The House Appropriations Committee is slated for major changes when Congress reconvenes in early January. Republican rules limit the number of years that a Member can chair a full committee or subcommittee. Appropriations Committee chairman Bill Young (R-Florida) must relinquish his seat after serving six years. He is expected to take the chairmanship of one of the other major Appropriations Subcommittees, most likely either Defense or Homeland Security. The chairs of those subcommittees are in a three-way race to head the full Appropriations Committee. Rep. Jerry Lewis (R-California) must give up the chair of the Defense Subcommittee, and is seeking to lead the full committee. Homeland Security Subcommittee chairman Hal Rogers (R-Kentucky) and Labor/HHS/Education Subcommittee chairman Ralph Regula (R-Ohio) are also vying for the Committee chairman's seat. The Republican Steering Committee will decide this first week in January when Congress reconvenes from this Christmas and New Year's holiday.

Regardless of who wins the full committee chairmanship, the subcommittee chairs will be reshuffled as senior members of the committee claim the most desirable subcommittee slots. At least one current subcommittee chairman, James Walsh (R-New York), has requested a waiver to continue as chair of the VA, HUD, and Independent Agencies Subcommittee beyond his six-year term. If unsuccessful, that subcommittee could go to the current chair of the Energy and Water Development Subcommittee, David Hobson (R-Ohio), who could elect to stay in his current post or seek another subcommittee assignment. Although his term has not expired, Transportation Subcommittee chairman Ernest Istook (R-Oklahoma), might face a challenge to his chairmanship because of Republican discontent over Amtrak funding issues and the controversial IRS provision associated with him that was discovered in the Omnibus Appropriations bill, stalling adjournment and forcing a second "lame duck" session before Christmas.

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.