Page images

are derived from the old age survivors and disability insurance trust funds and from the supplemental security income program. These outlays are included in the income security function since their primary mission is to reduce reliance on income programs. Outlays for programs for older persons are estimated to be $545 million in both 1979 and 1980. Advance funding is requested for 1980 for these programs, which are designed to enable older persons to live in their own homes and communities. Special programs for older Americans will also provide approximately 530,000 daily meals, an increase of 95,000 over 1978. A White House Conference on Families will be convened in 1979 to examine the impact on families of government actions and policies. Funds are also included to continue demonstrating approaches to the provision of services that meet the needs of other special groups, such as runaway youth and native Americans.

Community services program.—Several social services programs are undertaken through community action authority of the Community Services Administration. Administrative support is financed for about 900 local community action agency grantees, although most local community action agency program funding is derived from such sources as Head Start and employment and training programs administered by other Federal agencies. The 1979 budget seeks to: • strengthen the administration of community action agencies; • expand innovative demonstration activities concentrating on the delivery of assistance to the poor and emphasizing self-help and integrated human services projects; • increase funds to develop and test new, effective programs for the poor; and • improve the quality of community action programs and their management through more evaluation efforts. Special community action programs are supported at levels required to conduct direct service activities and demonstrations. In 1979, the energy conservation program level reflects the transfer of the home weatherization effort to the Department of Energy. Community action agencies will remain the primary network for delivering this service. State economic opportunity offices—as State grantees and conduits for Federal assistance under the direction of the Governors— will be supported on a 50% matching basis, with the Federal and State Governments sharing the cost equally. Funding for the community economic development program will be concentrated in 1978 and 1979 on the more successful grantees and on improved management of the program. An assessment will be made of the lessons learned from this program and its potential usefulness as a part of a comprehensive urban development plan.

Domestic volunteer programs.-ACTION, the Federal Government's agency for volunteers, supports Volunteers in Service to America (VISTA), University Year for ACTION (UYA), foster grandparents, senior companions, and the retired senior volunteer program. ACTION has recently adopted a basic human needs planning and programing strategy, designed to enable the agency to target its volunteer services more effectively on seven basic human needs areas: health and nutrition, knowledge and skills, economic development and income, housing, energy conservation, community services, and legal rights. This new strategy is changing the emphasis in the agency's program.

VISTA will be increased in 1979 by approximately 1,200 volunteers and efforts will be focused on health and nutrition, community development, and energy conservation. This expansion reflects the administration's conviction that effective volunteer programs are crucial to meeting the social needs of the country. The budget requests funds for the senior companions and foster grandparents programs to support the same number of volunteers as in 1978. The retired senior volunteer program will be smaller than in prior years. Projects that only substitute for services already provided by private voluntary organizations, or that do not meet the basic human needs criteria, will be phased out or transferred entirely to private resources. The UYA has been judged to be an ineffective program and few sponsoring institutions have been willing to incorporate the programs into their own curricula. This budget marks the beginning of a phaseout of the UYA.

The budget also proposes increases for technical assistance, grants, and model demonstrations to explore alternative approaches to voluntary action, primarily in the private sector. Outlays for ACTION's domestic programs are estimated to increase from $109 million in 1977 to $117 million in 1978 and $128 million in 1979.


The income tax law provides significant benefits that have effects similar to budget expenditures for education, training employment and social services.

Education.—Tax expenditures that aid higher education are the exclusion of scholarships and fellowships from income subject to tax, the personal exemptions claimed by parents of students age 19 or over, and the deductibility of contributions to educational institutions. These tax expenditures are estimated to be $0.3 billion, $0.7 billion, and $0.8 billion, respectively, in 1979.

Training and employment.—The jobs credit, a new tax expenditure, was introduced by the Tax Reduction and Simplification Act of 1977. For calendar years 1977 and 1978, employers whose employment is increased will generally be able to take as an offset to their tax liability a credit equal to $2,100 per new employee hired. The aggregate credit is limited to $100,000 per employer. An additional credit of $420 is provided for all handicapped individuals newly hired who have received vocational rehabilitation. The tax expenditure associated with this provision is estimated to be $2.5 billion in 1978 and $1.9 billion in 1979.

Social Services.—The provision of social services by a wide variety of private institutions is encouraged by the deductibility of contributions to those institutions. The tax expenditure associated with this provision of the tax code is expected to be $4.8 billion in 1979.


National Needs Statement:

• Assure access to quality health care services, with
emphasis on the needs of the poor, the aged, and the
• Restrain inflationary growth in health care costs.
• Acquire knowledge regarding the causes, prevention, and
treatment of disease and the behavior by which good
health can be attained and maintained.
• Support training and education of a broadly representa-
tive health workforce.
• Assure consumer and workplace health and safety.

To address national needs in health in 1979, the Federal Government will spend an estimated $49.7 billion in outlays in support of the following major missions: • Health care services: $45.1 billion. • Health research: $2.9 billion. • Education and training of the health care workforce: $770 million. • Consumer and occupational health and safety: $887 million. To help carry out these missions, the following major proposals are recommended: • An expanded child health assessment program with estimated outlays of $263 million in 1979, to provide early and periodic screening, diagnosis, and treatment to an additional 1.7 million low-income children and youth under the age of 21 currently not eligible for medicaid. • An extension of medicaid to cover low-income expectant mothers, with an estimated Federal outlay of $118 million in 1979. • A new program with $100 million in 1979 budget authority to help prevent unwanted adolescent pregnancies and to assist adolescent parents to avoid future welfare dependency. * A hospital cost containment initiative, now before Congress, to hold down increases in the cost of hospital services. This initiative will reduce the Nation's anticipated health bill by an estimated $2 billion in 1979, including $730 million in Federal outlays. * Fraud and abuse legislation to reduce payment errors under the medicaid program, with estimated 1979 outlay savings of almost $400 million.

• Increases in 1979 obligations of $32 million for research in reproduction and the biological and behavioral aspects of development, and $42 million for mental health and substance abuse research. The administration expects to submit national health insurance legislation this calendar year. It will not, however, affect Federal outlays in 1979 and, therefore, no funding is reflected in this budget.

Health care services.—The mission of financing and providing health care services represents the largest portion of Federal spending for national health needs. The Federal Government, primarily through medicare and medicaid, is a major source of financing for health services. To achieve its mission, the Federal Government funds about 28% of the financing for health services in the country; this includes 39% of hospital expenses, 32% of nursing home expenses, 19% of physicians' services expenses, and 5% of drug expenses. Total Federal outlays for health care services are estimated to rise from $34.5 billion in 1977 to $39.9 billion in 1978 and $45.1 billion in 1979.

The availability and use of new medical services and an increasingly older population account in part for increased health spending. Nevertheless, much of the increase has resulted from inflation. Without cost restraints, Federal spending for medicare and medicaid alone would rise an estimated 60% (from $42 billion to $70 billion) between 1979 and 1983.

To curb health cost inflation, enactment of pending legislation would allow the Federal Government to limit annual increases in hospital revenues. Hospitals could vary from Federal limits only in exceptional circumstances. This proposal would result in 1979 outlay savings of $630 million for medicare, $100 million for medicaid, and $1.3 billion for non-Federal payers—a total of $2 billion.

Medicare.—Outlays of $25.6 billion in 1978 and $29.4 billion in 1979 are estimated for health services for the 27 million aged and disabled medicare recipients.

Legislation, signed by the President in 1977, will provide for medicare cost reimbursement for services rendered by physician assistants and nurse practitioners in rural health clinics. The administration also supports legislation that would encourage renal dialysis in the home in order to reduce costs and help patients lead more normal lives.

Medicaid.—Enactment of an expanded proposal to establish the child health assessment program would extend medicaid's early and periodic screening, diagnosis, and treatment program to cover an

« PreviousContinue »