DHS recently announced a series of grants to states and urban areas totaling over $2.5 billion. States would receive $1.66 billion with urban areas picking up $855 million.

On the state side, New York received the largest amount, $298 million, with California a close second at $282 million, and Texas in third at $138 million. These were followed by Illinois, Florida and the District of Columbia.

The largest urban area grant went to New York, at almost $208 million. The DC area picked up the number two grant at $78 million. Other cites of note include Seattle at almost $12 million and Atlanta at $13 million.

The full breakdown by states and urban areas is located here and is in .pdf format.

CQToday is reporting that an HHS task force designed to study the effects of drug re-importation from foreign countries has concluded such a move would only save 1-2% and "would likely adversely affect incentives for research and development".

The task force was created in the wake of the Medicare Prescription Drug Law enacted this year, and was composed of officials from HHS, the Food and Drug Administration, and other government agencies.

The Government Accountability Office (GAO) released a report Tuesday criticizing the government's financial records. This marks the eighth fiscal year in a row the GAO has been unable to determine whether the federal government's financial statements were accurate. They found 10 of 23 major agencies and departments had restated their fiscal 2003 records, an increase of six from the previous year.

Former EPA Administrator Michael Leavitt, who has been nominated to succeed outgoing Tommy Thompson as Health and Human Services secretary, may be organizing a new effort to curb the growth curve in Medicaid spending while ensuring smooth implementation of the Medicare overhaul law.

The choice of Leavitt came as a surprise to many who expected the President to replace Tommy Thompson with Mark McClellan, head of the Centers for Medicare and Medicaid Services (CMS). This move is seen by many as an effort on the part of the White House to install a very seasoned political hand at the top and to maintain a strong implementer at CMS.

Senate Democrats are already preparing for a battle. After Leavitt’s nomination, 47 Democratic senators sent a letter to President Bush drawing a clear line between Medicaid changes they would and would not accept.

Republican aides are avoiding any talk of block granting Medicaid. However, Democrats have also warned against a “capped allotment” proposal, which was advanced unsuccessfully by the administration during President Bush’s first term. That approach would have capped spending growth for parts of Medicaid. Democrats would support “structural changes that enhance state flexibility”.

Michael Leavitt explored Medicaid flexibility in a plan approved by the federal government in 2002. The “Utah waiver” expanded coverage of low-income workers by cutting benefits elsewhere in the state’s Medicaid program. Administration officials are praising the Utah plan as a way to increase access to care in tough budget times. However, advocates for the poor say the waiver took dental and vision coverage away from people whose incomes were at half the federal poverty level while imposing new co-payments that caused some Utah Medicaid beneficiaries to skip seeking medical care.

It is generally agreed that widespread adoption of the waiver approach would not by itself generate the Medicaid savings that congressional budget committees are seeking. Those kinds of numbers require approaches such as block grants or caps on per capita Medicaid spending.

It’s unclear how receptive Congress will be to cost-saving moves. The Senate Democrats said in their letter that they oppose flexibility that compromises “the health and well-being of beneficiaries.” Although, there will be fewer Senate Democrats in the 109th Congress, the Finance Committee is likely to be resistant.

President Bush signed the Intelligence Reform Bill today, enacting the largest series of changes to the Intelligence Community since many of the agencies involved were founded.

A new Director of National Intelligence position will now have to be found, but the position will have full control over the budgets of all the IC agencies, including the CIA, NSA, NRO, DIA and NGA.

House Majority Leader Tom Delay, credited with strengthening is party’s hand in Congress and persuading his caucus to protect his status as leader even if he is indicted, seems to recognize that his latest power play may be too much. Rep. Tom Delay (R-Texas) recently floated a proposal to uproot the jurisdictions of Appropriations subcommittees and reduce their number from 13 to 10, which would remove gavels from three of the panels’ powerful chairmen, known as cardinals.

Delay’s proposal is not getting a welcome reception from the cardinals themselves, or the Senate leaders. Delay’s moves demonstrate the degree to which he is exerting power in his chamber, and he is clearly positioning for advantage in what is expected to be a shake-up among appropriators in any event.

Currently Republican term limit rules require both House and Senate chairmen to step down at the end of this year. In the House, that will mean a new chairman beholden to the GOP leaders who will select him. In the Senate, Thad Cochran (R-Mississippi) is slated to resist the kinds of changes Delay is seeking.

In Rep. Delay’s proposal, he recommends completely unraveling the subcommittee jurisdictions, which in the same bill often pair unrelated agencies, requiring them to compete for limited funding. The Commerce, Justice and State Departments for example, are funded by one subcommittee, while veterans’ affairs, housing, space and environmental programs are mixed together in another bill known as VA-HUD. The jurisdictions have stayed essentially the same for decades. Difficult trade-offs occur because each subcommittee is given a sum of money to divide up, so that awarding budget increases to veterans’ programs, for example, comes at a cost to the budget of NASA, the EPA, or the Department of Housing and Urban Development.

Delay wants to replace these subcommittees with others more suited to GOP control. For example, under his plan the Regulatory Agencies Subcommittee would have jurisdiction over such agencies as OSHA, while another would cluster funding for Congress, the White House and the Judiciary. The idea is that certain bills would represent GOP priorities while others would focus on Democratic priorities such as public housing.

There are three candidates to succeed C.W. Bill Young (R-Florida) as chairman of the House Appropriations Committee, they include: Rep. Ralph Regula (R-Ohio), Rep. Jerry Lewis (R-California) and Rep. Harold Rogers (R-Kentucky). The race has put House leaders in a position to exact promises of fealty greater than that demonstrated by Young.

Regula has the most seniority of the candidates. He received accolades for taking on Democrats, who in 2003 opposed the fiscal 2004 Labor-HHS spending bill for insufficiently funding education programs. Regula retaliated by denying all requests for Democratic earmarks, and this year, Democrats voted for all appropriations bills in large numbers.

Next in seniority is Lewis, who appears to have the most support on the Appropriations panel. However, with the Ways and Means, Rules, Armed Services, Homeland Security and Resources panels also headed by fellow Californians, geographical considerations may work against Lewis.

Rogers chairs the Homeland Security Subcommittee and promises to implement tight budgets expected in the next few years. Sources on the Hill say there is no compelling reason to vault Rogers ahead of his more senior rivals.

President Bush has nominated Environmental Protection Agency head Michael Leavitt to lead Health and Human Services. Leavitt used to be the governor of Utah until he joined the administration in 2003.

The twenty-one GOP lawmakers in the House who supported doubling Amtrak's budget extracted a promise from Speaker Dennis Hastert (R-Illinois) that he would attempt to restore funds for highway projects cut in the omnibus spending package. The projects were cut by Appropriations Chairman Ernest Istook (R-Oklahoma) in retaliation for a letter all 21 signed supported an increase in Amtrak's budget. Because of the timing of the move, the bill was signed before any of the affected members could protest the cuts.

Over the weekend, Bernard Kerik's nomination for Homeland Security Secretary was scuttled, and it now appears that the head of NASA, Sean O'Keefe, may also be on his way out to take a job at LSU.