program is removing a major lever for them to consider as they try to balance the budget. can you give me a yes or no answer as to whether there will be an opportunity to waive that provision and help that the fed and other states close their budget holes? >> that question does not lend itself to yes or no. we have the ability to grant 1115 waivers to states that improve the medicaid program, and we're working actively with governors across the country. i have met with all the new governors. we are in 19 states, working a budget at a time to look at the flexibility that governors are requesting. >> given the supreme court will be looking at this new law, we as a congress have to prepare for the possibility that a portion of this might be invalidated all other parts remain.

if the individual mandate were set aside and the remaining portions of the bill left intact, would be the impact in the total number of uninsured? and assuming that number would grow, with the administration sent to find a new way to cover these folks through medicaid? >> we are confident that the personal responsibility portion will be upheld. there are 12 judges who have dismissed cases so far, three federal judge, including one as recently as last week that held the entire law constitutional, one judge in virginia who have found a portion of the individual responsibility portion unconstitutional, but declared it inseparable and refused to grant an injunction, and a florida judge here ruled another way. we are confident at the end of the day that the law will be held constitutional. we're looking at a variety of options, and those were examined

as the affordable care act was being considered about the best way. if you eliminate pre-existing conditions, the personal responsibility section actually came from the insurance industry. they felt the way to have a solvent poll in an insurance market is to make sure you can balance the risk. that proposal really comes from the insurance industry. that >> will you approve and medicaid block grant program? >> there is not a block grant program that has been suggested at this point, but and know there is some interest in that. i cannot tell you what the parameters might be. i think a block grant has a real danger of shifting the enormous burdens onto already stressed states. >> thank you, i will yield the balance of my time to dr. cassidy.

>> one of my concerns is how the state medicaid budgets will be supplemented. mr. waxman's state of california suffers from this because one of your consultants publisher article that says in his state about 1.7 million people will be added to medicaid under this plan. do you see concerns about how the current map is constructed regarding states? about $7,500 per beneficiary, -- for mott gets about $7,500 per beneficiary and mississippi gets less. >> there are constant concerns about the formula that is the allocation formula. mississippi has the highest match. . >> but they only get $3,000 from the federal government.

>> i want to speak that. i don't know the numbers. i know they have the highest that operate -- the highest map rate in the country. in louisiana, it became an issue after katrina in new orleans and the changing demographics of the city changed dramatically, their share of the federal budget, so there have been concerns and we would work with congress to look at updating the map on a regular basis. >> i yield five minutes to the ranking member. >> thank you, mr. chairman. i would mention that if he would entertain the possibility of raising more with the f-map, i would be happy to oblige, more than willing to do another f-map bill and increase the funding.

america's competition depends on our ability to innovate and keep america number one, but the republicans included a $3 billion of cuts to the nih and over to the $40 million to the food and drug administration, and i believe this represents a significant setback because key agencies are essential to facilitating an environment where americans innovate. last week we heard about the newly announced medical device initiative, a new voluntary prayer in the review program by the fda to review medicare -- new medical devices to bring their products to market. but if the cuts and a republican c.r. are enacted, they did not think that the funds.

madam secretary, i believe a cut of 17% will slow the approval for devices, drugs, and other innovative products, isn't that correct? >> i think, congressman, the president shares your belief that investments in the fta and nih are wise and strategic investments -- investments in the fta and nih are wise and strategic investments, both for the food supply and accelerations of devices and drugs getting to market. and to keep america at the forefront of the biomedical industry, which we have been for decades. he has made recommendations about investments, enhancements to both the nih budget and for the food and drug administration, and believe strongly in keeping the

commitment to not only the american public but growing jobs and the economy. and that the failure to fund those agencies to the full extent both jeopardize is the support responsibilities they have as well as threatens -- the last detail i saw from dr. collins at nih, for every dollar in research grants, $7 is generated and the local community. it has an enormous ripple effect when research grants are put out across this country, as well as the life-saving care possibilities that result. >> it proposes over a billion dollars in cuts to the nih budget. it appears the majority will come from a small percent of the budget for new nih grants. that would mean thousands fewer

nih awards this year. the cuts at nih would be devastating on cutting edge research into new cures and treatments for diseases. if he could comment on that briefly. -- if you could comment on that briefly. >> the nih budget had a dramatic increase in funding, thanks to the investment and recovery act. scientific investment was a major innovation effort for the united states. they are already struggling with the record for a minute. rigid with that grant funding. will have a chilling impact on research grants across this country if the nih budget is not adequately funded in 2012. >> the president's budget zeroed that out. we have the highest rate of

autism in the country, in my home state, one in 94 children. my concern is we have very few some special place in pediatrics. in the budget, it basically justifies is zeroing it out because they want to focus on primary care, but we actually need more specialists, so how'd you justify that? it seems to not make sense to me. >> i would say you're concerned about this program, we have heard from a number of people. i assure you in any different budget time, this would not have been one of the recommendations. the goal was to try to focus as

many dollars as possible into the workforce for primary care gerontology and put it into the programs where the vast majority is training primary-care doctors, but this trend of was very difficult >> thank you. >> thank you, i want to start off initially by following up on a question you asked. regarding the maintenance of effort. the president said earlier this week that states to prevent a bipartisan proposal on medicaid, he would like to support it. and if there is broad bipartisan support to repeal the maintenance of effort, would that be something you would like to work with us on? >> the president has directed me to work with the governors are around this proposal, so i will be very actively involved, and he is eager to see their ideas.

i think what we are eager to do and have pointed out to a number of governors is a lot of the cost troubles are the dual eligible,, which is why congress was wise enough to include a new office of bull eligible as part of the affordable care act structure. it is about 15% of the population of medicaid beneficiaries, close to 40% of the cost nationwide. we are eager to work on those issues. >> have you identified a subset of republican and democratic governors who you believe he could work with yet? >> believe me, i am very deferential to my former colleagues.

the national governors' association, they have been asked to put together a governors' group. >> you discussed the state based health insurance exchanges created by the new law. as noted in the budget, you are provided a mentor appropriation, not simply an authorization, to issue grants to states. is there any monetary limitations to the crack making authority? >> no, sir. with the exception that the exchanges have a series of legal parameters that have to be met in order to draw from the fund. >> under 1311-beach, -- 1311-h,

it prevents them from contracting with health care programs and the exchange. have you started to draft any regulations yet on that? >> mr. chairman, i am not aware of any mandatory provider provisions or expulsion. i will be glad to answer that question in writing. i am not familiar with the section you are speaking of off the top of my head. >> before the house budget committee two weeks ago, richard foster was asked about two out of the main claims that the supporters talked about. first he was asked about whether the claim that the law would hold down cost whether it was true or false. he said a false more so than true. and second he was asked whether americans could keep their health care plan if they liked them, and he indicated that was

not true in all cases. those are his words. the you agree or disagree with some of the things he said? >> mr. chairman, i have read mr. foster's testimony, and i think what he has indicated it is he does not feel is likely that congress follow the outlines of the law. if the laws change, there will be a different result. we believe that the congressional budget office analysis, which was updated just 10 days ago, that $230 billion will be saved over the next 10 years and a trillion dollars over two decades is accurate. if the law is changed, there needs to be a different assessment. >> the last question i have it is regarding the grandfather status. by some estimates, anywhere

between 87 million and 117 million americans will not be able to keep their health care plan. does the administration continued to claim that health care law will in fact allow americans to keep their plans if they like it? >> mr. chairman, the law is built around the private insurance market. employers voluntarily enter that market and make decision a year at a time on plan designed, a provider issues, network issues. the grandfather clause is designed to make sure that as much as possible, without shifting major financial burdens on to consumers or dramatically changing benefits, that plans can indeed keep exactly the plan moving forward, making adjustments in premiums as they go along, but nothing precludes

what has been part of a dynamic market in the private sector all along, which is that employers choose year in and year out to move in and out of the marketplace. >> the gentleman's time has expired. the chair recognizes mr. waxman. >> thank you. as i mentioned in my opening statement, i am deeply concerned about the cuts proposed by the republicans for the remaining seven months of this fiscal year and their continued resolution. i have a letter i would like to read into the record before the social security administration to its employees. a >> without objection. >> it states the social security administration may have to initiate furloughs if the budget cuts being considered by the house become law. how would that impact medicare?

>> the social security administration -- >> they process new enrollments into medicare. for those with the two backlogs in processing new enrollment and gaps in coverage for nearly half a million new medicare beneficiaries. so that should be of concern, not just for social security but the medicare program. >> as you know, this year the first of the baby boomers became medicare eligible, so we're seeing an expanded medicare beneficiary class this year and every year of the immediate future. enrolling people in a timely and accurate fashion is hugely important. 2011 is the first baby boomer eligible class. >> i have an analysis from the

democratic staff to insert into the record. >> without objection. >> some of these numbers are just shocking, the programs of overseen by your committee. republicans propose to reduce funding for cms, the agency that runs medicare and medicaid in the children's health program by 23%. it this is not a little hair cut or finding efficiencies. that could prevent them from performing its core duty, bang for the health-care needs of seniors, persons with disabilities, mothers, and kids. would you be concerned about the impact on medicare beneficiaries of a proposed 23% cut, combined with delays in processing? >> yes, congressman, it would be

very difficult to continue the services to the american people. the administrative cost for medicare in the budget year 2010 included no affordable care act implementation because there was no affordable care act. what we're talking about is an enormous reduction in the overall ability to administer medicare, medicaid, the children surrounds program at a time when there are significantly more beneficiaries in each program around country. >> and it is not limited to cms. public safety functions would be jeopardized. fda would be cut and be faced with an effective cut of 17% for the remainder of this year. would not a cut of this magnitude seriously undermine their responsibilities to rapidly identify and respond to food related health threats and

its mission to protect patients from faulty or substandard devices? >> the president has recommended that 31% increase in the fta, because of the new responsibilities with the historic safety act -- >> he did not anticipate this kind of cut this year. the republicans are proposing to cut $1 billion of funding to the community health centers as part of a shocking nearly 50% reduction in programs administered by the health resources and services administration. that could result in the closure -- would result in the closure of 127 health centers and countless layoffs. would that not jeopardize access to patient care? >> community health centers have long been a bipartisan effort to build the public health of the structure, delivering low-cost,

high-quality preventive care around the country, and that would seriously impact that. >> every state has a different medicaid program, there is flexibility in that program. at tuesday's hearing, gov. barbour asserted the need for total flexibility. governor barbour said the problem is federal regulations do not allow a provider to deny services to an individual on the basis of the individual possibility to pay and no cost sharing measures can be imposed on any medicaid enrollees, including children. you talked about the flexibility in the system and how that is balanced against the minimal levels of the fishery and provide protections with regard to access to providers? >> the medicaid program is a federal/state partnership, and it looks different in states around the country.

the program already has an enormous flexibility in the affordable care act, more significant flexibility designing benefit packages, designing for some of the upper income beneficiaries, cost sharing, making sure that optional services in some states are part of the package and in other states they're not. there is a wide variety of program design. we are working actively. the nation has a host of brand new governors, and we're working actively with each of those states to not only give them a snapshot of what their program looks like but also of the strategies that have been committed in other parts of the country that have been very effective delivering care. >> thank you, the gentleman's

time has expired. >> thank you. i would point out to the ranking member of the full committee that the democrats had entire year to come up with their appropriations. it is only because they failed to do their work that we're doing this right now. let me direct your attention -- >> the house passed it, the senate did not. >> this is my time. i sent a letter on february 10 asking you about the implementation plans of hhs, to which i have not received an answer. my concern is the judge in his ruling said it was the functional equivalent of an injunction and he went on to say that officials of the executive branch will adhere to the l w as

declared by the court and it it is the functional equivalent of an injunction. there is no reason to conclude this should not apply here. you apparently feel differently, and we heard from our governors this week they are feeling like they're on shifting sand. you feel the individual mandate will be upheld as constitutional by the supreme court. the florida judge felt otherwise. i wish we could accelerate or expedite the supreme court, but apparently i don't get my wish. the supreme court will likely rule in june of 2012, and that is a long time to look at this and wonder which direction do we go. you could provide guidance and help by saying we are working and looking seriously at what the judge said. i still await a response from your letter, but could you briefly give me some comfort

that you will comply with the judge's order? >> congressman, i think it is far from clear what the judge's order indicates. the justice department has gone back to the judge to ask him for a clarification of his order. >> i think he stated as clearly as he could. he will restate that and i look forward to his decision. honestly, the decision of a member of the executive branch not to adhere to the directive of the board -- >> the standard procedure is to file an injunction. >> governors all across this country, including my state of texas, are very concerned about what we do now, because we don't know. >> there is not anything now that is being done -- >> i look forward to your response to the letter i sent a month ago and i hope you will provide that.

we heard some of the questions already centered around some of the issues of mandatory funding within the law signed last year. i am concerned about section 4101, both a and b. "a" provides mandatory spending for the construction of school clinics. "b" creates discretionary funding for pang the doctors and nurses in this school clinics. why is the construction mandatory and paying the staff discretionary? >> that is the way the bill was constructed by members of congress. >> by members of the senate finance committee staff. and to take up where chairman at upton was talking a moment ago, i would draw your attention to section 1311, page 79, 78 of my

copy, where under enhancing patient safety, in ward 1, 2015, a qualified health plan, a health-care provider only if such provider of elements such mechanisms as the secretary may by regulation require. that is specific. where are you going with this? what have you directed your staff to look at? providers all over the country are asking me, what does this mean for us? again, perhaps i could get that response in writing. look, we switched sides here in january. the reason we switch sides is because of this law. it is because of this language that the american people looked at this and rejected the notion of what was forced upon them

last year. that is on% to the power that goes to your office, -- there is unprecedented power that goes to your office. at no other time in our history has so much power gone to one federal agency. can you understand why the american people are understandably concerned? >> congressman, i think the american public should be alarmed if we're paying taxpayer dollars to any provider or hospital bed of over 50 that does not have a quality system. >> but while the day determined by the secretary, and no right of appeal, no secondary motion may be made, only by the secretary. >> within the guidelines in terms of medicare payments, when that rule is promulgated, there will be public input. it would be alarming if we paid taxpayer dollars without the quality -- >> the rules have gone into

action without public comment. >> the gentleman's time has expired. >> thank you for your courtesy. welcome, madame secretary. pleasure to see you here. questions. with regard to the affordable care act, the continuing makes a number1 of blunt, reckless cuts. at the same time, the affordable care act has begun implementing historic consumer protections, including insurance coverage for children with pre-existing conditions, prohibiting recission by coverage of insurance companies, allowing children up to 26 to stay on their parents' insurance, amongst others. cms would receive a cut of more

than 23% of that agency's 2010 budget under hr-1. it will delay or impede the consumer protections of the health care reform act, yes or no? >> yes. >> would you please give us a statement as to how and where these cuts will come and will be the effects of the programs involved? the affordable care act provides seniors on medicare with 50% discount on brand-name drugs, a critical step toward increasing coverage under medicare part d. will hr-1 delay or prevent senior from receiving this discount, yes or no? >> mr. chairman, the cuts to medicare services will -- >> it is a danger? >> yes. >> yesterday we heard from

medicare program integrity director regarding the anti- fraud efforts at cms, including new tools provided to prevent fraud before it occurs. will hr-1 delay or harm efforts to prevent this, yes or no? >> yes, sir. >> would you submit a statement as to how and why? >> i will. >> with food safety, another important undertaking is the food safety modernization act. this legislation made historic investments in our food safety system and provided new authorities to help the fda to prevent food problem before that occurred in the food supply. hr-1 include a two hunter $40 million in cuts to the fda. will these cuts impede their

ability with the food safety modernization act, yes or no? >> yes, they will. >> would you please explain that, for the record? >> yes. >> last congress, i join with my colleagues to introduce drug safety legislation that would give the fda authority and resources it needs to adequately protect consumers from unsafe drugs and monitor our food safety and the safety of our blood supply. it will hr-1 -- will hr-1 impede this? >> yes, sir. >> would you submit an explanation as to why that is so? is consistently and

chronically underfunded, and i continue to hope that it will get the needed funding to felipe limit the food safety law. i know it was supported by the industry. you believe that registration fees are necessary to implementing the food safety modernization act, yes or no? >> yes, sir. >> madame secretary, the department has been requested to produce documents for the benefit of this committee. i would note, madam secretary, that hhs has produced over 50,000 documents at no insignificant expense in response to the committees' requests related to the waiver process and the creation of ccio.

would you submit to the committee statement as to how you have complied with that request for papers and documents and what seems to be the problems, if any, that exist with regard to the committee's request for information? >> i would be happy to submit that. >> madame secretary, we have completed our business with 11 seconds left. >> the gentleman's time has expired. the chair recognizes mr. barton. >> thank you. well, madam secretary. congratulations to your jayhawks for defeating my texas aggies last night and basketball. i hated to see it, but you all were the better team. i may ask this question and a different way. i think you are well aware that a federal court has recently ruled that the health care law is unconstitutional, and as the

chief administrative and executive in charge of at limiting that law, what is your position on agreeing to the court order and ceasing to implement the new law? the you intend to agree with that, will you ignore it, will you appeal it? could you enlighten us to what your position is? >> congressman, thank you on behalf of the hawks. we have sought clarification from judges vincent. about the implications for both the plaintiff states, as well as the membership of the nfib, which is one of the plaintiffs in the florida case. once we get that clarification, we intend to take next steps. meantime we are implementing the law. judge vincent is now an outsider

in terms of what the other federal judges, four other judges have ruled differently than the judge we are seeking clarification. >> what is the time line? >> we expect to hear back from the judge soon. the doj has filed their clarification request, the plaintiffs have responded. this week the judge indicated he would rule quickly. >> once that information is received from the judge, whose decision is said, yours, the attorney general's, the president's? or all of the above? >> our legal team is led by the department of justice, so we defer to their legal counsel. >> do you have official input into the decision? >> to the legal counsel's? >> as the secretary.

>> our legal counsel is involved with the justice team, but they are proceeding to have this dialogue with the court. them are ok, i would disagree that the judge's decision was an out liar. my understanding, if you are keeping score, it is 2-2. >> no, it is 3-2. >> have we had another? >> i have to keep an accurate score. 12 have dismissed the case out. . >> all right. >> and the clarification i would make is in the other decision, which came out of a court in virginia, where the judge found an individual responsibility to be the one portion of the law, that he found unconstitutional, he disagreed with judge vincent 's description that was essential to strike down the entire law. >> i am aware.

>> that is what i meant. >> one last question on that. is it conceivable that the obama administration, if the decision is to appeal, would appeal directly to the supreme court so we get this soft hopefully before -- so that we get this solved hopefully before the next presidential election? >> the attorney general of the state of virginia has filed an ax to that it appealed to the u.s. supreme court asking them to grant cert in the case in virginia. the administration has opposed that decision to expedite, but that is now before the court. the court will make a decision on whether they intend to expedite this case. >> i have a number of questions for the record. i will submit them in writing. my final question is on nih.

several years ago we passed a reform bill to this committee that was signed into law. that bill was a reauthorization bill that lapsed several years ago and is up for renewal. i will encourage chairman at upton to have a hearing and we reauthorization. in that was the creation of a common fund to try to get more cross-examination between the various nih organizations. have you followed that? if so, can you give an update on how you believe that common fund is operating? >> i know that the new director of the nih has taken a great interest in the common fund and has been actively involved in not only seeking to fill gaps in

research, but directing it to the most promising options that he feels in the research field. i think it has been something that has been definitely a stream of funding that has been important and one that i would be happy to get some details from dr. collins on exactly where the funds are being directed. that is something he takes very seriously. >> thank you. >> the gentleman's time has expired. the chair yields to the gentleman from the york. >> thank you. i have been listening to the planning on the other side of the aisle, and it boggles my mind. madam secretary, the bottom line is that we want to provide american citizens with health care or don't we?