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Washington, D.C. --- U.S. Rep. Frank Pallone, Jr. (D-NJ), Chairman of the House Energy and Commerce Subcommittee on Health, gave the following opening statement this morning at a subcommittee hearing entitled: "Treatments for an Ailing Economy: Protecting Health Care Coverage and Investing in Biomedical Research."
"Good morning. We are here today to examine the issue of providing economic relief for millions of Americans by protecting Medicaid health care coverage and investing in biomedical research at the National Institutes of Health (NIH).
"Medicaid provides 59 million Americans with access to medical care and specialized supports and services. It protects our most vulnerable populations: the poor, disabled, and elderly. It also accounts for nearly half of all nursing home care.
"The NIH is America's leading medical research agency and the foremost biomedical research institute in the world. It is through the work of NIH that we are living longer and healthier lives and may someday soon find cures for the epidemics of our time like cancer and diabetes. And it will be through the NIH that we are protected from those that wish to harm us through bioterrorism.
"No doubt the effects of the current economic crisis are on the forefront of everyone's mind. Americans are facing uncertain times and wondering how they are going to pay for basic necessities like fuel, food and health care. Others are just hoping to hold on until they are lucky enough to find a job. As this crisis hits both Wall Street and Main Street, Washington must act because the situation in the states, as we will hear from Governor Napolitano, is dire.
"Due to shrinking state revenues, states may cut coverage and restrict new enrollment, which means millions of Americans may lose access to the health care coverage they desperately need and those who have lost their jobs, will lose health care coverage also. Right now, more than 10 million people are actively seeking work but unable to find it. The unemployment rate is at 6.5 percent, which is the highest level since 1994. Each month this year our economy has shed more jobs than it has created. To date, 1.2 million jobs have been lost.
"A study conducted by the Kaiser Family Foundation found that increasing the national unemployment rate by one percentage point increases Medicaid and SCHIP enrollment by 1 million people. Such a change would increase state spending by approximately $1.4 billion at a time when states are already struggling to balance their budgets.
"And to make matters worse, cuts to state Medicaid programs not only impact Medicaid eligible individuals but they also adversely affect the health care job market. Medicaid cuts translate into health care job losses. Therefore, such cuts only contribute to a state’s unemployment rate and can exacerbate a worsening fiscal crisis.
"Earlier this year, I introduced a bill with my colleagues Chairman Dingell, Mr. King and Mr. Reynolds to temporarily increase each state’s Federal Medical Assistance Percentage (FMAP) during this economic downturn to ensure that states can continue to provide critical services, instead of cutting them. A similar provision was included in the recovery package that the House passed in September. I hope that this FMAP increase will be included in any economic recovery package that is crafted during a possible lame duck session.
"As we explore the possibility of another economic recovery package, we should also discuss providing additional assistance to states and creating jobs by investing in biomedical innovation and research. While there is no question regarding the importance of the research NIH conducts to improve our health, it also provides real, direct economic benefits at the local level including increased employment, growth opportunities for universities, medical centers, local companies, and additional economic stimulus for the community.
"In 2007, NIH grants and contracts created and supported more than 350,000 jobs that generated wages in excess of $18 billion in the 50 states. These are good paying jobs---the average wage being $52,000. According to FamiliesUSA, if the amount NIH awards to the states were to increase by 6.6 percent, the national economic benefit would add up to $3.1 billion worth of new business activity, 9,185 additional jobs and $1.1 billion in new wages. We have a proud tradition in this country of persevering through tough times by investing in American innovation and ingenuity. What better way is there to tap into that great American spirit and industry, than by investing in research to combat disease and lead the world in that noble endeavor?
"At a time of great economic uncertainty, Washington must act. Last month, Federal Reserve Chairman Ben Bernanke voiced his support for an economic recovery package during testimony here on Capitol Hill. Some economists are saying that we need to pass a more robust package in the range of $200 or $300 billion.
"Each day, we hear about more job losses and troubling economic trends. I would hope these headlines would serve as a wake up call at the White House. House Democrats are prepared to work with President Bush and the Senate to pass another economic recovery package in a lame-duck session if the President finally recognizes the need for such action. I would like to thank each of our witnesses for being here today. I especially would like to welcome Arizona Governor Janet Napolitano. I look forward to hearing your testimony today and now recognize Mr. Deal for his opening statement."
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